Memorandum from Department for Business
Innovation and Skills
Further to the evidence presented to the Public
Accounts Committee at its hearing on "The Customer First
Programme: Delivery of Student Finance", this memorandum
provides further information on the delivery by the SLC of the
student finance service for the academic year (AY) 2010-11 applications
cycle as requested in the letter of 28 July from the Chair of
the Committee. The performance data requested is provided in full
at annex A.
As that letter suggested, SIS and SLC officials
have worked with the National Audit Office (NAO) to agree the
nature and format of the data provided. The NAO have confirmed
that they are content with the data and that the analysis is comparable
with that provided in their report on the SLC's performance in
delivering the AY2009-10 applications cycle. The NAO have requested
that further information be included in this return on a number
of other issues raised in the hearing. An update on progress in
implementing the NAO's recommendations is also included at annex
S.
SIS and SLC have published a series of Official
Statistics to show progress in processing applications for financial
support for students in England. The figures published in the
Official Statistics are not directly comparable with those provided
here; different definitions have been used and the Official Statistics
include applications made to both the SLC and Local Authorities
while the figures here cover only those applications made to the
SLC. Delivery of the academic year 2010-11 applications cycle
The SLC has appreciably improved its performance
in processing applications and in answering telephone calls for
the AY 2010-11 applications cycle. At the start of term, the SLC
had fully processed ready for payment 72% of the 691,900 applications
received from new students and from returning students who began
their studies in the 2009-10 academic year. In contrast, last
year SLC had fully processed only 46% of applications from new
students by the start of term. In addition, this year another
41,300 (6%) applications were assessed under the Late Application
Process, where the SLC prepares a payment for the minimum non-means
tested loan to be made where they do not have financial evidence
or where the application is submitted close to the start of term.
For the whole AY2010-11 application cycle the
SLC has taken on average 10.8 weeks to process applications from
new students. This is a reduction of 1.6 weeks compared to the
SLC's own performance last year, but 1.5 weeks longer than Local
Authorities took in AY2008-09. On average the SLC has taken 8.7
weeks to process applications for returning students this year.
This is 3.1 weeks longer than Local Authorities took this year
(when Local Authorities processed applications for students returning
for their third and later years of study) and 2.1 weeks longer
than Local Authorities took in AY2009-10. Year on year trends,
however, can be misleading. The average time to complete an application
reported here includes the additional time taken to request evidence
not provided with the application and to receive the signed loan
acceptance form which is only required where an application has
been submitted online. The return of the signed loan acceptance
form can take a considerable period of time, particularly where
applications are made early in the cycle when applicants feel
less urgency as the start of term is still some time in the future.
In a year where the number of applications received online has
increased "significantly and the SLC has successfully encouraged
applicants to apply earlier in the cycle, this will undoubtedly
have had an effect on the average processing time and does not
necessarily reflect the SLC's performance in processing applications.
Last year, Professor Sir Deian Hopkins' report
described how disabled students were poorly served. Mr Lester
set out at the hearing the steps taken to improve the service,
including discussions with stakeholders to better understand the
needs of disabled students and involving stakeholders in improving
the complete process. SLC have also increased the number of staff
assessing Disabled Student Allowances (DSAs) applications and
provided enhanced training for these staff. Average processing
times for DSAs have improved this year. The NAO's analysis of
the data available in January showed that it took on average 20
weeks to pay a claim for DSAs last year. At 8 October this year
the SLC are processing applications for DSAs on average in 17.8
weeks for new applicants and 14.7 weeks for returning students.
This measure captures the time taken from receipt of the application
to when a payment is made, rather than when approved for payment,
used when measuring performance in processing applications for
loans and grants. The nature of the application process for DSAs
is such that the SLC first determines the level of entitlement
and students are then reimbursed the costs of purchasing specialist
equipment or support after an appropriate invoice has been submitted
to the SLC. The level of entitlement can be established, and the
application approved for payment, a considerable length of time
before an invoice is received, particularly where an application
is made before the student starts their course. The SLC have encouraged
applicants to apply early in the cycle and the number of applications
received this year has been ahead of the SLC's forecasts since
June. Paragraph 10 below outlines SLC's performance against the
targets agreed with SIS for processing applications for DSAs.
The performance of the SLC's contact centre
has also improved. Over 95% of telephone calls were answered in
September, compared with 13.3% in September last year. The SLC
has used an outsourced contact centre during the period of peak
demand, but is also assessing the reasons why customers telephone
the Company with the aim of reducing avoidable contact. For example:
the SLC has used stakeholders to pass messages to students; correspondence
is being analysed and clarified; and work with Direct Gov allows
customers to reset their online passwords (which has reduced the
proportion of calls about passwords from 10% in 2009-10 to 4.6%
this year). SLC continues to work with Direct gov to make SLC's
on-line service easier to use.
REVISED PERFORMANCE
TARGETS
The Department has agreed objectives and targets
with the SLC to improve operational performance as recommended
by the NAO in their report. Three targets have been agreed in
the SLC's Annual Performance and Resource Agreement (APRA) letter
around the timeliness of processing applications: (a) making payments
by the start of term in respect of all applications submitted
by the relevant deadline with full supporting evidence; (b) assessing
eligibility for support within two weeks of receiving a fully
completed application; and (c) assessing the student finance entitlement
within four weeks of the eligibility being assessed or within
4 weeks of receiving full financial evidence where this was not
provided with the application. The effect of (b) and (c) is that
the target for complete processing of applications with full supporting
evidence should be within six weeks.
At the end of September, the SLC Balanced Scorecard
reported that SLC had processed for payment by the term start
date 99.3% of fully completed applications submitted by the relevant
deadlines. At the start of the reporting period in April 2010,
the SLC was achieving poor ratings against the other two processing
targets, but by September 100% of applications were assessed for
eligibility within 2 weeks where full evidence is provided, and
97.6% applications were assessed for the student finance entitlement
within the target four weeks.
BIS has provided SLC with additional resources
to improve the processing targets for DSAs. The SLC is responsible
for assessing eligibility for DSAs and, on the receipt of an independent
needs assessment report, determining the level of entitlement.
During the AY2009-10 applications cycle, the target for assessing
eligibility and entitlement for DSAs was 15 days for each of these
stages: in AY201 0-11 this has been reduced to 10 days. At the
end of March 2010, the SLC Balanced Scorecard reported performance
against the 15 day targets in respect of AY2009-10 cases as 51.95%
and 38.6% respectively. It was, therefore, initially proposed
that a target of 20 days be considered appropriate this year.
BIS provided SLC with additional resources to reduce both targets
to 10 days. Inadvertently, Mr Lester informed the Committee that
these targets had been halved to two weeks (10 working days) this
year from a four week (20 day) target last year. The target has
in fact been improved by a third on last year and halved when
compared with the proposed target for this year. We apologise
for this error, which has only recently come to light. While it
took SLC several months to build the internal capacity to meet
this improved target, in September the SLC Balanced Scorecard
showed that SLC was assessing eligibility within 10 days for 100%
of cases and entitlement within 10 days for 92.6% of cases. This
compares with 61.1% and 48.2% against the 15 day targets last
year.
A new target has also been agreed for the processing
of applications for childcare grants in four weeks of SLC receiving
a fully completed application. This target is currently being
met in all cases. Other elements of targeted support, including
Adult Dependents' Grant and the Parental Learning
Allowance are processed with the main application
and included within the 6 weeks processing target.
IMPROVED MANAGEMENT
INFORMATION
The NAO and the Committee criticised the lack
of management information last year which undermined the ability
of the SLC Board and the Department to provide effective oversight
of the Company's operational performance. BIS and SLC officials,
supported by professional expertise from PwC and across government,
have worked to implement the recommendations from the NAO to overhaul
the SLC's management information systems to provide data on processing
applications and handling telephone calls. The SLC now has complete
and coherent management information which is updated daily and
used for operational management. A summary version is sent weekly
to the SLC Board and the Department to ensure effective oversight
of operational performance. This information is also shared regularly
with stakeholders so they are well informed and can challenge
as necessary. Applications for all the categories of targeted
support and applications from part-time students are included
in the management information.
ICT INFRASTRUCTURE.
At the heart of last year's problems was the
failure of the scanning equipment, and the management response
to it, which created processing backlogs which in turn created
an unmanageable number of telephone calls. Scanning was re- launched
on 22 March 2010 and is now operating satisfactorily. To date,
1,163,347 individual items have been successfully scanned. Contingency
plans are in place against any technical failures. The business
case cost for scanning was £1,563,000 with the final outturn
cost being £2,588,000, giving an overspend of £1,025,000.
However, Contact Centre Technologies has yet
to be brought into operation. The system is currently being tested,
with phased delivery planned from November 2010. The business
case cost for the Contact Centre Technologies was £4,550,000
with the forecast outturn being £10,992,000, giving a predicted
overspend of £6,443,000.
OVERALL PROGRAMME
SAVINGS.
Because the Department provided the SLC with
additional resources this financial year, Mr Fraser said at the
hearing that the Customer First Programme would break even a year
later than planned. The original business case showed a six year
payback period to financial year (FY) 2011-12, with cumulative
savings accruing from FY 2012-13: the forecast is now a seven
year payback period to FY 2012-13, with savings accruing from
FY 2013-14. The Department is discussing with the SLC its financial
requirements for the AY2011-12 service. A conclusion will be reached
in time for a final OGC Gate 0 review which is due to be conducted
in January. This will review the strategic business case for Customer
First and the assumptions therein, as well as the benefits realised
so far. To the extent that the Department provides additional
resources compared to the original business case to support the
service in AY2011-12 and beyond, it is likely the benefits will
be further delayed and possibly reduced.
LOOKING AHEAD
As announced on 14 October, how student support
is administrated will be discussed as part of the Government-wide
review of public bodies, and will take account of the Government's
response to the Browne Review which will be developed in a Higher
Education White Paper, expected in the New Year.
BIS has appointed a permanent Chair to the SLC
Board, Mr Ed Smith, who will take up the post from 1st November.
Mr Smith, who has also been re-appointed as Deputy Chair of the
Board of HEFCE, will be able to draw on his expertise in the fields
of leadership and customer service, together with his knowledge
of the higher education sector, to offer strong and effective
leadership of the SLC. SLC can now proceed with the recruitment
of a permanent Chief Executive and four permanent Executive Directors.
We now have a strengthened framework for delivery,
which will allow improvements to continue to be driven forward.
The development of a complete and coherent suite of management
information, alongside enhanced forecasting capabilities, allows
us to recognise where there are still weaknesses and to apply
appropriate resources to address them. Significant steps have
also been taken in building a constructive relationship with stakeholders
in the higher education sector. The Student Finance England Stakeholder
Forum and the working-level groups that sit beneath it have provided
SLC with challenge and support, both in delivering the AY2010-11
applications cycle and in identifying areas to improve the service
in future. In addition, the internal governance structures for
student finance have been reviewed. The SLC leadership team has
been restructured and strengthened and new sub-committees of the
SLC Board provide more opportunity for challenge. BIS has undertaken
a review of its sponsorship function across the Department and
has strengthened its oversight of its partner bodies. The BIS
Management Board has taken a close interest in the SLC's delivery
of the AY2010-11, receiving regular updates on performance. The
Management Board now reviews the top risks across its partner
bodies at each of its monthly meetings.
We acknowledge that the service delivered by
SLC for students starting in academic year 2009-10 was unacceptable
and caused real upset for many students and their families. SIS
and SLC have sought to learn from the events of last year and
the service delivered this year has been much improved. We recognise,
however, that there is still more to do and SIS continues to work
with the SLC to make improvements to the student finance service
so that students and their families receive the service they have
a rig ht to expect.
Annex A
PERFORMANCE IN PROCESSING AND PAYING APPLICATIONS
AND IN ANSWERING CALLS
1. PERFORMANCE
IN PROCESSING
MAINSTREAM APPLICATIONS
FOR THE
ACADEMIC YEAR
2010-11 AS AT
THE START
OF TERM
(SIMILAR TO
FIGURE 8 IN
THE NAG REPORT)
All Students
| Academic year 2010-11-17,
At term start date
|
| Number | %
|
SLC processed New and Returner applicants
| | |
| Applications Received | 691,900
| 100% |
| Of which: | |
|
| Fully processed | 499,600 |
72% |
| Provisional and interim assessments | 41,300
| 6% |
| Not approved—awaiting information |
42,700 | 6% |
| Not approved—awaiting assessment |
108,200 | 16% |
| Of those applications not approved and awaiting assessment
| | |
| Received within six weeks of reporting date
| 31,100 | 29% |
| Received more than six weeks prior to reporting date
| 77,200 | 71% |
Source: Company analysis of its own data
NOTE
Data relate to applications received from new and returner applicants which was not reported by NAO in 2009-10
Data relate to applications received on or before 10 October Figures rounded to the nearest 100 which may cause totals to be different from component figures
| | |
New Students
| Academic year 2010-11
At start date
|
New applicants |
| |
| Applications Received | 396,600
| 100% |
| Of which: | |
|
| Fully Processed | 272,800 |
69% |
| Provisional and interim assessments | 21,500
| 5% |
| Not approved—awaiting information |
29,700 | 7% |
| Not approved—awaiting assessment |
72,600 | 18% |
| Of those applications not approved and awaiting assessment
| | |
| Received within six weeks of reporting date
| 19,000 | 26% |
| Received more than six weeks prior to reporting date
| 53,600 | 74% |
Source: Company analysis of its own data.
NOTE
Data relate to applications received from new applicants only
Data relate to applications received on or before 10 October
Figures rounded to the nearest 100 which may cause totals to be different from component figures
| | |
Returning Students
| Academic year 2010-11
At term start date
|
| Number | %
|
Returner applicants |
| |
| Applications received | 295,200
| 100% |
| Of which: | |
|
| Fully Processed | 226,900 |
77% |
| Provisional and interim assessments | 19,800
| 7% |
| Not approved—awaiting information |
13,000 | 4% |
| Not approved—awaiting assessment |
35,600 | 12% |
| Of those applications not approved and awaiting assessment
| | |
| Received within six weeks of reporting date
| 12,000 | 34% |
| Received more than six weeks prior to reporting date
| 23,600 | 66% |
Source: company analysis of its own data.
NOTE
Data relate to applications received from returner applicants only. They were not reported by NAO in 2009-10.
Data relate to applications received on or before 10 October
Figures rounded to the nearest 100 which may cause totals to be different from component figures
| | |
2. THE NUMBER
OF APPLICATIONS
FOR DISABLED
STUDENTS ALLOWANCES
FOR THE
ACADEMIC YEAR
2010-11 RECEIVED, AND
NUMBERS PAID,
AS AT
THE START
OF TERM
At 8 October 2010
| New applicants |
Returners processed by SLC | Total SLC
|
Received | 16,000
| 2,200 | 18,200 |
| Approved | 5,200 | 2,200
| 7,400 |
| Rejected or cancelled | 300
| 0 | 300 |
| Payments made | 3,300 |
700 | 4,000 |
Note: The 3,300 new applicants paid compares to 800 at the same point in 2009-10 and 2,200 at the same point in 2008-09.
| | | |
3. PERFORMANCE AGAINST
TARGETS IN
THE SLC'S
ANNUAL PERFORMANCE
AND RESOURCE
AGREEMENT FOR
APPLICATION TIMELINESS
Mainstream Applicants
(i) 99% of core applications, new and continuing, received
before the deadline processed before the start of term
Performance at end of September: 99% (Green—target
met)
(ii) 95% of applications new and continuing, received
before and after the deadline, assessed for eligibility within
two weeks
Performance in September: 100% (Green—target met)
Year to Date: 97% (Green—target met)
(iii) 95% of evidence assessed to confirm full entitlement
within four weeks of eligibility for student finance being confirmed,
or within four weeks of the evidence being received where it is
not provided with the application.
Performance in September: 97.5% (Green—Target met)
Year to Date: 59.7% (Red—unacceptable)
Targeted Support
(i) 95% of Disabled Student Allowance applications processed
within two weeks of receipt
Performance in September: 100% (Green—Target met)
Year to Date: 79% (Red—unacceptable)
(ii) 95% of Disabled Student Allowance needs assessment
reports processed within two weeks
Performance in September: 92.6% (Green-amber—target
met)
Year to Date: 94.1% (Green-amber—below target)
(iii) 95% of Childcare Grant applications (with estimated
costs) processed within 4 weeks of receipt
Performance in September: 100% (Green—target met)
Year to Date: 94.1% (Green-amber—below target)
(iv) 95% off Childcare Grant applications (with actual
costs) processed within four weeks of receipt
Performance in September: 100% (Green—target met)
Year to Date: 100% (Green—target met)
4. AVERAGE PROCESSING
ITEMS FOR
ACADEMIC YEAR
2010-11
Mainstream Applications
| At 10 October
|
| Average time (weeks) to fully process an application
|
| (All) | (Online)
| (Paper) |
New applicants and returning students 2010-11 academic year (processed by SLC)
| 9.9 | 10.2 | 8.4
|
| New applicants | |
| |
| 2010-11 academic year (processed by SLC) |
10.8 | 11.2 | 9.6
|
| Returning students | |
| |
| 2010-11 academic year (processed by SLC) |
8.7 | 9.1 | 6.4
|
| 2010-11 academic year (processed by Local Authorities
| 5.6 | 6.9 | 2.1
|
Source: Company analysis of its own performance data.
NOTE
Data relate to applications received from new and continuing applicants processed on or before 10 October 2010.
Average processing times in the NAO report for 2009-10 were calculated at 31 January.
| | | |
Disabled Students Allowances
| At 8 October |
| Average time (weeks) |
New applicants | 17.8
|
| Returners processed by SLC | 14.7
|
NOTE
Average processing time is from receipt of application to payment of first invoice.
| |
5. PERFORMANCE OF
THE SLC CONTACT
CENTRE IN
ANSWERING CALLS,
FROM FEBRUARY
TO SEPTEMBER
2010 INCLUSIVE
| Date | Feb-10 |
Mar-10 | Apr-10 |
May-10 | June-10 |
Jul-10 | Aug-10 |
Sep-10 |
Call volumes | 345,164
| 434,092 | 642,574 | 513,929
| 667,063 | 595,652 | 7,903
| 8,500 |
| Network Terminations | 7,858 |
8,990 | 30,654 | 4,379
| 22,378 | 5,954 | 7,903
| 8,500 |
| Completed in IVR | 75,077 |
93,250 | 146,896 | 114,518
| 140,001 | 127,057 | 146,441
| 192,966 |
Calls Answered
(Agent) | 252,901
| 311,347 | 374,679 | 376,717
| 453,503 | 443,937 | 538,495
| 694,033 |
Calls abandoned
(Agent) | 9,601
| 20,505 | 90,345 | 18,315
| 51,181 | 18,704 | 21,450
| 30,337 |
| |
| | | |
| | |
Annex B
PROGRESS AGAINST THE RECOMMENDATIONS MADE THE NAO'S REPORT
"THE CUSTOMER FIRST PROGRAMME: DELIVERY OF STUDENT FINANCE"
(EXCLUDING RECOMMENDATION F DIRECTED AT THE GOVERNMENT)
RECOMMENDATION A
The Department and Company must do everything possible to
avoid repeating the serious failings of 2009. In particular, the
Department should:
— Develop clear, customer-focused targets for all loans,
grants and allowances covering the process from application to
approval.
The Department and SLC agreed revised, customer-focused targets
for the 2010-11 financial year to capture the end to end process
for applications processing from application to approval. These
targets were translated into a published Customer Promise to make
clear the level of service that students and their families can
expect when applying for student finance.
— Improve its oversight of operations, including by
obtaining professional expertise to advise on service readiness.
Following the publication of the NAO's report in March 2010,
the Department commissioned PwC to provide a professional view
of the SLC's readiness to deliver the AY2010-11 applications cycle.
This led to the appointment of a strengthened SLC leadership
team and engagement by SLC of a team from PwC to provide expertise,
including in programme management, to support SLC managers and
boost SLC's capacity and capability in delivering an improved
AY2010-11 applications cycle.
— Strengthen the Programme Board to include the right
skills.
The Customer First Programme Board is being closed down and
has been replaced with a revised governance structure to ensure
clearer lines of accountability and that the right skills are
included.
— Ensure the Company is not overburdened with change
requirements during 2010
Complex policy changes have not been introduced in 2010.
However, late decisions on the requirements for the AY2011-12
applications cycle have led to a delay in the launch of the service
and this will need to be closely managed.
RECOMMENDATION B
The Department and the Company's Board should actively monitor
the Company's implementation of the following actions:
— Deploy sufficient, flexible resources to process applications
and handle customer contact to at least the standards agreed with
the Department during 2010.
SLC has cross-trained 50 call centre advisers in application
processing and has used outsourced contact centre resource to
provide sufficient flexible resources to manage peaks in demand
during the applications cycle. The SLC has consistently delivered
to the contact centre performance standards agreed with the Department.
SLC has improved its performance in applications processing during
the first half of the year and is now delivering to the performance
standards agreed with the Department in this area.
— Activate robust contingency plans in the event that
significant backlogs start to develop.
The SLC have developed robust contingency plans for a wide
range of eventualities in the delivery of the student finance
service, including to manage significant backlogs in applications
processing.
— Reduce unnecessary calls, through proactive and frequent
communications with customers and stakeholders, for example, by
letting applicants know when they will receive their finance.
The SLC has developed an avoidable contact strategy to tackle
the reasons for customer contact and reduce the overall demand
on the contact centre. For example: the SLC has used stakeholders
to pass messages to students; correspondence is being analysed
and clarified; and work with Direct Gov allows customers to reset
their online passwords (which has reduced the proportion of calls
about passwords from 10% in 2009-10 to 4.6% this year). SLC continues
to work with Direct gov to make on-line easier to use.
— Establish an improved management information regime
to track operational performance.
SIS and SLC officials, supported by professional expertise
from PwC and across government, have worked to overhaul the SLC's
management information systems. The SLC now has a comprehensive
and joined up set of management information updated on a daily
basis. The management information covers the end-to-end application
process, including targeted support, and the performance of the
contact centre and has continued to develop as the applications
cycle has progressed. This information allows SLC to identify
weaknesses and apply appropriate resources to address them.
— Use the recruitment of new executives to drive through
a real improvement in the Company's Culture and quality of management
throughout.
The appointments of Professor Sir Deian Hopkin as interim
Chair and Ed Lester as interim Chief Executive, alongside a high-quality
interim Chief Operating Officer, has improved the quality of management
at the SLC and introduced a culture that is more clearly focussed
on the customer. This will need to be driven through the Company
by a permanent leadership team. Ed Smith will formally take up
his appointment as permanent Chair on 1st November. Mr Smith will
be able to draw on his expertise in the fields of leadership and
customer service, together with his knowledge of the higher education
sector, to offer strong and effective leadership of the SLC.
RECOMMENDATION C
The Department and Company urgently need to strengthen their
relationship so that there is mutual trust, open communication
and shared understanding of how to deliver the service this year.
The relationship between the Company and Department has been
strengthened. Ways of working and working relationships are now
much improved and are supporting a shared understanding of risk.
Governance arrangements have been revised with a new programme
structure in place for student finance policy and delivery. This
involves BIS and SLC officials at each level, with regular meetings
to enable more open communication and development of a shared
understanding of how to deliver the service.
RECOMMENDATION D
The Department must undertake an urgent options appraisal
to determine how best to deliver the service from 2011 onwards
if the service should fail to improve radically. Options should
include:
— continuing with the Company;
— appointing an alternative provider to deliver part
of the service, such as targeted support; and
— appointing an alternative provider to replace the
Company in delivering the entire service.
There has already been significant change in the leadership
of the SLC this year, with a new interim Chair and new interim
Chief Executive in place since the end of May, as well as three
other interim Directors and three new non Executive Directors.
This is effectively a change in the management of the SLC. The
Department has also provided additional resource so the SLC can
draw specialist operations and programme management skills to
support a more stable operation in AY2010-11. As announced on
14 October, the way student support is administrated is being
debated as part of the Government-wide public bodies review process.
The future of the SLC will be considered as part of the Government's
response to the Browne Review which will be developed in a Higher
Education White Paper, due to be published by the New Year.
RECOMMENDATION E
The Department and Company should work together to simplify
the Student Finance England service through streamlining processes
and regulations, and pressing ahead with the planned improvements
in technologies, prioritising those which offer the clearest value
for money.
The Department and the Company have worked together, supported
by professional expertise from PwC, to identify and implement
improvements to streamline processes to improve the delivery of
the service. Improvements in technology, including the introduction
of a more user-friendly online application process and the facility
to make changes of circumstances online, are starting to make
the process easier for customers. Simplification of student finance
policy and regulations will be considered as. part of the Government's
response to the Browne Review which will be developed in a Higher
Education White Paper, due to be published by the New Year.
29 October 2010
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