He gives noted service, that is (5)

I believe the answer is:

ernie

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'he' is the definition.

'noted service that is' is the wordplay.
'noted service' becomes 'ern' (I am not sure about this - if you are sure you should believe this answer much more).
'that is' becomes 'ie' (short for Latin 'id est', 'that is').
'ern'+'ie'='ERNIE'

'gives' acts as a link.

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(Other definitions for ernie that I've seen before include "It picks Premium Bond winners" , "Premium Bond selecting machine" , "Man - chooses Premium Bond winners" , "Eric's TV partner" , "Premium Bond picker" .)

I've seen this clue in the Evening Standard.

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