Customer first programme

Under the Customer First Programme, delivery of grants and loans to higher education students in England is being transferred from local authorities to the Student Loans Company (the Company), a non-departmental public body of the Department for Business, Innovation and Skills (the Department). In 2009 the Company began assessing applications from new students; by 2011 it will be responsible for applications from all students in England. Performance in processing applications and communicating with students in this first year was completely unacceptable. Many students waited weeks or months for their financial support. Fewer than half of all applications were fully processed by the start of term, and applications took on average a third longer to process than local authorities had achieved. The Company answered fewer than half the calls it received in 2009; in September 87% of calls went unanswered. Disabled students suffered disproportionately in 2009, as the Company devoted too few staff to processing their applications. The Company also demonstrated a number of IT failings in 2009: most importantly, it did not sufficiently test its crucial document scanning - the failure of which was the catalyst for the failure of the entire system. The Department underestimated the risks in centralising the service, the Programme Board lacked skills and experience, and there was poor communication between the Programme Board, the Company's Board, and the Department. There has been limited improvement in 2010 but uncertainties remain over the Company's ability to deliver and maintain a service that provides value for money.