Student loan sale – “amber rating”

The Department for Education published information on its Major Project Portfolio last month.

Five of its projects are rated from Amber to Red, where Red indicates that the project is ‘at risk’.  Amber/green means a project is still “probable”, while “amber-red” is “in doubt”.

No projects are “at risk”, but two – Apprenticeships Reform programme and 30Hrs Free Childcase – are “in doubt”.

The Sale of Income Contingent Student loans, one of this blog’s concerns, is classed as “Amber” – between “probable” and “in doubt”.

The narrative provided with the judgement explains that the sale is meant to reduce Public Sector Net Debt, but has to ‘realise value to the taxpayer’. See here for why the latter is a problem: value here means ‘would tolerate a loss’.

The amber rating is glossed as follows:

All stakeholders and governance bodies are aware of the challenging timetable, lack of contingency and urgency needed in decision making, and continue to be regularly updated. On 6 February 2017, Government announced the start of the sale process, which is expected to take several months.

It further notes that the sale was delayed by the general election and that “Ministers will consider revised timings over the summer”. This suggests that the plan is to push on with the sale, but that achieving value for money is uncertain. Ministers will report to parliament on a sale within three months of it being finalised, while the Office for National Statistics will determine at that point whether the sale has achieved its main objectives.

Since March 2010 (the last days of the Labour), government has spent £15million on attempts to sell the loans. The budget for 2016/17 has been approved at another £5.5m.