Lend loose

PhilHunt2015.jpgPhilip Hunt on the ongoing problems within the Student Loans Company and the need for greater parliamentary scrutiny of its performance

Students facing ever increasing debt and a whopping 6.1% interest rate are also having to contend with the catastrophic performance of the Student Loans Company (SLC). A recent review found the organisation plagued by bullying, low morale and high sickness rates, with disillusioned employees taking to recruitment websites to warn of substandard systems, inadequate training and poor management.

Students can find it a bureaucratic nightmare to deal with the company’s inadequacies. Every year a growing number of graduates have been forced to overpay – in some cases as much as £10,000. Three years ago, the SLC was accuse of using controversial tactics akin to those of the worst of pay day loan companies.  

There have also been allegations that some private providers are able to effectively defraud the SLC and the wider public purse. Places been given to students known not to be attending classes; while others have had advice on how to purchase assignments written by a third party. Given the government’s plans to encourage private sector providers of higher education, serious questions arise about the ability of SLC to prevent significant abuse.

The latest calamity to befall the SLC is the dismissal of the Chief Executive Steve Lamey, following an investigation regarding ‘allegations about aspects of his management and leadership’. Two months earlier however, he rather oddly received an outstanding performance review.

Last week, The Times reported the real reason for his sacking – his open admission to a conference of university administrators that the organisation was a mess. Mr Lamey claims his dismissal is the result of an orchestrated campaign to discredit him, after attempting to reform the organisation. And the newspaper also had access to an external review that commended him for the positive difference he had made to the company.

The SLC is wholly owned and funded by the UK Government and devolved administrations. It carries a loan book of £100bn, yet there is little transparency or accountability to Parliament for its performance – a point forcibly made by our Higher Education spokesperson in the Commons, Gordon Marsden.

Without a huge improvement, existing graduates and students will continue to have their confidence eroded in a system in which they end up with so much debt. In the Lords today, I will ask Ministers what action is being taken to turn the SLC around. With an interim CEO shortly in place and a permanent appointment some months off, Parliament should know of any ongoing issues. Only then, can MPs and Peers properly scrutinise and challenge both the eventual new appointment and any further related policy decisions.

Lord Philip Hunt of Kings Heath is a member of Labour’s front bench team in the House of Lords

Published 21st November 2017

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