Quality watchdogs have named the first university found to be failing under the three-year-old light-touch audit regime, writes Phil Baty.
The Quality Assurance Agency found "alarmingly low" standards of student achievement and "misleading" marketing claims at the American Intercontinental University, London.
Confirming the findings of The Times Higher' s exclusive report in January, the QAA this week published a "no confidence" judgment in the management of the private institution.
It means that AIU London is the only institution to fail a routine QAA inspection since the agency was set up in 1997. Thames Valley University was heavily criticised by the QAA in 1998, but this followed a special investigation outside the routine inspection cycle.
The QAA's report on AIU London concludes: "At present, no confidence can be placed in the soundness of AIU London's management of the quality of its programmes."
AIU London, based in Marylebone, is one of seven AIU campuses owned by Career Education Corporation, a US private education company. It was providing Open University degrees under a validation contract at the time of the inspection last year.
AIU London specialises in business, media, interior design and fashion degrees and has fewer than 1,000 students. It was not part of the QAA's regulatory system until it volunteered to join the new regime. But, despite its size and private status, the QAA's verdict sets a new landmark and demonstrates the agency's claim to be "light touch, not soft touch".
Geoffrey Alderman, its senior vice-president, is an outspoken critic of the QAA. He was previously responsible for quality assurance at London and Middlesex universities.
In its report, the agency calls for "essential" action to ensure that the management of AIU London's academic standards is fully informed by a "rigorous and scrupulous" consideration of all external examiners'
External examiners have raised numerous serious concerns about business degrees for several years, the QAA says. But, despite these strong warnings, the QAA says that its audit team saw no evidence of an adequate response to the concerns raised.
The report says that AIU London had a "defensive and insular" approach to external scrutiny and advice.
The QAA also found that AIU London had falsely claimed in publicity material to offer UK and US degrees from one programme of study without additional work - or "two degrees for the price of one", as AIU London describes it.
The QAA found that these claims were used to encourage admissions, but the position was changed after students enrolled. One student called the claims "deceptive".
"AIU London must be sensitive to the need not to allow market considerations to override academic probity," the QAA says.
In a statement, AIU London said that it was disappointed with the QAA's approach.
The university said that the QAA had previously criticised the accreditation model employed by the Open University, which, nevertheless, AIU London was required to run under its validation agreement.
AIU London has since "obtained accreditation from another renowned UK university" - London South Bank.