Student loans staff face curb on perks

The head of the Student Loans company had his contract renewed for a further five years after allegations of financial impropriety were made against him, MPs were told last night, writes Fran Abrams.

Claims against Ron Harrison, its chief executive, were made in October 1992, more than two years before he was sacked for financial misdealings. Mr Harrison faced the claims that he misused expenses and that he took his wife and secretary out at the company's expense.

An investigation in 1992 dismissed allegations made in anonymous letters, but in January 1994, a further report by Coopers & Lybrand proved some of the claims to be true.

Now staff perks such as private medical insurance, company cars and petrol allowances, have been withdrawn from new staff, the Commons Public Accounts Committee heard.

An ombudsman who was paid pounds 8,000 per year but who only received one student's complaint in four years, is to be replaced on a smaller fee. The company could also cease to be a private concern and become a government department.