back to article Workday gets £9.8m deal for second chunk of UK's Student Loans Company project

Workday has pocketed a £9.8m contract for the second phase in an ERP project intended to improve efficiency in finance and HR management at the UK's Student Loans Company (SLC). According to a contract award notice, the US SaaS application vendor has won the deal for "provision of Workday ERP software licences and associated …

  1. TRT Silver badge

    The SLC should be scrapped. It's an inefficient, over-bureaucratic behemoth that offers negative value-for-money for the tax payer and for the country as a whole.

  2. Anonymous Coward
    Anonymous Coward

    Just imagine how much money would have been saved for both students and other taxpayers if the government had had the courage to say "graduate tax" and handled it through HMRC.

    Of course if they'd done that then the various intermediaries would have had to find some other system to leech off. Still, I suppose someone has to do the valuable work of calculating all that annual interest, soon to be over 10%, which will never be paid but not counted as an economic loss until long after those responsible for the system have retired on guaranteed pensions.

    Interesting that student interest is (RPI + 3)% - the RPI / RPIX measures are better fits for the inflation experienced by the medium and lower paid, the CPI measure is more accurate for those with incomes in the top third (and the CPIH measure is just a bad joke).

    1. TRT Silver badge

      If I had been asked to design a means of recouping university tuition costs from the direct beneficiary I would have started by working out what the return on investment for graduate and postgraduate education actually was to the economy. Even if you needed to recover the costs without accounting for the economic gain that graduates bring through their work let alone through their higher average earnings, a graduate contribution indicated by say a G prefix to the tax code, you'd need 1.5% on the basic rate, 4% of the higher rate and 10% on the extra rate. Paid over a working life those rates eliminate the existing SLC loan book in 15 years whilst providing for new intake over those years.

      Graduate tax. It's cheaper, smarter, fairer.

      1. Cederic Silver badge

        Higher taxes for being educated? That would have stopped me seeking education.

        I'd far rather scale back the universities in this country and stop treating a degree as a basic requirement for so many jobs.

        1. TRT Silver badge

          Graduate pay is on average higher than non-graduate. Therefore the amount paid, because it's a percentage of pay, will be higher. If you take the higher receipt over say a 50 year working lifetime of a graduate then it more than repays the cost of tuition and even a living bursary. However as much as there is a resistance to a higher rate for higher education there is a resistance to the perception that the beneficiaries of higher education receive those benefits at the expense of all taxpayers - a perception of unfairness. This was the dilemma that created the appalling Student Loans company. It was seen as the least worse method of funding expanded access to Higher Education. Now as we see an appetite amongst some for course fees that are proportionate to the actual cost of course delivery the whole edifice will crumble. The general public understanding of taxation is, I feel, quite poor, as can be seen by what is probably the most common misconception, that is that Vehicle Excise Duty aka Road Tax pays for the upkeep of the roads; the reality is that it goes into one big pot along with most other revenue and roads are paid for out of that big pot.

          The rates I stated in my previous post don't take account of the graduate pay gap - what rate would seem palatable? What would be the effect of imposing a tax on employers for every graduate they employ? It's a subtle distinction of very little numerical significance but the psychological difference could be devastating.

          1. Cederic Silver badge

            Which rate would be palatable? The same rates that non-graduates earn.

            Why should a nurse on £30k/year pay higher taxes than a fireman on the same salary? Why would a fireman with a degree in Nursing pay higher tax than a fireman without a degree?

            It doesn't make sense and it's unfair.

            Many university degrees have little value in the workplace - see the number of people that'll never pay off their student loans. Many university degrees have no academic merit - you can get on to them having basically failed your A levels.

            Free education is a key enabler of economic success, so instead of charging people more for daring to be educated, switch to educating only those that will benefit from it.

            (No, that doesn't mean defunding all arts degrees)

            1. W.S.Gosset Silver badge

              Not sure what the current situation is, but in Australia when I went through, after graduating and once your income exceeded $X, you paid an additional %tax. Once that additional tax added up to your tuition fees, no more graduate tax.

              A graduate tax slapped on for life is just mad. Way too many ways for it to go wrong/unfair.

              1. TRT Silver badge

                A graduate tax for life means less administration and enables a lower rate. The SLC method is essentially like the Australian method, but with more bureaucracy I expect. Oh, and they charge interest linked to RPI, which is criminal IMHO.

                1. TRT Silver badge

                  And making it a loan with interest, as it is now done in the UK, means it's not compliant with, for example, Sharia. So you then have to create and administer a whole parallel system of funding that essentially works out the same but all you're doing is changing a few column headings to hide the fact that you ARE charging interest.

            2. TRT Silver badge

              Well the Nursing 2000 scheme was another ill thought out thing.

              So if there is the same tax rate for graduates as non-graduates, as at present, how do you fund Higher Education?

              You seem to indicate that it should be FREE education, which is more or less what I said above. There would be no need to target taxation that flows to Higher Education, but as a result of historical jiggling of the bank balance by the governments of the past, passing the expense of Higher Education on to the SLC and therefore on to the individual who received the education gave the opportunity to announce increased spending in some areas and a general tax reduction. This is populist politics.

              So a return to funding Higher Education from general taxation would mean an extra, what, 1.25% on the basic rate for everyone? Currently in the UK the proportion of people employed who have a degree-level qualification is around 40%, so we're half-way to doing it anyway! Then there's the question of it being fair or unfair that there's a portion of income tax from people who will never directly benefit from Higher Education going to fund universities (which are hated by a fair percentage of the UK population for many reasons, just like the BBC is hated).

              Historically the cut to direct university funding created a competitive market, and lifting the cap on student numbers meant there was an incentive to provide "Mickey Mouse" courses. Universities became businesses; they were able to take out loans against future income and thus expand their investments and property portfolios. Look at UCL for example - more than half of the property between Kings Cross and Euston, southward down to Russell Square is now owned or leased by universities. Prior to 2000 it was around a fifth of the size it is now. That expansion was only possible as a result of the new funding arrangements - I don't personally think that's a good thing; it smacks of a bubble to me.

              To answer your specific questions:

              The amount that a person pays in tax under PAYE is taken by their employer on behalf of the Inland Revenue. Specific occupations could, therefore, have a dispensation or a rebate. As it stands, graduate nurses get an NHS bursary, a £1000 NHS grant, a reduced rate of maintenance loan from Student Finance England, around a third of their tuition fees paid as a grant... you could ask why a graduate nurse has to repay a student loan. A graduate nurse employed by the NHS and therefore using their degree would be a case where it makes no sense to pay out of the tax pot the same money that you are trying to get paid back in. The current bursary scheme would be adjusted so that the net effect on take home pay would be just the same as it is today.

              A firefighter with a degree in nursing would pay the graduate rate because their personal tax code would indicate this is the case, same as it indicates they are using married persons tax allowance. The fact that they are choosing NOT to make use of their degree and are NOT employed by the NHS means that they wouldn't be paid the NHS bursaries - their take home would be a little lower than their non-graduate colleague - just the same as it is at present with repaying a student loan, only a little bit less as it would be spread over a longer period. You could argue that firefighter training is a vocational qualification that is the equivalent of a degree... it is paid for by the employer. Do we have private firefighting in the UK? Not really - some specialist roles such as aviation and fossil fuel exploration / exploitation, industry with specific risks etc. We have private medicine though, so is it fair that a nurse can get a higher education degree in nursing paid for by the tax payer, yet choose employment that uses that education but is not working for the state directly?

              It's also hard to know how to sort out those who would benefit from higher education from the who wouldn't. I do think that at 18 / 19 you're still not mature enough to make a decision with the enormity of financial repercussions that going to university does. Thankfully there is guidance.

              One thing where graduate tax in the UK fails is in accounting for international movements.

              1. Cederic Silver badge

                I'm confused, you want a graduate tax because it'll be simpler and cheaper, then want to add exclusions and caveats and special cases. Which are complicated and expensive.

                Even the current set up is better than that, and fairer, and doesn't penalise people for getting educated. Do not punish people for being educated.

                1. TRT Silver badge

                  (1) The exclusions, caveats, bursaries, government grants etc exist for certain cases already. You outlined a specific occupation that is known to be underpaid and asked why should they be taxed at a higher rate? I read into that of course that the occupation is noble and returning to the nation, so their education should be supported by the nation. Well the fact is that it already is! They still have to do the paperwork for getting a student loan and there's still the administrative burden of the SLC and all the bursaries and all the rebates and grants from the NHS. This is how it is today and any reduction of any part of that complexity is to be welcomed with open arms!

                  (2) The paperwork and administration is done by the employer for many if not all of those cases. For the self-employed who fill in a tax return, it would be simpler to handle it through the HMRC tax system than to have to provide a separate declaration and return to the SLC.

                  It's not a penalty for getting an education! For the individual, it's still a net gain. The situation today is that the penalty for getting an education is having a loan debt hanging over your head for 30 years, accruing interest and with a repayment threshold decoupled from all the rest of the thresholds for taxation! The posit, I'll admit, is how would you design a system of Higher Education funding... so how would you do it?

                  I've benefitted from Higher Education, and I'm a great supporter of "free" education. I'd happily see a return to no tuition fees and means-tested grants for maintenance, but that would mean higher general taxation anyway.

                  There's a predilection towards hypothecated taxation in this capitalist-leaning country, and Higher Education is one area where there would be (history tells us this) a push-back. It was once seen as the reserve of the elite - a means of preserving and perpetuating the old order. The son of the bank manager would be the one who could afford to get the education that would enable him to become a bank manager. The intelligent individual from a poor background would have to compete for a scholarship, and those were limited in number. Why should THEY, the capable poor, be punished for their class? I've no desire to return the country to that state. So access to higher education must remain uncoupled from means. The widened participation will therefore need to be paid for, though I suspect your counter-argument is that widened participation need not be so wide, and would thus be brought back to being a manageable size and intake limited and filtered by merit. Merit alone?

                2. TRT Silver badge

                  Alternatively, just raise graduate nurse pay by an additional 1.5%

    2. thedogandduck

      But then the useless SLC management wouldn't get their bonuses. Beer icon for trebles all round

    3. Richard 12 Silver badge

      Blame game

      If they'd done that, the Tories wouldn't have been able to blame the Lib Dems, and wouldn't have got their outright majority at the next election.

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