Investigation into oversight of the Student Loans Company’s governance

14 May 2018

Following the dismissal of the chief executive of the Student Loans Company, the National Audit Office investigated the oversight of the Company’s governance and management of its former chief executive.

Background to the report

The Student Loans Company (the Company) administers loans and grants to students at universities and colleges across the UK. It processes around 1.8 million applications a year and has more than 8 million customers repaying or due to repay loans totalling over £100 billion.

The Student Loans Company appointed Mr Steve Lamey as its chief executive officer on 1 June 2016. Two members of Company staff made formal allegations about Mr Lamey to the Department for Education (the Department) and Company in May and July 2017. Following internal processes, including a hearing panel and an appeal, the Company dismissed Mr Lamey, without compensation, on 7 November 2017 for gross misconduct in public office, including breach of four of the seven Nolan principles and failure to adhere to HM Treasury’s Managing Public Money guidance.

This investigation describes the events surrounding Mr Lamey’s appointment and dismissal. It sets outs the Department’s role in oversight of the Company and how it responded to the concerns raised by the two Company staff.

The Department is reviewing the governance and structure of the Company, with the first phase to be completed by June 2018. In phase one, the Department is working with UK Government Investments to examine how the current governance arrangements are operating, whether they work well, and whether they could be improved in the short to medium term.

The Department has not yet set out the detailed scope of phase two, during which it intends to examine the Company’s longer-term operating model. The Department is also reviewing its relationships with all of its arms-length bodies, which it aims to complete by January 2019

Read the full press release from the National Audit Office.