Corporate report

Independent Assessors’ Annual Report 2021/22

Published 8 February 2023

1. Introduction

The Independent Assessors (IAs) are appointed by the UK and Welsh Governments to consider appeals and complaints by customers who are not satisfied with the responses they have received from the Student Loans Company Limited (SLC). This is our annual report for the financial year 2021/22 and covers cases on which we have reported in the twelve months to 31 March 2022. It sets out the background to our work and the role we play, describes our caseload during the year, and draws out some themes from it. The report then refers to the role of ombudsmen in considering SLC cases and concludes with some recommendations.

2. Background

There are presently nine IAs, as there were at the start of the year, but the number has fluctuated during the year because of resignations and a recruitment exercise.

Our appointments are statutory and are made under section 23(6) of the Teaching and Higher Education Act 1998. Student finance customers have access to an IA if they remain dissatisfied after two formal stages of appeal or the now single-stage complaint process within the SLC.

Responsibility for the SLC and for our appointments lies with the Department for Education (DfE) within the UK Government and with the Department for Education and Skills in Wales. All our reports are copied to the relevant Department. Our recommendations are binding on the SLC unless it is directed otherwise on the authority of the Secretary of State or Welsh Minister. If officials disagree with our recommendations to the SLC, they advise accordingly. Welsh cases are passed to a Minister for a decision. In most DfE cases a Director General with delegated authority decides whether or not the recommendations should be implemented. We routinely explain the provisional status of our recommendations to every appellant and complainant.

During 2021/22 the SLC were instructed not to accept an IA recommendation in five cases. In a further three cases IAs recommended that DfE consider exercising a discretion available to them and DfE declined to exercise that discretion. We will refer to some of these cases below.

In our reports we may make recommendations to address the specific circumstances of a case and may also highlight more general issues arising from it. We meet SLC and departmental staff several times a year to review the complaints and appeals caseload and how our reports have been handled, and we are briefed on relevant administrative developments and policy proposals. Our remit does not extend to the policy behind the regulations and in deciding appeals we are bound to accept the provisions of the regulations as they stand. However, our reports may sometimes lead to reconsideration of the wording of the regulations or accompanying guidance, if, for example, a particular case reveals some ambiguity.

As always, we have continued to receive excellent support throughout the year from the SLC’s Senior IA Liaison Officer and her team. Our thanks to them for their help, and to their SLC colleagues who answer queries we raise.

3. Caseload

The SLC has separate channels for handling appeals and complaints, involving different teams of staff. An appeal is a formal request for a review of a decision as to eligibility for, or entitlement to, support, or regarding the level of funding awarded. It will usually involve a contention that the student support regulations have not been applied correctly. A complaint is any expression of dissatisfaction with the service which the organisation has provided.

The time it takes for appeals and complaints to be escalated to IAs and resolved has varied over time, with the number of IAs in post and with the SLC’s capacity to collate cases for us. At the end of March 2021, there were 11 appeals and 23 complaints awaiting allocation to an IA, with a waiting time of six weeks and three months respectively. One year later, at the end of March 2022, the figures were 14 appeals and 42 complaints awaiting allocation to an IA, with a waiting time of four months and three months respectively. This deterioration is attributable to difficulties with the collation of cases, rather than a lack of capacity amongst IAs. We have been assured that the SLC have made additional resources available to address this issue. We hope that the waiting time for appeals, in particular, is now reducing.

We have been glad to learn that, during 2021/22, the SLC’s appeal and complaint teams have been brought together under a single manager and are now operating in an increasingly integrated way. We hope that this will make it easier to manage fluctuations in different workloads, and also improve the handling of those cases that might raise both service and eligibility or entitlement issues.

We noted in our report last year that the SLC’s operations had been significantly impacted by the coronavirus pandemic. The work force was reduced, through illness and self-isolation and the SLC had to introduce new working practices quickly. Moving teams from the office to home working led to unavoidable delays for several weeks, because staff were not always able to access the necessary equipment and systems. We saw a number of complaints from customers who said that their complaint or appeal had not been registered in time or escalated within normal time limits. The IAs were conscious of the strain on the SLC in what were unprecedented times, and this was reflected in our responses. Nevertheless, we also pointed out that, as customers were expected to continue to pay the same level of fees for courses which had been seriously impacted over the period of the pandemic, while seeing no variation in the terms and conditions of their SLC loans, they might also feel entitled to expect no diminution in the standards of service they received.

Our impression from our caseload in 2021/22 is that the SLC have continued to make progress towards normalising service standards in the last year, while retaining and adapting new ways of working. However, our impression is that there may be some continuing quality issues with call handlers working from home rather than in call centres, where they can more readily take advice from colleagues. There have also been some problems with poorer quality telephone connections. We will highlight in our recommendations a particular problem of inconsistency in handling dissatisfied customers’ requests to speak to a manager.

4. Appeals

During the year we have reviewed 60 appeals, including one Welsh case. A comparison with the preceding four years may be seen in the table below:

Year	SLC Decision Upheld	Appeal Upheld	Total
2021/22	55	5	60
2020/21	60	2	62
2019/20	86	19	105
2018/19	52	25	77
2017/18	81	28	110 (1 withdrawn)

The table below sets out the broad categories of appeal with comparable figures for previous years:

Subject Matter	17/18	18/19	19/20	20/21	21/22
Unfitted (fraud)	43	32	40	6	9
Previous study/ELQ*	9	5	11	8	11
Residency	24	14	30	27	28
Overpayment/Repayment	1	1	5	4	1
Funding entitlement	9	6	8	4	3
Migrant Worker	5	6	4	4	2
Postgraduate Loan	9	4	3	1	2
Other	10	9	4	8	4
Total	110	77	105	62	60

(* ELQ – equivalent or lower qualification: where a customer is ineligible for support because they already hold a qualification at the same or a higher level than the course they now wish to take)

In considering an appeal IAs will sometimes also address service issues which have arisen in the handling of a case. During 2021/22 recommendations were made in eleven cases for the offer of an ex gratia payment. The total amount recommended for payment in these cases was £2100. These included one Welsh case, with a recommendation that £350 should be offered.

There are several themes arising from appeals we have considered this year which we would like to highlight here.

4.1 The ‘exceptional circumstances’ discretion under Regulation 19

We raised issues about this provision in 2020/21 and it has become more problematic in 2021/22. These are cases where a student is ineligible for funding for a course because of the impact of previous study or qualifications already obtained. If they are wrongly told in writing that they are eligible for funding, despite having described their history accurately in their application, there is provision to leave the wrongly awarded funding in place for one or more years of a new course. The SLC have delegated authority to honour funding awards for the year in which the error is realised and for any earlier years of a course. DfE retain the discretion to award future funding for later years of the course if there are ‘exceptional circumstances’.

In last year’s report we pointed out that the SLC’s responses to appeals and complaints sometimes failed to mention or note the further discretion available to DfE where there are exceptional circumstances. We said that there needed to be greater transparency about this possibility and about what may constitute exceptional circumstances, particularly where a customer may want to argue that hardship has been caused. We suggested that evidence about such matters could be requested earlier in the process, because at the point the matter comes to an IA who identifies the existence of the discretion, there may be little evidence of exceptional circumstances because the customer does not know about the issue and has not been asked to provide relevant evidence.

There have been further issues this year. Firstly, the procedure has been that DfE have required the appeal process to be completed, including a recommendation from an IA, before they will consider the exercise of their discretion in relation to future years. This means that customers are likely to be left in limbo, waiting several months for a decision. This procedure could also be seen to be inconsistent with the normal system for overriding IA recommendations at Director General level within the department. This is because decisions on the exercise of regulation 19 discretion are taken by the Deputy Director for Student Funding Policy. In three cases in 2021/22 the Deputy Director took a different view on such cases from the IA and declined to exercise discretion. A final issue is that, while DfE have now produced written guidance on how they will exercise their discretion in these cases, this is not yet publicly available – although it has been shared with IAs.

A report in June 2021 by the Parliamentary and Health Services Ombudsman on one of these cases was highly critical, not only of the SLC’s handling, but also in finding that the IA had been maladministrative in “asserting [the case] as fitting the exceptional case discretion when this was outside of their responsibilities”. As IAs we are satisfied that it is legitimate for us, within our terms of reference, to take a view on whether an individual case should be treated exceptionally. But the Ombudsman’s criticism highlights that the current system falls between two stools. It is important that the system is changed to ensure that, in appropriate cases, DfE can make its decision before a case comes to an IA, and the IA can then review that decision along with any other aspects of the case which need to be considered.

At a recent liaison meeting there was agreement between IAs, DfE and the SLC to change the current handling of potential “exceptional circumstances” cases and so we hope that some of the identified difficulties can be avoided in the future.

4.2 Discretion, policy and transparency

A wider point related to this is the importance of transparency if DfE and the SLC are operating any policy that effectively constrains the exercise of powers which are available on the face of the regulations. We hope that the policy on ‘exceptional circumstances’ will soon be made available publicly. But similar issues have also arisen in other areas. For example, there are a number of options available under the regulations when it is found that customers have received overpayments of support. Overpayments of loans can be left for recovery in the normal way on an income-contingent basis. It is also possible for the SLC to seek earlier recovery, and they will typically seek to agree direct debit arrangements for the repayment of loan overpayments. This is obviously justifiable as a general principle in terms of the overall impact on the public purse. However, there may be particular reasons in an individual case which make it less reasonable to seek early recovery in that way. In one case in 2021/22 DfE did not accept an IA recommendation for income-contingent recovery of a loan overpayment on the basis that it was only their policy to allow this option when there had been an error by the SLC. This is not a policy which has been made explicit in any public documents. In our view, it should be.

5. Complaints

This year we have reported on 148 complaints, including 13 from Wales. The table below shows the comparative numbers of complaints reported on each year:

2021/22	148
2020/21	124
2019/20	142
2018/19	168
2017/18	191

Many complaints have a range of issues within them. A report in such cases will therefore review a number of issues and may contain findings adverse to the SLC on only some of the issues raised. For this reason, it is difficult to describe complaints as being upheld, either in full or in part. The table below shows the complaints by categories used by the SLC when the complaint is first registered:

Subject matter	17/18	18/19	19/20	20/21	21/22
Processing	100	80	58	35	83
Grant overpayment	5	1	0	2	3
Advice given	29	34	38	29	20
ICR	36	25	22	20	16
Other	21	28	24	38	26
Total	191	168	142	124	148

Within the 2021/22 figures, the thirteen Welsh cases fell into the following categories: processing – four; advice given – three; other – six.

In 2021/22 recommendations were made in 114 cases for the offer of an ex gratia payment. The total amount recommended for payment in these cases was £21,415, of which £1,750 related to Welsh cases.

We routinely note in our annual reports that we are conscious that we see an unrepresentative sample of some of the worst cases. Many millions of customers will have received a satisfactory service from the SLC. This obviously limits our ability to draw any general conclusions about customer experience. We also acknowledge that, even within the range of cases which we see, there are often encouraging examples of good practice – from patient call handlers trying to help sometimes difficult customers, to clear and open explanations from customer relations officers seeking to find a satisfactory remedy when things have gone wrong.

In every year, most of the very small proportion of customers who made a complaint were satisfied with the response they received from the SLC’s internal system. There does not seem to have been any significant increase in the number of requests for escalation to an IA as a result of the SLC’s move in 2021/22 to a single-stage complaint response, replacing the two formal stages of earlier years. This would seem to suggest that there has been no diminution in the quality of responses following the removal of senior manager sign-off at the second stage. However, there do seem to be some issues with perceived delay in the escalation of complaints, which we will discuss below.

It has always been a feature of SLC complaints that many customers do not find it easy to use its telephone system for enquiries. There are often long waits for initial connections and while internal enquiries are made. Customers resent having to recount their histories every time they make a call. It can be particularly difficult for disabled customers. We are very pleased to note that there has been an important development from January 2022 with the introduction of an online chat function as an alternative to telephone enquiries. The chat function includes the option of secure messaging, which effectively resolves a long-standing concern for many customers that it has not been possible to email the SLC on general matters.

We would like to highlight the following themes from this year’s caseload.

5.1 Overpayments not written off but not to be recovered

We highlighted last year the issue of customers who were told by debt owners such as Erudio that their loans had been written off, but who were nevertheless found to be ineligible for further funding because of outstanding loans on their account. A related but more general issue arose this year when, in two cases, DfE rejected IA recommendations to write off overpayments of grant and instead gave instructions for the overpayments to remain on the accounts but that no action should be taken to recover them. We are not sure that this is wise: in addition to the uncertainty that may arise with any future funding applications, it will also be possible that collections activity might be resumed in error at some later point, which will inevitably lead to further complaints. We recognise that an approach of “not recovering” may be seen as more consistent with the current wording of the regulations, but consider that it adds unnecessary complication in practice.

5.2 Calls back from managers

We raised last year the particular problems there had been under the new working arrangements for the pandemic in ensuring that customers who wanted to speak to a manager were either transferred to one or a call back arranged. It has continued to be a feature of complaints this year that customers have had difficulty with these requests, with promised calls back frequently not materialising. We have recently been briefed on changes to the software which the SLC’s advisers use in doing their work. We are told that the new system means that requests for calls back will be more visible and will be tracked more closely, with a clear audit trail. We hope that this will indeed bring improvements, because the issue has been a real irritation for many customers.

5.3 Delays in escalation

The complaints team understandably want to make sure they have had the opportunity to respond to any new points which a customer might raise in further correspondence before acting on a request for escalation to an IA. However, particularly following the move to a single-stage internal complaint system, we have seen examples of unnecessarily protracted correspondence after a request has been made. This can give rise to further service issues as customers feel they are being prevented from exercising an option available to them. We have seen cases where, after several exchanges prior to escalation, a customer is asked to specify the issues they want an IA to consider – when, in our view, that has been entirely obvious from the preceding correspondence.

6. Parliamentary and Health Service Ombudsman (PHSO) and Public Services Ombudsman for Wales (PSOW)

The PHSO and PSOW provide an opportunity for customers who are dissatisfied with the outcome of the complaints or appeals process to seek a review, either through referral by their MP to PHSO or directly to PSOW. Contrary to some customers’ expectations, the Financial Ombudsman Service (FOS) does not have jurisdiction in relation to the SLC’s caseload, save with respect to a narrow area of complaints between 1 April 2007 and 30 March 2015 in relation to mortgage style loans.

At the start of 2021/22, there were eight PHSO cases that remained open. Of these, five progressed to investigation and three did not. Of the cases that progressed to investigation, three were completed during 2021/22 with the complaint being partially upheld, and one with the complaint not being upheld. One of the partially upheld cases was the one concerning regulation 19 ‘exceptional circumstances’ discussed above. In one of the others an IA recommendation for a reduction to the amount of a grant overpayment was raised from £300 to £800. In the third the Ombudsman made no further recommendation of a remedy, on the basis that the complainant had provided misleading information to the SLC.

During 2021/22 the PHSO has requested information from the SLC in 18 cases, of which five progressed to full investigation, ten did not and three are still being considered.  We await the outcome of the five that are being investigated.

The PSOW has requested information from the SLC in nine cases during the year, none of which progressed to investigation. The PSOW also confirmed a further case had been rejected without consideration.

Additionally in 2021/22 the Northern Ireland Public Services Ombudsman (NIPSO) requested information in one case which did not progress to investigation.

7. Recommendations

On the basis of our experience this year, our recommendations are as follows:

a. a new system should be put in place as soon as possible for DfE to be able to make decisions on regulation 19 ‘exceptional circumstances’ before cases come to IAs, with the criteria for their decisions made available to customers and more widely;

b. as a wider principle, in the interests of transparency, the SLC and DfE should ensure that any general policies on how they will interpret and apply the regulations are publicly available;

c. the experience of disabled customers in using the SLC’s communication systems should continue to be monitored as part of the work to improve those systems and the overall customer experience;

d. there should be a continuing focus on ensuring that dissatisfied customers can speak to a manager on request, with promises to call back reliably followed through;

e. DfE should reflect further on the wisdom of rejecting recommendations for the writing off of some overpayments and substituting recommendations for no collections activity to take place. Cancellation of the relevant amounts would be more straightforward and could avoid the practical risks we have identified above.

8. SLC response to the IA annual report recommendations

a. a new system should be put in place as soon as possible for DfE to make decisions on regulation 19* ‘exceptional circumstances’ before cases come to IAs, with the criteria for their decisions made available to customers and more widely:

• SLC agrees that this would provide speedier decisions and therefore represent a better customer experience. We are currently working with DfE to agree a new process wherein the exceptional circumstances could be considered prior to the case escalating to IA, which we hope to be in place by the end of the calendar year.

b. as a wider principle, in the interests of transparency, the SLC and DfE should ensure that any general policies on how they will interpret and apply the regulations are publicly available:

• SLC currently publishes all formal policy guidance received from DfE via our Practitioners website. When we receive guidance from DfE on the two specific topics noted in the report, exceptional circumstances and recovery of overpayments, these will also be published on our Practitioners website.

c. the experience of disabled customers in using the SLC’s communication systems should continue to be monitored as part of the work to improve those systems and the overall customer experience:

• Through the implementation of CEM (Salesforce) we have increased the number of communications channels available to our customers this year, and we are carefully monitoring how these are used by customers and adjusting our channels strategy to ensure the channels are optimised for both SLC and our customers’ needs. In particular, we are currently reconsidering the customer proposition for Secure Messaging potentially leading to a more targeted Secure Message service pointed at the most complex customer circumstances and/or to customers with enhanced support needs.

• SLC is committed to improving the customer experience of all customers but improving the experience for customers who display vulnerability or disabilities is a top priority for us. As outlined in the CX update to Board, we are currently finalising an organisational Vulnerable Customer Charter and Reasonable Adjustment policy. The Reasonable Adjustment policy will outline policy controls, expectations and governance of our reasonable adjustment processes. We continue to recognise that not all customers may be able to interact or manage their account with us because of their needs. They could, due to their circumstances, experience a substantial disadvantage because of their individual needs compared with people who do not share their vulnerability or disability. Our reasonable adjustment policy will ensure that customers have the option to communicate with us in the way that suits them and their needs.

• Further, we have two projects currently underway to improve the service for customers with a disability who apply for Disabled Students’ Allowance (DSA) – the procurement reforms project and the Evolve application improvements project. As well as improving the overall experience for these customers, the procurement reforms in particular will simplify communications options for these customers by reducing the number of suppliers they are required to be in contact with and changing the onus on initiating contact from the customer to the supplier.

d. there should be a continuing focus on ensuring that dissatisfied customers can speak to a manager on request, with promises to call back reliably followed through:**

• SLC acknowledges that following the transition to home working at the start of the pandemic, an issue arose relating to customers on the phone requesting that they be able to speak to a manager. Whereas prior to the pandemic these calls were escalated to managers by manually transferring the call, moving to a fully-home working environment we had to put in place a new process for manager escalation. The new process included offering customers a call back from a manager within an agreed timeframe. However, SLC did not initially have the right technologies in place to be able to sufficiently track and monitor manager call backs and we are aware that this led to some call back requests not happening successfully across both Apply-to-Pay and Repay call centres.

• We believe this issue is now on track to be resolved, as through the introduction of new process and new technologies (Salesforce) SLC is now able to track and monitor the completion of manager call backs for both our internal contact centres and our outsourced partner.

• For Apply-to-Pay calls in Operations, CEM (Salesforce) is now in place and is already being used to track manager call back compliance in some areas, although not yet consistently across all Apply-to-Pay teams. Work is currently underway to understand all of the existing processes and then standardise and document the process to consolidate all of our call-back management into the same referral model we have in Salesforce. Reporting provided by the system will be used to implement a monitoring and management process, as well as MI that can be used by management to track that call-backs are being completed and inform improved customer comms or operating processes.

• Related, SLC is also considering the nature of “management” call-backs. Quite often a customer wants to escalate to a manager, and while this might be appropriate where there is a complaint about the service provided by an individual, if the customer is escalating to achieve a resolution it is likely to be more appropriate to route the escalation to an appropriately trained Student Finance Officer under our new Ops 2.0 structure. This broader issue is currently being considered by Operations.

• Meanwhile in Repayments, we have introduced the ability for calls to be transferred to a manager hunt queue, no matter the location. This means that even if colleagues are working from home calls can be directly transferred to a manager without the need for a manager call-back request. Should no manager be available via the hunt queue at the time of the transfer, a call-back request will be logged, and following this IA recommendation we are reviewing the governance process in place to ensure those requests are actioned within one working day.

• We will continue to monitor complaints data on this topic closely.

e. DfE should reflect further on the wisdom of rejecting recommendations for the writing off of some overpayments and substituting recommendations for no collections activity to take place. Cancellation of the relevant amounts would be more straightforward and could avoid the practical risks we have identified above:

• This recommendation is for DfE rather than SLC; however, we acknowledge that our repayment systems are currently designed to automate recovery wherever possible, which does make it challenging for us to provide assurance that no collections activity will take place on a balance that has not been cancelled or written-off and we have provided this feedback to DfE when such recommendations have been made.

*Regulation 19 covers situations in which SLC has awarded funding in error. In general terms, Regulation 19 provides that if a student has provided all relevant information in respect of their previous study, and SLC confirms in writing that they are entitled to funding even if they should not be due to their previous study, that funding can be left in place/paid for the year covered by the written notification of entitlement and any previous years. However, a further clause of regulation 19 provides that where the Secretary of State considers that there are exceptional circumstances, the Secretary of State may determine that the student should qualify for a fee loan in respect of one or more academic years of the current course. Essentially enabling funding to be awarded for the entirety of their course in situations where SLC has, in error, notified a student in writing that they are entitled to funding, when they should not be due to previous study.