In a report published today, the Committee of Public Accounts says there were failures last year in both the company’s management and in the Department for Business, Innovation and Skills’ oversight.

The committee expresses its disappointment that the BIS officials responsible “appear not to have been held accountable for their failures”. It calls for a “step change” in the performance of the SLC, arguing that progress has been too slow.

In the autumn of 2009, the SLC had fully processed less than half of students’ applications, a situation the committee describes as “completely unacceptable”.

Service to students applying for Disabled Students’ Allowances was significantly worse –less than a quarter of the 17,000 applicants had received payment by the end of December last year. More than half of telephone calls to the company went unanswered, with the figure peaking at 87 per cent in September 2009.

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By the start of this academic year, 69 per cent of new applications had been fully processed, but there were still 100,000 cases – one in four – that were not sufficiently advanced to allow any payment to be made before the start of term.

Margaret Hodge, Labour MP for Barking and Dagenham and chair of the committee, said: “Many students had to do without their financial support for weeks, if not months. For students with disabilities, the failures were even greater. The department also failed in 2009 to manage and monitor the programme effectively. Even as serious problems emerged, officials did not take prompt action. We are disappointed and concerned that no official seems to have been held to proper account.”

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At the end of May this year, after a change of government, BIS announced that John Goodfellow, chair of the SLC, was standing down, and that Ralph Seymour-Jackson, the company’s chief executive, had resigned.

David Willetts, the universities and science minister, said the SLC had now significantly improved its service.

“The new government acted quickly, replacing the company’s senior team and making clear our expectation for substantial improvements for students taking out a loan last summer,” he said.

rebecca.attwood@tsleducation.com