Report damns Student Loan Company’s ‘conspicuous failures’

The Student Loans Company’s claim that a lack of funds was to blame for huge delays in processing loan applications has been rejected by a critical report published on 8 December, which calls for the company’s senior management to be “reorganised”.

Universities were forced to make emergency loans to thousands of students at the start of the 2009-10 academic year after the SLC failed to process their applications in time.

Its inquiry lines were blocked during the crisis, and the report reveals that the SLC claimed it was unable to manage high volumes of calls because it “strived to live within its means” and regarded its budget allocation as a “strict constraint”.

However, the report’s author, Sir Deian Hopkin, rejects the excuse, saying that the SLC had sufficient resources to manage peak demand but chose to provide a poor service.

The SLC staffed its call centres to meet average demand throughout the year, rather than putting extra staff in place in busier times.

“The resourcing model chosen by the company did not aim to deliver the standards of customer service achieved by other public-service delivery organisations,” the report says.

In October, Times Higher Education revealed that the SLC had spent more than £1 million in 2008-09 on first-class rail travel, team-building events and consultancy fees. Despite this outlay, it failed to achieve a “culture change” that should have seen it place more emphasis on customer service, Sir Deian finds.

“In our view, decisions taken by the company’s leadership did not give enough priority to the customer experience,” he writes.

His report also finds “conspicuous failure” in other key areas.

New scanning technology designed to process documents submitted in support of applications failed and the SLC had to revert to processing by hand.

“Management indecision and over-optimism in the scanning technology meant that manual processing was not introduced quickly enough, the consequences of which were far-reaching,” the report says.

The company’s directors and the Government are criticised, along with the SLC’s senior management. Board members were unaware of many of the company’s problems, partly because key information was not revealed to them by the executive, but also because “the non-executive directors did not challenge the executive team sufficiently”.

The Department for Business, Innovation and Skills should gain a “fuller understanding” of the SLC’s operations, it adds.

Wes Streeting, president of the National Union of Students, said: “The poor leadership and management of the SLC has led to disruption and hardship for hundreds of thousands of students. Given the catalogue of failures identified by this report, heads must roll if the public is to have any confidence in the SLC in the future.”

The SLC’s chairman, John Goodfellow, has promised to adopt the report’s recommendations and “strengthen and restructure” the senior management team.

The contract of the company’s chief executive, Ralph Seymour-Jackson, who has led the SLC since 2003, was renewed for three years in June.

melanie.newman@tsleducation.com