a) Contracts should allocate the risks associated with a project to the parties best placed to manage them.
■ The contract with SBS allocates risks to the parties best placed to manage them.
b) Departments should identify all the significant risks associated with the project and understand the implications of such risks for their businesses.
■ National Savings identified all the significant risks involved in transferring the operational service to the private sector.
c) Departments should recognise that, although they can, and should, transfer the financial consequences of certain risks, it is unlikely that all of the business risk can be transferred. Departments remain accountable for these business risks and should ensure adequate contingency plans exist to manage these risks.
■ National Savings is monitoring progress through an agreed governance structure, joint plans, formal business reporting and working level contacts. SBS is obliged to manage the business in accordance with internationally recognised quality management and quality assurance standards.
■ If things go wrong, National Savings can re-tender for a new private sector partner at any point during the life of the contract. In such circumstances, the contract requires SBS to continue to provide the operational service for six months after termination, while National Savings finds a new partner.