Major Projects Authority – sale of student loans ‘Amber/Red’

The 2013/14 annual report from the Major Projects Authority continues to rate the student loan sales programme as ‘Amber/Red’ (on the traffic light scheme ‘green’ indicates confidence in delivery, ‘red’ is the lowest category). Out of 200 major projects, roughly 40 are rated Amber/Red or Red.

The aim is still to commence the programme of sales in 2015/16 and to raise c. £11billion: the project has moved from feasibility to delivery stage with a budget of £28m to 2018.

Actions being taken to address the Amber/Red rating include the Project Steering Group assessing and confirming the delivery capability of key partners. Following agreement that the Go/No-Go criteria (required to continue with phase two of the project) has been met the Project will undertake work to further define its objectives, establish more robust plans, governance and project management disciplines, and appoint experienced external advisers to assist on the project.

In December, the Chancellor George Osborne announced plans to expand undergraduate numbers by lifting recruitment restrictions on universities. Concerns about the costings presented were first raised on this blog. We have since had further indications that a failure to go forward with the planned sale of student loans would affect the ‘uncapping’ of university undergraduate recruitment.

In related news, the £140m overhaul of the Student Loans Company is rated ‘Amber’:

The Amber status reflected the requirement to have more detailed plans in place from Transformation Partners and programme work-streams.
Detailed planning sessions are planned to l enable the development of a baseline delivery roadmap which will then be used to refresh the delivery plan , budget and team structures. This roadmap will continue to be refined.
Resource capacity has been highlighted as a challenge – action plans are being put in place to manage this challenge. A resourcing governance process has been agreed, defined and implemented.

And the ‘HE reform programme’ is rated ‘Amber/Green’. It aimed to realise ‘£3billion of savings annually by 2014/15’.

The Amber/Green status reflects that student numbers appear to be recovering this year after a fall in the first year of the new regime.  New regulatory requirements for alternative providers have been introduced to strengthen protections in the absence of primary legislation.

The claim to savings is not assessed explicitly, but

The assessment of the long-term resource cost of loans has increased since the original cost estimates were made, primarily because the £21,000 repayment threshold for 2016 will now be more generous than originally planned due to lower than typical earnings growth. … [The £3bnsaving to government]  has not yet been reviewed but is likely to fall as a result of the increase in the estimated resource cost of the new student loan outlay. We will review this estimate once we are in a position to review the expected cash outlay on loans using final 2012/13 academic year data.