Did OGC Gateway Review process let down Student Loans Company?

             Or did Student Loans Company tell Gateway reviewers part-truths?

Today’s report by the National Audit Office into the Student Loans Company’s “Customer First” IT-based programme found that OGC Gateway reviewers got it badly wrong.

A Gateway review in the midst of a crisis, in July 2009, put the “delivery confidence” in the ability of the Student Loans Company to make payments by the start of term in September 2009 at “amber/green”.

Yet months before that Gateway review, a crisis had begun to unfold.

Instead of confronting it, the Company appears to have taken the approach of Henry Kissinger who said, “There can’t be a crisis next week. My schedule is already full.”



In April 2009 before being fully tested, a scanning system went live atthe Student Loans Company. The Company was “expecting to resolve anyteething problems as they arose”, said the National Audit Office which adds:

“TheCompany and its supplier were, however, unable to scan work at therequired volumes and after seven weeks’ delay the Company decided tointroduce a manual process”.

Backlogs built up sothat by 6 September, at the start of term, 241,000 applicationsremained outstanding. There were so many provisional and interimpayments made that by the end of January this year 80,000 of thesepayments still hadn’t been finally verified. 

At this time 18,000 applications had received neither a provisional, interim nor full assessment.

Inthe middle of this chaos, in July 2009, came a positive Gateway review.It was early enough to provide a loud warning. But it wasn’t published.And in any case it was wrong.

By July 2009 large backlogs ofapplications for loans were already building up, according to the NAO.The scanning technology had already been supplanted by manualprocesses.

Students had made their applications by the deadlines months before.They needed the money before the start of term in September 2009. 

This is what the NAO report says of the “increasingly positive” Gateway reviews and the final  amber/green one:

“The Programme is inherently high risk because it involves: 

–  centralising a service provided by around 130 local authorities with a large number
–  challenging and cyclical work, governed by complex regulations
–  some new IT and business processes
–  mostly new staff working under new management.

 “Many of these risks were highlighted at an early stage. In April2006, consultants commissioned by the Department [for Business,Innovation  and Skills] identified the delivery model as ‘high risk’.

“In March 2007, an Office of Government Commerce Gateway Review madesix recommendations to improve performance of the Programme, two ofwhich were urgent, resulting in an overall ‘Red’ RAG (Red/Amber/Green)status.

“Subsequent Gateway Reviews were, however, increasingly positive:

– in February 2008 the Programme was assessed as ‘Amber’

– in July 2009 the OGC assessed the Programme’s ‘delivery confidence’ as ‘amber/Green”

This suggests that the Gateway review process didn’t have the benefit of being pointless: it was misleadingly wrong.

The Public Accounts Committee will question civil servants on the NAOreport – though it may be a PAC formed by the next government.

The committee MPs may wish to ask whether Gateway reviewers should always remain anonymous.

With anonymity and no sanctions for getting it wrong, Gateway reviewerscan continue to get £1,000 a day, or thereabouts, for writing reviewsthey can never be held accountable for.

Not even their reports are published.

The failures at the Student Loans Company show that the OGC Gateway Review system needs strong independent external scrutiny. 

**

Richard Bacon MP, a member of the Public Accounts Committee, said of the NAO report on Student Loans:

“The extent of the Student Loans Company’s meltdown isquite extraordinary.  The Company didn’t tell students when they wouldget their money, its contact centre staff couldn’t answer queries andthe Company’s electronic document scanning system didn’t work. 

“Then, as the volume of calls grew dramatically, the Company putfrantic students and parents on hold.  At best, fewer than half ofthose phoning the company got through but at the height of the loanscrisis, almost nine out of ten calls went unanswered.  

“This must never happen again.  The Department and the Student LoansCompany should apologise to students and their families for failingthem in such an abysmal manner.  The Company must also make sure thatit has acted on the National Audit Office’s recommendations in goodtime for the start of the 2010-11 term”. 

Amyas Morse, head of the National Audit Office, said today:

“The Department for Business, Innovation and Skills and theStudent Loans Company underestimated, and therefore did not do enoughto mitigate, the significant risks in integrating the student financeservice previously carried out by 130 separate local authorities.

“Both bodies failed to grasp the magnitude of problems that weredeveloping in 2009 as applications for loans, grants and allowancespiled 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 becomesresponsible for applications from both first and second year students.

“The Department and the Company must give the highest priority toachieving a radical improvement in the service and, in so doing, torestoring the confidence of applicants and stakeholders. They will haveto manage substantial risks.”

**

Edward Leigh, chairman of the Public Accounts Committee said:

Havingchaired the Committee of Public Accounts for eight years, I have seenmy fair share of public administration failings. But I must say thatthe litany of shortcomings in this instance is particularly appalling.”

Links:

Student Loans Company’s Customer Programme – NAO report 19 march 2010

IT that sparked Student Loans crisis may still be faulty – ComputerWeekly.com

Student Loans – the wrong resignations? – IT Projects Blog

Students left penniless by Student Loans meltdown says PAC MP Richard Bacon – Blogminster

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