BUSINESS PLAN FINANCIAL YEAR APRIL 2013

Transcription

1 BUSINESS PLAN FINANCIAL YEAR APRIL 2013

2 Contents Page About SLC 1 Chairman s Statement 3 Chief Executive s Foreword 4 Executive Summary 6 1. Transforming SLC 9 2. Sustaining our business and systems Delivering change Serving our customers Managing our people Managing public money Leadership Team priorities 33 Annexes Annex 1. Planning framework Annex 2. Key business objectives Annex 3. Balanced Scorecard illustration Annex 4. Balanced Scorecard targets Annex 5. Key risk themes Annex 6. Funding requirement

3 About SLC Who we are The Student Loans Company (SLC) is a non-profit-making Government-owned organisation set up in 1989 to provide loans and grants to students at universities and colleges in the UK. We play a central role in supporting an educated, flexible workforce, and by doing so contribute to strong, sustainable and balanced growth in the economy. We do this by working with the Departments for Business, Innovation & Skills (England), Education and Lifelong Learning (Scotland), Education and Skills (Wales) and Employment and Learning (Northern Ireland). We also work closely with the Student Awards Agency for Scotland (SAAS), Local Authorities in Wales, the Education and Library Boards in Northern Ireland, higher and further education providers, HM Revenue & Customs (HMRC) and other delivery partners. 1

4 What we do Our core functions are to: provide information, advice and guidance (IAG) on student finance pay loans and grants to students and learners in higher and further education pay tuition fees to higher and further education providers pay bursaries and scholarships on behalf of higher and further education providers work with HMRC to collect loan repayments manage direct collection from customers making voluntary additional payments, living overseas or repaying grant and loan overpayments collect repayments on loans issued under the former mortgage-style loans (MSL) scheme make maintenance payments to pupils aged over 16 in Northern Ireland and Wales provide expert operational advice and high quality data and information to support Government Administrations policy-making and analysis We strive constantly to streamline the student finance system, enhancing our services and the customer experience through technology and improved business processes. Who we help For most students in the UK we provide loans to help cover their living costs, as well as loans for their tuition fees. We pay the maintenance loans into their bank accounts at the start of each term (monthly for students in Scotland) and the tuition fees direct to their provider. In FY we supported around 1.3 million customers, paying out 5.6 billion in maintenance loans and grants, and 3.1 billion in tuition fees to higher and further education providers. And, in partnership with HMRC, we recorded collections of 1.6 billion in loan repayments. Where we re based SLC currently has around 2,000 staff on permanent contracts, located across four sites: Glasgow (city centre), Glasgow (Hillington), Colwyn Bay and Darlington. We also have up to 1,500 additional staff supporting us at peak times of the academic year through outsourced service providers and temporary contracts. To further our aim for closer working with our stakeholders we are establishing a presence in London in the early part of FY , sharing the Higher Education Funding Council for England s new office facility. 2

5 Chairman s Statement It has been enormously encouraging to see the change in SLC over the last three years under Ed Lester s leadership. Service to customers is stable and satisfaction improving. Far-reaching policy initiatives have been implemented smoothly. New services have been built, and are now being delivered to new customers. Confidence in SLC has regained and surpassed previous levels. I am most grateful to Ed, and to staff at every level in SLC for the skill and commitment they have demonstrated. It is now time for the next step. In 2011 the Leadership Team looked closely at the challenges ahead and recognised the need to modernise SLC s ageing systems and to change its delivery model. Without significant change we cannot meet these challenges. And this change needs to penetrate every level of the organisation. I am delighted, therefore, to welcome Mick Laverty to SLC as its new Chief Executive Officer to take this ambitious programme forward. Mick has set out the steps he and his Leadership Team will take this year. In the whole of SLC s existence nearly 25 years the wider environment it operates in has possibly never been more demanding, nor the needs more pressing. But the opportunities are also considerable, and I remain confident that the Company has what it takes to become a high-performing organisation and fulfil its central role in providing excellent loan application and management services to students, sponsors and graduates as well as effective relationships with our many other stakeholders. That is why I fully endorse this Business Plan, and the Transformation Programme at its heart. Ed Smith Chairman April

6 Chief Executive s Foreword As the Student Loans Company s newly-appointed Chief Executive, it is clear to me that the coming year is a very important one. This Business Plan sets out why. It explains our mission and vision, key business objectives and priorities, and how we aim to achieve them. We are now delivering student finance services to over four million customers, customers who live in an increasingly digital world. They are used to doing almost everything on-line or through apps. This is particularly true, for example, for banking, where accounts can be checked, questions answered and loans applied for from a smartphone, with instant 24/7 access. Take-up of our social media channels, launched on Facebook and Twitter in 2011, has been impressive and points to the demand that exists. We now need to go further. We are implementing the Government s higher and further education reforms. Last year, the first year of the new higher education funding arrangements in England, we met the challenges of increased tuition fees and payments to higher education providers for full-time students with a successful Academic Year (AY) 2012/13 cycle. We introduced a new digitally-enabled service for part-time students using an innovative approach to service design which puts customers at the heart of what we do. We also launched the service for AY 2013/14 in February and the processing cycle is now underway. Alongside our existing services we are rolling out a new customer-led, digitally-enabled service in April for further education in England 24+ Advanced Learning Loan with the Department for Business, Innovation & Skills (BIS), the Skills Funding Agency (SFA) and learning providers. This represents a new customer group for SLC, and a new stakeholder base. And for Wales, we are continuing the work started last year to build a new, modernised end-to-end student finance service, which will be launched early in Throughout this change, at a time of severe pressures on public funds, managing public money responsibly remains vital. We are developing a strong regulatory framework with the Higher Education Funding Council for England (HEFCE) and other partner bodies to protect students and meet the sector s future needs. We also recognise the importance to Government of the fast-growing student loan book, underlined by the forthcoming National Audit Office review of repayments, and the criticality of maintaining effective collection arrangements. Ministers have asked us to make this a strategic priority and we are currently refreshing our repayment strategy. All this means working even more closely with our stakeholders and delivery partners in future, so that we engage effectively, understand and anticipate concerns, and respond quickly and appropriately. We are now putting plans and resources in place to ensure that we are able to meet their needs and expectations in the future. 4

7 At the heart of the Business Plan this year is our Transformation Programme. We are already preparing to replace our customer accounts platform, along with other core systems, so that we can provide the digital systems customers expect, and offer the flexibility stakeholders need far into the future. But transformation is about much more than replacing IT systems. For SLC it is a business-wide transformation, and an opportunity to put in place the foundations for a truly excellent organisation, delivering digitally-enabled services at a significantly reduced cost. The Business Plan builds on the strong progress we have made over the last three years. It is good to know that BIS and our other stakeholders recognise how far we have come and now have great confidence in us. They believe we are sound, reliable and capable of delivering a safe service for customers. While we were rebuilding our reputation we were largely protected from the spending cuts applied across Government and its partner organisations. Now that confidence in SLC is restored we have to step up and make our full contribution to the budget reductions being sought across the public sector. Our Transformation Programme will let us take a very close look at how we can do things smarter and much more efficiently. And, as we do this, we will be developing unique capabilities that can be used elsewhere, and looking to exploit growth opportunities across Government and beyond. I believe that SLC is a good organisation, and one that could be great. We have very talented people who value customers and are committed to delivering quality services and driving change, in line with our behavioural and cultural blueprint, Leading the Way. We have everything we need to succeed and this Plan sets out how we will start to create a truly great organisation. Mick Laverty Chief Executive and Accounting Officer April

8 Executive Summary 1 Our Mission We enable our customers to invest in their futures by delivering secure, accurate and efficient assessment, payment and repayment services. Our Mission sets out what we do, how we do it and why we do it. It describes our current remit why we exist and what we re doing today, tomorrow and in the months ahead: What we do has three main components: we assess eligibility, we make payments and we provide repayment services. Everyone in the Company whatever their role is supporting these activities, even if they aren t directly involved in providing them. How we do it stresses both the need to do things right first time with minimum fuss, so that customers get what they need from us easily and speedily, and we don t waste time and money. It also highlights the very real need to deal with personal information carefully and sensitively. Why we do it captures the essence of why we exist. We re here to help our customers invest in their futures. We help them access funding to enhance their knowledge, improve their skills and increase their opportunities. This benefits not only them, but also the communities they live in and the country as a whole. Our Vision Our vision is to be valued as a digital, customer-focused, centre of excellence. Our Vision looks further ahead. It sets out what sort of organisation we want SLC to be in the future and how we d like to be regarded. It has three components: Digital captures the transition we re making from being an organisation that still relies heavily on manual processes to one that will, for most customers, be wholly automated and accessed via the internet or mobile device. Our digital aspirations are consistent with the Government s digital by default agenda which aims to provide digital services that are so straightforward and convenient that all those who can use them will choose to do so whilst those who can t are not excluded. Customer-focused reflects our aspiration to provide a high-quality service to our customers, whatever their needs and preferences, allowing them to transact their business with us whether it s accessing funding, making repayments or tracking their account quickly, easily and conveniently. It also marks our determination to get things right first time, so that we compare favourably with bestin-class customer service organisations. Centre of excellence looks to the future. We already have deep expertise across the Company and replacing our core systems will give us the capacity to further develop and expand this expertise, enhancing the Company s growing reputation as a centre of excellence. This will allow us to provide or sell our services beyond our current remit and we will look to explore opportunities across Government and further afield. 6

9 Our Objectives Over the past three years we have demonstrated that we are a reliable delivery partner and have regained the trust of Government. Our aim now is to build on that trust and go further, not only providing excellent customer service, agile delivery and a cost-efficient business model but, in time, becoming an authoritative partner to Government on student finance and high-volume digital delivery services. Having delivered a safe student finance service consistently, the period of consolidation is nearing its end and we now move forward to deliver the Transformation Programme with confidence. Over the next three years we will transform our organisation to achieve more efficient and effective service delivery for customers. At the same time it is essential that we sustain current services and deliver the policy changes required by Government. As we deliver against our performance targets we will do our utmost to continue improving the services we provide, using feedback from customers, staff and other stakeholders. We rely on the full engagement of our people. Our Leading the Way framework describes the organisation we want to be and the culture we are striving to achieve. And we need to retain the trust of our stakeholders by demonstrating the highest standards possible at all times in the way we manage public money and provide value for money. These key business objectives (Fig 1) will enable us to meet the requirement on all public bodies to become more efficient and to deliver improved services with less funding. 1. Progress our business Transformation Programme 2. Sustain critical business processes and systems for the duration of the Transformation Programme to ensure a safe service 3. Execute our Delivery Programme to meet annual policy changes and new stakeholder priorities 4. Provide a safe and efficient student finance service that meets the needs and expectations of our customers and stakeholders, and continue to improve the customer experience 5. Manage our people responsibly and continue to embed our Leading the Way framework 6. Manage public money responsibly Fig 1 Key business objectives 7

10 Leadership Team priorities Alongside these key business objectives for the Company, our Leadership Team will be paying close attention to a number of priorities that underpin the objectives, and that will require collegiate ownership and action: 1. Delivering our Vision and aligning our approach with Leading the Way 2. Reviewing our organisational design to align with our transformation work and to ensure it remains fit-for-purpose 3. Creating an effective, integrated framework for corporate, business and financial planning 4. Developing a stronger approach to strategic relationship management 5. Exploring new opportunities for growth, to leverage our existing and emerging unique capabilities Fig 2 Leadership Team priorities Communicating our priorities The purpose of this Business Plan is to inform our staff, stakeholders and the wider public of our plans for the forthcoming financial year. This year s Business Plan is issued at the halfway stage of the SLC Delivery Strategy When the Delivery Strategy was prepared in 2011 we recognised that fundamental reform of the Company was needed if we were to fulfil the role envisaged by BIS as a result of the Higher Education (HE) reforms, and to be able to satisfy the increasingly divergent needs of the four Government Administrations: nothing less than a transformation would suffice. Although this document focuses particularly on new services and initiatives, and the changes that will be delivered through our Transformation, Sustain and Delivery Programmes, our other key business objectives are no less important. We will use our Plan to communicate and confirm the priorities for the year ahead and to set the personal objectives for all staff across the Company. We will also publish it on the Company s public website. The targets agreed with our Government sponsors in our Annual Performance and Resource Agreement (APRA) letter are incorporated into our Balanced Scorecard and performance against them is reported on a monthly basis. The Balanced Scorecard also includes key internal targets that are monitored by our Board. During FY we will review our Balanced Scorecard and move towards a more strategic set of measures for next year to support our Transformation Programme and our longer-term organisational strategy. 8

11 1. Transforming SLC Rebuilding our organisation to meet the future needs of our customers and stakeholders Over the past three years we have demonstrated that we are a reliable delivery partner and have regained the trust of Government. Our aim now is to build on that trust and go further, not only providing excellent customer service, agile delivery and a cost-efficient business model but, in time, becoming an authoritative partner to Government on student finance and high-volume digital delivery services. The vast majority of our customers are technically-proficient, and used to instant communication via social media and on-line channels. They log into their on-line bank accounts, can instantly check balances and do not expect loan applications to take weeks to process. Some of our customers have additional needs that require specific support from us. We need to respond to changing customer demand if our services are to fit around their choices and lifestyles. We will aim to be more responsive to these needs by seeking to improve our services to fit around our customers choices and lifestyles, for example by adopting mobile technology, and also increasing the accessibility of our digital services for our customers with disabilities. As technology has changed, so too has the role that Information Technology (IT) plays in modern business. IT s role is not to develop systems that the business has to adapt to: it is to build core services that are flexible and reliable, and that allow new applications and functionality to be built on top of them. Business logic and processes should be readily configurable by users without the need for assistance from software developers. Within SLC, this role will rely on IT being an active and integrated part of the business, fundamentally changing the way that we operate. This will require technical, organisational and cultural change. A Transformation Programme has already been established to drive this forward. It has four key elements: Core Systems Replacement Digital Delivery Business Improvements Organisational Design and Efficiency Success will be an SLC that delivers services in a way that is driven by customer need, rather than the limitations of our current business model, and meets the expectations of our stakeholders at reduced cost levels. 9

12 1.1 Core Systems Replacement Building a new IT platform to support our future business needs Our systems have evolved over the last two decades through a mixture of in-house development and commercial off-the-shelf packages, and increasingly lack the ability to support Government requirements and customer needs fully for the future. To provide a quality customer experience we need the flexibility to offer a range of on-line communication channels capable of being developed as customers adopt new technologies (or use them in new ways), and of adapting to feedback. To offer our stakeholders the responsiveness and value for money we both seek, we need the flexibility to build and operate business processes that are efficient and effective, improve continuously and readily accommodate policy change. Moreover, public student loan debt currently stands at approximately 50 billion and is forecast to rise rapidly, while underlying transaction volumes are also set to grow significantly. Stability of the underlying systems is of paramount importance to maximise and protect the value of the loan book, particularly in the light of future debt sales. These requirements demand a flexible technology platform and Fig 3 provides a high-level view of the technical model we are proposing to adopt. Working in partnership with the Cabinet Office Government Digital Service team, the Transformation Programme will pursue an Agile approach, ensuring early deliverables offering customer and business benefit, and helping to manage risk. Fig 3 Technical model 10

13 We have completed a detailed analysis of which systems we need to replace and have considered alternative scoping options for automating and digitising our business services. We have developed a business case that sets out the strategic, economic, financial, commercial and management logic, 1 and believe that maximum benefit will be achieved by replacing CLASS and other core systems with a bought-in core banking system and by building on open-source solutions. The primary purpose of CSR is to modernise and provide resilient systems in order to deliver the Government s HE reform programme. Without investing in new systems, SLC would not be able to deliver HE reform (volumes of transactions, variable interest rates, etc). The case for CSR is therefore not financial in its own right but rather is a pre-requisite to delivery of significant savings for Government. SLC is taking the opportunity to build upon this investment and to replace other components and reengineer its processes in order to deliver ongoing financial benefit. We published a contract notice in the Official Journal of the European Union (OJEU) in January A competitive dialogue process is being followed to appoint suppliers to develop a technical solution and manage its implementation. The full business case and benefits realisation plan will be submitted to BIS for approval prior to the planned contract award in September 2013, with a subsequent implementation phase lasting 15 months to the end of December The first version of the new processing system is planned to be in place in January 2015 to process new applications for the AY 2015/16 cycle. Subsequent phases of delivery will include migration of existing customer accounts and key data to the new systems framework. The combination of revitalised core systems platform and new data centres (section 2.3) will be major milestones on the road to SLC s strategic goals. 1 CLASS (Customer Ledger Account Servicing System) is an internal system that allows SLC to manage student loan applications from approval through to final closure of the account. SLC staff use CLASS to process loan payments, maintain customer details, add interest, process repayments and manage loan deferments. 11

14 1.2 Digital Delivery Delivering our services on-line, anytime, anywhere The Government Digital Strategy (2012) sets out how the UK Government will become digital by default. This means providing digital services which are so straightforward and convenient that all those who can use digital services will choose to do so, while those who can t are not excluded. SLC s Digital Delivery project team is working closely with partners at Government Digital Service in the Cabinet Office, with BIS, and with other organisations experienced in Agile development, to deliver a new set of on-line services in line with what customers want. Our current on-line service has been effective in encouraging on-line applications currently over 90% of customers apply that way but surveys have shown that the majority of customers are dissatisfied with the way the system works and find it difficult to navigate. We aim to ensure that all of our customers can use our new systems with ease. Currently, each on-line application generates an average of 3.6 calls to the contact centre. A large portion of these calls are enquiries which could be answered on-line, or eliminated altogether. A new application process that is easier to navigate and clearer on what information needs to be provided by the customer will reduce these calls, provide a better service on-line and save significant sums of public money. At the same time, our approach to digital delivery is introducing new customer-focused and Agile methodologies to our development work and, through this, challenging existing ways of working across the organisation. 1.3 Business Improvements Continually improving what we do and how we do it We have an ever-increasing list of business process and system changes we know would improve customer experience, increase efficiency, reduce costs and strengthen management control. Improvements that are both high priority and large scale will be managed as projects under the Transformation Programme. These include, for example, delivery of income-contingent repayment (ICR) statements on-line and a new platform for system-generated letters that will let us tailor correspondence to customers specific needs more easily. We will prioritise improvements that offer early delivery of business benefits. 12

15 1.4 Organisational Design and Efficiency Ensuring fast, effective decision-making and successful delivery of service So far, the Transformation Programme described above has focused on the processes and systems that will support future service delivery. However, successful transition to SLC s desired future state will depend significantly on the investment we make in our people. Critically, the impacts of transformation on our employees will need to be carefully planned and managed over the next two to three years (see section 5.3). The main objective of our Organisational Design and Efficiency project is to design the future organisation, determine the type and number of people required for the transformed SLC, and the mix of in-house and outsource provision. As SLC implements its Transformation Programme our resource requirement will reduce. Key principles are to maximise security of employment for permanent staff and to provide skills and opportunities for people to move to new roles as we progress through the transformation. Working in partnership with PCS, our trade union, we will keep our staff fully informed as our thinking and planning develops. The need to reduce staff numbers will be offset to some extent by successful identification and delivery of the new growth opportunities described in section 7.5. Creation of the future organisation design will be led by the Executive Team as one of their key priorities. Supporting them will be two groups. One will look at organisational design and development, establishing organisational structures, developing the capability, capacity and culture of the organisation, and planning the approach to staff and stakeholder engagement. The other will look at benefits realisation linking in with the work on value for money described in section 6.1. The Government s move to shared services (section 6.8) will also be reflected in SLC s organisational design and resourcing plans. KEY BUSINESS OBJECTIVE 1 KEY ACTIVITIES FY APRA MEASURES INTERNAL MEASURES Progress our business Transformation Programme Complete the Core Systems Replacement (CSR) procurement process through to contract award Complete delivery of the new digital services for HE parttime and Further Education (FE) 24+ Advanced Learning Loan Establish the business improvement framework within the Transformation Programme Establish the organisational design workstream to design a fit-for-purpose future business model Prepare the organisation for migration of agreed activities to shared services None Evaluation by the SRO/Programme Board 13

16 2. Sustaining our business and systems Keeping our services running smoothly while we change In a time of substantial change affecting almost all of our processes and systems it is vital that we maintain them properly during the period of transformation to ensure that they remain capable of delivering the services on which our various customers depend. We have reviewed our capacity and capability to meet the challenges of the Transformation Programme and established the Sustain Programme to address our findings. The objective of the Sustain Programme, and of the projects described below, is to reduce risk to delivery of the stable, safe and efficient service that we have established in the last few years (see section 4.1) while core systems are being replaced. The Programme addresses our major IT systems, networks and data management, together with the infrastructure and data centre environment which host them. The burden on our existing systems and services will increase while we are going through the Transformation Programme and we need to be sure that processing and systems capacity will continue to meet demand, that defects and faults are managed and that software and applications are adapted and developed to meet business needs. The Sustain Programme is designed to be flexible: as systems are reviewed and stability confirmed, initiatives related to those systems will be removed from the programme. New workstreams will be added as the programme develops and any unforeseen issues arising will be managed. 2.1 CLASS We need to ensure that our core systems continue to perform reliably until they are replaced. Our CLASS Sustaining project is already achieving a steady reduction in daily/monthly batch run-time. We have established a base position that ensures performance will meet business requirements for the next 24 months while the new solution is being developed. We are now moving on to look at other core systems, including public facing portals and those supporting assessment and repayment, to ensure that we take any necessary steps to maintain capacity. We will complete our assessment of the remaining systems by July At the same time, we have a range of initiatives underway to stabilise our network infrastructure, to help mitigate risks around availability and performance of all core business systems. This work is scheduled to be substantially complete by July 2013 and should provide sufficient capacity to protect service delivery through the transformation period. 14

17 2.2 Workflow and imaging Our service relies heavily on robust document and image processing. The workflow and imaging project has been reviewing the current infrastructure to ensure it can cope with the volumes expected in AY 2013/14 and AY 2014/15. Our imaging service is made up of a number of individual components, some of which now require attention. For example, a key component associated with image capture needs to be upgraded. This has been scheduled around business needs and will be in place by May The component supporting storage of images is robust and sufficient for the transformation period, but we need increased ICT capacity to be sure that the component associated with presenting images to SLC operational staff will be available, and will perform to the required levels, through the anticipated peaks. We intend to complete the necessary additions to capacity by July Once we have established a stable imaging platform the project will look to introduce an automated workflow solution to assist operational managers in allocating and reporting on work-in-progress more efficiently. This work will bring operational efficiencies and improved customer service. Options are currently being considered to determine which solutions are available and whether these can be deployed in time to provide benefit during the AY 2013/14 application cycle. 2.3 Data centres As part of a wider review of our infrastructure estate we are currently placing a contract to move to two new high-specification hosted data centres. This project involves a number of strategic elements: reviewing our current assets; developing an asset replacement plan which includes looking at new technical options, such as use of the cloud ; a data centre design which delivers strategic disaster recovery capability; and technical facilities which provide a platform for long-term operational stability. This project is essential as there have been long-standing concerns around the resilience of our existing data centre arrangements. Substantial progress has already been made. A procurement exercise is nearing completion. A preferred supplier has been selected and due diligence is underway to confirm that any potential technical issues are understood and that there is confidence in the proposed solutions. We expect that this will be completed in time for contracts to be signed before the end of April In the meantime procurement of the equipment required within the SLC infrastructure to support this project is well advanced and we expect to have our base infrastructure build completed in May/June Detailed plans for migration from our existing data centres will be finalised in the early part of the year and we expect to complete migration to the new data centres by March

18 2.4 Business continuity We also intend to implement actions recommended in our recent governance review of business continuity management and IT disaster recovery, to ensure that our processes are in line with good practice. We are looking to build on improvements delivered last year to disaster recovery arrangements for a number of core systems. Plans are in place and resources allocated to allow a full review of business continuity and IT disaster recovery plans to be completed by July 2013, ensuring that these are aligned to business impact analysis and reflect fully the criticality of our vital business systems. Initial tests to prove the level of resilience and establish lessons learnt are scheduled to be completed by February Further stages of testing will be completed following relocation of our data centres. 2.5 Other initiatives The Sustain Programme is also considering a number of other system issues, such as core business stability. As mentioned above a number of relatively minor initiatives such as this are expected to come into the scope of the programme during the course of the year. KEY BUSINESS OBJECTIVE 2 KEY ACTIVITIES FY APRA MEASURES INTERNAL MEASURES Sustain critical business processes and systems for the duration of the Transformation Programme to ensure a safe service Ensure SLC s current ICT systems, processes and infrastructure remain reliable and fit for the purpose of delivering a safe and effective student finance service Develop an effective workflow solution, starting with the imaging platform, to streamline the application assessment process Complete the data centre contract process and commence migration of systems Complete the planning process for business continuity and align business continuity and IT disaster recovery plans Target and address stabilisation issues on other business systems until core systems are replaced Maintain interim technology roadmaps for business systems that match business demands until core systems are replaced None Evaluation by the SRO/Programme Board 16

19 3. Delivering change Creating the products and services our stakeholders want 3.1 Policy change commissioning and delivery The scope and pace of education policy change is unrelenting. Last year we took a close look with our stakeholders at how we could make the policy change commissioning and delivery process work better. The changes we introduced are already yielding real benefit. There is more we want to do and we will continue to work closely with BIS and the Devolved Administrations to develop the process further. In particular we aim to reduce delivery risk by providing input to policy decisions at an early stage, to allow SLC sufficient time to plan, obtain and allocate resources to meet delivery requirements (scope, time and budget). This will help ensure a safe service for the AY 2014/15 and subsequent cycles. We will also provide expert delivery advice at the appropriate level of detail at the right time. In tandem, we are reviewing our approach to end-to-end change management, to continue to improve the way we deliver SLC projects. This builds on work last year that highlighted issues inhibiting our ability to implement change efficiently and effectively, and contributing to unnecessary delivery risk and cost. As part of this we will be looking to extend our current use of Agile development principles, in line with Government digital delivery thinking, and to implement improvements throughout key stages, from requirements definition and design to development and testing. We also plan to refine the way we manage our change portfolio, to maintain a single view and ensure better prioritisation. Implementing these changes will ensure that benefits are realised quickly, and the new ways of working will be refined as we learn what works best for us. 17

20 3.2 HE Reforms for England Last year saw the first cycle of the new HE funding arrangements for England introduced successfully and we intend to build on this to improve service to students and HE providers this year. We will also continue preparations for the new repayment collection arrangements, which start in FY , and support BIS with debt sale preparations. As a consequence of the HE reforms in England, the bulk of funding that HE providers will receive for teaching will migrate over the next two years from block grants through HEFCE to fees paid by students for learning, supported by fee loans from SLC (see Fig 4). It is absolutely critical that migration of cash flows is smooth, and payment by SLC accurate and reliable. The same applies to fee payments for learning providers following introduction of the 24+ Advanced Learning Loan for FE. Fig 4 Institutional funding shift Advanced Learning loan In April 2013 we are launching the 24+ Advanced Learning Loan, in partnership with the Skills Funding Agency. The provision of loans to support course costs is a new concept for the Further Education sector. These loans are to be made available to people aged 24 and above at the start of their course. The loans are not means-tested and will be paid directly to the learning provider. In preparation, we have been developing information, advice and guidance (IAG) and building a new IT delivery platform, extending existing systems such as scanning and imaging, and reusing current interfaces with delivery partners, such as the Identity and Passport Service. 2: Source: Patterns and Trends in Higher Education, Universities UK

21 3.4 Student Finance Wales Modernisation We have been asked to manage and deliver a modernised student finance system for Wales, scheduled to launch in February This will involve transfer of student finance functions currently performed by Welsh Local Authorities to SLC and co-location at a single site in Llandudno with SLC staff currently in our Colwyn Bay contact centre. We will establish a full end-to-end operational service, including marketing and communications, which delivers student finance to Welsh students in line with defined service levels. The service will be bilingual. We will also progress bilingual repayment to meet the requirements of the Welsh Language Act, implement agreed HE reforms and respond to changes arising from regulatory framework revision. 3.5 SAAS Payment process Currently SAAS manages the student finance application process for Scottish students up to the point of confirming entitlement. SAAS then makes tuition fee payments on behalf of the student and pays bursaries to individual students, while SLC makes the loan payments to students. This can cause confusion to customers and we are in discussion with SAAS about transferring responsibility for loan payment to them in time for AY 2014/15. SLC will continue to manage the repayment process. 3.6 Northern Ireland As well as continuing to provide an efficient and effective payment and collection service for FY we will work closely with the Department for Employment and Learning to take forward priority work to agreed delivery timelines. Changes to the Education Maintenance Allowance scheme have now been finalised and we will progress the necessary development work to implement the policy changes in time for AY 2013/ Repayment programme We are currently finalising our strategic review of repayments, with input from HMRC. Ministers have asked us to make repayment of loans a strategic priority this year, given its growing importance due to the increasing size of the loan book following the HE reforms. We need to ensure that their HE reform policies are delivered successfully and that collection through both HMRC and direct SLC channels is optimised. The National Audit Office (NAO) will also be reviewing student loan repayments this year (see section 6.6). The strategic review reflects UK Government policy objectives, including the HE reforms and debt sale, and identifies measures to improve collection performance, efficiency and cost reduction. It describes where we want our repayment process to be in 4-5 years time, how we can respond most effectively to the challenges ahead and what action we need to take. This is discussed further in section

22 3.8 Debt sale The mortgage-style loans (MSL) scheme was superseded in 1997 by the income-contingent repayment (ICR) loans scheme and the remaining publicly-owned mortgage-style loans are a closed portfolio of ageing debts that are becoming harder to collect with time. We are therefore working with BIS to support the proposed sale of the mortgage-style loan book and to support preparations for any further debt sale the Government may seek. Our loan book modelling and repayment analysis capability will be enhanced to ensure that we have a sound information base to support the MSL debt sale. Following any sale, we will redeploy MSL staff to focus on collection within the main ICR loan book and recovery of grant overpayments. KEY BUSINESS OBJECTIVE 3 KEY ACTIVITIES FY Execute our Delivery Programme to meet annual policy changes and new stakeholder priorities Launch the AY 2014/15 service successfully and on time Undertake a review of SLC s end-to-end change process and implement a new approach Deliver the remaining elements of the HE reform programme Launch and roll out the new FE 24+ Advanced Learning Loan service Progress the Welsh Modernisation programme Implement arrangements to enable SAAS to make loan payments Deliver committed change initiatives for DEL (NI) Implement projects in support of the strategic review of repayments Support MSL debt sale arrangements Continue to support any preparatory ICR debt sale work that may be required APRA MEASURES Commissioning and Change Programme Delivery RAG status INTERNAL MEASURES None 20

23 4. Serving our customers Delivering a safe service and improving the customer experience 4.1 Delivering a safe service Over the last three years we have delivered a safe service and demonstrated that we can introduce and operate new services at the same time as providing our existing ones. In 2012 we rolled out the first year of increased tuition fee loans and payments to HE providers, as well as launching the new loan service for part-time students. As described in section 2, we are working hard to ensure that our core systems continue to provide the services we need pending replacement. We have also established stable mechanisms for delivering services, with effective forecasting, resourcing, planning and process control. Individual Service Delivery Plans describe in detail the approach adopted. These are refreshed each year following formal lessons learnt exercises. This approach is continuing and processing for the AY 2013/14 service is well underway. Each year we provide a range of information and guidance for customers across various channels so that they know what finance may be available and when they should apply. Feedback from customers has indicated that the quality of information has improved significantly over the last two years and we will continue to act on feedback, both from customers and other stakeholders. 4.2 Satisfying customers We aim to ensure that the service we offer satisfies our customers by publishing timely and accurate information, advice and guidance; by paying them the right amount of money on time; by taking correct repayments; and by ensuring that when customers need to contact us they speak to knowledgeable, helpful and friendly contact centre staff. Customer surveys have shown a significant improvement in customer satisfaction over the last two years. This is due to improving the quality of service, as well as ensuring that we meet volume processing and call answering targets. In order to ensure that service quality is sustained through controlled processes, we will continue to develop a systematic approach to quality management. Data from quality checks at various stages in the processes enable us to identify common errors and why we make them. We then seek to eliminate these errors through various actions supervision, training, coaching, procedural improvements and system changes. We also actively capture ideas for service improvement from staff and, together with feedback from customers and other stakeholders, we maintain a consolidated list of improvement ideas which are progressed through various channels programmes, projects, system changes and line management action. 21

24 4.3 Listening to customers Rebecca Clark thank you for your help sfe(facebook support) as having my questions answered directly here has saved me having to call Dasha twitter #customerservice is impeccable!!! Best customer service I had in my 12 years of living here! So pleased! We seek feedback from customers students and learners, their sponsors and repayers and listen to what they say. Our customer insight activities include surveys, research, focus groups, user testing and call reasons analysis. In the past 12 months we have set up the Student Finance Lab to capture the views of customers over a range of issues. The Student Finance Lab is SLC s on-line customer research panel. It has almost 3,000 members covering new and continuing part-time and full-time students, sponsors and repayers from all over the UK. We gather feedback from these customers on SLC s products and services via on-line surveys and discussions. Since we launched our social media channels on Facebook and Twitter in 2011 this has proved an extremely valuable source of information for and from customers, sponsors and stakeholders. Usage of these channels has continued to grow (Fig 5). Fig 5 Adoption of Student Finance on social media 22

25 The customer insight activities help keep the customers point of view in the forefront, ensuring that the voice of the customer is a key factor in service design, project prioritisation and business decisionmaking. Analysis of call reasons enables us to identify how we can improve our systems and processes, so that we can improve how we resolve customers queries, or provide the information on-line to make it unnecessary for them to call in the first place. Customer complaints provide invaluable insight into the errors we make. We seek to address each individual complaint as fairly and quickly as possible, and if customers are still unhappy with our response, there is an escalation route, ultimately resulting in adjudication by an Independent Assessor. As well as addressing individual complaints, we carry out an analysis of trends, identifying the most common reasons for complaint, and conduct detailed analysis to identify root causes. As a result of this analysis we trigger improvement actions, which operational managers take forward through procedural changes, coaching and training. If elimination of root causes requires system changes, these are pursued through inclusion in projects and programmes wherever possible. A priority this year is to increase our capability for root cause analysis and improve the way that this is used to drive continuous improvement and therefore drive down the numbers of complaints we receive. This year we intend to conduct a benchmarking exercise on the volumes of customer complaints and how we handle them. We have established a new customer experience forum to oversee consolidated action plans arising from analysis of data from complaints, customer insight, surveys, quality measurements and other relevant sources of information, which will raise the profile of the action we are taking to address customers issues. 4.4 Listening to other stakeholders Stakeholders play an extremely important role in the development and delivery of our services and we have a structured approach to consulting and working with them through a series of engagement groups where they provide insight and specialist expertise from their role in the HE or FE sector. They provide input to service design, work with us on service improvements, help with communications to students and learners and highlight delivery issues from their experience on the ground. Our annual stakeholder survey in 2012 has shown an overall increase in satisfaction compared to the previous year, indicating that stakeholders continue to be positive about the Company and the quality of the relationship developed with them. I found everyone I have spoken to in relation to Student Finance very helpful, professional, understanding of my queries. I have particularly found the support provided by the speaker who came to discuss his experiences with the learners very helpful. I have good working relationships with senior members of the SLC Board and there are good links in place within my team and different areas within SLC 23

26 Measures across the three key survey indicators (which establish whether stakeholders are likely to act as advocates of the student finance service, of SLC the organisation and how they view the quality of their relationship with SLC) have improved significantly compared with the previous two years results (Fig 6). We also aim to improve the service we provide to HE and FE providers by developing a new approach to strategic relationship management (see section 7.4). Fig 6 Stakeholder Satisfaction Survey results 4.5 Improving the customer experience Core Systems Replacement and Digital Delivery are key vehicles for improving the customer experience through easier and faster processes via the development of new systems, and section 1.3 described how we are prioritising business improvement initiatives that provide early benefit. We also recognise the need to make efficiency savings at the same time as improving service and protecting safe delivery, as part of our wider responsibility to reduce the Company s operating costs. Analysis of First Contact Resolution provides insight into why we fail to resolve customer enquiries at the first pass and triggers management action and ideas for process and system improvement. Analysis of Avoidable Contact provides insight into how we can improve processes to reduce the number of telephone calls we receive and hence to reduce costs. Sustained service improvement also depends, however, on the day-to-day teamwork between the different departments within the Company, the strength of the continuous improvement culture and creating the necessary organisational capacity. Our aim in FY is to continue to embed this culture across the organisation through Leading the Way. Everyone in the Company has a role to play in improving quality, by doing their job to the best of their ability and seeking ways to do it better for the benefit of the customer. 24

27 4.6 Marketing and Communications Our first Marketing and Communications Strategy was created shortly after the Directorate was formed two years ago and set out a 5-year strategic plan. However, in light of significant changes SLC s transformation plans, digital delivery, new products and customers, the strategic review of repayments and the additional campaign and IAG work being undertaken for the Welsh Modernisation Project the Marketing and Communications Strategy will be reviewed in FY to ensure we remain targeted and fully effective in all aspects of strategic communications delivery. As part of this review we will be looking at the SLC corporate, service and product brands, and considering the impact on customer and stakeholder understanding. KEY BUSINESS OBJECTIVE 4 KEY ACTIVITIES FY APRA MEASURES INTERNAL MEASURES Provide a safe and efficient student finance service that meets the needs and expectations of our customers and stakeholders, and continue to improve the customer experience Provide IAG on student finance that meets customers needs Process applications, pay students and providers, and administer repayment collection with HMRC in line with agreed service standards Sustain customer satisfaction by fulfilling our promises Capture and act on feedback from our customers Improve root cause analysis of complaints and benchmark complaint volumes Enhance relationships with HE and FE providers within a broader, refreshed stakeholder engagement strategy Build on Leading the Way practice to embed a continuous improvement culture Review our Marketing and Communications strategy Overall customer satisfaction Complaints handling Core processing timeliness (England only) Targeted support (England only) Contact performance Customer communications (England only) On-line take-up (England only) 24+ Advanced Learning Loan processing timeliness (England only) Provide agreed services to Devolved Administrations and Learning Providers: Performance v SLA Delivery partner performance ICT systems availability Avoidable Contact First Contact Resolution 25

28 5. Managing our people Investing in our people and equipping them to deliver the best possible service 5.1 Improving our ways of working We will invest in our people to deliver the best possible service for our customers. We require a better-aligned, more collegiate culture, where we expect excellence, where people work together to do what is best for customers in the most efficient way possible, where challenge to improve and innovate is welcomed and where colleagues are empowered and trusted to do what is right. Setting a clear set of shared priorities for delivery and transformation, and communicating and translating them into improved ways of working, will be supported through rigorous implementation of the performance management process. Achieving consistency of how we do business with each other and with stakeholders, and strengthening our management of performance, will be achieved through adoption of our Leading the Way commitments, which spell out the attitude, approach and positive ways of working that SLC is seeking as its cultural brand. We will continue to promote diversity and inclusion within our workforce. Fig 7 Leading the Way framework 5.2 Developing our leaders and managers With a fast-moving, innovating and transforming organisation comes the requirement for excellence in leadership and management. We will invest heavily in developing better leadership to take us through change and improving managerial skill to fully support our people as well as provide stable and excellent operational delivery. Measurement of managerial performance will be equally focused on leadership and delivery. 5.3 Planning our resources Delivering the public service efficiencies agenda requires tight resource management, new approaches to our working practices and careful workforce management as new systems, digital services and working practices demand changes to the shape and size of our workforce over the coming years. Honesty, engagement, investment in staff and careful forward planning are key to success (see section 7.1). 26

29 5.4 Managing the change in pension arrangements We need to take account of the significant changes that are taking place in pensions across the public sector. Firstly, we are required to enrol all employees into a workplace pension scheme by August 2013 ( auto-enrolment ) and will be communicating our plans to all staff well in advance of that date. Secondly, we are proposing to amend SLC s existing pension scheme in response to the significant deficit and increases in the costs of that scheme. Changes will be in line with recommendations being adopted elsewhere in the public sector, with the key objectives being to provide a more affordable pension cost for the Company and to continue to provide an attractive defined benefit scheme for members. Consultation with our trade union (PCS) and staff will commence in Autumn 2013, with changes anticipated to be implemented in November KEY BUSINESS OBJECTIVE 5 KEY ACTIVITIES FY APRA MEASURES INTERNAL MEASURES Manage our people responsibly and continue to embed our Leading the Way framework Communicate to staff a clear, shared vision of the future for SLC, setting out clear priorities for the organisation, and how teams and individuals contribute to achievement of it Build on our Leading the Way commitments, measuring managers and staff on how, as well as what, they deliver Continue to develop resource planning to achieve a fit-forpurpose organisational design and structure and to meet the efficiencies agenda Continue to invest in, build and deliver development programmes that maximise the skill, knowledge and contribution of staff Build leadership and management capability and address performance issues Continue to build recognition of staff and teams Introduce auto-enrolment and other required pensions initiatives Continue our close working relationship with our trade union None Capacity Sickness Turnover Capability Implementation of learning plans Evaluation of learning plan effectiveness Culture People Insight Survey (monitoring the extent to which our Leading the Way framework is embedded NB to be baselined in FY ) 27

30 6. Managing public money Using stakeholders money wisely and getting the most out of it for them 6.1 Delivering value for money As custodians of public funds we must deliver value for money, operating at all times in accordance with the standards set out in HM Treasury s Managing Public Money and maintaining strong internal controls. As with all public sector organisations we are required to deliver budget reductions being demanded across Government, and so we will be taking a close look at how we can do things smarter and more efficiently. We have already started this process and have seen significant budget reductions in certain areas. We are expecting greatly improved efficiency through successful implementation of the Transformation Programme, delivering the anticipated benefits in customer service, efficiency and reduced costs. We will continue to deliver the company-wide Efficiency / Value for Money Programme, which will include specific initiatives delivered by ring-fenced resources. We expect our continued focus on improving quality, with associated reduction in cost due to a lower requirement for rework, to reduce call volumes and lead to fewer complaints to manage. We also expect to drive greater value and innovation through our relationships with suppliers and achieve more for the money available to us. 6.2 New accountability arrangements for HE funding 3 BIS s White Paper sets out the Government s vision for a flexible, competitive and innovative HE system that responds to the needs of students and puts them at its heart. The changes are profound: funding that follows the student, increasing diversity of HE provision, a more level playing field for providers, and enhanced tools and support to help students make informed decisions on their choice of course and provider. As funding shifts over the next few years, away from block grants for HE providers towards higher fees paid by students supported by Government-backed loans, the role of SLC becomes increasingly central. HE providers will rely on us for timely and accurate payment of a greater proportion of their revenue and effective stakeholder relationship management will be essential (section 7.4). We are also working closely with HEFCE, BIS and sector organisations to establish appropriate accountability arrangements to protect both the student and the public purse, and to ensure that the Government s vision to put the student at the heart of the system is realised as fully as possible. This will require developing a successor to HEFCE s current Financial Memorandum for HE providers. Together with HEFCE we co-chair the Regulatory Partnership Group (RPG), set up to advise Ministers on implementation of regulatory reforms to underpin the White Paper and Technical Consultation, and will be taking forward approved RPG proposals during the year. This may result in some reallocation of existing responsibilities for SLC and/or take-on of new duties but we do not envisage any fundamental change to our core role. Further work may also arise from BIS s recent consultation on applying student number controls to alternative providers with designated courses. 3 Higher Education: Students at the Heart of the System, BIS, June

31 6.3 Accurate forecasting We will continue to provide accurate forecasts of loans and grants expenditure, enabling improved financial planning by Government Administrations, cash flow management and tracking of take-up against forecast. 6.4 Driving down fraud Our application and assessment processes are designed and operated to establish eligibility and entitlement correctly, and to make student support payments securely and on time. In addition to reducing fraud and error through our core operational processes, we also strive to drive down the level of fraud through a range of specialist counter-fraud tools and techniques, drawing on the knowledge and skills of our Special Investigations Unit. Last year we piloted the use of additional counter-fraud tools successfully. This resulted in a significant increase in the total level of stopped fraudulent payments, demonstrating an excellent return on the resources that were invested in this work. This in turn has served to increase the level of stakeholder confidence in our counter-fraud arrangements, and the initiative has been recognised within Government as an important step forward, not least through our active engagement with the Cabinet Office s Fraud, Error and Debt Taskforce. During the forthcoming year we will continue to explore with BIS how we can build on our experience and drive down fraud in the student finance system further still. 29

32 6.5 Maximising loan repayment Ministers have asked us to make repayment of loans a strategic priority this year, to ensure that their HE reform policies are delivered successfully and that, as the number of borrowers in repayment, size of loan and Government outlay all increase, collection through HMRC and direct SLC channels is optimised. Collection effectiveness will have a bearing on the value of the loan book and revenue streams in the event of debt sale and maximising loan repayment is therefore critically important. All Government Administrations need SLC and HMRC to administer collection arrangements effectively across an increasingly diverse and complex product set, ensuring that borrowers repay the correct amount and cannot avoid their obligations. SLC s role here is primarily one of loan management and administration, maintaining accurate and up-to-date customer information and accounts, posting repayments collected by HMRC to loan accounts and applying interest correctly. We are, however, responsible for collecting directly from customers who live abroad a group that will continue to increase and attract attention as the loan book grows. We also collect directly where student support has been overpaid as a result of changed personal circumstances, and from any remaining MSL customers. Our internal processes need to improve continuously and we have identified a range of customer service and efficiency initiatives we wish to pursue. Effective collection relies not only on rigorous, efficient, high-volume automated processes but also high-quality information, and it is essential that we make it as easy as possible for customers to manage their accounts and transact with us. Customer insight and engagement are providing us with a deeper understanding of customers needs and expectations. These now need to be translated into tangible service improvement. Our strategic review of repayments describes our vision for the repayment service in five years time, reflecting these three perspectives Government Administration, delivery organisation and customer. Proposed or planned initiatives are mapped to our repayment goals for 2017: increase revenue collection; improve on-line service; improve IAG; improve data and information handling; and deliver mandatory change. The initiatives are listed overleaf. 30

33 Goal 1. Increase revenue collection Strategic Repayments Review Initiatives Initiative PayPal Review of multiple employments Self-Assessed Prevent Over-Repayments Review of EU and overseas letters Redeployment of collections MSL Resource 2. Improve on-line service Redesign of the repayment website and portal On-line statements Secure for overseas borrowers On-line Change Of Customer Details (COCD)/ Overseas Assessment forms On-line direct debits 3. Improve IAG Repayments communications strategy Review of all repayment correspondence 4. Improve data and information handling 5. Deliver mandatory change Real Time Information Department of Work and Pensions data matching Automated trivial balance write-offs Collections data cleansing Electronic transfer of COCD information to HMRC SAAS pay loans MSL debt sale 24+ Advanced Learning Loan Core System Replacement procurement and build Preparatory ICR debt sale work (support as required) HE reforms Part-time loans 6.6 National Audit Office review of student loans repayments The NAO will be carrying out a review of student loan repayments, publishing its findings at the end of Autumn The study falls under the NAO s Value for Money programme and will consider BIS s success to date in collecting repayments due on student loans made since It will examine in depth the arrangements overseen by BIS and SLC, and discussions are underway with the NAO on the detail of the review. 31

34 6.7 Benchmarking the cost of student loan processing The Cabinet Office has published an update to its Transactions Explorer tool. This now contains data on the cost per transaction for 44 of the biggest services the Government offers the public, including the student finance service. Making this data public is a big step forward in transparency and sets a baseline for service performance. The public can and should judge our progress on improving against this baseline. It is no coincidence that those who have made the biggest strides on-line have some of the lowest costs. Doing things digitally is simpler, better, faster and cheaper. We will use the information from this publication and other sources to benchmark our processes against best practice, so helping us to move towards being a centre of excellence, as highlighted in our Vision statement. We will also continue to contribute to the Government s transparency agenda, unlocking our data and making it available to the public in popular formats to enable them to hold politicians and public bodies to account for their performance and improve value for money further. 6.8 Supporting the Government s shared services initiatives Shared services will play a key role in the way that public services are delivered in the future. For BIS, this means using existing assets and resources to establish a programme that will deliver a structural reduction in the cost base by providing simpler and integrated processes across the BIS family of organisations, of which SLC is part. BIS have selected Research Councils UK Ltd, also part of the BIS family, with specialist expertise in this area, to be the shared service provider for BIS and partner organisations. The transition of some of SLC s transactional finance, human resources, procurement and estate management activities is part of this programme. We will continue to work closely with BIS to support successful delivery. Working in partnership with PCS, we will keep our staff fully informed. KEY BUSINESS OBJECTIVE 6 KEY ACTIVITIES FY APRA MEASURES INTERNAL MEASURES Manage public money responsibly Deliver agreed services within the budget as per the APRA letter Deliver the Efficiency / Value for Money programme Prepare for budget pressures in subsequent years Through the Regulatory Partnership Group (RPG) define and take forward proposals to ensure proper HE accountability arrangements are maintained Continue to monitor and drive down fraud and error Manage loan books efficiently and effectively while assisting BIS and HM Treasury in the sale of these books Support the forthcoming NAO review of student loan repayments Participate in BIS s shared services programme Assessment and payment accuracy (England only) Fraud and error Delivery within agreed budget Loans and grants expenditure forecasting accuracy Repayment of Income-Contingent Repayment loans Repayment of Mortgage-Style loans (England, Northern Ireland, Scotland only) Recovery of Grant Overpayments (England, Northern Ireland, Wales only) None 32

35 7. Leadership Team priorities Sections 1 to 6 of this Plan have described the key business objectives for the Company. Alongside these, our Leadership Team the Executive will be paying close attention to a number of strategic priorities that underpin the objectives and that will require collegiate ownership and action by it. 7.1 Delivering our Vision and aligning our approach with Leading the Way The particularly challenging environment in which all public sector bodies are now operating means going back to first principles and re-examining not just what we do now, and our current ways of doing it, but radically re-evaluating the full potential of our organisation and making the case with Government for what we could do. We believe strongly that there will be no shortage of opportunity for an organisation that delivers excellent customer service, offers outstanding value to Government and responds to its changing needs positively and dynamically. And this needs our vision to be coupled with outstanding leadership, harnessing the knowledge, skill, enthusiasm and commitment of our people through Leading the Way. 7.2 Reviewing our organisational design to align with our transformation work and to ensure it remains fit-for-purpose Being clear about our purpose and long-term ambition will help us determine which activities we need to excel at, and which may be better performed for us by others; and how to connect the components to enable them to work most effectively together to deliver seamless high-quality service. 7.3 Creating an effective, integrated framework for corporate, business and financial planning Consequently, during the year ahead, we will be rethinking our planning processes carefully. Aligning our resources, our effort and our will to a compelling vision will demand a company-wide planning framework that sets out what each of us needs to achieve individually, how we support each other and how everything we do integrates without friction so that we can fulfil our full potential as an exemplary public service organisation. 33

36 7.4 Developing a stronger approach to strategic relationship management The nature of the stakeholder landscape for SLC is changing as a result of the 2012 HE reform programme. In particular, relationships with HE providers and the governing and representative bodies in the HE sector are evolving to meet the changed delivery landscape and funding flows (section 6.2). Ministers have specifically asked us to consider our relationships with HE providers. At the same time new relationships are being built with FE providers. In addition, the changing shape of student finance provision in the four UK Government Administrations is leading to a need for more diverse approaches to these Administrations and the services we provide for them. Connections with other parts of the HE and FE sectors and key suppliers are changing and a broad approach to our stakeholder landscape is required. The importance of ensuring that we understand our stakeholders and communicate clearly with them in the right way and at the right time has never been greater. An approach to stakeholder management through the stakeholder forums and a range of other mechanisms has been in place for several years and some strategic principles have been set out in the Marketing and Communications Strategy but a comprehensive review of these arrangements to reflect the changing landscape is now appropriate. The review is intended to produce a comprehensive three-year stakeholder engagement strategy, with agreed processes for an annual review. The strategy should set out the objectives which the engagement strategy is designed to support, the various methods by which it will be delivered, the organisational and individual responsibilities for delivery and the measures by which improvement will be tracked and reported. 7.5 Exploring new opportunities for growth, to leverage our existing and emerging unique capabilities Replacing our core systems and transforming our delivery capability will create an invaluable asset for Government and we are keen to ensure that the return on their investment is maximised. This means looking beyond what we do currently and being prepared to step outside our traditional remit where it makes sense to do so. By 2015 we will have created a highly cost-effective, state of the art customer-led, digital application processing, payment and accounting capability that can be reused elsewhere. We will remain alert to opportunities and, where appropriate, seek to explore these further with Government as our longerterm strategy develops. 34

37 ANNEX 1: Planning framework Three interlinking documents form the foundation of the current planning framework (Fig 8): the annual Business Plan (this document), which sets out what we intend to do in the financial year the Budget, which sets out the resources allocated the Balanced Scorecard, which sets out our performance measures and targets and allows us to track performance Stakeholder Requirements SLC Delivery Strategy Transform Sustain Deliver ICT, People & MarComms Strategies APRA SLC Business Plan Budget FY Balanced Scorecard Service Delivery Plans Performance Management Fig 8 SLC Planning Framework The context for these documents is provided by: the SLC Delivery Strategy , which sets out our overall direction of travel our supporting strategies for ICT, Marketing and Communications, and People our Annual Performance and Review Agreement (APRA), which is the formal agreement between Government and SLC and defines targets and resources our Transformation, Sustain and Delivery programme plans our Service Delivery plans for the AY 2013/14 operational cycle 35

38 The Business Plan is the definitive reference point for the Company s objectives. Six key business objectives have been declared for FY Although broadly similar in scope to the nine objectives declared for FY , the opportunity has been taken to re-focus our priorities for the coming year. The performance measures and targets are largely unchanged since last year but have been re-aligned to the six key business objectives for FY and re-calibrated to our budget settlement. These are described in Annex 4. The key business objectives set out in the Business Plan will be cascaded down to each individual s personal objectives via the performance management system. This ensures alignment of individual objectives to business goals. 36

39 Annex 2. Key business objectives KEY BUSINESS OBJECTIVE 1. Progress our business Transformation Programme 2. Sustain critical business processes and systems for the duration of the Transformation Programme to ensure a safe service 3. Execute our Delivery Programme to meet annual policy changes and new stakeholder priorities ACTIVITY Complete the Core Systems Replacement (CSR) procurement process through to contract award Complete delivery of the new digital services for HE parttime and Further Education (FE) 24+ Advanced Learning Loan Establish the business improvement framework within the Transformation Programme Establish the organisational design workstream to design a fit-for-purpose future business model Prepare the organisation for migration of agreed activities to shared services Ensure SLC s current ICT systems, processes and infrastructure remain reliable and fit for the purpose of delivering a safe and effective student finance service Develop an effective workflow solution, starting with the imaging platform, to streamline the application assessment process Complete the data centre contract process and commence migration of systems Complete the planning process for business continuity and align business continuity and IT disaster recovery plans Target and address stabilisation issues on other business systems until core systems are replaced Maintain interim technology roadmaps for business systems that match business demands until core systems are replaced Launch the AY 2014/15 service successfully and on time Undertake a review of SLC s end-to-end change process and implement a new approach Deliver the remaining elements of the HE reform programme Launch and roll out the new FE 24+ Advanced Learning Loan service Progress the Welsh Modernisation programme Implement arrangements to enable SAAS to make loan payments Deliver committed change initiatives for DEL (NI) Implement projects in support of the strategic review of repayments Support MSL debt sale arrangements Continue to support any preparatory ICR debt sale work that may be required 37

40 KEY BUSINESS OBJECTIVE 4. Provide a safe and efficient student finance service that meets the needs and expectations of our customers and stakeholders, and continue to improve the customer experience 5. Manage our people responsibly and continue to embed our Leading the Way framework 6. Managing public money responsibly ACTIVITY Provide IAG on student finance that meets customers needs Process applications, pay students and providers, and administer repayment collection with HMRC in line with agreed service standards Sustain customer satisfaction by fulfilling our promises Capture and act on feedback from our customers Improve root cause analysis of complaints and benchmark complaint volumes Enhance relationships with HE and FE providers within a broader, refreshed stakeholder engagement strategy Build on Leading the Way practice to embed a continuous improvement culture Review our Marketing and Communications strategy Communicate to staff a clear, shared vision of the future for SLC, setting out clear priorities for the organisation, and how teams and individuals contribute to achievement of it Build on our Leading the Way commitments, measuring managers and staff on how, as well as what, they deliver Continue to develop resource planning to achieve a fitfor-purpose organisational design and structure and to meet the efficiencies agenda Continue to invest in, build and deliver development programmes that maximise the skill, knowledge and contribution of staff Build leadership and management capability and address performance issues Continue to build recognition of staff and teams Introduce auto-enrolment and other required pensions initiatives Continue our close working relationship with our trade union Deliver agreed services within the budget as per the APRA letter Deliver the Efficiency / Value for Money programme Prepare for budget pressures in subsequent years Through the Regulatory Partnership Group (RPG) define and take forward proposals to ensure proper HE accountability arrangements are maintained Continue to monitor and drive down fraud and error Manage loan books efficiently and effectively while assisting BIS and HM Treasury in the sale of these books Support the forthcoming NAO review of student loan repayments Participate in BIS s shared services programme 38

41 ANNEX 3: Balanced Scorecard illustration S L C B a l a n c e d S c o r e c a r d FY : December 2013 and Q3 performance, for Main Board meeting on Tuesday 28 January 2014 Month YTD YE Page Month YTD YE Page Measures at red or amber-red Objective 1 - Transformation Programme Objective 4 - Safe and efficient service (cont.) This commentary will focus on relevant issues for the month. Any graphics or illustrations used may also vary. However, metrics that are at red or amber-red will always 1 Transformation Programme (UK) Objective 2 - Sustain Programme 2 Sustain Programme (UK) Objective 3 - Delivery Programme 3 Commissioning & Change Programme Delivery (UK) Objective 4 - Safe and efficient service 4 Overall Customer Satisfaction (UK) 5 Complaints Handling (UK) 6 Core Application Processing Timeliness (Eng) 7 Targeted Support Processing Timeliness (Eng) 8 Contact Performance (Eng) 9 Customer Communications (Eng) 10 Online Take-up (Eng) Application Processing Timeliness (Eng) 12 Northern Ireland 13 Scotland 14 Wales 6 15 Higher Education Institutions G G G G GA GA 16 FE Learning Providers G GA GA G G G 7 17 Delivery Partner Performance (UK) 18 ICT Systems Availability (UK) 19 Avoidable Contact (Eng) (Quarterly) G G G G G G R R R 20 First Contact Resolution GA GA GA 8 (Eng) R AR GA Objective 5 - Manage our people responsibly 21 Capability Capacity And G G G 9 Culture (UK) GA GA GA be addressed. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Other points to note Some measures have a green "headline" RAG status, but contain individual components that are red or amber-red, as follows: Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et AR GA GA Objective 6 - Manage Public Money responsibly Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore dolore magna aliqua. 11 magna aliqua. G G G 22 Assessment And Payment (Nov) 28 Accuracy (Eng) GA GA GA 12 G G G 23 Fraud (UK) 29 AR G G 13 G G G 24 Delivery within Agreed 30 Budget (UK) G G G 15 AR GA GA 25 Loans & Grants Expenditure 31 Forecasting Accuracy (UK) N/A N/A N/A CAUTION KEY 16 G G G 26 Repayment of Income There are sound reasons why aspects of this report may Up Same Down 32 Contingent Loans (UK and EU) GA GA GA differ from the MI Pack, and both are valid. 17 Green (the target to be met) G G G 27 Repayment of Mortgage G G 33 The MI pack is weekly, SFE-based, and aligned to the Style Loans (Eng, NI & Sco) GA GA GA 18 academic year. The scorecard is monthly, over the Green-Amber (below target) G G GA 28 Recovery of Grant financial year, and covers all domiciles. GA GA GA 34 Overpayments (E, W & NI) AR GA GA Amber-Red (significantly 19 G G G RAG assessments in the MI pack are based on below target) AR AR AR judgement. For the scorecard, the rules agreed in the 20 APRA are used. Red (unacceptable) G G GA R R APRA measures shown in Red N/A - Not applicable Non-APRA measures shown in Black N/A 39

42 Annex 4. Balanced Scorecard targets The Balanced Scorecard contains APRA targets that have been agreed with BIS and internal targets agreed and monitored by SLC s Main Board. During FY we will review our Balanced Scorecard and move towards a more strategic set of measures for next year to support our Transformation Programme. KEY BUSINESS OBJECTIVE 1. Progress our business Transformation Programme TARGETS APRA None Internal Transformation Programme Delivery GREEN against evaluation criteria established by the SRO / Programme Board KEY BUSINESS OBJECTIVE 2. Sustain critical business processes and systems for the duration of the Transformation Programme to ensure a safe service TARGETS APRA None Internal Sustain Programme Delivery GREEN against evaluation criteria established by the SRO / Programme Board KEY BUSINESS OBJECTIVE 3. Execute our Delivery Programme to meet annual policy changes and new stakeholder priorities TARGETS APRA Commissioning & Change Programme Delivery GREEN against evaluation criteria Internal None 40

43 KEY BUSINESS OBJECTIVE 4. Provide a safe and efficient student finance service that meets the needs and expectations of our customers and stakeholders, and continue to improve the customer experience TARGETS APRA Overall Customer Satisfaction out-turn + 0.5% points. Complaints Handling Substantive response to complaints within 15 working days of receipt: 85% Substantive responses within 20 working days of receipt: 95% Core processing timeliness (England only) % of core applications, new and continuing, received before the deadline processed before the start of term: 99% % of applications, new and continuing, received before and after the deadline, processed within x working days: 70% applications processed in 20 days and 95% within 30 days % of financial evidence assessed to confirm full entitlement within 20 days of evidence being received where it is not provided with the application: 95% Targeted support (England only) DSA applications processed within 2 weeks of receipt: 95% DSA needs assessment reports processed within 2 weeks: 95% CCG applications with estimated costs processed within 4 weeks: 95% CCG applications with actual costs processed within 4 weeks of receipt: 95% Contact Performance % Calls Answered: 90% (average), and 70% (floor, for each 2 week interval across the year) Customer Experience advisor: target plus 2% points i.e. 83% or out-turn if it is higher Customer Experience outcome: target plus 2% points i.e. 76% or out-turn if it is higher Customer Experience consistency: target i.e. 80% or out-turn if it is higher 41

44 KEY BUSINESS OBJECTIVE 4. Provide a safe and efficient student finance service that meets the needs and expectations of our customers and stakeholders, and continue to improve the customer experience TARGETS Customer Communications (England only) Satisfaction with channel and timeliness of IAG: 63% On-line Take-up (England only) On-line Take-up Students: 91% On-line Take-up Sponsors: 65% 24+ Advanced Learning Loan Processing Timeliness (England only) On-line applications - % of all on-line applications which do not require any physical evidence, and have successfully passed the IPS check will be processed within 5 working days of receipt: 95 % in 5 working days On-line applications - % of all on-line applications requiring any manual check of physical evidence will be processed within 20 working days of receipt by SFE: 95 % in 20 working days Paper applications - % of all paper applications will be processed within 20 working days of receipt by SFE: 95% in 20 working days Change of circumstances - % of all on-line Change of Circumstances submitted on-line via the Learning Provider Portal or the Customer Portal will be processed within 5 working days of receipt by SFE: 95% in 5 working days Change of circumstances - % of all paper Change of Circumstance forms submitted by the Learner will be processed within 20 working days of receipt by SFE: 95% in 20 working days Provide agreed services to Devolved Administrations and Learning Providers: Performance v SLA Northern Ireland: only minor elements of the service agreement not met Scotland: only minor elements of the service agreement not met Wales: only minor elements of the service agreement not met HEIs: only minor elements of the service agreement not met FE Learning Providers: only minor elements of the service agreement not met Internal Delivery partner performance Achieve a weighted RAG status of GREEN across the 9 services that comprise delivery partner performance ICT Systems Availability Achieve a weighted RAG status of GREEN for the availability of the key systems Avoidable Contact Avoidable Contact to be no more than 55% of calls. Achieve a reduction in Avoidable Contact volumes against FY First Contact Resolution Achieve a First Contact Resolution rate which is 3% points higher than the FY out-turn 42

45 KEY BUSINESS OBJECTIVE 5. Manage our people responsibly and continue to embed our Leading the Way framework APRA None Internal TARGETS Capacity Sickness absence targets that take into account Chartered Institute of Personnel and Development and contact centre benchmark data i.e. Support Services 3% Operations 6% Turnover to be kept between the FY out-turn plus 0.5% points and the FY out-turn plus 5.5% points Capability GREEN against criteria for creation and delivery of learning plans GREEN against criteria for evaluation of learning plan effectiveness Culture Embedding of the corporate culture envisaged in the Leading the Way framework - with performance to baselined using a new People Insight Survey 43

46 KEY BUSINESS OBJECTIVE 6. Manage public money responsibly APRA TARGETS Assessment and payment accuracy (England only) Predicted Payment Accuracy (financial variance): ±0.5% Fraud and error Identify at least the same number of cases as in FY12-13 where erroneous payments are prevented as a result of fraud monitoring Delivery within agreed budget Delivery within agreed budget : year-end outturn between a -1% underspend and zero overspend against the agreed mid-year budget Development of unit cost measurement for FY : Progress GREEN against agreed milestones Loans and grants expenditure forecasting accuracy In year forecasting accuracy (mid year): loans ± 2.25%, grants ±1.75% In year forecasting accuracy (9 month): loans ±1%, grants ±0.75% Repayment of Income-Contingent Repayment loans % borrowers in repayment channel (UK & EU incoming cohort): 96.5% % UK resident borrowers in repayment channel (past cohorts): 98.8 % % past cohorts UK borrowers who moved overseas: 73.5% % past cohorts EU borrowers who moved overseas: 53.5 % Repayment of Mortgage-Style loans (England, Northern Ireland, Scotland only) % MS loan accounts not in arrears: 91.5% % MS loan accounts less than 24 months in arrears and are repaying: 28.4% MS loan accounts <24 months in arrears average monthly repayment over the year: Recovery of Grant Overpayments (England, Northern Ireland, Wales only) Average monthly recovery over the year: % Grant overpayments accounts making a payment: 29.02% with the target being raised potentially as high as 33.41% if a MSL Debt Sale frees up resources Internal None 44

47 Annex 5. Key risk themes KEY BUSINESS OBJECTIVE 1. Progress our business Transformation Programme 2. Sustain critical business processes and systems for the duration of the Transformation Programme to ensure a safe service 3. Execute our Delivery Programme to meet annual policy changes and new stakeholder priorities RISK THEME Due to complexities in undertaking and implementing the Company s strategic objectives through the Transformation Programme, and the tight timescales involved in delivering the key components, there will be challenges inherent to scheduling, specification and integration across the business. The Company will employ a consistent approach to the management of major programmes to avoid potential misalignment between these programmes, particularly for the key risks, dependencies and the governance that underpin them. It will be vital to ensure that key resources are not diverted from the Transformation Programme, and that the critical path activities for the CSR programme are protected. A holistic approach to sustaining and maintaining business operational stability is essential to ensure we continue to meet the needs of customers and stakeholders until the Transformation Programme has been completed. SLC will continue with CLASS sustaining activities; developing business continuity / disaster recovery capabilities to ensure resilience of systems and processes; progressing the move to new data centres; and meeting and maintaining our information security obligations in line with industry standards. The complex and concurrent nature of the Delivery Programme and the need to keep our resources aligned with business requirements may challenge our ability to deliver all of our Government stakeholders requirements and expectations alongside the Sustain and Transformation Programmes. We will continue work to enhance and improve our end-toend change management arrangements and capabilities and will work closely with our key Government stakeholders to manage the overall level of change. 45

48 KEY BUSINESS OBJECTIVE 4. Provide a safe and efficient student finance service that meets the needs and expectations of our customers and stakeholders, and continue to improve the customer experience 5. Manage our people responsibly and continue to embed our Leading the Way framework RISK THEME Alignment of resourcing priorities and procedures as we progress our Transformation Programme objectives may be problematic and could present some significant challenges within operational areas, where the balance of permanent and temporary staff can impact overall performance, and in support areas, where an increase in activity may be experienced as a result. To maintain and improve customer experience, service efficiency and reduce Avoidable Contact, the Company will enhance its web presence and usability, continue to improve on-line information, implement service improvements, drive down system defects and seek to introduce more efficient means of delivery. Without support from the Company as a whole there may be difficulties in fully implementing systems and process changes crucial to the Transformation Programme. Further embedding of our Leading the Way framework, having an agile medium term resourcing plan and a cohesive approach to the ongoing development of our people will be key factors in making this a success. We will review SLC s sourcing model to ensure we have the capacity and capability needed to deliver the whole Change Programme. Early engagement with our Government stakeholders is required to enable effective forward programme planning. For some key elements of our plans, there is a requirement for specialist knowledge to complement SLC s existing resources, and the loss of critical IR35 status individuals will have a broad impact on our progress against the Company s key objectives. This will be difficult to mitigate in the short term, and will require close management in the first part of the year. 6. Manage public money responsibly We must meet our responsibilities for managing public funds effectively and efficiently, both for the funding required to deliver the services that we provide, and also in terms of the customer payments and repayments that we handle on behalf of our stakeholders. In addition, we recognise that spending restrictions and approval processes within Government are often timeconsuming and may compromise our ability to complete key business objectives. We will work hard to achieve the necessary efficiency savings to meet our spending targets arising from the Spending Review process. SLC will continue to focus on improving accuracy, reducing error, actively countering fraudulent activity and maximising repayments. The Company will liaise with key Government stakeholders at the earliest possible time, and also ensure that appropriate forward plans are put in place wherever possible. 46

49 Annex 6. Funding requirement Funding Breakdown The figures in the table below show the funding being granted to SLC for FY , as confirmed in the Annual Performance and Resource Agreement. SLC Funding Table Funding Category Non-Ringfenced Resource (DEL and Capital DEL available for FY ) Administration Programme Capital BIS HE ( 000s) 32,196 62,385 3, ALL Scheme ( 000s) 872 4, Total ( 000s) 33,068 66,797 3,210 Sub Total 97,637 5, ,075 % Ringfenced Resource Administration Programme 2,819 2, ,842 2,709 Annually Managed Expenditure 2,030-2,030 Total BIS (England) 104,995 5, ,656 86% Total SAAS (Scotland) 3,437 3% Total DEL (Northern Ireland) 4,000 3% Total DfES (Wales) 9,600 7% Total Other Sources 1,122 1% UK Total 128, % 47

50 Expenditure Breakdown A high-level breakdown of SLC s Profit and Loss operating expenditure is shown below in Fig 9. The main categories are as follows: People Costs (58%) The salaries and associated costs of our permanent employees delivering the core business functions and objectives, as well as the cost of the temporary staff we have supporting us during peak times of the academic year. This includes the staff involved in all change programmes. Outsourced Contact Handling (11%) We use outsourced suppliers to help us to deliver a quality service to our customers who need to phone us. This supplements our in-house contact centre offering and helps us to manage calls at peak times. IT Systems (9%) The maintenance, lease, licence and telephony costs associated with both our internal and external IT systems and infrastructure, supporting the customer journey, our technology links with third parties, and our staff in the delivery of their objectives. In-house customer contact (9%) The non-people costs associated with our customer engagement postage and printing costs related to our customer correspondence and literature, telephone charges arising from customer contact, print and mailing equipment costs and customer IAG. Premises Costs (6%) The spend associated with renting and maintaining the buildings at our four sites in Glasgow city centre, Glasgow Hillington, Colwyn Bay and Darlington. Other (7%) Depreciation on Company assets, professional services, tax etc. Fig 9 SLC Profit and Loss operating expenditure by category 48