David Willetts

Previously unseen documents released under Freedom of Information show the Government’s key role in the decisions which led to this year’s student loans chaos. Tens of thousands of students will begin university tomorrow without loans and grants after administrative chaos led to severely delayed applications, loss of identification documents and thousands of unanswered helpline phone calls.

The minutes of Board Meetings of the Student Loans Company (SLC) reveal:

• In July 2008 - a year before problems became public - the SLC forecast that 40 per cent of phone calls would go unanswered and there were three times as many emails coming in as it was possible to deal with.
• Confirmation in November 2008 that 250,000 phone calls went unanswered in just three months.
• The official adoption, at the same meeting, of an ‘avoidable contact’ policy, to reduce the amount of time staff spent on the phone, in order to achieve savings.
• A senior official from the universities department in January 2009 instructing the SLC to cut costs further, immediately after hearing about the high number of unanswered phone calls.
• The SLC is using an 0845 number - against official OFCOM guidance - so callers must pay up to 10p a minute to call, and some of the revenue can be ‘shared’ with the SLC.

Shadow Universities and Skills Secretary, David Willetts said:

“We were led to believe that this year’s problems with student loans were the result of a simple increase in applications but increasingly it looks like the seeds of disaster were sown by the Government months ago.

“The chaos that students are now experiencing is a direct result of a toxic combination of bad Government guidance and shocking operational decisions. Under orders from the universities department, the SLC chose to ignore many thousands of phone calls in a bid to cuts costs. When the Government then gave them the extra responsibility for processing applications as well as recouping repayments the system completely buckled under the pressure.

“Now that we know that senior departmental officials were involved in all these meetings where the problems were discussed, it’s vital that ministers tell us exactly when they knew about the problems and what steps they took to sort them out. Ministers must answer for their role in this year’s chaos.”

Students Loans Crisis - seeds of disaster sown months ago

Ministers have so far tried to dismiss the student loans crisis as ‘regrettable’ and attributed the problems to a higher than normal number of applications. Lord Mandelson said in a letter to David Willetts on 17th September 2009, ‘as you know, demand for university is up this year and this has put some pressure on the LSC’s helplines.’

But the SLC’s helplines have been experiencing problems for months as they deliberately reduced the number of incoming calls answered in order to cut costs, under instruction from the universities department.

SLC forecasts 40 per cent of calls going unanswered

SLC directors were aware of serious problems in the customer service centre as long ago as July 2008. At a meeting of the Operational Delivery Board in Darlington on 15th July 2008, senior directors were told that:

“Overall resource levels were too low to handle the total demand for contact across all channels.”

• “average handling time was increasing” due to “low levels of staff availability”
• The company forecast that 40% of all calls would be abandoned because customers would find the line engaged.
• There were also problems with the email inquiry service, with the customer service centre “receiving 3 times as many Emails a day as it was possible to process and that as a result the email service could not be consistently made available.”

http://www.slc.co.uk/pdf/Operational%20Delivery%20Board%20Minutes%20-%2015th%20July%202008.pdf

‘Avoidable contact’ policy adopted after confirmation of 250,000 unanswered calls

In 2008 the SLC adopted an official policy of discouraging staff from talking to students on the phone in order to save money. At a meeting of the Board of Directors on 25th November 2008:

• Customer Services Director Dr Martin Herbert criticised the fact that contact centre staff were “spending an excessive amount of time on the phone to customers”.
• SLC Chairman Keith Bedell-Pearce said that “avoidable contact via call centres was … an area where considerable savings could be achieved.”
• Bedell-Pearce told the other directors that there had been a 13.9% increase in phone calls in the second quarter of 2008/9 and said “the Company should be looking to develop the area of avoidable contact” as a means of addressing this.
• Non-Executive Director Sandra Arkle suggested “proactively encouraging online take-up and e-mail contact” in order to address the problem.

http://www.slc.co.uk/pdf/FOI%20Main%20Board%20Minutes%20-%2025th%20November%202008%20(KBP).pdf

DIUS instructs SLC to cut costs further

On 27 January 2009, senior DIUS civil servant Michael Hipkins attended a meeting of the Board of Directors in Glasgow:

· Finance Director Les Campbell told him that “there was a significant gap between what the Company believed it required and what DIUS could provide” and warned that “service standard levels may eventually be affected“.

· Chief Exec Ralph Seymour-Jackson “advised that Board that the Company have never applied for resources to answer all phone calls and accepted that at peak times, service levels would worsen”.

· Hipkins responded that “there are significant funding pressures and that DIUS expected efficiency savings within the Company to have an increased focus.”

http://www.slc.co.uk/pdf/A.3%20FOI%20Main%20Board%20Minutes%20-%2027th%20January%202009%20(JG).pdf

SLC uses 0845 (NTS) number

The SLC helpline number is an 0845 (Number Translation Service or NTS) number so each call costs up to 10p a minute. 0845 numbers are commonly used for ‘revenue sharing’ - money from the call can be paid to the recipient so they can cover their costs or even make a profit. Government guidance explicitly recommends that public bodies should not use NTS numbers:

• “Ofcom continues to recommend that public bodies should not use NTS numbers exclusively (ie: without giving equal prominence to a geographic alternative) especially when dealing with people on low incomes or other vulnerable groups.”

http://www.ofcom.org.uk/media/news/2006/04/nr_20060419

Thousands of students begin university tomorrow

Many university terms, such as the University of Leeds, begin on Monday 28 September, with Freshers’ Weeks starting tomorrow, Monday 21 September:

http://www.leedsuniversityunion.org.uk/news/article/6003/227/