Grants chief 'sorry' for fiasco

31st October 2008 at 00:00
Chief executive compares IT system with iPhone and pleads to avoid Pounds 3m contract fine as 360,000 await payment

The man in charge of resolving the education maintenance allowance crisis has apologised for mistakes that left hundreds of thousands of students awaiting payments.

But Richard Webster, acting chief executive of Liberata since his predecessor departed a month into the crisis, said the company should not pay a financial penalty for its errors.

He said: "We were wrong. We made mistakes in the IT system, that's our issue and we are not saying otherwise.

"We are very concerned about the impact on individuals. We know that this affects people's income, which gets people concerned. We are very concerned not to see people being disadvantaged."

Mr Webster said delays introducing a new IT system were the cause of the backlog.

He said: "It's like getting a new iPhone. The first day you get it, it takes time to get familiar with it.

"After a couple of days, you're a lot more conversant. We've got the same thing, staff familiarity is now where it needs to be."

But Mr Webster said he hoped the Learning and Skills Council would not impose a Pounds 3 million penalty on the company, as it was entitled to under the terms of the six-year, Pounds 80 million contract. "The issue really for us is, do we want to put Pounds 3 million back into improving the service or put Pounds 3 million into paying a penalty? We would like to see it going back into the service," he said.

Liberata was trying to create an online application service for the allowance, which Mr Webster said he hoped would make it faster and easier for teenagers to apply.

He said the company is financially robust and could pay a fine if necessary, but in its negotiations with the Learning and Skills Council it was arguing that investment would be a better option.

After hiring extra staff to speed up the processing of applications, Mr Webster said it now took just three days to deal with applicants.

He said: "We are about three weeks behind the profile from last year. It's not good, but we don't see it as a cataclysm."

Once applications have been processed and students receive a notice of entitlement, they have to claim the cash through their college or training provider, and it is eventually paid out of LSC funds controlled by Liberata.

Jim Knight, the schools minister, said that of the 600,000 applicants, by last week nearly 390,000 had received the notices of entitlement and nearly 240,000 were receiving payments.

Mr Knight said: "There is a gap there that we are trying to reduce rapidly."

Very few applicants are rejected, Mr Webster said, suggesting there are still hundreds of thousands of teenagers entitled to payments who have not received any cash.

15p to last until pay day, page 5.

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