Conclusions and recommendations
1. It is completely unacceptable that, by
the start of term in autumn 2009, the Company had fully processed
only 46% of students' applications.
Performance did improve in 2010, to the extent that 69% of new
applications were fully processed by the start of the autumn term
although there were still 100,000 cases (one in four) which were
not sufficiently advanced to enable any payment to be made before
the start of term. The Company has a target to process applications
within six weeks of receipt and for 2011 it should guarantee to
make at least an interim payment on all eligible applications
submitted more than six weeks before terms starts. The Department
should provide the Committee with a further Memorandum on performance
next October. We expect to see a step change in performance to
give us the assurance that proper value for money is secured from
this programme.
2. Targets set by the Department to measure
the Company's performance in 2009 were inadequate to monitor its
performance effectively. The main target
set by the Department was wrong. It measured whether applications
had been partly processed rather than fully processed.
The Department and the Company must develop clear, customer-focused
targets for all loans, grants and allowances covering the full
process from application to approval and payment.
3. The Company's service to students applying
for Disabled Students' Allowances in 2009 was significantly worse
than its overall service, with fewer than a quarter of the 17,000
applicants having received payment by the end of December 2009.
The Company deployed too few people to process these applications
in 2009. In 2010 the Company has doubled
the resources it devotes to the processing of Disabled Students'
Allowances, which is welcome. However, it was still taking nearly
18 weeks to process these applications from new students, and
this is unacceptable. The Company must work with the Department
to set stringent targets for processing applications for Disabled
Students' Allowances and ensure sufficient resources are in place
by next summer to provide a better service for disabled students.
4. It is completely unacceptable that 56%
of telephone calls to the Company went unanswered in the year
to January 2010, and this figure peaked at 87% in September 2009
- when students needed to know whether they would get money in
time for the start of term. The Committee
expects the Company to achieve the industry best practice standard
of answering at least 95% of calls. We note that the Company's
performance improved in 2010, answering 96% of telephone calls
in the peak period of August to September. The Company now needs
to bring its target into line with best practice and maintain
its performance at or above that level.
5. The Company did not adequately test its
document scanning system before going live, and could not cope
when the system subsequently failed. The
scanning system is crucial to the timely processing of applications
and the Department should assure itself that the Company now has
robust contingency plans for maintaining an effective service
in the event that the scanning system, or other aspects of its
IT, fails again.
6. The Programme has been dogged by significant
delays and cost overruns, notably IT systems. The
Department's plans for achieving financial savings of £20
million a year from 2011-12 have slipped to 2012-13, and it now
considers that these savings might be delayed further and possibly
reduced. At a time when the Department is facing financial challenges,
it is imperative that it achieves the planned savings once the
service to the public has been improved and stabilised. The Department
should seek increased efficiency at the Company through faster
processing and minimising the need for telephone contact with
applicants.
7. Governance arrangements to oversee the
programme failed to identify or address emerging risks and problems.
The Programme Board lacked the requisite skills and experience,
the three sub-programme boards failed to escalate awareness of
emerging risks, and the Company's Board itself was consequently
unaware of serious problems with the processing of applications.
The Department and the Company should review whether the revised
governance structure successfully addresses the weaknesses in
the old Programme Board. They should ensure there is full and
open communication between all tiers of management, including
robust challenge and interrogation of management information and
emerging risks.
8. The Department failed to take prompt action
to address serious problems with the Student Loans Company.
For example, despite the unacceptable delays in processing applications
in time for the 2009/10 academic year, and the Hopkin Review's
recommendations of December 2009, the Company's Chair and Chief
Executive were not replaced until May 2010. The Committee is disappointed
that the responsible officials in the Department appear not to
have been held accountable for their failures. We believe improvements
can only be secured when the civil service ensures proper accountability
and responsibility for successes and failures. The Committee expects
the Department to provide assurance that in future it will closely
monitor the performance of the Company, and indeed that of other
bodies within the Departmental group, and intervene quickly and
decisively wherever the quality of service being provided to users
falls short of the standards expected.
9. The failings in the design and execution
of the Customer First Programme have been seen in other programmes
sponsored by the Department and more widely across other government
programmes which are delivered by arm's length bodies. These include
weaknesses in management information, target setting, testing
IT systems, piloting, risk management and departmental oversight.
We are particularly concerned that in this case the OGC Gateway
review process did not surface the problems.
The Treasury has responsibility for disseminating lessons across
government and should write to the Committee to explain how it
will draw the lessons from this report to wider attention. The
Cabinet Office Efficiency and Reform Group should examine the
operation of the OGC Gateway process in this case to see if improvements
can be made to ensure it operates as intended and provides early
notification of problems.
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