Page last updated at 18:11 GMT, Tuesday, 22 December 2009

Student Loans Company directors resign after delays

Generic image of students in science lab
Delays left many students needing emergency loans

Two directors at the Student Loans Company have resigned in the wake of a damning report on payment delays.

Its heads of customer services and information and communication technology have left, the firm said.

The company said its board was taking "immediate and decisive action" on Prof Sir Deian Hopkin's recommendations.

His inquiry had examined the delays in payments to students which forced universities to pay out hundreds of thousands of pounds in emergency funds.

Its report, published two weeks ago, concluded that information and communications technology (ICT) and communications failures lay at the heart of the problems.

A system for scanning students' documents failed and there was no adequate backup, it said.

When people tried to contact the loans company, as many as 95% of their phone calls went unanswered - while information for universities, other interested parties and the news media was also not forthcoming.

We are determined to do whatever it takes to ensure processing and payments are faster next year
Student Loans Company

In response, the company said it was strengthening and restructuring its senior management team.

ICT director Wallace Gray and marketing and customer services director Martin Herbert have left.

A new chief operating officer, reporting to the chief executive, would be appointed to oversee service delivery and risk management, the firm said.

'Sorry again'

Deputy chief executive Derek Ross would take up a new role as managing director of its Student Finance England service - the service which has failed to make the payments of grants and loans to tens of thousands of students.

But the board also said it could be another two years before the service was running properly.

"Achieving the full vision for Student Finance England service was always supposed to be a three-year process and it is clear that there are significant lessons to be learned from the first year of operation," the company statement said.

"We are determined to do whatever it takes to ensure processing and payments are faster next year, so that we can deliver the service that students and their parents have every right to expect."

A director of human resources would be appointed to drive through a change in culture, it said.

It welcomed the setting-up by England's higher education minister of a Student Finance England Stakeholder Forum with representatives from the National Union of Students, higher education institutions and the admissions service, Ucas.

"We would like to say sorry again to those customers who have been so let down by us over the last few months," the statement concluded.

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