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 at the Student Loans Company. The Company was "expecting to resolve any teething problems as they arose", said the National Audit Office which adds:
"The Company and its supplier were, however, unable to scan work at the required volumes and after seven weeks' delay the Company decided to introduce a manual process".
Backlogs built up so that by 6 September, at the start of term, 241,000 applications remained outstanding. There were so many provisional and interim payments made that by the end of January this year 80,000 of these payments still hadn't been finally verified.
At this time 18,000 applications had received neither a provisional, interim nor full assessment.
In the 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 of applications for loans were already building up, according to the NAO. The scanning technology had already been supplanted by manual processes.
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 April 2006, 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 made six recommendations to improve performance of the Programme, two of which 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 NAO report - 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 reviewers can continue to get £1,000 a day, or thereabouts, for writing reviews they 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 is quite extraordinary. The Company didn't tell students when they would get their money, its contact centre staff couldn't answer queries and the Company's electronic document scanning system didn't work.
"Then, as the volume of calls grew dramatically, the Company put frantic students and parents on hold. At best, fewer than half of those phoning the company got through but at the height of the loans crisis, almost nine out of ten calls went unanswered.
"This must never happen again. The Department and the Student Loans Company should apologise to students and their families for failing them in such an abysmal manner. The Company must also make sure that it has acted on the National Audit Office's recommendations in good time 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 the Student Loans Company underestimated, and therefore did not do enough to mitigate, the significant risks in integrating the student finance service previously carried out by 130 separate local authorities.
"Both bodies failed to grasp the magnitude of problems that were developing in 2009 as applications for loans, grants and allowances piled 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 becomes responsible for applications from both first and second year students.
"The Department and the Company must give the highest priority to achieving a radical improvement in the service and, in so doing, to restoring the confidence of applicants and stakeholders. They will have to manage substantial risks."
Edward Leigh, chairman of the Public Accounts Committee said:
Having chaired the Committee of Public Accounts for eight years, I have seen my fair share of public administration failings. But I must say that the litany of shortcomings in this instance is particularly appalling."
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