HC Deb 22 February 1994 vol 238 c140W
Mr. Matthew Taylor

To ask the Secretary of State for Education if he will list the schemes his Department operates to assist staff facing financial hardship following a transfer, showing(a) the particular criteria and rules applying to each one, including the circumstances under which any loans can be written off, (b) the total amount loaned or granted under the schemes in 1992–93 and so far in 1993–94 and (c) the number of staff assisted in 1992–93 and so far in 1993–94.

Mr. Boswell

Prior to October 1992, the Department operated a special scheme agreed with the Treasury to deal with a small number of financial hardship cases involving large bridging loan shortfalls. The terms of the scheme were:

  1. (i) that the Department would meet the first £5,000 of any shortfall;
  2. (ii) that individual members of staff would contribute, either in cash or through an advance of salary, up to the value of one year's salary, reduced by 10 per cent. for each year by which an officer exceeded 50 years of age;
  3. (iii) the Department met the balance.

Any advance of salary was interest free, repayable over 15 years with the option of deferring the first payment for two years.

Advances were made to eight staff under this scheme in 1992–93 totalling £112,337 and to four staff in 1993–94 totalling £70,471. These staff and one other benefitted from the arrangements in respect of shortfalls. Payments totalling £258,384 were written off in 1992–93, with a further £25,703 written off under the scheme in 1993–94. The expenditure was variously met by the Department and, following its creation in September 1992, by the Office for Standards in Education in respect of former members of Her Majesty's inspectorate of schools.

Since October 1992, the Department has used the services of a relocation company which eliminates the need for bridging finance. However to assist staff with negative equity shortfalls, it may offer an interest bearing loan up to the limit of the mortgage shortfall, repayable over 12 years. In those cases where staff would face extreme financial hardship as a result of being asked to pay interest on the loan, the advance may be made interest free. No staff in the Department have yet received a loan under this scheme.