Homeowners and borrowers around the UK may be laughing, but savers are having a tough time as the Bank of England attempts to kick start the economy with low interest rates.
Trevor Bayley, finance director of government agency National Savings feels the pinch more than most – he has the task of encouraging the public to invest their money when the Old Lady is doing her best to make them spend. “Falls in interest rates affect National Savings just as if we were a private sector financial services business. We have to strike the right balance between the government line and giving good value for customers,” says Bayley. “We react to changes in rates as much as we have to.”
As 50% of National Savings staff now come from the private sector, and all of its day-to-day operations have been farmed out to a private partner, Bayley is at the heart of turning National Savings into a virtual private financial services company.
Bayley moved to National Savings in June 2001 after 21 years in the finance function at Britannia and having been on its board as FD since 1988. His only regret was that he didn’t leave the building society sooner. “The job at National Savings is a challenge because it is non-routine. The smaller management team also means I can be a more important cog in a smaller wheel,” he says.
And National Savings is a much smaller wheel. It was established 140 years ago and became a household name through National Savings Certificates and Premium Bonds. But it has been undergoing some pretty serious organisational change since April 1999 when it outsourced all its operations to Siemens Business Services, reducing staff levels by 97% in the process – from 4,500 employees to 125 today.
“Thousands of people moved out on day one of the contract and became SBS employees,” says Bayley. “When I arrived in June there was already a massive change programme in place. But we still have some products on legacy systems.”
So how does Bayley monitor one of the flagship, and most extreme, public-private partnerships under New Labour? Typically for government the red tape is bewildering. “The KPIs are interesting. There are a lot of them, probably too many. But the key indicators are based on service times, stuff like that,” he says.
The partnership has several deliverables built into the contract. The main indicator is response time from the new “state of the art” enquiry service. “It now takes us only four days to respond to enquiries from customers who write to us,” Bayley boasts. Only four days? “You may say that is still too long. But before responses could have taken seven days or even longer,” he says.