Spending watchdog the National Audit Office is investigating another government IT-based disaster, this time at the Student Loans Company.
Problems with scanning equipment set off a chain of events that caused chaos at the Company.
Tens of thousands of students did not receive loans, allowances or grants on time - and the technology problems which triggered the chaos may still be unresolved.
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The National Audit Office is studying the Student Loans Company's "Customer First" modernisation under which 90% of students submitted their applications online.
Students were "timed-out" or were unable to progress their applications past certain pages even though they had input the correct information. Paperwork to support their applications was lost or not scanned in correctly.
The NAO is due to report in Spring 2010.
A separate independent report on the fiasco was published yesterday, written by a professor, Deian Hopkin, who until this year was Vice Chancellor and Chief Executive of London South Bank University.
His report says: "At the time of writing, this review had not received any assurance that the scanning problems had been resolved"
The professor's report shows that the Student Loans Company has repeated some of the problems found after the failure of other Government IT-based projects and programmes:
- The Company put problems down to "teething troubles" which employees hoped - wrongly - would be resolved.
- During this time ministers were given reassurances that problems would be solved.
- A "can-do" attitude stopped bad news travelling upwards within the organisation. The Hopkin report finds that "non-executive members of the Board of Directors only discovered the full extent of the problems from media reports or indirectly from others".
- When critical scanning technology failed "the Company had to resort to manual processing for which it was not fully prepared".
- There was "over-optimism" in the technology which meant that manual back-up processing was delayed "the consequences of which were far reaching".
- The Company did not tell the whole truth to the media, which had received emails from students angered by having their applications delayed or not processed at all. The Company revealed problems only when confronted with requests under the Freedom of Information Act.
- At its worst the Company was answering only 5% of incoming calls. In the first week of September 2009 nearly 1.5 million calls were made.
- The Company blamed media interest in the troubles for the high number of calls. But people who hadn't had their queries answered kept ringing, or shared their bad experiences of the Company on dedicated Facebook sites.
- The Company issued self-praising internal reports while the problems got worse.
The Hopkin report said: "New students this year have experienced real and significant problems in applying for financial support and in contacting the Student Loans Company."
It's unclear how much effect the Hopkin report - which attacks the culture of the organisation - will have. The Student Loans Company is even now reporting largely positive messages on its website.