Beleaguered National Savings is set to transfer almost 4,000 staff toemens. German electronics giant Siemens, including up to 20 of its 30 accountants.
There are fears that the transfer could lead to four-figure redundancies at the agency, which manages more than #63bn of investments on behalf of 30 million customers.
The state-run savings institution was called before the Commons Public Accounts Committee last week to explain what steps it had taken to strengthen its financial management, following criticism by the National Audit Office.
The NAO report, first published in 1996 and followed up last year, focused on the lack of qualified accountants at National Savings which resulted in a failure to produce accurate financial information.
PAC chairman David Davies and other MPs heard that National Savings had signed a ten-year contract with Siemens, with the option of a five-year extension, to take over most of its work.
National Savings chief executive Peter Bareau admitted the transfer had been driven partly by the lack of trained accountants within the service.
‘We just have not got the qualified people within National Savings to deal with the accounting problems,’ he said.
Bareau told the PAC that the restructuring will see National Savings current staff of 4,000 chopped to just 120 in a ‘core’ service, including jobs for ten accountants. Among them will be Richard Douglas, National Health Service executive deputy finance director, who takes up his new post on 1 March as National Savings finance director.
The remaining 3,380 employees will be transferred to Siemens, which will also inherit the internal audit team.
The restructuring could include up to 1,200 redundancies once the transfer is completed on 1 April.
National Savings has an ongoing contract with Deloitte & Touche to provide internal audit services. Deloittes will continue to provide internal audit services to ensure that Siemens is providing a proper level of service.
The committee also grilled Bareau about National Savings’ precise liability to investors, the investigation of unreconcilable discrepancies on monies owed between National Savings and its agents, the appearance of unexplained balances on suspense accounts and the establishment of mechanisms to prove the existence of fraud.
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