120.
An all loan scheme would also reduce the
financial consequences which result from inaccurate and mis-statement of information in applications for financial assistance, which was referred to in the Fourth Report of the Public Accounts Committee issued in December 1981. The Committee were alarmed at the high incidence of dishonesty then reported in the applications for financial assistance and considered the situation most unsatis- factory. The Committee went on to recommend that the application forms for assistance should require the production of supporting documentary evidence wherever appropriate, for example, tax returns, salary statements, receipts for rent paid, certificates of bank balances, and that in future the Secretary, University and Polytechnic Grants Committee should check such supporting evidence submitted together with the application forms.
121.
A recent study has indicated that mainly as a result of the requirement for more supporting documentary evidence introduced with effect from 1982-83, there has been a reduction in the number of applications containing inaccurate and mis-stated information. However the level of overpayments still remains high. Over the two academic years 1982-83 and 1983-84, the amount of grants and loans overpaid was estimated to total $6 million and $12 million respectively, representing 13% and 9% of total grants and loans awarded in these two years. The Secretary, University and Polytechnic Grants Committee has informed me that the processing of applications has evolved over the years into a highly complex and time-consuming affair, which probably has reached the limits permitted by the -time and resources available. With the continual increase in the number of applications any further improvements to the thoroughness and subtleness of checking will sooner or later cause the entire structure to fall apart, when the demands on staff and space outgrow the manageable or, at least, cost-effective level. Nevertheless, the Secretary envisages further improvements could be made as a result of various revisions to the vetting procedures which he is currently examining, but additional staff resources would be required to carry out the necessary checking work. change over to an all loan scheme would, in my view, have the desirable effect of reducing the incentive to submit inaccurate information and the financial consequences arising from overpayments, since all overpayments could eventually be recovered. The procedures for administering such a scheme would also be simpler.
122.
A
I have also suggested to the Secretary, University and Polytechnic Grants Committee that in view of the high cost of interest that the Government has forgone in the past by making the loans under the scheme interest-free, the cost of which I have estimated to be in excess of $100 million, he should also consider imposing a concessionary rate of interest on outstanding loans, partly to defray the cost of running the scheme and partly to ensure that students apply only for what they genuinely need.