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Safe as houses: Assisting UKAR’s separation programme through contract treatment

The decision by UK Asset Resolution (UKAR) to outsource its mortgage servicing operation to Computershare Mortgage Services Limited was key to its strategy. But with 1700 jobs included in the transfer and the continued servicing of billions of pounds worth of mortgages in scope, a smooth separation of the business was critical.

Efficio was engaged to support the contract separation activities that underpinned the outsourcing.

Working closely with UKAR’s procurement team, business stakeholders and suppliers the objective was to ensure the contracts allowed a seamless separation of the UKAR business. 


UKAR was set up in 2010 to manage the closed mortgage books of Bradford & Bingley (B&B) and NRAM, formerly Northern Rock (Asset Management). Today, it is made up of approximately 175 employees and is responsible for around 148,000 customers holding £19.5bn of mortgages and loans.

In 2015 UKAR announced two transactions to:

  • Accelerate repayment of their government loans by selling a £13bn portfolio of NRAM loans (worth £13bn), and;
  • Outsource the servicing of its loans to a third party.

Treatment of existing contracts was key to the success of the outsourcing programme.

Efficio played a key role in the contract treatment exercise required to support the outsource. This complex exercise required contractual separation of multiple entities, ensuring that contracts were aligned to the appropriate procurement teams following the business transfer and that necessary contractual permissions, for example, right to use and bureau rights, were in place. The work included providing a detailed review of all in-force contracts and working with internal and external business stakeholders to identify and implement the required contractual treatment strategies.

Efficio embedded themselves within our business and helped us drive the business transformation agenda set by our management. We were very pleased with the support Efficio provided during this challenging period.

Rhys Silverwood, Strategic Procurement Manager at UKAR


A team of Efficio consultants was embedded into UKAR’s procurement team. They designed tasks around four key stages:

  1. Discovery: The first step was to identify and document all contracts impacted by the separation. These were then reviewed and categorised based on criticality and key issues needing to be addressed were identified.
  2. Contractual design: We worked closely with UKAR’s legal team and business stakeholders to determine future requirements to ensure continuity of service following separation.
  3. Negotiation: We played a key role in the negotations with suppliers to achieve UKAR’s desired outcome. Some of these negotiations involved securing essential third-party software and servicing rights.
  4. Training: We also provided broader procurement support through the delivery of customised training programmes for UKAR's procurement team, spend analytics and support of other business-as-usual procurement activities.


Our work supported UKAR’s separation and helped enable:

  • Interim servicing of the £13bn worth of NRAM mortgages following their sale
  • Ongoing servicing of both NRAM and B&B mortgages following the subsequent outsourcing of the mortgage servicing business

Specific deliverables included:

  • An inventory of contractual details and proposed treatment strategies of all contracts in scope
  • 428 contract treatments including contract novations, terminations, duplications, securing of software use rights, setting up new agreements and right-sizing of contracts in readiness for separation
  • Customised dashboards which provided complete transparency and progress reporting throughout the process
  • Supporting the development of the outsourced servicing agreement
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