The Government has announced an independent inquiry into how London Metropolitan University came to owe £36 million to the Higher Education Funding Council for England after MPs suggested that the two bodies had colluded over inaccurate data submissions.
Hefce is clawing back the money after it found that the university had submitted inaccurate data on student completion rates.
Speaking in the House of Commons last night, David Lammy, the Higher Education Minister, said: “There will, of course, be an independent inquiry, and an inquiry by the National Audit Office into the financial arrangements for universities, which will have particular regard to the London Met situation.”
His announcement followed a debate in which Diane Abbott, Labour MP for Hackney North and Stoke Newington, accused Hefce of colluding with the university over its inaccurate data returns.
“There was a degree of collusion between the funding council and the university in misreporting for years before the former finally decided to pull the plug,” she said. “That may be the responsibility of management, but it is also the responsibility of the funding council, which could and should have addressed the issue in a much more measured way, much earlier.”
She later repeated her claim of collusion, adding: “Who is suffering? It is not the people at the funding council, but the students. That is my concern.”
Figures obtained by Times Higher Education from Hefce under the Freedom of Information Act show that the university was submitting inaccurate data for at least three years from 2005-06 to 2007-08.
The university, which admits a large number of students from deprived backgrounds, reported an undergraduate non-completion rate of 2 to 3 per cent – lower than that of some Russell Group universities.
A Hefce audit found the true figure to be about 30 per cent.
Some within the sector have suggested that Hefce knew of the inaccuracies for some time but had “turned a blind eye” before deciding to conduct an audit in 2007.
Hefce has strenuously denied this allegation.
Problems with the student data do not appear to have been discussed by the university’s governors until mid-2007. Minutes of the December 2007 board meeting record that London Met’s governors were “shocked by Hefce’s change in attitude”.
Jeremy Corbyn, MP for Islington North, who called last night’s debate, asked: “When was the department [for Innovation, Universities and Skills] first informed of these problems? What was its response to Hefce and to the university? Why did the governors apparently keep this information secret from many people until this January?”
Rob Wilson, Conservative MP for Reading East and a former Shadow Higher Education Minister, asked whether university departments were told to suppress dropout information.
“My information is that that is exactly what they did,” he said. “Far from being a cock-up, this was a conspiracy.”
He added: “Does [Mr Lammy] not find it strange, as I do, that the university was submitting non-completion rates 13 times lower than the norm?
“Rates of 30 per cent should have been expected, so why did his department not pick that up for years? It is incredible that his department and Hefce were not on top of the situation.”
Mr Corbyn said: “I am looking for the answer myself. It has been reported in Times Higher Education. I had raised in this House the question of the very high dropout and non-completion rate from that university, and suddenly it fell to a very low figure.”
Adam Afriyie, Conservative Shadow Science Minister, pointed out that the only people paying the price for the debacle were London Met lecturers and students.
He said: “The big question is who or which group of people is responsible for the crisis… It seems clear that there has been a management failure; the vice-chancellor has stepped down.
“However, it has come through loud and clear in other members’ comments that Hefce may well have played a role.
“If there were nudges and winks – ‘Well, we may overlook those numbers of non-completions for a couple of years’ – that is a serious matter.
“The allegations are significant. It is the least that the Minister can do to hold an inquiry. We should look not just at the role that Hefce thought it was playing, but step back and see whether any collusion took place.”
However, Hefce responded defiantly to the suggestion that it had failed in its duty.
A spokesman said: “It’s completely untrue that we turned a blind eye to incorrect data returns from London Metropolitan University.
“We also refute the fact that there was any change in attitude by Hefce, as appears to have been claimed in LMU board papers.
“We have been carrying out a thorough, systematic and detailed investigation into the university’s data returns, which have resulted in the decisions to recover over-claimed funding.”
He added that Hefce had notified the university of its intention to audit its data return in January 2007, a month after receiving the 2005-06 year-end individualised student data from the Higher Education Statistics Agency.