The chief executive of Britain’s venerable state-owned savings bank talks about its pandemic savings push, reputation management and transforming his organisation
It’s fair to say that Ian Ackerley’s experience of life as a senior civil servant has been a voyage of discovery – and not always in a good way.
As chief executive of National Savings and Investments, his journey has been filled with ups and downs, largely due to the conflict at the heart of the UK’s only government-owned savings bank.
That’s because NS&I has three different groups to please in a relationship where delivering for one group often comes at the expense of another.
One of NS&I’s purposes is to raise money for the government – but if this is done too well then it can have an adverse effect on the wider financial market, which is disadvantaged by not having the government backing that NS&I enjoys.
It is also tasked with delivering for its customers.
But while raising interest rates is welcomed by its savers, it’s not such good news for the general taxpayer – as it means that there’s less money being made by the Treasury.
As with anything financial, the detail gets pretty complicated pretty quickly, but speaking from NS&I’s head office in Pimlico, London, Ackerley summarises it as a “balancing act”.
He explains: “It is a trade-off. The taxpayer pays the interest, the customers receive it; what we do will impact our competitors in the market so there is always that trade-off.”
Ackerley did not plan to become a financial plate spinner. As a young boy, photography was his passion. Life got in the way, with Ackerley pursuing a career in management consulting and financial services – working for the likes of Virgin Money, Sun Life International, and Barclays Bank – before moving to the public sector in 2017 when he joined NS&I.
Originally known as the Post Office Savings Bank, it was founded in 1861. It’s best known today for Premium Bonds – which account for almost half of the £200bn in savings held by its 25 million customers. A non-ministerial department, NS&I is an executive agency of the chancellor of the exchequer.
As with many public sector organisations, the past couple of years have seen NS&I face huge challenges, with problems ranging from inadequate levels of customer service to complaints that it has been taking a disproportionate share of the savings market.
The outbreak of the pandemic in 2020 prompted the Treasury to turn to NS&I to raise an unprecedented amount of money by increasing the amount being deposited by savers.
“At the start of the Covid crisis our target for 2020-21 was going to be about £6bn. In the end we delivered £38bn in the first six months and that was our way of trying to help with the fact that the government was facing significantly increased expenditure,” Ackerley says. “If you think about it, that £38bn is just about what the government spent on the furlough scheme during its first six months, so it was a really material amount of money, and more than we’d raised in the preceding three years put together.”NS&I rose to the task, capitalising on a wider growth in savings that hadn’t been seen “in decades”. But it came at a cost. The sheer scale at which people were depositing money, combined with a lack of capacity due to the effects of the pandemic, compromised customer services.
When NS&I slashed its rates and also reduced the chances of winning a premium bonds prize in September 2020, it prompted many people to try to get their money out in search of a better return.
Thousands of complaints were made about the time that call centre staff were taking to answer calls – with some savers having to wait 20 minutes to speak to someone. Ackerley was subsequently hauled before the Treasury Select Committee, in a gruelling encounter in which he told committee chair Mel Stride he was “genuinely sorry” for the inconvenience to people affected by customer service that had “fallen well below [his organisation’s] normally high standard”. For his part, Stride warned: “The damage that may have been done to NS&I’s reputation over the last few months is worrying.” He suggested that NS&I would “need to work hard to win back customers”.
But Ackerley is a man for whom the phrase “glass half full” could have been invented, with a knack for turning a negative into a positive. He prefers to summarise past problems as “a challenging period”, explained by a record volume of business combined with reduced capacity due to Covid-19. Things are now back on a more stable footing. “I think inevitably when you get the sort of negative coverage that we received during that time it’s going to have some negative impact on the brand,” he adds. “But I’m really pleased to say that our customer satisfaction now is pretty much at where we were pre-Covid.” He adds: “I think we are on a rising and improving curve at the moment.”
The NS&I chief executive is upbeat about the grilling he received from the Treasury Select Committee. Having to appear before MPs is “one of those things you’re very aware of when you accept the job.” He says: “Obviously one would always much rather get lots of praise, but I think that’s human nature. And, by and large, I think the questions at these events to be fair. It was good to get the opportunity, frankly, to be able to go on the record, to be able to explain a little bit more about what had actually happened and what we were going to do to fix it.”
For all the well-publicised problems, the actual transition to remote working was straightforward. “We were well prepared, I’m delighted to say. A little over 18 months beforehand we had refurbished our main office building in London and in the process of doing that we made a strategic decision to switch away from desktop technology to laptop technology. During the refurb we also didn’t have enough capacity for everyone to be in the office so we sent half the people to work from home.” Remote working “went extraordinarily smoothly” and was “a really straightforward transition because we had the tech and the experience.”
Talk turns, inevitably, to the Partygate scandal that has engulfed Whitehall. Ackerley does not think this has affected civil servants’ morale, arguing that the state of mind of the vast majority of officials is “impacted by things usually much closer to them”. So, were any parties held at NS&I’s offices? “That didn’t happen in NS&I,” he says. “Not least because during that period we were all working from home – only in exceptional circumstances were there people in [the office] during most of the time when I think those incidents happened.”
Partygate to one side, Ackerley is measured when asked if he feels more like a civil servant now that he’s been in the job for five years. “I don’t know, but I certainly think I know a little bit more than I knew before, or at least I’m aware a bit more of the things that I don’t know,” he says. As for the future savings market, Ackerley is concerned that the cost-of-living crisis will see a “squeeze” on incomes that could reduce the number of people able to save. Amid the economic uncertainty, NS&I has taken its first steps into the world of green investment. Its first ever green savings bonds were launched with fanfare last October, but the miserly interest rate of 0.65% was significantly lower than other green savings products on the market. In a move that could indicate an initial lack of interest in the bonds, NS&I decided to double the rate to 1.3% when it issued more earlier this year.
Ackerley will not divulge the take up of the new bonds. “I’m not going to share numbers today because we release those in the annual reporting cycle, but suffice it to say that what was important for us was that we learnt about the market, about the relative attractiveness of our product and our brand in that segment and it’s more than fulfilled that.” He hints that the numbers will not make for good reading, stressing that it had been an opportunity for both the Treasury and NS&I “to learn about the green savings market and it’s really fulfilled that for us so we’ve learnt a lot through the release of the first tranche”.
The jury is out on any future plans for green investment products. “There is clearly an opportunity to continue with a green proposition – quite when that will be, what scale it will be, is something that we are in discussions with Treasury about,” he says.
Ackerley is keen to highlight another positive development – the £2bn Rainbow programme that will see NS&I transformed into a 21st century organisation. It aims to replace ageing technology and old processes. The Rainbow programme is a series of contracts that are being tendered in what represents a big shift away from the large, single outsourcing contract that has seen Atos handle the NS&I’s operational services since 2014. Future plans include having a mobile banking app and a fully functional transactional website. Ackerley sums it up as being “about a fundamental transformation of our operating model.” He adds: “It means that we will be responsible for integrating the provision of services by those players, which brings more skills and experience back into the civil service, which again creates some really exciting opportunities for people who want to be involved in that sort of thing.”
Across the wider civil service, he sees some “really positive stuff” being done around diversity and inclusion. There’s also “a lot of energy going into getting the civil service to work better across departments”. He recognises that the need for greater collaboration is nothing new, which begs the question of how you actually achieve it. “There’s a lot to be said for getting a good mechanism in place, and having as many people as possible motivated and driving towards it. There’s been a real focus that I can see about trying to get mobilisation across the civil service, across all levels, to really drive towards a more inclusive civil service and one that works much better together.”
The pandemic showed what could be achieved by different departments working together, he adds. “The latest crisis in Ukraine has provided another opportunity to learn and also to leverage the lessons that were learned from Covid.” There are no quick and easy fixes, according to Ackerley. “It’s lots of different things that are needed; there is no magic bullet for making this work. Having worked in very large corporates for most of my career, they faced very similar challenges to the government. The bigger organisations get, typically the more difficult it is to get them to work well together.”
Having mutual trust and understanding are key, he argues. In the case of NS&I, the Treasury has a couple of representatives on the board of this executive agency. However, the real insight the Treasury gets is from the “multiple relationships” where “members of my team and our organisation are talking to the Treasury every day”. Ackerley also meets with Treasury permanent secretary Sir Tom Scholar every Monday – another example of the two-way communication between the organisations.
His five years as a civil servant have been “an amazing period” and it’s been a “great privilege to see the inside of the Treasury, a little bit more of how government and Whitehall works”, he says. Asked if he’s in it for the long term, Ackerley laughs and says: “It’s obviously not my decision in the end because I have to be reappointed by the Treasury, but I’ve certainly enjoyed the five years that I’ve had. It’s been, as I say, challenging at times. There’s been some real highs, there have been some lows, but I do really enjoy the role.”