Education Committee
Oral evidence: Accountability Session: Student Loans Company, HC 341
Tuesday 30 October 2018
Ordered by the House of Commons to be published on 30 October 2018.
Members present: Robert Halfon (Chair); Marion Fellows; Ian Mearns; Lucy Powell; Thelma Walker.
Questions 1405 - 1497
Witnesses
I: Paula Sussex, Chief Executive, Student Loans Company, and Christian Brodie, Non-executive Chair, Student Loans Company.
Paula Sussex, Chief Executive, Student Loans Company, and Christian Brodie, Non-executive Chair, Student Loans Company.
Q1405 Chair: Good morning, everybody. Thank you very much for coming today. For the benefit of the tape and those listening on the internet, could you kindly introduce yourselves and your title? Watch the acoustics; they are not great in this room.
Paula Sussex: Good morning. Paula Sussex, the new Chief Executive of Student Loans Company.
Christian Brodie: I am Christian Brodie, the non-executive Chair of the Student Loans Company.
Chair: Thank you.
Q1406 Thelma Walker: What steps has the company taken to improve its governance and leadership following the departure of the previous CEO and the subsequent National Audit Office investigation?
Paula Sussex: I am sure the Committee will forgive me; because I joined last month, some of these are observations. It strikes me that governance has strengthened considerably. There has been a considerable focus on communication as well, which is within the executive as well as the non-executive layer.
What I am very pleased to see—which is not always the case—is that it is a strongly unitary board. I am a member of the board. The new members are my new chief financial officer, who has been an exceptional hire, and also my deputy chief executive officer, who has the very long view on the company. That considerably strengthens communications at both the non-executive and the executive level.
Q1407 Thelma Walker: One of the six components of the new strategy was aligning culture management and leadership behaviours. Could you say how leadership behaviours are being addressed?
Paula Sussex: Yes, I can. I will try not to speak for too long on this as well. It is an area that, as you can imagine, I want to put a great deal more focus on. Despite the considerable increase in volume and complexity that the organisation has faced, over the last three to five years I would say, it has none the less started on the road to modernising technology and also, vitally, early steps with leadership capability. There is a programme that has been run called Role of the Manager. If you are familiar with it, it is very similar to leadership development programmes. It works quite closely on the competencies and accountabilities of the cadre of managers. It is a great start point. I want to extend that further into the company, then, of course, to extend further into the people strategy, which I am happy to talk about further on in this Committee, but I should probably pause at that point.
Q1408 Thelma Walker: Thank you. Have you any comments on this, Christian?
Christian Brodie: As I have been involved with a number of items that Paula has referred to over the course of the last 16 months, I can probably go into a little bit more detail on those topics.
They really fall into four main areas. The first is around recruitment of chief executives, the second around governance more generally, the third is working with the Department for Education, and finally addressing the issues of staff morale, which clearly was at a low ebb during the tenure of the last chief executive.
Starting with recruitment, we considerably revised our way of recruiting a chief executive. We introduced psychometric, numeracy and double-reasoning tests. We involved a psychologist to evaluate those tests and to have interviews with candidates. We did a lot of due diligence around social media activity and triangulation of references. We had a very, very targeted and specific induction programme. We made sure that the last interim chief executive handed over for a two-week period to introduce Paula to the Student Loans Company. Therefore, around recruitment we made some considerable steps and advances and believe we have a truly excellent candidate as a result.
Q1409 Thelma Walker: It is early days at the moment, but is there any evidence that there has been improvement in terms of the culture, relationships and communication?
Christian Brodie: It is early days, but we are continuing the programme I had with the last interim chief executive, which was that every week Paula and I either meet or speak on the telephone against an agreed agenda of the things that have been going on that week. We met for almost two hours yesterday, discussing the salient things that are coming up in the week, and we do that every week.
The progress we made with the last interim chief executive has been extended and continued with the new permanent chief executive.
We launched a formal review of governance. We revised terms of reference for the board and various committees. We have strengthened our remuneration committee to include organisational design and recruitment of senior people. As Paula said, we appointed a very well-qualified chief financial officer, who has experience with the National Audit Office as a director, so is well familiar with managing public money, regulations and rules. We have also asked members of the executive team to attend board meetings on a regular basis, which had not been the case before. We have really, I believe, taken some concrete steps to improve governance more generally in the Student Loans Company.
We have improved ways of working with the Department for Education. Again, I have regular meetings with the director, who was the leader of the sponsorship team for the Department, in a more formalised way than we did before.
Finally, most importantly, we have taken steps to address some staff morale issues. Paula has referred to the Role of the Manager programme, which we are rolling out across the company. We are introducing lean ways of management and processing, which we believe will increase and improve staff morale. We now have regular surveys of staff morale and we address quickly, we hope, any issues that come out of those regular services.
We have taken about four or five concrete steps to significantly improve, we believe, governance since the Steve Lamey affair.
Q1410 Thelma Walker: Is there going to be a programme of regular evaluation? Performance management was mentioned but I am talking about the actual evidence.
Paula Sussex: Yes, absolutely. Where your question relates to our team of 3,300, there is a lot of work that we need to do there. This is an exceptional team, doing an exceptionally difficult job. We do not believe that pay at the junior levels of the organisation is where it should be. There are also a number of other factors about the complexity and pressure of their work and the way we can make Student Loans the most rewarding place it can be for them to work. That is quite a task; it is quite a long road.
Over the last month I have made sure I have gone around all the sites—we have three in Glasgow, our main one in Darlington and then up to Llandudno on the edge of Snowdonia—sat with the staff and listened and listened and listened in large groups and one on one, encouraging them to send in suggestion emails. I am getting a lot of feedback about what the issues are and getting more and more confident about what we need to do, but it is quite a long road.
Q1411 Chair: Can I ask you why there has been such a shambles in the past and why you think this was allowed to happen? You had a chief executive clearly engaged in wrongdoing, and huge problems across the Student Loans Company. Can you explain why this was allowed to happen and who is responsible for it?
Christian Brodie: I regret the recruitment of Steve Lamey and what happened under his tenure; there is no question about that. However, I would argue with your characterisation of the mess.
This is a company that has 41 key performance indicators. In the last financial year, on 36 we were green, on five of them we were green-amber and on only two amber-red. This is an organisation that is actually doing what Parliament has asked it to do. That took place during the time of trouble with Mr Lamey. This is an organisation that is performing well.
If you look at our level of complaints, they are about 1.58 per thousand customers. That is in line with the best in the public sector. I came from the private sector where, running a large financial services organisation, we would have died for complaint levels of that level.
Q1412 Chair: I understand that, but you still had a chief executive dismissed for gross misconduct, breaches of the Nolan Principles of Standards in Public Life, of the guidance on the management of public money and the companies code of conduct. That is huge and it is the chief executive of the organisation itself. How was that allowed to happen? How was such an individual appointed? Why were there not checks and balances? If it had not been for the 69 whistleblowers this would have carried on.
Christian Brodie: I would argue the operational performance of the company was good. Clearly, as you said, there were a number of breaches of the Nolan Principles that he committed.
Chair: This is not any member of staff; this is the chief executive.
Christian Brodie: I understand that.
Chair: This is the whole face of the organisation.
Christian Brodie: When we recruited him, his references did not give any indication specifically that the acts he undertook might be likely to have occurred. He was at the director general level in HMRC. He did a good job at HMRC. We recruited him on the basis that he was well qualified to do the job. The acts that were complained of occurred in the last two or three months of his tenure. As soon as we found out about them we suspended him immediately.
Q1413 Chair: Before I carry on I should add, for the public interest, that I do know you well through the local enterprise partnership in my area.
Why were there not enough checks and balances within the Student Loans Company? Why did you have to rely on whistleblowers? This was not just one middle-ranking employee; this was the chief executive of a company. Surely there was something deeply wrong with the way the company was run, in that there were not checks and balances. You had to rely on whistleblowers, or none of this would have come out and this chap could have been there for a long time to come.
Christian Brodie: It was an iterative process as to why the whistleblowers came out. There were discussions with these people before I offered them whistleblower protection, so we were in communication with these people. As soon as the gravity of the offences became clear, we moved within days—literally days—to instigate investigations. As soon as the second whistleblower came forward we suspended Mr Lamey immediately.
It was not as if these things had been going on for a long time before. Most of the acts complained of were in the last two or three months of his tenure. Therefore, I would argue the checks and balances worked well. We moved very quickly to suspend Mr Lamey as soon as we became aware.
Q1414 Chair: To be sure, what checks and balances have you introduced to make sure nothing like this happens again?
Christian Brodie: As I said at the beginning, we have certainly revised our recruitment procedures. In particular, we instigated psychological tests, we had interviews with a psychologist, we did a lot of triangulation of references, and we checked social media activity. We revised the recruitment procedures quite considerably.
In terms of checks and balances going forward, I have mentioned that Paula and I now have weekly meetings to go over events that are occurring, as and when they arise. We have changed the terms of reference of the remuneration committee. We have strengthened the board and we have added two very well-qualified non-executive directors since that time.
A lot of work has been done to make sure that the events that did occur have a much lower chance of recurring. You can never say it will never happen again, but we are trying to make sure we reduce the likelihood of that occurring again.
Q1415 Chair: Before I hand over to my colleague, Ian, on the SLC 2020—which we are going to come on to—the six things you have partially mentioned are very “jargony”. It is the sort of thing you can imagine any company writing. They do not look particularly remarkable. If I could pick you up on No. 2, you have, “Customer & Product - The simplification of customer and product to enable quick delivery of government policy objectives”. Not only is that “jargonesque” personified, a Sir Humphrey dream sentence, but there is nothing about customer service or in terms of looking after the student customer. It is very “management consultancy speak”. You could imagine this coming out of a Fujitsu training seminar for management consultants rather than changing the culture and really making a difference.
Paula Sussex: Perhaps I may pick that up, as an ex-management consultant, not that I wrote that.
Q1416 Chair: Who did write this?
Paula Sussex: The strategy two years ago was a combination of the team and also the previous chief executive, Steve Lamey. We have always apologised for the jargon.
The focus on the customer is there. In Operational Excellence, one of the four programmes, the speed and efficiency with which we deal with the customer addresses it. In the area you are talking about, which is digital, there is a huge focus. I have been very impressed to see what the team is doing with organisations like The Student Room. We are increasingly doing communication through YouTube and all the other social media outlets including Facebook because, absolutely, our core demographic is there.
Q1417 Chair: Why is one of these things not customer service, ensuring that the student gets the best service possible from the Student Loans Company, rather than, “Driving SLC towards an operationally excellent company, aligning our culture, management and leadership behaviours, organisational structures, performance…management”? This is all gobbledegook. It is management consultancy speak. It does not mean anything to the students who are going to be using this service.
Paula Sussex: To students we would say, “We know that when we independently survey, 84% of you say you are satisfied with the service.” We would say, “You are a digital demographic and we need to do more to serve you where you exist.” We are trying to eradicate paper and posting because we know that our demographic does not post things. We are trying to do more through Facebook. We are also doing customer service now by dropping into Facebook and joining conversations about issues or challenges that students might have, which is quite advanced and tricky to do because, as we know, the world online is much less regulated than other routes and we are still dealing with executing public policy. Apologies for the words, but I think we are customer-focused in the strategy.
Q1418 Chair: Are you going to change this strategy?
Paula Sussex: We have to reframe the strategy. It has also been pared back to one year of funding, which is not sustainable for the amount of work we need to do.
Q1419 Chair: I would suggest that calling students “digital demographics” is not the best way of bringing people on side. Students are human beings. They may use digital media but I think you could read a lot of this anywhere. I could go, as I say, to a Fujitsu, KPMG or whatever it is pamphlet and I am sure it would be in there. It does not “speak human”, any of this.
Christian Brodie: We will reflect on what you are saying, Chair. We will take those comments, which are good and on point, and take them into account.
Q1420 Thelma Walker: To support the Chair on the human side of this, in a previous session we heard that 76% more students are stressed about finances, worrying about the future and leaving studies with £50,000 plus.
In terms of relationships and that human interaction, to be called a customer when somebody is already stressed and worried—it is about that relationship and what you do to consider those individual students, who are stressed and worried about day-to-day costs and also the long-term impact of leaving their studies with £50,000 plus.
Paula Sussex: Absolutely. Since I have been on the payroll, every week I sit in on calls or listen to recordings of calls. Part of that is just to listen to the tone and style of those conversations. I have only been there for a few weeks, but for every call or recording I have heard, the handling has been immaculate. It has been at quite a slow pace, it has been quite considerate, it has been quite open to taking on any more questions, and so on. From my personal experience of how the call handlers are doing their job, if I were on the other end of the line I would be feeling quite good when I got off the line.
Q1421 Chair: On the whistleblowers, how did that work? Can you explain that, please? Did they whistleblow to you? How did it happen?
Christian Brodie: Chair, it was more of an iterative process. I spend a lot of time in Glasgow and a lot of time speaking to staff.
Q1422 Chair: From what I have read there were 69 whistleblowers. How was the whistle blown?
Christian Brodie: There were 69 allegations, I think. Formally, there were two individuals who had whistleblower protection. There were 69 complaints, seven of which were found to be valid.
There were two whistleblowers. I do not want to go into too much detail because obviously it is important we protect them.
Chair: I am trying to understand how they blew the whistle, not who they were.
Christian Brodie: Basically, an individual had an issue with the CEO. I became aware of this and spoke to her at her home on a Bank Holiday Sunday, had an hour and a half conversation with her. She did not ask for, but I did offer during that call, whistleblower protection. There had also been a conversation with one of the director generals of DfE and the individual as well. The director general and I decided immediately to instigate a Government Internal Audit Agency investigation. That is how that one came about. The whistleblower was able to speak very freely to the GIAA and that investigation continued.
As far as the second one is concerned, the chair of the audit committee became aware of some concerns another individual had. The chair of audit rang to tell me about these concerns. I had independently noticed this individual was also having certain stress. When the chair of audit said to me she had also noticed this, I telephoned the individual and asked him to fly down from Glasgow to visit me in my London flat. We had a couple of hours discussing the issues that he had. He did not ask for, but I offered him, whistleblower protection. Within two days I had suspended Mr Lamey.
Q1423 Chair: Have you introduced formal whistleblowing procedures?
Christian Brodie: We have formal whistleblowing procedures. We have revised those, Chair but we have those anyway. I hope as a result of the incidents that people now at the Student Loans Company feel that the chair takes these things extremely seriously and acts immediately when these things come up.
As a result of the second whistleblower, the Permanent Secretary at the Department for Education and myself commissioned Sir Paul Jenkins to carry out an investigation.
Q1424 Ian Mearns: The National Audit Office report was critical of the process by which Mr Lamey was recruited in the first place. Within that, it was critical of the fact that the Department, which was then BIS, did not take concerns from officials more seriously before his appointment. What were those concerns?
Christian Brodie: The concerns were about Mr Lamey’s management style at HMRC.
Q1425 Ian Mearns: How long was Mr Lamey with you in total?
Christian Brodie: He started on 1 June 2016 and he was suspended on 12 July 2017.
Q1426 Ian Mearns: Just over a year. Given the National Audit Office report and the serious breaches of the Nolan Principles on Standards in Public Life, which were highlighted within that, have you conducted any sort of retrospective root-and-branch review of all the decisions that Mr Lamey was involved in taking—appointments that were made or decisions about staff structures, or whatever? If it was found out in the latter part of his tenure that there were particular problems, surely that must have built up over time. Therefore, have you conducted a proper review of staff appointments that he was involved in and so on, if there were significant concerns about Nolan Principles being breached?
Christian Brodie: The answer is yes; we have absolutely done that. The previous interim chief executive, Mr Lauener, who stepped down three weeks ago, as a result reorganised the responsibilities of the executive leadership team. We have thoroughly investigated all the things that Mr Lamey undertook when he was there and have made a number of significant adjustments.
When you go through an episode like this, it is really important that you understand what went wrong and learn from that and make adjustments. I would argue, Mr Mearns, that we have absolutely done that.
Q1427 Ian Mearns: Paula, I know you have just taken over, but are you confident that that is entirely correct—that you are taking over an organisation that has learnt from those serious mistakes in the past?
Paula Sussex: Yes, absolutely. As Chris said, I had the benefit of Peter Lauener, who is an excellent career public servant—
Ian Mearns: To be fair, Peter Lauener was wearing about five different hats at the time he was there.
Paula Sussex: You would be very surprised at how very present he was. He has been enormously thorough. We have had a very good handover. He has graciously agreed to stay on as my mentor, so we speak very regularly. Therefore we have, as they say, good eyes on the history as well as the future.
Q1428 Ian Mearns: The Chair has touched on this already, but you have inherited the SLC 2020. Are you going to have a good look at that in terms of it being an appropriate way forward for the organisation?
Paula Sussex: Yes, absolutely. In fact, the end of the week is my first opportunity to go away with my executive team to do just that.
Q1429 Ian Mearns: One thing that strikes me about the Student Loans Company is that its customers—the students out there who are desperate to get finance in order to allow them to study—do not have much choice in this; there is not a market out there so they can go to that market. Therefore, to call them customers is, I think, a little strange because it is not an ordinary customer-client relationship from that perspective.
Paula Sussex: You are right that there is not a ready market.
Chair: They have no choice but to do this. It is not like going to Sainsbury’s or Tesco; they are not customers as such.
Paula Sussex: Absolutely. I am very happy for you to suggest an alternative. I think it is healthy for public servants to focus on customer service and, therefore, the concept of having a customer to whom good customer service is owed.
Q1430 Ian Mearns: The very fact that 84% of customers say they are satisfied implies that 16% are somewhat less than satisfied. That is a lot of people. A big retail organisation would not be happy with that statistic. Chris Grayling would not be happy if the train services in the areas that were doing well had those sort of statistics. In the rail service, 95% is the target they aim for. I should have thought you would be aiming for satisfaction rates in the high 90s from the people you are providing a service for.
Christian Brodie: Three things make the Student Loans Company unique in its ability to serve customers. The first is that we are actually serving four different Governments, so we have four different sets of rules to administer. McKinsey did a report for us about 18 months ago on the complexity of what we have to deal with. We have an extraordinarily complex product base and rules base. That makes the complexity of the Student Loans Company quite unique. If you compare it with a financial services company of an equivalent size, McKinsey calculated we were probably one and a half or two times more complex because of the different Governments we serve, the complex products we have and the different regulations we have to administer. Complexity is one thing we have to deal with.
The second thing we have to deal with is an organisation that is growing very, very rapidly. We are adding 450,000 users every year, year in, year out. There is no other organisation—I defy you to name one—in this country that is growing at that level.
Therefore, we have complexity and enormous growth. No financial services company is growing at that rate at that size. We now have 8.1 million customers.
The final thing we have to deal with is an immensely seasonal business. To give you an illustration of how the seasonality works, in January or February, say, we get about 1,000 to 2,000 calls per week. In our busy period—August and September—we get about 250,000 per week. We are dealing with a really complex organisation, an organisation that is growing incredibly rapidly and one that is also dealing with huge seasonal variations. That makes it a very complex mix to administer.
You are right to say that our satisfaction rates are at 84%, but they have gone up from 70% in 2011-12 so we are on a trajectory that is improving. We clearly need to improve further. I take Ms Walker’s point that we are dealing with human beings here. We are dealing with young people taking on probably the first major complex financial transaction in their lives. I have been the chair of a university and I have been a pro-chancellor of a university. I am acutely aware of the stresses and strains that students are under and I feel that myself, very clearly. As Paula said, if you come to Darlington and you sit and you listen to the calls that our call handlers have to take every day, I think they do an outstanding job under very difficult circumstances.
I do want to go on record here this morning to say what a good job I think my colleagues in Darlington, Glasgow and Llandudno Junction do. They do a really good job. They are not very well paid. They are subject to public sector pay constraints. I wish we could pay them more. That is another thing that we have to deal with. We have very high rates of staff turnover and that is a function of the labour markets in which we operate. In Darlington, we lose people to other Government Departments. In Glasgow, we lose people to banks, which love our staff because they do a really good job and the banks want them. In Llandudno Junction, if you can believe it, we lose to the Welsh Government in the same building. They can go for a significant premium to other areas of the Welsh Government in the same building. They just have to cross the corridor and they can get up to a 20% premium in pay. We have a very complex and difficult task and I think that my colleagues—
Chair: May I ask you to be slightly briefer in your answers? We have a lot to cover.
Christian Brodie: I feel very strongly, Chair, and those are points that absolutely needed to be made this morning.
Chair: If you could just keep it slightly shorter.
Q1431 Ian Mearns: You have explained a range of different constraints on the organisation. My next question is to you, Paula. You were aware of all of that before Mr Brodie’s answer to me. Do you think you can make the improvements that will be required so that we, as Members of Parliament, representing the constituents who are your customers, can be confident that our constituents—your customers—will be having increasing levels of satisfaction in the organisation? I take on board the trajectory, but that is a relatively slow trajectory of progress in six or seven years. You have added about a 1% increase in satisfaction levels per year over that period. I understand about the difficulties you are having with staff recruitment and retention, but does that not imply that you need to think about that as well in terms of where your bases are?
Paula Sussex: Yes. There were perhaps a few questions in there. Starting with do we want to improve, can we improve—yes, of course. The team is highly committed. My observation is that SLC badly needs the space to be able to improve. I might even say breathing space.
Touching on technology, and given our previous conversation, it is outstandingly complex. The legacy systems that I have spent quite a bit of time looking at—and I do have an IT background—need time to be straightened out. Some of the dissatisfaction in that 16% is about when the systems do not readily produce the right numbers, because they can’t, because we have systems that are not speaking to each other. They have been growing like Topsy over the last 20 years. To re-engineer the estate, we would need space and that is exactly what I and the team are going to be putting our brains to, very seriously, cognisant of the risk that we might be running now and the risk we don’t want to run by doing anything like that this week.
Q1432 Lucy Powell: Do you think that, in a funny sort of way—we have just discussed this as part of our inquiry into value for money in higher education—the idea of a loan is a bit of a misnomer now? Is it actually a loan or a fee that you pay, because of the way in which people do or do not repay? Do you think that there is a growing misnomer? Secondly, do you think that the job that you are being asked to do will become increasingly impossible, and that a simpler system of, say, graduate tax or something administered by HMRC might be better able to do what you are increasingly being asked to do, which is possibly impossible to do? It is a big question, but it does relate to something we have been discussing.
Christian Brodie: Yes, it is a big question. It is very interesting. You have raised a lot of issues that I have thought very deeply about, even before I started the job.
Lucy Powell: As we have.
Christian Brodie: On the graduate tax idea, the current income contingent repayment obligation, to give it its full name, operates similarly to a graduate tax. However, it has a number of advantages over a graduate tax. Graduate tax, if it were recovered by HMRC, would not be hypothecated to the universities. It would just go into the Treasury, and then who knows what would happen to it? At the moment—
Chair: Just as they did with the road funds yesterday, for example.
Christian Brodie: At the moment, a general tax is not hypothecated. Road tax may be a singular exception.
Lucy Powell: There are ways of doing it.
Christian Brodie: There are ways of doing it. The second reason is that taxes are not enforceable in other countries, so if people went overseas you would not be able to enforce the tax.
Thirdly—you mentioned the loan sale and there is a connection here—there has only been one instance that I know of where a sovereign body has sold its taxes forward. That was in the state of Missouri in the United States, and it did not end well. Basically, the income contingent repayment obligations are capable, as we have proved, of being packaged and being sold, and it is one of the Government’s policy requirements that that can be done. A tax would not have that advantage.
Q1433 Lucy Powell: We will come on that in a second. Do you feel that given the way that this system has evolved, a lot of the language used and the way that it is sold have not kept pace with that?
Christian Brodie: Let me come to that. That is a very interesting point. Long ago, before 2006, we did create loans as such, which operated as loans. They were called mortgage-style loans. As an ex-lawyer, I believe that when we switched to the income contingent repayment obligations, the definitions “debt” and “loan” are difficult ones to stretch over what we do, because an income contingent repayment obligation is one that you only pay as you earn over a certain amount. It is a fixed amount that does not bear reference to the amount of the so-called debt, and it gets written off after 30 years. You only pay it if you earn over a certain amount, so if you take a career break, as 60% of graduates are likely to do during the course of their careers, you do not pay, and under the current scheme, Plan 2 loans, the debt gets written off at the end of 30 years if you have not paid it.
To me, an ex-lawyer, all those things suggest it is not really a debt as such; it is something else. If we called it a graduate contribution, as opposed to a graduate tax, that might be a more accurate description and would be a better description for me. People get frightened by the idea of a debt hanging over them. This really is not like that and the terminology that we use is potentially not helpful.
Q1434 Lucy Powell: It is misleading. I have used that language before and it is almost being mis-sold.
Christian Brodie: Not as helpful as it could be; I would not use the word misleading.
Q1435 Lucy Powell: One of the points I am going to get out, and then I will get on to the sale of the loan book, is whether you think looking at the scheme anew would help you with some of the administration challenges that you have. As you say, obviously the seasonal nature of demand, some of the customer service challenge because you are having to educate a lot of people about what their commitment actually is, and so on—sorry, I am not being very articulate.
Christian Brodie: I don’t know, but I hope that is one of the things that Mr Augar and his committee are looking at. I think they are looking at the whole communication aspect and the administration aspect.
Before I became chair of Student Loans Company, in my interview I did ask the question, “Why is it called the Student Loans Company because we do not actually make loans?” I think it would be much more helpful if it were called something else. For example, the Student Finance Company might be a more accurate and more helpful description. In fact, the name that we use in England is Student Finance England, which I think is a much more accurate description of what we do.
Q1436 Lucy Powell: Coming on to the sale of the student loan book, do you have an opinion about whether that is a good thing or not? Are you allowed to have an opinion about that?
Christian Brodie: It is Government policy, so I do not have an opinion.
Q1437 Lucy Powell: What role do you have in that?
Christian Brodie: We have three basic functions. We cleanse the data and we provide the data for UK Government Investments to package it and to sell it. Leading up to the loan sale, we have a role in preparing the information about the asset that is being sold. After it has been sold, we have a continuing obligation to service those assets that have been sold. That is the second function. Also, at the time of the sale or just after the time of sale, at the direction of the Secretary of State, we write to all the borrowers affected to tell them that the sale has taken place.
Q1438 Lucy Powell: Do you not think this is just a bit of a financial “makey-uppy” whizzy thing that is what led to the financial crash in the first place, where people package up debts and sell them on, even though to all intents and purposes you are still in charge of those debts?
Ian Mearns: It is AAA-rated by Standard and Poor’s.
Christian Brodie: That is probably a question that you ought to address to the Department for Education and HM Treasury.
Q1439 Lucy Powell: As far as you are concerned, those customers are still your customers?
Christian Brodie: We still have obligations to service those loans under the master servicing arrangements, correct.
Q1440 Lucy Powell: But it is a lot of extra work for you?
Christian Brodie: No real difference.
Lucy Powell: I mean the preparation.
Christian Brodie: The preparation, yes.
Q1441 Ian Mearns: Isn’t it a difficult product to sell inasmuch as, as you have said yourself, many of those students will never repay because they are not loans? It is not like selling a basket of sub-prime mortgages, because a sub-prime mortgage has a property connected to it, whereas this is an indeterminate amount of money because we do not know whether or not the student will earn enough—
Chair: Are you able to comment on why on earth people would buy this product?
Christian Brodie: Those are questions you really ought to address to the Department and to UKGI. What we do is facilitate the sale. That is our only role.
Q1442 Lucy Powell: I do not know who buys these things, presumably some big sovereign wealth fund somewhere else in the world that no one can ever get hold of, but have you had to consider what would happen if one of the financial institutions that bought these loans collapsed? Has there been any contingency planning? What if it turned out that the institutions did not have enough assets to save themselves and they collapsed, in the same way as when we had the financial crash? What would happen?
Christian Brodie: In that hypothetical scenario, the loans would be an asset in the collapse of whatever institution had bought them and they would presumably be sold on by the people handling the bankruptcy.
Q1443 Lucy Powell: That is not what happened before, though, is it, when we sold on packaged-up assets?
Chair: Would the Treasury have to buy them back under such a scenario?
Christian Brodie: You are asking questions that are way beyond my pay grade, Chair, I am afraid. All we do is facilitate the sale. The decisions regarding those other matters are taken by Ministers and—
Q1444 Lucy Powell: You are not a civil servant, though. As a business person, do you not have an opinion? To me, it seems to be just a clever wheeze to try to make the public finance ledger look a bit healthier, but the reality of the facts is no different. It does not matter.
Chair: Are you able to say whether you think doing this is a good idea?
Christian Brodie: Our role is to carry out Government policy and if Government policy changes, then we will carry out the changed Government policy. I do not have an opinion on those matters.
Lucy Powell: You are being very kind. I am being very unkind, asking. I will move on.
Q1445 Marion Fellows: When you talk about independent students, what gave the Student Loans Company reason to believe that estranged students were a particular source of fraudulent claims, and that that warranted such action as has taken place?
Paula Sussex: I have read the files and had the briefing on it. As you can imagine, this was an issue principally over the summer. As far as I understand the situation, first of all our handling could have been a lot better, clearly. My excellent predecessor was very quick to personally write to the students affected with his personal, as well as SLC’s, apology.
The concept of auditing for counter fraud is something that absolutely we will do because we have a duty to the taxpayer. From what I can see, the sample was about the right size, but that is not the point; the point is about how we did it and that is what, quite rightly, you are getting at here. We have taken away several lessons from that, very many points for the organisation, and it is now my job to oversee them being delivered.
Q1446 Marion Fellows: Do you have anything to add, Mr Brodie?
Christian Brodie: No. I echo what Paula has said and reiterate that I am acutely aware that students are people—in the case of estranged people they are especially vulnerable—and certainly I would wish them to be treated with a degree of sensitivity and care. That clearly did not happen and I am very sorry about that. Like all such instances, Ms Fellows, I believe we learn from them and we take steps to ensure that the chances of them happening again are lowered.
Q1447 Marion Fellows: How did the company assess the effect on students’ rights to privacy when this was carried out? I know you will take that forward, but was an assessment made?
Paula Sussex: Could I come back to you on that? I probably need to speak to my team about that precise point, so I can come back to you, if that is all right.
Q1448 Marion Fellows: Okay. That is fair enough. Students seem to have to provide a great deal of evidence to prove estrangement. Does this show that the company does not have faith in its own processes, the excessive amount of information they have to provide?
Paula Sussex: Eligibility and evidence of identity and so on, in all of our very many loans or grants, can seem onerous to either sponsors or to students. The rules will be prescribed in part by the regulation, but in part through our business process. We are always looking for ways to lighten the burden or, as I have said before, to automate the process so the student does not need to find a post box and a stamp, and so on. Again, in this precise instance, I could not give you an absolute answer on whether the process was onerous or whether we were following both regulation and best practice.
Q1449 Marion Fellows: Reading the regulations and the briefing I have received, it seems to me that there are reasons, but there does seem to me a great degree of flexibility in the decision-making process in this regard, so it is about the environment in which the decisions are made. Going forward, will that environment be improved, will it be changed, will it stay the same?
Paula Sussex: One of the learnings from our handling of the audit of estranged students is absolutely something about listening, and listening more carefully. I have looked at the way that the team took feedback and one of my prime actions is to ensure that that feedback is acted upon all the way up the line.
Q1450 Ian Mearns: Is this not more evidence that the organisation needs to be much more humanised?
Paula Sussex: To humanise? It is very difficult for me to say, after five weeks, whether it is human or not. When I meet my operational colleagues, when I join them in their working sessions, they speak a lot about the satisfaction they have in helping the student. I have not seen instances of the organisation not being human. I think that listening more carefully and perhaps having the courage to say, “This doesn’t feel quite right,” which, when you are in a front-line service and you have rising demand, the phone ringing off the hook, queues and so on, is a muscle that is quite hard to develop. I do know that we need to do better.
Q1451 Lucy Powell: Do you think there is conflict between being the gatekeeper and the administrator? It seems to me that being the administrator of the system, packaging up to sell on and so on, but also being the gatekeeper is potentially an area of difficulty.
Paula Sussex: Gatekeeper to eligibility?
Lucy Powell: Yes. If we go back to our previous conversation about the idea of this being student financing, obviously you have to be eligible to get a mortgage or certain other kinds of finance, but if this is based on your future ability to pay and, if you cannot pay it, then you won’t pay it, then do we need to have such strict policing of eligibility?
Christian Brodie: I infer from your question, Ms Powell, that you think we exercise some sort of credit—
Q1452 Lucy Powell: No. I am exactly the opposite about it. What I am saying is that if we go back to our previous conversation, which is that this is not a loan, this is a contribution you may make, subject to your earnings, then do we need to have such strict policing of eligibility?
Christian Brodie: On estrangement, what happens is that if you are estranged you are not means-tested for your maintenance loan, so that is free will, to some extent. Estrangement is a particularly sensitive area. I am really conscious of that. The full idea of asking people to prove estrangement, to me, just morally is an issue.
Q1453 Lucy Powell: No, but there are other examples. I have dealt with cases of refugees who have come over here, who have not been able to get a so-called student loan because it was deemed that some qualification they had in Iraq 20 years ago was an equivalent, and so on.
Christian Brodie: We have an obligation to the taxpayer to make sure that only those people who are eligible for elements of student finance help are eligible to receive it. To that extent, we do have to exercise judgments, clearly. For the vast majority of people who are just straightforwardly making an application, there is very little judgment involved at all. People are eligible, they are entitled to student finance; end of. There are more complicated areas—estrangement, for example, or in the case of people who have complicated backgrounds with regard to the countries they may have lived in or not lived in. We even have complications within the UK itself. For example, are people who move from Wales to England and back again entitled under the Welsh system or the English system? These are difficult questions—
Q1454 Lucy Powell: That is what I am asking about. Do you think there is an argument that maybe the administration side of this should be separate from what might be a more accountable gatekeeper role, that we as politicians in Parliament would want to have more of a—
Christian Brodie: What I would want you as politicians to do is to reduce the complexity.
Lucy Powell: Right, okay.
Christian Brodie: I referred to the McKinsey report on complexity. Complexity around things like estrangement or eligibility makes our job much more complicated and difficult. If we could ask our politicians to really think about the complexity of the system and try to reduce it, that would make it easier for everybody.
Q1455 Lucy Powell: Especially given that, as you say, this is not actually a loan; this is something that if you earn more later on in your life you will pay back. If you are going to earn enough, you will pay it back; if you do not earn enough, you will not pay it back.
Christian Brodie: Correct.
Q1456 Lucy Powell: You do not really need to assess whether someone has the income or the assets in the usual way.
Christian Brodie: We don’t have to do that but Parliament set out, and does set out, lots of regulations for us and we have to comply with them; we absolutely have to.
Lucy Powell: Okay. That is a good talking point.
Q1457 Chair: Christian, can I clarify something? The National Union of Students published part of a letter to an estranged student. It said, “You had applied for student finance on the basis that you are estranged. However, we found evidence on Facebook of conversations between you and your mum in October 2017.” That is really freaky. It is sinister, a sort of KGB knock on the door type of thing. Why would you be trawling people’s private social media accounts? Surely that is against data protection regulations, anyway, if it is their private social media account, to get this kind of evidence.
Christian Brodie: Social media tends to be public, Chair, and we have a duty to make sure that the taxpayers’ funds are being properly disbursed, and if there are public sources of information, the terms and conditions on which people apply allow us to look at public sources of information.
Q1458 Chair: I suspect that most students are not fraudulent. You may get the odd rotten apple. Just because somebody is talking to their mum does not mean they are not necessarily estranged from their families. They may talk to their mum once a year. You know as well as I do that people who put stuff on social media often do not have the correct privacy settings. Surely trawling social media is an abuse. You are creating a surveillance society. How can it be right to trawl people’s social media accounts? It is very sinister.
Christian Brodie: I will repeat myself one more time. The application process allows us to look at public sources of information. If people have public sources of information about themselves, then they must expect that they will be looked at.
Q1459 Chair: You knew that as part of this you would be trawling people’s social media accounts?
Christian Brodie: We are entitled to look at public sources of information.
Q1460 Chair: Did you know that part of that would be trawling people’s social media accounts?
Christian Brodie: Did I personally know that?
Chair: Yes.
Christian Brodie: No; I found out subsequently.
Q1461 Chair: Is it something you approve of?
Christian Brodie: This whole question of estrangement is a very difficult one, Chair, and there are moral and ethical issues that one needs to take into account.
Q1462 Chair: That is an answer to a different question. Do you approve of your organisation trawling people’s social media accounts to find information?
Christian Brodie: I will repeat myself one more time. We have an obligation to make sure that taxpayers’ funds are properly disbursed. We are entitled to look at public sources of information.
Q1463 Chair: I accept that, but do you approve, specifically? I am sorry to ask you this again, because you are not answering the question. Do you approve of people in your organisation looking at people’s social media accounts, trawling through social media accounts—where does it stop?—to find out sensitive information?
Christian Brodie: We have a duty to make sure that taxpayers’ funds are properly disbursed and we are entitled to look at public sources of information. My approval is neither—
Q1464 Chair: It is essential. You are the chairman of the organisation. I want to know whether you approve of your organisation trawling. I find this really sinister, to be honest, because people do not put privacy settings on their accounts and they may have deeply emotional issues, or whatever it may be—family trauma, whatever. Rightly or wrongly, people do not always put their privacy settings on their Facebook or other social media accounts. What I want to know specifically—not your general answer, which you have been giving me—is whether you approve, both of you, of your organisation trawling through people’s social media accounts to check for information about them.
Christian Brodie: I think I have said all I can on the subject.
Q1465 Chair: Why can you not say more?
Christian Brodie: Because Parliament requires that we have a duty to look after public funds.
Q1466 Chair: Parliament does not say you should trawl through Facebook accounts.
Christian Brodie: Parliament allows us to look at public sources of information.
Q1467 Chair: And yourself, Ms Sussex?
Paula Sussex: I would happily go and investigate. I have tried to get on top of this issue, but I do not have that information now. I will very happily write to you separately when I understand what we did in this instance and whether it was appropriate and consistent with the objective of protecting taxpayers’ money, which it may not have been in this instance. I simply do not know at the moment.
Q1468 Chair: Will it be future policy in your organisation to trawl through the social media accounts of the students that you have? Is that why you call them digital autonomous units or whatever?
Paula Sussex: We do not trawl but a lot of our business is now done through Facebook and through online fora so we are present there in the conversations.
Q1469 Chair: I think this is deeply wrong for you to trawl through people’s social media accounts for the reasons that I have given, because you do not know the reasons for the estrangement. Just because people do not have privacy settings does not prevent it being an abuse of people’s personal privacy.
Christian Brodie: Those are important points and we will take them into account.
Q1470 Ian Mearns: Chairman, I think additionally the example in “The National Student” of a £70 gift transferred with reference about Christmas does not give evidence of an ongoing financial commitment. We are talking about a £70 Christmas present, for goodness’ sake, not an ongoing financial commitment that the mother is now going to support that student into the future. The decision was taken on the basis of that to withdraw and review that student’s finance. I think that is unbelievable.
Chair: Who makes the decision as to how you investigate the students? Who decides the way you do it?
Paula Sussex: Going forward, me and my executive team.
Q1471 Lucy Powell: Do you think there is a separation here of your core job, which is about graduate contributions towards higher education, and means-tested maintenance grants that are nothing to do with funding higher education but to do with supporting that student? Do you think you are asked to do too many jobs here and, therefore, there is some shortcutting? Do you think some of these things could be done better elsewhere?
For example, I do not want to say DWP but there are other organisations whose job it is to assess family income and that is only a very small part of what you do now. The bulk of your customers are getting student finance to contribute towards their so-called tuition fees and that is different from the maintenance grants.
Paula Sussex: As Christian has said, we do not set the structure of Government or the policy, but my observation is that sort of question would be an entirely sensible one to put of the organisation.
Q1472 Lucy Powell: Over time, one arm of your business has grown exponentially and is going to continue to grow exponentially, and at the edges of that you are being asked to do something that other Government Departments could probably do much better in a less challenging way.
Paula Sussex: It stretches the team. It is quite a hard-pressed and stretched team. If you look at all the work we do for disabled students, when I was in Darlington a couple of weeks ago that is quite an eye-opener in a very tricky area.
Q1473 Lucy Powell: But you do not have the tools to do it, so if I, as a parent, am applying for tax-free childcare or for extra hours of childcare, I go through an HMRC system and have to do that to prove I qualify, and I would expect they would have access to all my income and everything anyway or an understanding of my background. Perhaps another arm of Government is better placed to administer the maintenance loan aspect because that is free money, essentially, and your organisation should stick to its core business of the student contribution to tuition fees aspect. Is that a fair thing to say?
Christian Brodie: I think as one runs an organisation one should always ask questions about whether the core competences one has are the right things to do the jobs you are doing, and whether other people are better placed to do certain aspects. That is something one should do as a management team and as a board one should do on a regular basis, of course.
Q1474 Lucy Powell: How often do you talk to Ministers about that kind of thing, saying, “We need this power” or, “We do not want this power” or, “We have done a review of our organisation and it says X, Y and Z”?
Paula Sussex: I have not met a Minister yet. I hope that will happen soon but I am, with my apologies, racing off to join the Government’s retail services forum, talking to colleagues in NS&I. Operationally, it is my job to understand, as you are saying, what we are best at and whether there might be other ways of delivering this. I do not make those decisions, but if somebody asks me that question I need to be able to provide the analysis to say this could be done a different way.
Q1475 Marion Fellows: You have covered some of this, but I am going to ask this question because I think it is important. Peter Lauener announced a review of the policy. What is the current status of this review and what are the next steps you are going to take?
Paula Sussex: A lessons learnt exercise was done relatively recently. It has, from memory, about 20 recommendations, and I and the team early next week are reviewing the progress on those actions that cut across a whole raft of cultural process policy review types of activity. We were just reminding ourselves of it last night on our weekly call. It will be absolutely uppermost on my list.
Q1476 Chair: To reiterate my point, I feel very strongly about this as you can see. If there is an estranged student who might have family trauma and who may speak with a parent very occasionally, and who may have a Facebook account that they have not closed down properly; and then the Student Loans Company trawls KGB-like through their private information and notices that they may have said something to their mother or sister, or whatever it may be; and one of you, a bureaucrat, in a polite way rings them up or speaks to them or investigates them, the trauma of that individual is huge. I would dread it. I could not think of anything worse to know that somebody had trawled through my private family information.
Can you not see why this is a wrong way of checking people out? I suspect the vast majority of students are not fraudulent. Those that say they are estranged—why would people do that? I may be naive but I suspect it is a tiny amount and I think your figures bear that out. I may be wrong. Surely you should look at this, and there must be other ways of being much more sensitive to checking people’s credentials.
Christian Brodie: As Paula said, we are looking at lessons learnt. Your comments are extremely trenchant and we will take those into account.
Q1477 Marion Fellows: You have talked about some things we have already discussed. Lessons learnt are one thing; what are you doing to ensure that those who do not fit the typical student mould—you have already mentioned disabled students and we have talked about estranged students and maybe even people like care leavers—are not disadvantaged by the policies and practices of the Student Loans Company?
Paula Sussex: On policies, operational policy, yes, but not public policy as it comes to us from DfE or from Wales or wherever. We cannot comment on the appropriateness of that.
On the practices, my last job was running the Charity Commission and a lot of the registered charities in England and Wales are focused on just this type of issue. I am enormously familiar with the types of individuals we are dealing with, what their lives can be like and how incredibly stressful it is.
I am also very happy to send the letter to the Chair on the Facebook issue on what the recommendations are. My precise focus is going to be on our communications with those individuals and also communications within the organisation to say, “Does this feel right?”
Q1478 Marion Fellows: Christian, have you anything to add on that?
Christian Brodie: No. As I hope the Committee will understand, this is a subject I find personally difficult. I found our response during the summer was a poor one and I was in close contact with Peter Lauener in his response. I will be looking very carefully at the lessons that we have learned and, more importantly, the steps that we take to make sure that we treat this whole area, and indeed any area with students, with sensitivity. We have to remember students are human beings. Usually they are young and this is the first complex financial transaction they are taking on board. That needs sensitivity. I understand that, I really do.
Q1479 Ian Mearns: I want to move on to overpayments and how they are managed, and also to graduates being put on to a penalty rate of interest. Given the complexities the organisation deals with and the levels of satisfaction and dissatisfaction with the Student Loans Company by the customer body, we have a situation where 85,000 graduates paid off more than they owed in 2016-17. On average, graduates overpaid by nearly £600 but 40 people overpaid by more than £10,000. That was money that was lost to them, for a temporary period at least.
To overcome that, I understand that the Student Loans Company is trying to advise repaying customers to transfer to direct debit in the last two years of repaying their loan. What proportion of students within the last two years of their loan are paying by direct debit?
Christian Brodie: Thirty four per cent.
Ian Mearns: Thirty four per cent?
Christian Brodie: Correct.
Q1480 Ian Mearns: In that case, there is a lot of work to be done to increase that.
Christian Brodie: Yes, and the rate of people taking up that option has increased significantly but is still too low. In particular, we are working with HMRC on a so-called more frequent sharing data programme and we anticipate that, during the course of the 2019-20 financial year, we will have completed that programme with HMRC so there is more real-time connectivity between their information and our information. This should potentially eliminate the problem of over-repayment. We are working on it and about a year ago the Chancellor released some funds for both HMRC and ourselves to improve our mutual systems and improve connectivity. We are working on a number of things and we hope to reduce this problem during the 2019-20 financial year.
Q1481 Ian Mearns: Given that there are problems in terms of people overpaying at one end, how many of the people who have had a penalty rate of interest applied to them because apparently they have not responded to correspondence, are you confident have had that penalty rate applied to them correctly, rather than as an administrative problem caused by the Student Loans Company itself?
I understand that something like 47,000 between April and October 2017 had been put on that rate. I am wondering whether there should be some sort of reflection by the Student Loans Company to make sure, before that penalty rate is applied, that it is the person’s fault as opposed to that of the organisation.
Christian Brodie: That is a good point. The difficulties usually occur because the contact details that we have for the student are out of date. When they sign up for a student loan they sign up to an obligation to keep the Student Loans Company informed of their current contact details. For whatever reason, that does not always occur, and that is often why we lose contact. Because we lose contact, we apply the rate of interest, as we are obliged to do under the regulations.
Q1482 Ian Mearns: Is there a right of appeal against that process?
Paula Sussex: Certainly, you can complain, absolutely, against the decision.
Q1483 Ian Mearns: Having not moved house for a number of years but having moved house four or five years ago, the number of things you have to do to get your affairs in order, and it is one of those things—you are paying a repayment and the repayment still carries on, so it is just something that slips your mind and you end up not having answered a correspondence.
Christian Brodie: We acknowledge that it is a problem.
Q1484 Ian Mearns: I hope that the organisation would reflect on that. The number of students that you paid compensation to increased last year. Is this evidence of the Student Loans Company not learning from its mistakes and continuing to treat students probably in an over heavy-handed way, so that you end up having to pay them compensation? The compensation that has been paid to students runs into thousands of pounds.
Christian Brodie: It is about 146 students. These numbers vary from 100 to 146 year by year. Clearly, we would like to reduce it to nothing, of course, but when you say they have increased, the number may have gone from 110 to 146 or something like that, and next year it may go down by a similar amount—who knows? Are you able to draw firm conclusions from that out of 8.1 million customers, so-called? It is kind of difficult, I think.
Q1485 Ian Mearns: But not all of the 8.1 million are at the stage where that sort of mistake would occur.
Christian Brodie: The point I am trying to make is that statistically, going from 110 to 146, given a large number—it may not be 8.1 million but it certainly runs into a large number—statistically these are not that significant, and if they go down by 30% or 40% next year will we clap ourselves on the back and say, “Job well done”? No, we won’t, but whether they go up by 30 or 40 between 110 and 146 or go down by 30 or 40 out of 110 or 146—
Q1486 Ian Mearns: I have got a funny feeling that the 146 individuals all regard themselves as statistically important.
Christian Brodie: Absolutely, of course, and as I said at the beginning of my answer, I would like that number to be zero.
Q1487 Ian Mearns: From that perspective as well I am also wondering how many hidden cases there are out there of people who have not yet pursued it to the level where there could be compensation.
Paula Sussex: I can see in the eyes of my operational colleagues that they are enormously pleased when they improve on, to use that dreaded word, statistics—so when they think they are doing a better job, when they know they are doing a better job. If Chris and I were to sit here and say we will get that to zero, particularly given what I have just said about our enormously complex technology, which makes this quite difficult to get right in the first place, irrespective of the very best human endeavour, it would not be a realistic statement to make, but we keep striving.
Q1488 Ian Mearns: From your perspective as the new chief executive, being in post only for a number of weeks, it is probably too early to answer this question, but do you think the organisation needs investment in order to improve?
Paula Sussex: Definitely.
Q1489 Marion Fellows: You have taken on an organisation that appears unpopular with both staff and students. What are you doing to improve staff morale?
Paula Sussex: Staff morale is hugely important. First, the survey done last year came in at about 68% in engagement score. That is not bad for both public and private sector, but none the less I am troubled by, as I discussed, a lot of issues around pay and conditions, particularly in the junior grades, that are unacceptable. I think I and my team have quite an early focus on that area to fix pay, but also to fix progression throughout the organisation, which for a variety of reasons we have not been able to put enough focus to.
Q1490 Marion Fellows: You have previously talked about IT upgrades and that is not exactly a morale booster in many organisations. Is there anything else you can think of that would help staff do their jobs better?
Paula Sussex: Do their jobs better? When I sit with the staff I always say, “How do you find your systems?” and when I sit with them on their calls and watch how they use the systems and the screens, the tools of the trade are not the best, and that drives in frustration and delay when they go between different systems, and in some instances they have to get a calculator out to have the conversation with the student.
This is quite a stressful way of doing work, but the most important thing for the team is to make this the most rewarding place we can possibly make for them, and we need to understand that. We need to go on talking, but as we put in the reform to our total reward and career progression and skills development we need to make sure it really does meet with the very different employees we have doing different jobs, with different aspirations and different geographies.
Q1491 Marion Fellows: Do you think a change in the company ethos would help people do their jobs better?
Paula Sussex: I would be interested in your view on the company ethos. I do not know if I can put my finger on it yet.
Q1492 Marion Fellows: In terms of how things have been working and the bad publicity and all of that, maybe ethos is not the right word. If you could get a different atmosphere or scenario for them to work in, do you think that would help? People who work in the Student Loans Company must feel battered and bruised as well. People answering the telephones must feel battered and bruised by the bad publicity the company has received.
Paula Sussex: That is very insightful of you, because as I arrive I am hugely surprised that we have not been telling our story better. There is some excellent work being done day in and day out by that team and I think we need to get slightly better at telling those good news stories.
Q1493 Chair: Have you estimated how much an IT system would cost that is fit for purpose? Are you doing that?
Paula Sussex: I would never do that in this room here and now, but with the size and complexity it is tens of millions.
Q1494 Chair: Are you meeting with the Minister, Sam Gyimah, or the Secretary of State?
Paula Sussex: I hope we are going to do that soon.
Q1495 Chair: Have you had a date? Has something been agreed for you to meet the Minister yet?
Christian Brodie: There is talk of a date. The officials know that this needs to happen quite quickly. I suspect probably because of the general political context at the moment it will be a month or two before that happens.
Q1496 Chair: How often does the chief executive normally meet with the relevant Minister?
Christian Brodie: The protocols are that it is usually twice a year.
Q1497 Chair: Thank you very much indeed. We have given you some hard questions but it is our job. I appreciate the public service and I wish you very good luck in your new position. It is a very tough one.
Paula Sussex: Thank you.
Chair: Thank you very much as well for all that you do.
Christian Brodie: It is a pleasure. Thank you for the opportunity to put our case.