2.10 NS&I has a separate contract with the Post Office for processing its transactions, some 18 million in 2001/02, which it has restructured to ensure that the Post Office is appropriately rewarded for the services it provides. There is a cap on how much NS&I can reclaim for the Post Office's failure to meet performance targets, but during 2001/02 the Post Office reached the cap before the contract year-end. This suggests that the cap should be set at a higher level. NS&I told us that it intends to continue to strengthen the link between payment and quality of service although SBS bears the risk of errors made at Post Offices.
2.11 The Post Office uses 58 forms to transact NS&I business and this figure has not changed despite efforts by NS&I and SBS to cut down the number of forms since 1999. Errors on Post Office forms can affect the efficiency and quality of imaging systems used by SBS. NS&I and SBS are reviewing the Post Office work stream because they believe there is still much more they can do to reduce errors.