Ed Lester to quit head of Student Loans Company

Ed Lester to quit on January 31; Pic cap courtesy of Daily Telegraph

Ed Lester, the civil servant whose tax affairs led Danny Alexander, Chief Secretary to the Treasury to order a  Whitehall wide inquiry, is to step down from the job next January.

The official who took over £182,000 a year in salary and pension without paying tax or national insurance at source is to leave when his current contract ends on January 31 next year. The SLC is already advertising for a successor.

Full details of the decision are in my piece on the http://www.exaronews.com website. Suffice to say since the story broke earlier this year Mr Lester has had to go straight onto the public pay roll and can no longer be paid through management consultants, Penna, to his own personal service company, Placepass, based at his home on an island on the Thames near Marlow.

His company is in the process of being closed down and now 2400 other civil servants and senior NHS executives  paid off pay roll may have to become direct employees by September. A review announced by Danny Alexander to Parliament will also mean that the following tax year people who hold controlling posts in private industry will no longer be able to do this either.

All these changes came from one well placed Freedom of Information request which exposed Mr Lester’s tax arrangements which had even been approved personally by Mr Alexander and  David Willetts, the universities minister. Mr Alexander has admitted to me he didn’t even realise the tax benefits when he approved the post.

 To his credit since then he has ordered the review and been shocked by the findings. But I am expecting a strong reaction from business when  it sinks in what has happened.

Update: In a statement issued today (Saturday) about his decision Ed Smith, chair of the Students Loans Company, said: “Ed Lester’s was appointed as interim CEO of  Student Loans Company in 2010. In that time he has turned the company around and his leadership has been outstanding. He is highly regarded by the Board, BIS and colleagues across the Higher Education sector. “Following the period as interim CEO, Ed was offered a fixed two year contract as substantive CEO from January 2011. This contract is due to expire in January 2013 and Ed has always made clear his intention to move to a new role at that time. As recruitment to such senior posts in public sector can be elongated, we have started the process to recruit Ed’s successor now to ensure they are in place prior to him leaving.

“Ed’s planned departure from Student Loans Company has always been a matter of public record. It is in no way linked to the tax arrangements in his contract agreed by BIS, HM Treasury, HM Revenue and Customs and the Head of the Civil Service.”