Press Release - The Customer First
Programme: Delivery of student
finance
19 March 2010
The service provided to students applying for finance in 2009 did
not achieve value for money, according to a report today by the
National Audit Office. There were major problems in the processing
of applications - with fewer than half new applications being fully
processed by the start of term - and in communications with
applicants.
In 2009 the Student Loans Company took over the processing of
loan and grant applications for new students from England which had
previously been carried out by local authorities.
According to today’s report, the Company’s document scanning
system was launched before being fully tested. Its failure was
critical, and the Company’s contingency plan was both flawed and
implemented late. The Company took 33 per cent longer to process
applications in 2009-10 compared with local authorities in 2008-09,
and only 46 per cent of new applications had been fully processed
by the start of term. From February 2009, applications arrived more
quickly than the Company could process them and, by September 2009,
241,000 applications had been received but not fully processed.
This led to a dramatic increase in the volume of calls, with the
Company receiving over four million in September – 87 per cent of
which were unanswered. The Company had failed to communicate key
messages to applicants that would have helped to reduce unnecessary
calls.
The customer service provided by the Company in 2009 was poor.
Half the students responding to an NAO survey said they had to send
in the same paperwork more than once, while 17 per cent said the
Company had told them it had lost some of their documents. Overall,
from February 2009 to January 2010 the Company answered fewer than
half of the calls to its contact centre.
The NAO has also raised concerns about the Company’s performance
in managing Disabled Students’ Allowance. By the end of 2009, only
4,000 of 17,000 applications had resulted in a payment, taking an
average of 20 weeks to be processed. For other ‘targeted support’
grants (Childcare Grant, Adult Dependants’ Grant, and Parents’
Learning Allowance), the Company does not collate information to
measure how long it takes to process applications.
The Department for Business, Innovation and Skills and the
Student Loans Company underestimated the challenges in centralising
this service. Neither the Department’s monitoring of the Company
nor the Company’s Board’s oversight were effective, the NAO has
reported.
Substantial risks remain to the successful delivery of the
service in 2010, which provides a focus for the NAO
recommendations. While the Department and Company still expect to
secure savings of around £20 million a year from 2011-12, this
benefit would be outweighed greatly by continued poor service in
administering over £5 billion of loans, grants and allowances.
Mr Amyas Morse, head of the National Audit Office, said
today:
“The Department for Business, Innovation and Skills and
the Student Loans Company underestimated, and therefore did not do
enough to mitigate, the significant risks in integrating the
student finance service previously carried out by 130 separate
local authorities. Both bodies failed to grasp the magnitude of
problems that were developing in 2009 as applications for loans,
grants and allowances piled up and applicants struggled to contact
the Company by telephone. In particular, students with disabilities
were supported badly.
“The question must be asked how the Company, given its
failure in 2009, will deal with twice as many applications in 2010,
when it becomes responsible for applications from both first and
second year students. The Department and the Company must give the
highest priority to achieving a radical improvement in the service
and, in so doing, to restoring the confidence of applicants and
stakeholders. They will have to manage substantial
risks.”
Notes for Editors
- The Customer First Programme was established in 2006 to
centralise the processing of student support. Its main aims are as
follows: improving customer service (through faster processing and
greater consistency); achieving financial savings; and improving
governance. The Student Loans Company began processing applications
for new students for the 2009 10 academic year (the first of a
three year phased introduction) in February 2009. Local authorities
will continue to assess applications from students who started
university before this date until the 2011 12 academic year, when
the Company will process all applications.
- Established in 1990 to administer student loans, the Student
Loans Company is a non-departmental public body, chiefly funded by
and answerable to the Department for Business, Innovation and
Skills. The Company’s service for students from England is known as
Student Finance England. The Secretary of State for Business,
Innovation and Skills has statutory responsibility for delivery of
student finance and the Department for Business, Innovation and
Skills retains overall accountability for the Programme.
- This report follows the Hopkin Review (December 2009) that had
been commissioned by the Department and Company
(www.bis.gov.uk/hopkin). The NAO report endorses the
recommendations of the Hopkin Review, and goes further by
interrogating performance and financial data, surveying students
and evaluating ongoing risks.
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard
copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Amyas Morse, is the head
of the National Audit Office which employs some 900 staff. He and
the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 18/10
All enquiries to Mark Anderson, NAO Press
Office:
Tel: 020 7798 7758
Mobile: 07796 937119