3.12 NS&I was aware of SBS's expenditure on the deal through open book accounting. Although it was apparent that SBS's costs during the first two years were rising faster than forecast, SBS continued to forecast a profit assuming it could achieve compensating efficiency savings. By February 2001, it became clear that this would not be the case and by the end of the year NS&I was aware that its partner faced potentially significant losses on the deal.
3.13 NS&I knew SBS's historical performance through open book accounting but it did not provide NS&I with evidence of SBS's future assumptions. NS&I now has access to those assumptions through open book forecasting which NS&I and SBS employ to assess the financial impact on the whole business of each other's actions.