Boom and bust

The University of Wales was brought down by validation, its money-making machine. David Matthews asks how that happened, how others might be stopped from putting cash before quality and whether the QAA should be able to impose stricter controls

January 5, 2012

When, last autumn, the University of Wales effectively announced its own abolition, the public could have been forgiven for not noticing the passing of a 118-year-old institution with 70,000 students. Most national newspapers seemed not to care. There were no cries of protest from politicians. And Wales' vice-chancellors, far from defending the aged father of Welsh higher education, seemed almost relieved by its passing.


From its foundation in 1893, when it united the institutions that were to become Cardiff, Aberystwyth and Bangor universities, until 1992, the University of Wales was the only university in the principality. It established its own university press, became a centre for Welsh and Celtic studies, and was an important component of Wales' national identity.

Being federal, it has always been different from most universities. While it awarded the degrees of its constituent institutions, it did not teach students, it had no campus and it had few academic staff. As such - and as has been the case with the federal University of London - its purpose has often been questioned.

As its colleges grew in autonomy, over the past two decades the University of Wales found a lucrative new role: validating courses at partner colleges across the world on a huge scale. It was a role that eventually mired it in controversy.

Following a series of scandals involving courses validated by the university, critical reports from the Quality Assurance Agency and calls from government ministers and vice-chancellors for it to be scrapped, the bubble burst. The validation system has been drastically reined in, and the university's charter will be discarded when it merges with two other institutions this year. University of Wales degrees, which are held by hundreds of thousands of graduates around the world, will no longer be awarded.

With these changes coming at a time of turmoil for Welsh universities - which are under pressure to merge - some vice-chancellors fear that the saga has damaged the country's higher education brand at the worst possible moment. So how did it happen and what lessons can the sector learn? And with universities in England facing a dramatically different and uncertain funding regime, could some institutions still find themselves tempted to pursue the profits of mass validation?

The beginning of the end for the university arguably came in 1992, when it lost its monopoly to the Polytechnic of Wales, which became the University of Glamorgan. Cardiff University, where academics had attempted to organise a split from the University of Wales as far back as the 1960s, broke away in 2005. Aberystwyth, Bangor and Swansea universities followed three years later, all straining at the leash for independence.

These breakaway institutions "resented the fact that you had to get promotions [and] chairs approved by the University of Wales", says one expert on Welsh higher education who asked not to be named.

Since then, a series of reports have attempted to pin down the purpose of the university. A review by John McCormick, a former BBC Scotland controller, in March last year - the fifth report on the university's future since 1993 - described an "unresolved struggle" between those who wanted to keep an identity for all higher education in the country and the "aspirations of individual institutions to grow, become successful and establish their own autonomy, degrees and identities".

The University of Wales started validating overseas courses and programmes outside the country in a significant way during the 1990s. It was a time when "the university had been struggling to find a role for itself", says John Andrews, who was chief executive of the Higher Education Funding Council for Wales from 1992 to 2000.

Compared with the vast operation that would eventually emerge, validation outside Wales in the 1990s was on a small scale. By 1994, the institution was validating courses in 12 countries. But even then, trouble loomed.

"The problems with the University of Wales go back to the early 1990s," says Roger Brown, professor of higher education policy at Liverpool Hope University and former chief executive of the Higher Education Quality Council, the QAA's predecessor.

These concerns were not confined to the University of Wales. The HEQC's first audits of overseas partnerships in that decade, including those of the University of Wales, were "absolutely shocking", recalls Brown. A report on the University of Wales by the watchdog in 1994 found poor documentation of agreements with partners, little attention paid to the renewal of agreements and a quality assurance system that was "primarily reactive".

But Times Higher Education's analysis of the university's accounts shows that the real boom years were the 2000s, not the 1990s (see graph below). In 2000-01, validation brought in just under a third of its income. Three years later, the university was validating 20 organisations in the UK and 55 overseas, which generated more than £3 million a year, nearly 40 per cent of its income.

In September 2007, Marc Clement was appointed vice-chancellor and chief executive of the university. Previously, the job had been rotated between the vice-chancellors of the constituent institutions, but now the university had its own dedicated head.

By 2009-10, the university was a validation machine, earning two-thirds of its £15.4 million income from about 140 collaborative centres in 30 countries.

Meanwhile, Clement's salary and pension package rose, too, from £84,284 in 2007-08 to £139,000 in 2009-10, while his role increased from four to five days a week.

According to the University of Wales' most recent guidelines on validation, each partner institution had to bring in at least £30,000 a year. They also had to cover travel and accommodation costs for University of Wales visitors, and were reminded that all "flights over four hours taken by staff or (validation) panel members must be in Business Class".

By 2009-10, the institution's income from validation services was £10.3 million. Of this, £882,437 was spent on internal staff, while £5.8 million was ploughed into what the accounts term as "other operating expenditure". When THE asked for details via a Freedom of Information request, the University of Wales said that this included the fees of moderators, examiners and assessors, internal staff expenses and travel, online library licensing and agents' commissions.

The university has previously said that as well as paying staff to man the validation system, it compensated Welsh institutions for the use of their staff. From 2004 to 2011, it says, this compensation accounted for £7.6 million of its expenditure. Bangor University received £2.2 million, while the University of Wales, Newport was paid £1.4 million.

Asked to comment on this, a spokeswoman for Bangor stresses that "the University of Wales is solely responsible for validating and moderating its programmes overseas and within the UK", but "contract[ed] a number of individual academics from a variety of universities to assist them in doing this, and [made] a financial contribution to their academic departments".

Even with these deductions, the federal university's validation system was highly profitable: in 2001-02, it brought in £580,000 more than it cost to run, but profits soared to more than £3.5 million in 2009-10 - mainly because the volume of business was growing. THE's analysis shows that the profit margin on validation climbed, too, from .4 per cent at the beginning of the decade to 34.5 per cent at the end.

These profits subsidised other loss-making areas, such as the University of Wales Press and the Centre for Advanced Welsh and Celtic Studies, and created substantial surpluses. In 2009-10, validation subsidised the Prince of Wales Innovation Scholarships, which were shut down in October following a Welsh Assembly report that raised concerns over "the significant personal involvement and interests of a small number of individuals in companies to which scholars have been allocated".

So what did the QAA make of this vast expansion in validation activities? In a report published in 2005 after an institution-wide audit, the agency said it had only "limited confidence" in the university's management of the quality of its programmes and the academic standards of its awards. Although the QAA reported confidence in the validation unit, which was "working effectively", where the university awarded research degrees through partners, it was "not clear to the team how this validation was undertaken, what checks were made on the quality of the research proposals and what the university's role was in the supervision and examination of candidates".

There was also no "regular review of moderators' performance" except for five-year assessments. And where subjects were validated that the University of Wales did not directly offer, there were "challenges in the safeguarding of standards".

Problems were picked up by the QAA in reports into specific overseas colleges in Spain (2000), Italy (2004), Russia (2007) and Malaysia (2010). However, in all these cases, the agency said it was confident in the partnerships, subject to issues being ironed out. Nonetheless, criticism from the media and politicians intensified (see below).

In November 2010, BBC Wales screened an episode of its investigative series Week In Week Out that claimed that Fazley Yaakob, a pop star and head of Fazley International College, a University of Wales partner in Malaysia, held bogus degrees.

In June 2011, the QAA published another institution-wide review, which this time said that the agency had confidence in the university. The institution had introduced new risk assessments for its collaborative centres and now demanded that they have British Accreditation Council approval. The QAA advised the university to begin "immediately a programme of reviews, using the new vetting process", of its partners. But the watchdog simultaneously published two very frank reports - the result of investigations carried out under its "concerns" procedure - which found the university "culpably credulous" in some of its due diligence, and identified problems with four separate partners.

Problems were not found with the validation system itself, explains Stephen Jackson, director of the Reviews Group at the QAA, but with the due diligence of financial systems, management or governance of partners. The university had "done some initial checking at the beginning of the relationship...but then the circumstances changed: they have been bought out [or there were] changes in staff".

On 3 October 2011, Medwin Hughes, the University of Wales' new vice-chancellor, announced an end to the validation system on his first day in office, except for - crucially - courses "designed and controlled" by the institution, thus signalling a significant scaling-back of its validation activities.

Two days later, BBC Wales aired an undercover investigation that found an alleged visa scam being perpetrated at a University of Wales collaborative centre, Rayat London College.

Whether an awareness of the imminent broadcast caused the sudden volte-face by the University of Wales is not clear, but Hughes did not deny it when asked by the BBC. Partner colleges certainly seemed shocked by the news.

Among them was the Hereford College of Arts, which said it was "deeply regrettable" that the university had announced its plans to withdraw its existing validation services through the media and "without informing the college in advance".

The effective end of the university came on 21 October 2011, when it announced that it would carry out its planned merger with one of its own branches, University of Wales: Trinity Saint David, and Swansea Metropolitan University under the charter of Trinity Saint David, rather than its own. The institution will be called University of Wales: Trinity Saint David, but the degrees awarded will not be University of Wales qualifications.

A key motivator for the boom in validation, according to some, was simply cash. It was a "money-making operation" that "had practically no relationship with the rest of the [academic] organisation", says Brown. Several senior figures in Welsh higher education, who asked not to be named, agree that generating income was a primary motive. Following Cardiff's exit from the university in 2005, "[the University of Wales] began to look for alternative sources of income", one explains.

But in an interview with THE, Hughes stresses that validation partnerships had a pedigree of at least 25 years, stretching back to such arrangements with Welsh colleges.

The ramping-up of validation was "a valuable service in the context of the delivery of higher education", he argues, but was also a business decision.

"The University of Wales at that time [during the expansion] saw that it was an appropriate business area to be taken forward," he says. "That planning premise is something that several other universities in the UK also take forward. That's why there are substantial multi-million-pound validation activities by other universities."

So with its charter and degrees to go and its validation system gone, what is left of the University of Wales? And why should the newly merged institution be called University of Wales: Trinity Saint David when it is in no way national? "That was the name that was approved by the Privy Council," Hughes says, adding that it was agreed in "full consultation with the sector".

International work will continue but with much stricter controls, Hughes says. He is not forthcoming when asked to talk about what went wrong with the validation system, but he repeatedly emphasises the need for greater "ownership" of courses by the university's faculty. "From issues of quality and equivalence, [the new validation system] is a model that will secure standards and quality." It will be based on a "cautious approach" with fewer partners, he adds.

It is "factually inaccurate" to say that the university has been abolished, he says. The University of Wales has simply "decided that it is going to merge into another university".

Given the strength of the battering it has taken over the past year from the media and the Welsh higher education minister (see below), several within the University of Wales suspect a conspiracy.

For example, the university's pro vice-chancellor for learning and teaching, Nigel Palastanga, has written that the BBC journalist who has repeatedly investigated the institution was engaged in a "relentless pursuit".

Some have asked why the institution should be blamed for its partners' failings.

In October 2011, in an internal briefing note accidentally sent to the press, the university claimed that it had been "under a coordinated attack for 12 months by detractors and competitors". It made the point that the qualifications allegedly sold by Rayat London College were not University of Wales degrees, but "allowed [students] to claim credit in order to enter degrees at any university in the UK".

But QAA guidance says that while many UK institutions offer their higher education programmes through links with partners, these institutions "are responsible for the academic standards of their awards, whether delivered inside or outside the UK".

Hughes says he does not "understand the words 'the victim of a conspiracy'". But he acknowledges that the institution, seen by many as a symbol of national pride that has widened access to higher education, is an "emotional brand" that elicits "strong views".

The University of Wales is not the only institution to have been called to account over its validation activities. In 2003, the QAA found "significant weaknesses" with The Open University's validation of a college's programmes in Denmark. Its system is on a smaller scale - it validates courses at 30 institutions.

In November 2011, the QAA said it had "limited confidence" in Leeds Metropolitan University's management of academic standards for courses delivered by partner colleges. At the time of the audit in June, Leeds Met had more than 15,000 students enrolled on courses with collaborative providers, including 43 UK colleges and 18 overseas partners.

There are alternative systems for universities seeking to offer their courses through partnerships, such as the University of London's International Programmes, formerly called the "external system".

London keeps control of student admissions, the curriculum and assessment, while students can study independently or through a local college.

Jonathan Kydd, dean of the programmes, explains that the university carries out due diligence on partners that teach its courses. But if a problem were to occur with a partner, he says, the exams themselves would be taken outside the local teaching organisation and marked in London, so the standard of the qualifications would remain untarnished.

This system has been given a stamp of approval by David Willetts, the universities and science minister, who has praised the International Programmes in speeches. Hughes' decision that the University of Wales should from now on design and control the content of the courses it validates moves its validation system closer to the favoured London model.

Brown argues that the cautionary tale of the University of Wales has important lessons for other institutions, and believes there was a "failure of the sector to protect its own reputation".

On the key question of whether the QAA could have done more, he thinks the watchdog should have issued the University of Wales with the "strictest possible warnings to pull its socks up", but that, ultimately, it did not have the powers it needed. "It demonstrates the weakness of the system" where institutions have degree-awarding powers no matter how often problems are highlighted, he claims.

Anthony McClaran, chief executive of the QAA, says the body did pick up on failings, but acknowledges that they might have been expressed more forcefully. "In retrospect, looking at the agency, our language has been good for higher education, but maybe not for the public."

Changes to the QAA's review processes made at the end of 2010 allow it to go into institutions and publish criticisms that are more focused on "public understanding" when it finds wrongdoing, McClaran argues, pointing to the investigations the QAA published about the university last June.

Under changes outlined in the government's White Paper on higher education, the QAA will also - controversially - move towards a "risk-based" quality assurance system rather than inspections at regular intervals. Some think this is a perilous tactic at a time when the government is seeking to increase competition in higher education, which may encourage universities to take greater risks. But, under a risk-based quality assurance system, one thing that could trigger a QAA inspection "could be the expansion of validation activities", says the QAA's Jackson.

Peter Williams, who was chief executive of the QAA from 2002 to 2009, says that the story of the University of Wales demonstrates the importance of good, internal quality assurance and the need for strong, independent oversight of collaborations. "Degree-awarding powers must not be seen as a licence to print money. This is a serious warning to those who wish to dilute the current safeguards."

Former HEFCW head Andrews concludes that the University of Wales made an enormous contribution to the nation's edification during its long history but that, in the end, problems of scale undermined quality. "If processes are not as tight as perhaps they should be and if you're seeking to grow an activity, then things go wrong."

But Brown fears that mass validation "could happen again" because the coalition is encouraging universities to become "profit-making operations". Under England's new funding system, "the commercial and competitive pressures are going to increase and universities will look for other sources of revenue".

Profits from the University of Wales' validation model increased by 610 per cent over a decade without pausing for breath during the recession.

With that kind of money on offer, how will universities be able to resist?


Validation: how does it work?


Validation takes different forms, but is usually a process through which course content is negotiated between a college and an awarding university.

Teaching, assessment, staff and admissions are controlled by the local college, subject to checks by the university, which gets a fee in return.

UK universities validate courses at further education colleges across the country. This arrangement, they say, gives colleges the flexibility to tailor courses to local requirements and aims to widen participation in higher education.

Many universities also validate courses at private colleges and institutions abroad. When the Quality Assurance Agency checks on overseas provision, it examines how these collaborations are managed by the UK awarding institution, but the agency's website states that it is not its "role to review or accredit partner institutions outside the UK".

It also publishes guidance for universities on selecting partners.

One hundred of the colleges that collaborated with the University of Wales were overseas. The biggest markets were China and Spain, with 14 and 13 partners respectively. Germany, Greece, Italy, Malaysia and Singapore each had about half a dozen centres.

In the UK, at least 22 of the 43 colleges validated by the University of Wales were private. Some were well known, such as Regent's College London, which said in October that it was moving to validation by The Open University for "reasons of quality, consistency and ease of oversight".

Other University of Wales partners included small Bible colleges and business schools.


They came not to praise the University of Wales but to bury it


The demise of the University of Wales was hastened by the fact that the institution had few friends in the Welsh government and academy.

The outspoken higher education minister, Leighton Andrews, was quick to respond to two highly critical BBC Wales documentaries about the university and its partners. In 2010, when Week In Week Out claimed that the head of a partner college in Malaysia was operating with bogus degrees, the minister said that the university had "let Wales down".

More criticism followed. In March 2011, the McCormick report warned of "reputational risk" to the country. Amid calls from the funding council and the minister to create research economies of scale and greater financial resilience through mergers, the report recommended that the university be merged into other institutions.

Last October, when the university's new vice-chancellor, Medwin Hughes, announced a retreat from mass validation, this did nothing to prevent continued criticism.

Following the second BBC investigation, the vice-chancellors of Cardiff, Swansea, Aberystwyth, Bangor and Glamorgan universities - known collectively as the St David's Day Group - called for an end to the University of Wales. Andrews once again piled in, saying the university should be given a "decent burial".

He even tweeted that Warren Gatland, the Welsh rugby union coach, could "run the university in his spare time".







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