I don't know what the situation is through out the country, but at my University PhD completion rate at three years is ONLY 20%. Also, withdrawal is around 30% and the majority of students tend to complete at 5 YEARS!!! I couldn't believe these figures. Is this problem experienced at other institutions also? Could there be something wrong with the PhD system? After all, it is a research training programme and not a means of recruiting cheap labour for supervisors to get their work done.

The completion rates you mention are very low. This is an extract from The Guardian September 3, 2002:

"The good news is that the number of postgraduates who do complete has risen enormously in the last few years. The most dramatic improvements have been in the arts and social sciences, which used to suffer appallingly high attrition rates. In the early 1980s, only 30% of funded PhD students in the social sciences submitted a thesis within four years; last year, 76% did. In the arts and humanities, the four-year submission rate for funded students has increased from 34% in 1993 to 71% today.

These improvements have come about in part because the research councils have insisted on them. The councils will cut off a department's (or, in some cases, an entire university's) supply of postgraduate students if submission rates drop below a certain level. The Arts and Humanities Research Board sanctions departments that fail to get theses out of half their students. The Economic and Social Research Council demands a 60% submission rate across the board."

It's also important to note that these figures don't include people who submit their thesis after the 4 year deadline. A low 3 year submission rate is probably to be expected anywhere, but it sounds like your institution has particular problems and may even be exploiting self financed students, as with performance like that they won't be receiving any Research Council funding.