Source · Select Committees · Public Accounts Committee
Recommendation 20
20
Acknowledged
Fraud involving franchised providers makes up over half of all detected student loan fraud.
Conclusion
The value of detected fraud in 2022/23 involving franchised providers totalled £2.2 million, 53% of the total £4.1 million fraud SLC identified.49 In our July 2023report on tackling fraud and corruption across government, we concluded that tackling fraud cannot be left to counter-fraud technical experts.50 We asked DfE whether it is taking fraud and abuse of student funding sufficiently seriously. DfE assured us that it sees fraud as a collective, as well as an individual, responsibility.51 Both DfE and SLC also emphasised that organisational culture is important, beyond individual organisations’ rigidly defined responsibilities.52 OfS added that, within the constraints of its current powers, it has been working collaboratively with DfE and SLC. DfE said that it had been helpful to get a broader understanding of where risk sits in the system, both for DfE itself and to play back to the sector so the system has a shared view of the issues.53
Government Response Summary
The government acknowledges the importance of addressing fraud and misuse of student funding and highlights existing collaborations and protocols between DfE, SLC, and OfS, including data sharing and incident response plans, while considering further improvements.
Government Response
Acknowledged
HM Government
Acknowledged
4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 The department, the Student Loans Company (SLC) and the OfS all share a low-risk appetite with respect to protecting student funding from fraud and misuse. The OfS is an independent body and must set its own risk appetite, in line with its requirements to act proportionately, but, like all public bodies, has a low-risk appetite for fraud and misuse of public money. All three organisations are committed to agreeing protocols for identifying and mitigating risk in the Higher Education (HE) system, working together but each playing their individual role in addressing providers of concern. 4.3 A data sharing protocol among DfE, OfS and SLC, and a joint incident response plan, are now in place. 4.4 The department and SLC already collaborate on setting risk appetite and on risk management arrangements. DfE attend SLC Audit & Risk Committee (ARC) and Board. SLC provides reports on fraud prevention and reduction to ARC and works with the DfE to consolidate quarterly fraud reports to the Cabinet Office, the Public Sector Fraud Authority (PFSA) and DfE ARC. Additionally, SLC agrees its fraud savings target annually with the DfE / PFSA. 4.5 The OfS has a strategic risk on its risk register, relating to potential concerns that providers do not have adequate internal controls over the data they supply to the SLC and the OfS, leading to risks to public funding and compliance with OfS’ conditions of registration. Through its own fraud risk arrangements, the OfS has identified and manages risks relating to fraud for the grant funding for which the OfS itself is responsible. The OfS will continue to undertake regulatory work in relation to registered providers, focusing on quality and management and governance; and will do so on the basis of the risk appetite set by the OfS board. 4.6 The department is considering the need for further improvements, including legislative changes to roles and responsibilities, if required.