Corporate report

Independent Assessors’ Annual Report 2025/26 

Published 26 August 2026

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 2025-26 and covers cases on which we have reported in the twelve months to 31 March 2026.  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 and concludes with some recommendations. 

2. Background 

1. There are currently eight IAs. Six new IAs were recruited in January 2025. On 1 April 2025 there were 12 IAs. Three IAs who had already served their three terms (the usual maximum appointment length) and exceptionally, an additional year in order to provide continuity and support to the new cohort, continued into the current year. This meant that for a number of months we had a larger than usual number of IAs in post. The appointments of the longstanding IAs have now come to an end. This, combined with resignations of two of the new cohort, means that our number is slightly below the usual level. The Department for Education (DfE) is recruiting with a view to a further cohort being in place in the autumn of 2026. There is support for this from the IAs, with a view to building resilience and ensuring ongoing capacity to provide our service.  

Our appointments are statutory and are made under section 23(6) of the Teaching and Higher Education Act 1998.  Student finance customers are able to escalate to an IA if they remain dissatisfied after a single stage appeal or complaint process within the SLC.  Customers with mortgage-style loans, which have now been transferred to the private sector, have to seek redress through the debt owner before escalating to the Financial Ombudsman Service. 

Responsibility for the SLC and for our appointments lies with the DfE within the UK Government, and with the Department for Education, Social Justice and Welsh Language (DESJWL) within the Welsh Government. Our recommendations are binding on the SLC unless it is otherwise directed by or on behalf of the Secretary of State for Education or the Cabinet Secretary of Education for Wales. 

Each report is the responsibility of an individual IA, but we have to date operated a system of peer review to provide comments on emerging findings and encourage a broad consistency of approach.  If the relevant departmental official disagrees with our recommendations to the SLC, they advise Ministers accordingly.  In England, the Director General for Skills Group (who has delegated authority) makes the decision whether to accept a recommendation from an IA.  Complex cases are passed up for Ministerial approval.  As far as Welsh cases are concerned the Higher Education Division will decide whether those recommendations should be implemented, with complex cases being passed to the Cabinet Secretary of Education for Wales for a decision. 

We routinely explain the provisional status of our recommendations in our reports.  During 2025-26 recommendations by IAs were rejected in this way by the DfE on seven occasions, three of which related to reports sent in 20025/26. No Welsh recommendations were rejected.   

In our reports we may make recommendations to address the specific circumstances of the case and may highlight more general issues arising from our analysis.  We meet three times a year with departmental staff at the SLC, DfE and DESJWL to review the complaints and appeals caseload and how our reports have been managed.  We are briefed on relevant administrative developments, policy proposals and legislative updates. Our remit does not extend to the policy behind the regulations.  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 highlights some ambiguity. 

As in previous years we have continued to receive excellent support throughout the year from the SLC’s IA Liaison Office Manager, her team and SLC colleagues.  We wish to express our thanks for their input and help. 

3. Caseload and Context 

We believe it is important to recognise that we see the concerns of a very small proportion of the SLC’s customers’ concerns in the matters escalated to us. The SLC received over 2 million applications for support in the 2025/26 academic year. As at 31 March 2026 it had a customer base of some 9.87 million. This indicates that the large majority of customers receive finance and their loans fall due for repayment without issues of a significance that they request escalation to us. The cases we see are not representative of the customer base. The remainder of this report should be read in that context.  

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 how the relevant regulations have been applied to the individual customer’s circumstances. We frequently see cases challenging assessments as to eligibility for support, the level of funding awarded or how repayments are handled. A complaint is any expression of dissatisfaction with the service which the SLC has provided. 

We are pleased to report that the majority of the time the SLC accurately identifies, and where appropriate apologises, for shortcomings in service or any errors in assessment of applications for support. We see a genuine commitment to treating customers fairly and to taking steps to improve the customer journey. 

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. This is addressed further below.   

4. Appeals 

The number of appeals dealt with in the last year and, for comparison purposes, previous years, separated out for decisions of Student Finance England (SFE) and Student Finance Wales (SFW) has been: 

Year	SLC Decision Upheld	Appeal upheld	Total
	SFE	SFW	SFE	SFW
2025-26	215	8	15	0	238
2024-25	140	3	13	0	156
2023-24	101	5	16	0	122
2022-23	72	4	8	0	84
2021-22	55	-	5	-	60
2020-21	58	-	2	-	60

During the year we reviewed an increased number of appeals, 238. This is a reflection of our increased capacity, along with greater capacity within the team which collates and sends cases out to us.  

The proportion of SFE appeals upheld has reduced which indicates that the SLC Appeals Team’s performance has improved as we have, in the very large majority of cases, agreed with their interpretation and application of the applicable regulations.  

The table below sets out the broad categories of appeal, and a comparison with previous years: 

Subject matter	2021-22	2022-23	2023-24	2024-25	2025-26
	SFE	SFW	SFE	SFW	SFE	SFW	SFE	SFW	SFE	SFW
Unfitted (Fraud)	9		13		16	1	53		30
Previous study/ ELQ	11		11	1	21	1	7		18
Residency	28		29	1	48	1	48	2	100	3
Overpayment/Repayment	1		4	1	3		2		4
Funding entitlement	3		4	1	13		9		15	1
Migrant Worker	2		4		2		8		18
Postgraduate loan	2		1		8	2	10		14
Other	4		14		7		16	1	31	4
Total	60		80	4	118	5	153	3	230	8

In our 2024-25 report we commented on the increased number of organised fraud appeals we were seeing. The number of such cases reaching us has reduced both in absolute terms, and perhaps more significantly, as a proportion of appeal cases. We have however continued to see a number of appeals where the SLC has determined that the customer was involved in organised fraud, particularly in relation to claims for Childcare Grant.  

As IAs we continue to reiterate that the individual customer must be given adequate reasons by the SLC’s Economic Crime Unit (ECU) for the decision to unfit them for support. This has not always been the case, and some appeals are escalated primarily because clear reasons justifying the decision have not been given.  

We take care when reviewing appeals arising out of organised fraud to satisfy ourselves that there is sufficient evidence that the individual customer, more likely than not, made fraudulent claims. We are conscious that there are likely to be some innocent customers caught up in wider fraudulent activity.  

We have seen a significant increase in the number of residency appeals. We have not been able to identify a particular reason for this. Many such appeals are brought by British citizens whose families relocated overseas, meaning that the student does not meet the requirement of three years’ ordinary residence in the UK prior to the commencement of their course.  

5. Complaints 

The number of complaints we have dealt with this year compared to previous years is shown below: 

Year	SFE	SFW	Total
2025/26	277	17	294
2024-25	179	14	193
2023-24	177	12	189
2022-23	171	14	185
2021-22	148	-	148
2020-21	124	-	124

Again, there has been a notable increase this year in the number of complaints we have dealt with, for the same reasons as the increase in the number of appeals considered.   

In terms of the matters raised as complaints, we see a wide range of concerns, a proportion of which are not substantiated. That said, we often see cases where SLC’s service has, in the IA’s view, fallen far short of a customer’s reasonable expectations. In that event we make a recommendation for an ex-gratia payment; a nominal sum of money (up to a maximum of £500) in recognition of the unsatisfactory service and the consequent impact on the customer.  

A broad summary of the key issues raised in complaints escalated is set out below. However, it is not unusual for a complaint to raise concerns in more than one area. As such, the table represents a high-level overview and does not reflect the range of service issues we see. For this reason, we are not able to say that a proportion of complaints were ‘upheld’ as often some but not all the matters raised by a customer are considered to objectively amount to service failures.  

Subject matter	2021-22	2022-23	2023-24	2024-25	2025-26
	SFE	SFW	SFE	SFW	SFE	SFW	SFE	SFW	SFE	SFW
Processing	83		78	7	89	7	86	9	138	10
Systems							16		30	4
Overpayment	3		1		0		1		2
Advice given	20		33	4	33	2	28	3	41	1
ICR	16		23	1	23	1	28	1	42
Other	26		36	2	32	2	20	1	23	3
Total	148		171	14	177	12	179	14	276	18

Bearing in mind the overall increase in the number of complaints dealt with, the proportion in most categories has remained similar to last year. Processing, the area which leads to the majority of complaints, relates to the time taken and decisions made (such as requests for additional evidence) to assess and reach a decision on a customer’s application for support.  

There has been an increase in the number of complaints arising from the SLC’s ‘systems’ meaning its IT infrastructure which automatically generates much correspondence and allocates repayments to loan accounts. We have seen an increase in complaints about the SLC’s system, for example, it may have incorrectly allocated repayments between customers’ different loan plans.  

Within the ‘Other’ category, we have again seen a number of complaints about delays in assessment for Disabled Students’ Allowance (support to mitigate disadvantage due to disability) and delays in the recommended support being implemented. Such delays often impact on a student’s ability to access their course and in turn, end of year course assessments. This function has been outsourced to third-party suppliers. Review of the service they provide has been brought within our remit, as customers can escalate their complaints to the SLC if they are not satisfied with the response of the supplier.  

We have been disappointed to see, for a second year since the change in process, some very significant delays by third party suppliers in assessments, poor quality assessment reports, and thereafter, unexplained delays in the recommendations approved by the SLC being implemented. Given that this ‘new’ process has been in place for approximately two years, we would expect initial teething problems to have been resolved. We would encourage the SLC to closely monitor their suppliers and take swift action where suppliers are not meeting Key Performance Indicators. 

Customers who are not considered to be raising a complaint 

On occasion customers contact the Complaints Department, and on review of their email, it is not considered that they are raising service issues. Last year we recommended that the SLC reconsider its approach to such customers and instead of sending a standard email with weblinks to information, that the customer’s email was instead forwarded to the general correspondence team for a response. The SLC has reflected on our recommendation but rather than adopt it, plans to introduce a web-form to help customers identify whether they actually want to complain, or just need information. They will then be signposted to where to get that information. It is anticipated that this will reduce or eliminate the general correspondence received by both teams. 

Ex-gratia payments 

This year we recommended ex-gratia payments totalling £37,623 for SFE cases (£33,023 for complaints and £4,600 for appeals). For SFW we recommended payments totalling £2,100 (£1,950 for complaints and £150 for appeals). At times we simply recommend that a sum previously offered by the SLC is re-offered where in our view the SLC has fully identified and acknowledged its shortcomings in service. On other occasions we may recommend an increased sum.  

We are conscious that some issues raised in both complaints and appeals cannot be put right by such payments, for example, where a customer was initially awarded support in error, and once identified, no further support can be paid, meaning that they may not be able to complete a course they have started. There has been discussion about increasing the £500 limit, which has been in place for many years. We are informed that Treasury guidance from April 2026 on Delegated Authority and ex-gratia payments retains the £500 limit, meaning that any such request to the DfE at this time is unlikely to be agreed. In addition to an ex-gratia payment, we are able to make a recommendation that proven direct losses be reimbursed in the very small number of cases where this can be evidenced. 

Quality of the SLC’s complaint responses to customers 

This year IAs have had cause to raise concerns about the quality of a small number of complaint responses provided by the complaints department to customers. Responses have been sent out with factually inaccurate information and also errors that would have been picked up by proof-reading. We understand that this has been raised with management, with a view to issues being fed back by team managers to the individual staff members involved. We hope to see improvements going forward.  

Quality of casefiles sent to IAs 

During the year, there has been a change of process in collating files for IAs. This we are informed is to speed up the process. We saw some correlation with a drop in the quality of the files sent to us, in that we were often missing relevant documents, information or correspondence, and would need to revert to the SLC. Cases were, for example, sent without a copy of the decision that was being appealed, or key correspondence relating to the issues in a complaint. This was not only a cause of frustration for us, but inevitably led to delays in us completing our reports.  

We raised this with the IA Liaison Office Manager and also discussed with management. The Independent Assessor Liaison Office Manager and her team checked the cases being sent to us for a period thereafter, which resulted in improvement for that period. However, since she and her team stepped back, there have been some further quality concerns. We continue to monitor the situation. 

Wait times for escalation to an IA 

Year	Appeals	Complaints
As at 31/3/2026	4.5 months	3 months
As at 31/3/2025	6 months	6 months
As at 31/3/2024	3 months	4 months
As at 31/3/2023	2 months	4 months
As at 31/3/2022	4 months	3 months

This has been an ongoing issue experienced by customers in recent years. In 2021-22 there was some consolidation of the appeal and complaint functions within the SLC. It was anticipated that this would reduce wait times for customers in having their cases escalated. There was some (temporary) improvement in appeal escalations in 2023, but wait times increased again in 2024 and further in 2025. This was in part due to a lack of capacity in the teams which collate cases for us. 

In our last annual report, we recommended that the SLC make every effort to reduce the wait time to no more than two months. We are pleased to see that positive progress is being made.  

This year has seen additional resource within the IALO team, which has led to significant reductions in customer wait times for IA review of both complaints and appeals. The complaint wait time has been halved over the last year and stands at three months, the 2022 level. Appeal wait times remain slightly above the 2022 level at 4.5 months. This is a notable improvement when viewed in the context of an overall increase of 52% in the number of cases sent to us. 

It is expected that the good progress made this year will continue into 2026-27 where we anticipate wait times to further reduce. We would continue to encourage the teams to work towards a target of two months, which we hope is achievable in view of the additional IALO resource and planned recruitment to increase the number of IAs.  

The time taken for escalation can have an adverse effect on the customer, particularly where their appeal or complaint is upheld, because often the academic year to which the issue related has ended before the customer receives our report or our recommendations are implemented. As such, this reduction in customer wait times is a welcome improvement.  

We previously recommended to the SLC that customers should be given an accurate estimate of the likely wait time for escalation. We are pleased to report that we have generally seen this implemented, meaning that expectations are managed. The IALO team will, we anticipate, give the current reduced wait time estimates, because it is important that this information is accurate.  

6. Parliamentary and Health Service Ombudsman (PHSO), Public Services Ombudsman for Wales (PSOW), Scottish Public Services Ombudsman (SPSO) and Northern Ireland Public Services Ombudsman (NIPSO) 

PHSO, PSOW, SPSO and NIPSO provide an opportunity for customers who are dissatisfied with the outcome of the SLC’s internal complaints or appeals process to seek a review via the Ombudsman scheme.  The PHSO require that the referral is made via the customer’s Member of Parliament.  It is worth noting, contrary to some customers’ expectations, that the Financial Ombudsman Service does not have jurisdiction in relation to the SLC’s caseload, save with respect to a narrow area of complaints between 01/4/2007 and 30/3/2015 in relation to mortgage style loans. 

At the start of the financial year there were 12 PHSO cases that remained open. A further 29 enquiries were received during the year. Of the resulting 41 cases, 10 were closed with no further action. Eight progressed to investigation. The SLC has not yet been informed how many of the remaining 23 will be closed or progress to investigation. Of the seven PHSO reports received during the year, the complaints of four customers were not upheld whilst the complaints of three were upheld in full. 

As at 1 April 2025 one PSOW case remained open. A further 10 enquiries were received during the year. Of the 11 cases, six were closed with no investigation. The outcome is awaited in relation to the remaining five. No reports were received.  

No matters were escalated to the SPSO or NIPSO. 

7. Recommendations  

Based on our experience this year, our recommendations are as follows: 

• We recommend that the SLC builds on the progress made to reduce customer wait times for escalation and aims to reduce this to two months for both complaints and appeals.  

• We recommend that the quality issues we have identified with complaint responses and collation of complaint cases sent to us is monitored by the respective teams’ management such that sustained improvements are made. 

• We recommend that the SLC (in particular the ECU) ensures that sufficiently clear reasons are given, which justify the outcome, when communicating to customers decisions that they are unfitted for support. 

• We recommend that the SLC has close oversight of the quality of service provided by its third-party DSA suppliers with a view to achieving the envisaged improvements to the customer journey that the scheme was designed to implement.  

Joanne Smith 

Victoria Smith 

Abdul Elghedafi 

Susan Bradford 

Melanie Palmer 

Hannah Bows 

Helen Flynn 

Georgia Taylor

8. SLC response to IA Annual Report

8.1 Background and context

SLC’s Framework Document requires SLC to establish and maintain processes for handling customer complaints and appeals (as summarised in the Complaints and Appeals report, presented by Stephen Baker under Board agenda item 5.1). Following consideration by Board the Independent Assessors’ Annual Report, and the response, will be published on Gov.UK.

8.2 Complaints and Appeals

SLC is required to ensure it has in place appropriate processes to manage complaints about its services. SLC is also required to ensure it has an appeal process to review decisions of SLC in relation to entitlement and/or eligibility to student finance based on its interpretation of relevant law, regulations and policy. This includes the process for referral to an external Independent Assessor (IA) whose task is to review complaints and appeals. External Independent Assessors shall be appointed by, and will report annually to, the Responsible Minister and the Welsh Ministers on behalf of all the Departments.

The resulting processes for handling complaints and appeals and the detailed Terms of Reference for external Independent Assessors is publicly available on gov.uk. SLC is responsible for ensuring effective liaison with Independent Assessors, and that recommendations made by them are followed unless otherwise directed by the Departments.

The IAs Annual Report will be made publicly available on gov.uk, alongside SLC’s response.

The IAs are appointed by the Secretary of State to deal with Higher and Further Education Student Finance complaints and appeals. There are currently eight IAs, however a recruitment exercise is underway to recruit up to four additional IAs.

As part of their role, in May each year, the IAs submit an Annual Report, in respect of their activity in the previous financial year, to SLC and Ministers. Recommendations made within the IAs’ Annual Report relate not only to SLC but also, potentially, to DfE and the Devolved Administrations (DAs).  The IAs’ Annual Report for FY2025-26 is attached as Appendix 1. SLC have considered the recommendations made in the report and our response to each recommendation can be found at point 3 of this paper.

Over the course of the year, the IAs may make recommendations on individual cases. In FY2025-26, the IAs reviewed a total of 532 cases, an increase of 52% compared to the previous year where 349 cases were reviewed. This increase relates largely to an increase in residency and fraud related appeals, and further detail is provided at sections 2.1 and 2.2 of this report. The below table illustrates the volume of recommendations this year in comparison to last year.

	FY 2024-25	FY 2025-26
Number of cases reviewed	349	532
Number of recommendations	246	340

Of the 340 recommendations made in FY2025-26, 328 have been fully implemented; 2 recommendations, made in 2 cases, are still being considered by DfE, the implementation of 10 recommendations, made in 10 cases, are still under consideration with SLC. One of which we believe there is a solution for, but which will take time to implement.

The IAs may make recommendations for an Ex-Gratia payment to be offered to the customer. As noted in 1.6 above, in FY2025-26, there was a 52% increase in cases reports, resulting in an increase to £39,723.56 (from £26,875).

In some cases, the recommendations in individual cases may have a wider impact on SLC’s ways of working. During FY2025-26 the IAs made 20 such recommendations, of which 12 have been implemented, 1 is being tracked to ensure the proposed solution is implemented and 7 remain open. The remaining open actions cover areas including customer communications, eligibility guidance and system changes. All of which take time to be triaged and added to worklists as required. Open recommendations are reviewed on a monthly basis with the relevant SMT owner to ensure they are actioned and closed as soon as possible. Updates on all recommendations are provided to IAs at each quarterly meeting.

8.3 Executive summary

Case numbers

In FY2025-26, the IAs reviewed 532 cases, comprising 294 complaints and 238 appeals. This represents a small proportion of the total 8789 formal complaints and 2958 appeals handled by SLC, equating to 3.34% of complaints and 8.04% of appeals being escalated to an IA. The rise in appeal referrals is largely due residency, in particular temporary absence. A student must be lawfully resident in the UK for 3 years prior to the start of the course unless they can demonstrate they were temporarily absence.

Board will note the particularly strong performance from our Processing, ECU and Appeals functions wherein SLC’s position was upheld in 223 (93.7%) of the 238 appeals cases escalated to an IA for review. The two most common drivers for appeal cases being escalated to the IA are Residency and Fraud. Residency remains a key area of focus for DfE and Welsh Government to potentially simplify via our policy work. However, the area remains inherently complex, reflecting the interaction between eligibility requirements in student support regulations and wider immigration and residency requirements determined by the Home Office. Protecting Public Money will also continue to be a strategic priority for SLC. ECU’s fraud decision making in 2025-26 was upheld in 100% of the cases reviewed, increasing from 96% in 2024-2025.

Should a customer remain dissatisfied with the outcome of their independent review; they can choose to escalate their complaint to the relevant Ombudsman. The table below demonstrates the small volume of complaints that were raised to the Ombudsman in FY 2025-26.

	Outcome of those referred for further investigation
					Still
				being
Open				consider		Completed
cases				ed as at		and
as at 1	Cases		Progressed to	31	Completed	complaint
April	Referred	No further	further	March	and not	partially	Upheld	Await
2025	in year	investigation	investigation	2026	Upheld	upheld	in full	outcome
PHSO	12	29	10	8	23	4	0	3	1
PSOW	1	10	6	0	5	0	0	0	0
NIPSO	0	0	0	0	0	0	0	0	0
SPSO	0	0	0	0	0	0	0	0	0
TOTAL	13	39	16	8	28	4	0	3	1

Time taken for case collation

The IAs’ Annual Report notes that during FY2025-26 there was a decrease in the backlog of cases awaiting an IA review and, in the time taken to compile a case for review. The compilation is carried out by the relevant team i.e. the Complaints team for complaints cases and the Appeals team for appeals cases.

In our response to the IAs comments in their FY2024-25 report, we confirmed the addition of two Independent Assessor Liaison Officers to assist with the escalation of cases to an IA. This increase effectively doubled the size of the team, with the team assuming responsibility for some aspects of the process which were previously managed by the relevant teams. This has allowed more flexibility within the Complaints and Appeals teams to manage case collation. The additional resource has been instrumental in the reduction of the customer wait times. However, the reduction in the wait times has been hampered by the reduction in the number of IAs available to review cases. This is being addressed by the recruitment of additional IAs which will increase the capacity for case reviews.

Appeals involving ECU investigations

The IAs’ Annual Report highlights the challenges involved in potential fraud investigations. SLC recognises the complexity of these cases and the need to safeguard public funds while also considering individual student circumstances. In FY2025–26, the IAs reviewed 30 ECU fraud related cases, upholding SLC’s position in all cases, demonstrating our commitment to making fair and robust decisions.

8.4 IA Annual Report recommendations and SLC’s response

As noted, the IAs’ annual report sets out the background to the work of the IA, their caseload and any recommendations for SLC. In FY2025-26 the IA have made 4 recommendations:

We recommend that the SLC builds on the progress made to reduce customer wait times for escalation and aims to reduce this to two months for both complaints and appeals.

Following discussion between Customer Resolutions and the Independent Assessors Liaison Office (IALO) the below actions have been considered to further reduce wait times.

Reduce Customer Wait Times

• Progress this through a Customer Resolutions Service Review, supported by dedicated resource and a clear Terms of Reference, with a core objective of improving end-to-end timelines
• Focus on simplifying processes and strengthening oversight to support delivery of the ≤2-month target

We aim to continue the progress made in FY 2025-26 and are working closely with Complaints and Appeals to ensure the timely escalation of cases. The current waiting time for cases escalated to an IA, in comparison to the same period last year, are illustrated below.

Year	Appeals	Complaints
As at 31/3/2025	6 months	6 months

As at 31/3/202                                    4.5 months                                3 months     

1. We recommend that the quality issues we have identified with complaint responses and collation of complaint cases sent to us are monitored by the respective teams’ management such that sustained improvements are made.

Following discussion between Customer Resolutions and the Independent Assessors Liaison Office (IALO) the below actions have been considered to improve quality.

Complaint Response Accuracy

• Use the Service Review noted above to establish clearer quality expectations and strengthen assurance approaches
• Reinforce capability through targeted guidance and continuous improvement activity

Case File Quality

• Define consistent standards for case management and documentation within the Terms of Reference.
• Support a more robust and audit-ready approach through improved governance and oversight.

Next steps

We will continue the Customer Resolutions Service Review from June 26, implementing its findings as required to make improvements.

We will provide an update on proposal to implement at the Quarterly IA meeting on 23 September 2026, with a further update on outcomes provided at first meeting in 2027.

1. We recommend that the SLC (in particular the ECU) ensures that sufficiently clear reasons are given, which justify the outcome, when communicating to customers’ decisions that they are unfitted for support.

The ECU supports the recommendation and recognises the importance of giving customers clear rationale for decisions concerning their eligibility and have made changes to decision letters. Of course, such disclosure must be balanced with the need to protect sensitive information and avoid impacting the integrity of our investigative work. 

We recommend that the SLC has close oversight of the quality of service provided by its third-party DSA suppliers with a view to achieving the envisaged improvements to the customer journey that the scheme was designed to implement.

We accept, and recognise, the need for robust, sustained oversight and full accountability for third-party DSA suppliers to ensure the delivery of a high-quality and consistent customer experience.

We acknowledge that Capita’s performance during 2024/25, and into early 2025/26, fell below the required standard due to weaknesses in system capability and operational delivery and have taken appropriate corrective action with the supplier.

Performance has improved significantly over the course of 2025/26. A key focus of Capita’s recovery has been the stabilisation and deployment of its core systems, which were a primary root cause of earlier underperformance. These systems now underpin improved workflow management, more consistent assessment quality, and greater processing efficiency, directly addressing the issues identified.

Alongside strengthened contract management arrangements and enhanced operational oversight, Capita is now delivering at the expected standard, evidenced by consistent compliance with contractual KPIs and sustained operational stability across consecutive reporting periods into the current year.

These improvements have been supported by a strengthened and more formalised contract management regime, including:

• Enhanced governance and oversight, with weekly performance reviews focused on risk management, issue resolution and customer outcomes
• Structured monthly contract and performance reviews, incorporating detailed KPI, compliance and operational reporting
• Introduction of supplier scorecards, providing transparent performance assessment and supporting early identification of risk and targeted intervention

A formal quality commitment framework has been implemented across all DSA suppliers, setting clear expectations for timeliness, accuracy and customer experience, and providing a consistent basis for performance assurance.

These measures are delivering sustained improvements in service performance and customer outcomes. Customer satisfaction has remained strong and consistently met APRA target levels, despite a significant increase in survey volumes, reflecting consistency across the service quality.

Suppliers have strengthened their internal complaint handling processes, resulting in improved responsiveness and clearer accountability. Consequently, complaint volumes have reduced significantly, with DSA-related complaints falling from an average of 133 in Q4 2024/25 to 47 in Q4 2025/26, reflecting improved underlying service performance and more effective issue resolution.

We continue to work closely with both suppliers to ensure a consistent approach to complaint categorisation, supporting accurate, transparent and comparable performance reporting across the DSA service.

We will continue to operate a strengthened contract management and performance regime. This includes proactive monitoring, early intervention where risks emerge, and a continued focus on delivering sustained improvements in customer outcomes.