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Friday, December 18, 1998 Published at 11:57 GMT

Business: Your Money

Siemens to manage National Savings

National Savings will see new technology introduced by Siemens

The UK Government is to privatise the day-to-day running of its borrowing arm, National Savings, which has recently been hit by accounting problems.

Treasury Economic Secretary Patricia Hewitt has agreed to a scheme whereby Siemens Business Services will be given a 15-year contract to provide administrative back-up for the agency..

The Treasury says around 4,000 people are employed by National Savings at centres in Blackpool, Durham and Glasgow.

In a Commons written reply, Mrs Hewitt said Siemens planned to introduce new technology, but would create jobs in Blackpool, Durham and Glasgow to offset the resulting reduction in operational jobs.

She said Siemens had made a "significant" commitment to safeguarding a National Savings' presence in Blackpool, Durham and Glasgow for the next five years.

"This contract is in keeping with the government's policy for public-private partnerships and for modernising public services so they serve the interests of all stakeholders," she said.

"This Public Service Partnership offers significant benefits to National Savings' customers and staff, and to the taxpayer, as well as to the local economies concerned," she added.

Accounting holes

In August, the government's financial watchdog, the National Audit Office, warned that National Savings still had large holes in its accounts.

This was two years after it originally found fault with accounting by the agency which last year handled £63bn of public money.

The NAO highlighted a deficit of £3.5m in one account and, in another error, £11.7m was found to have been caused by incorrect recording of transactions.

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