SLC faces more flak as travel and consultancy expenditure is exposed

The Student Loans Company spends more than £1 million a year on first-class rail travel, team-building events and external consultants, it has emerged.

Details of the expenses have been revealed as the company faces a barrage of criticism for the way it has handled this year's student-loan applications.

Tens of thousands of students were left high and dry by the SLC's failure to process applications by the start of term, leaving universities to bail them out.

Times Higher Education has learnt that the SLC spent £331,000 on first-class rail travel in 2008-09, £100,000 on team-building events and £780,000 on external consultants.

About £165,000 of the bill for first-class train travel was for trips between its Glasgow and Darlington offices, a three-hour journey.

The company's official travel policy states that staff may travel first class on all journeys that take more than an hour. The SLC said it expects them to work while travelling.

The company's annual spend on external consultants included a £440,000 "business as usual" bill, plus £340,000 for "special projects". Included in this category was £62,000 paid to a firm of "business psychologists" for its work on a leadership-development programme and other projects.

The company's accounts show that its administrative expenses rose from about £70 million to £80 million this year, which it said was a result of the expansion of its activities in Darlington.

The SLC's Glasgow offices are also being refurbished.

A spokeswoman for the SLC said the company was "committed to the training and development of our employees" and was dedicated to giving them "comfortable surroundings" to work in.

She added that its Glasgow office had won a British Council for Offices Award for "outstanding value for money".

The SLC's annual report for 2008-09 shows that it fell short of several performance targets for meeting budgets.

A former senior employee, who recently left the company, said the amount of money spent on apparent luxuries such as first-class travel was "ridiculous".

He was also critical of the backlog of loan applications that still has not been cleared.

"By the time they start to get on top of it, the next round of processing in December will hit home," he said.

One university to have taken action to assist students affected by the delays is the University of Central Lancashire.

Malcolm McVicar, the vice-chancellor, said Uclan had been forced to issue over 300 emergency loans totalling more than £50,000 to students left without money.

The most serious cases involve students with disabilities, who are awaiting assessment for the disabled-student allowance, he added.

Figures obtained last week under the Freedom of Information Act show that as of 4 October, 16 per cent of student-loan applications - up to 175,000 students - were still outstanding.

However, the SLC spokeswoman said: "We have now processed and approved the vast majority of applications received."

The Conservative Party has secured a parliamentary debate on the student loans crisis, which was due to take place on 14 October.

melanie.newman@tsleducation.com.