Studentloans chief`to clear backlog'

Sir Eric Ash, the new head of the Government's troubled Student Loans Company, yesterday pledged to clear the huge backlog of loan applications from students "within weeks".

Sir Eric, who took up his post following the departure of the chief executive, Ron Harrison, said he would review every aspect of the company's operation to ensure it"purrs like a Rolls-Royce with a BMW engine".

He said officials of the state-owned company - which has been dogged by allegations of inefficiency, mismanagement and financial irregularities - hadmade "fundamental mistakes" in trying to process loan applications for Britain's 300,000 students using a"fast-track" system. Working practices would be re-assessed "on the basis that they are guilty until proven innocent".

About 35,000 outstanding loan applications from students for the 1994-95 academic year would be processed and money paid by February, Sir Eric promised.

New procedures would be introduced in the New Year to ensure that students applying for loans next year would not suffer similar "drastic, awful and totally unacceptable delays".

Sir Eric, Professor of Physics at University College London who joined the company as a director earlier this year, declined to comment on the reasons for Mr Harrison's departure. Mr Harrison has been at the centre of allegations that senior officials used company funds to support a lavish lifestyle.

When leaked documents revealed that Mr Harrison had spent more than £1,000 on whisky, cigars, tickets to rock concerts and cricket matches, he was accused of incurring excessive expenses. Company officials said the money had been spent on legitimate corporate entertainment.

But last month, after fresh allegations of spending irregularities, the Department for Education and the National Audit Office asked the accountancy firm, Coopers & Lybrand, to carry out "a forensic audit" of the company. Its report is expected early next year.

A company statement issued earlier this week said Mr Harrison was "absent owing to ill-health". A spokesman said he was expected to return to his post in the New Year. But one senior official at the firm's Glasgow headquarters confirmed yesterday that hewould not be returning. "Mr Harrison has gone for good," he said.

Stephen Byers, Labour MP for Wallsend, who has called for an inquiry into the running of the company under Mr Harrison's leadership, yesterday welcomed Sir Eric's comments. He said: "It is encouraging that Sir Eric seems to want to sweep away the mess ofthe past."

Students also responded to Mr Harrison's departure by calling for a public inquiry into the student loans system after months of chaos caused by a change in the system designed to speed up payments to them.

The National Union of Students in Scotland has demanded an early meeting with Sir Eric to discuss the situation.

Thousands of students waited in vain for their loans last term as the company struggled to clear a backlog of payments. Ministers promised in Parliament that the problem would be solved by Christmas but many are still waiting.