Is the SLC really on the verge of collapse?
Jim is an Associate Editor (SUs) at Wonkhe
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If it’s true, presumably higher education providers are also at risk of being left without their fee payments – and who knows what preparedness is like for the Lifelong Learning Entitlement.
The story says that education secretary Bridget Phillipson has ordered the “dogged by inefficiency” SLC to overhaul its IT systems as part of a “crackdown on quangos to reduce bureaucracy.”
It says that out-of-date technology means up to 45 per cent of staff are performing tasks that the Department for Education (DfE) believes could be done better by computers and artificial intelligence.
We’re also told that officials manually input data and move it between eight separate IT systems, six of which run on technology that is no longer supported and is neither compliant with data protections law nor cybersecure.
These, we are told, are systems at risk of “critical collapse”.
All of that may well be true, but forgive my spidey senses for having a flare up – CSR negotiations ongoing, tick, bonfire of the quangos, tick, modernise via AI, tick, time for a crackdown, tick.
The interesting line is that modernising IT systems could, we are told, increase revenue raised by the SLC to £145 million over five years, “in part by making it easier for students to repay loans faster.”
Eh? Over the past couple of years, SLC Annual Business Plans have mentioned “Invest to Save” proposals when talking about operational excellence and efficiency:
…work with partners in DfE to progress our Invest to Save proposals to improve repayment customer verification rates, improve data quality to increase verification and yield and look at options to apply stronger sanctions to customers not adhering to the terms and conditions of their student finance repayments.
“Invest to Save” is a plan to get more people to repay more of their loans by:
- Finding more borrowers who should be repaying their loans
- Improving their data about borrowers
- Making their collection process work better
- Getting tougher with people who aren’t following the rules of their loan agreements
Right now, SLC successfully tracks about 92.9 per cent of borrowers (as of August 2024), which is better than the 90 per cent target. But 7.1 per cent of borrowers is a lot of borrowers and a lot of borrowing.
For every 1 per cent improvement in finding borrowers, SLC says it can track down about 60,000 more people and collect about £27 million more in repayments.
When we FOI’d “Invest to Save” a few months ago, we were refused on the basis that the proposals hadn’t been approved yet, and that releasing the information early might cause problems with their government relationships.
So maybe it’s true that the whole place is on the verge of collapse. But it’s also true that framing the story like this aligns it with the government’s “quango reform” agenda, language about systems at risk of “critical collapse” creates a crisis narrative that’s much harder for Treasury to ignore, and noting that that current systems are “neither compliant with data protections law nor cybersecure” creates legal and reputational exposure that requires action.
The claim that 45 per cent of staff are doing tasks that could be automated suggests significant future headcount reductions – attractive to Treasury as a long-term cost-saving measure – and the specific figure of “£145 million over five years” provides a concrete return on investment figure for Treasury to evaluate.
As the June spending review approaches, we’ll see more examples of this across government departments. The challenge for Treasury officials will be distinguishing between genuine crises requiring immediate intervention and tactical alarmism designed to protect budgets. Meanwhile, for department leaders, the game remains the same – position your funding needs as essential risk mitigation rather than optional improvement if you want to secure investment in an era of fiscal restraint.
Think it is reasonably well known that the SLC systems are very poor. There is no one overarching system, just a series of different systems built for different purposes that they have had to try to link together as things have changed and they have been asked to do more
They have not been given the investment to start again. Whilst I have often been critical of the SLC, I have a lot of sympathy for what they have been asked to work with
Let’s dissect this behemoth with the surgical precision of a particularly blunt butter knife.
The Waiting Room of Despair: Imagine Sisyphus, but instead of a boulder, he’s pushing a single, meticulously-completed form downhill, only to have it vanish into the bottomless chasm of the SLC’s processing system. Days bleed into weeks, weeks into months, and hope withers like a forgotten houseplant. Even the most meticulously documented case can be lost in the bureaucratic ether, leaving borrowers adrift in a sea of unanswered queries and escalating interest rates.
The Oracle of Ambiguity: Seeking clarification from the SLC is akin to consulting the Delphic Oracle—you’ll receive an answer, but deciphering its meaning might require a PhD in bureaucratic interpretation. Phone calls are met with hold music that could lull a grizzly bear into a coma, while emails are answered with robotic pronouncements that offer little practical assistance. The sheer volume of jargon the SLC employs suggests a deliberate strategy to obfuscate and confuse.
The Labyrinth of Forms: Navigating the SLC’s online portal is like attempting to escape a digitally rendered Minotaur’s maze, each form more complex and convoluted than the last. The requirements feel arbitrary, ever-shifting, and capricious, leaving borrowers scrambling to keep up with the ever-changing rules. Even a slight error can send your application tumbling back to the bottom of the ever-growing pile, condemning you to another cycle of maddening delays.
The Hydra of Interest: The interest on student loans is a many-headed beast, constantly regenerating regardless of your ability to pay. It relentlessly devours savings, dreams, and any faint hope of financial stability. Each attempt to slay one head results in the birth of two more, as heads seem to multiply exponentially.
The Conclusion: The Student Loan Company, in its current form, is less an organisation and more a metaphor for the Sisyphean struggle against bureaucratic inertia. It’s a system designed to confound and frustrate, leaving borrowers trapped in a relentless cycle of debt and despair. It’s a monument to inefficiency, a testament to the absurdity of the modern bureaucratic state. Only divine intervention (or a complete system overhaul) could grant salvation.