“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.”