£2m bonuses for loans firm staff

Some tens of thousands of students were left without payments

Staff at the Student Loans Company received almost £2m in bonuses last year, figures revealed.

The payouts, some of them five figure sums, were made while a system that has left thousands of students waiting for grants and loans was being developed.

The Liberal Democrats, who uncovered the bonuses under Freedom of Information laws, said rewarding failure was unacceptable.

The SLC said it operated a bonus scheme structure to reward hard-working staff.

SLC admitted that some £1,893,500 was paid in bonuses during 2008-09. Three bosses received £21,000 bonuses, while two got payouts of £15,000 and five were given £10,000.

Some 1,603 of the SLC's 1,876 staff picked up rewards.

While students have been left struggling to make ends meet, the company's top executives have been enjoying five-figure bonuses Stephen Williams Lib Dem universities spokesman

The figures also showed senior executives racked up an expenses bill of £110,596.31 - £28,000 more than the previous year. In total staff claimed more than £1.2m in expenses, up from £793,000 in 2007-08.

Ministers ordered an inquiry after tens of thousands of students who had applications approved were left without funding at the start of the new academic term.

This year was the first time first year students applied directly to the SLC for grants and loans.

The new arrangement has been beset by problems as the Glasgow-based firm struggled to cope with a higher number of undergraduates and deal with technical problems.

Lib Dem universities spokesman Stephen Williams said: "It is absolutely outrageous that the Student Loans Company, which has acted so incompetently this year, has been paying out these massive bonuses.

"While students have been left struggling to make ends meet, the company's top executives have been enjoying five-figure bonuses.

"Some of these pay-outs are more than many people earn in a year. Rewarding failure in this way is totally unacceptable."

An SLC spokesman said the bonuses were for last year's work and that decisions on this year's bonuses would be made in due course.

"Employees' objectives are monitored throughout the year and they are given an individual performance assessment at the end of the year."