Newby on rack over 'scandalous' bonuses for online university staff

Thirty-one members of the UK eUniversity's staff, including the sales and marketing director, were paid performance-related bonuses of between 10 and 50 per cent of their salary while running the doomed initiative, MPs heard this week.

Barry Sheerman, chairman of the Commons education select committee, described the bonuses as "scandalous" at a hearing this week to take evidence from Sir Howard Newby, chief executive of the Higher Education Funding Council for England, and David Young, the council's chairman.

The UKeU venture, announced in a blaze of publicity by David Blunkett, Education Secretary in 2000, was kickstarted with £62 million from the Government.

Hefce said this week that about £50 million will have been spent on UKeU by the time it is wound up.

Sir Howard told the committee that the bonuses became apparent only when the board of the company that ran the e-university resigned last year.

Committee members criticised Sir Howard for his reluctance to concede that Hefce had ultimate responsibility for the "high-risk" venture.

It was not until September last year, when UKeU admitted that it had recruited only 900 students against a target of 5,000, that the scale of the problems became clear, Sir Howard said.

After last week's board meeting confirming the winding up of UKeU, Hefce said that no "acceptable" bids for the e-learning delivery platform, which cost some £20 million to develop, had been received. A spokesman said negotiations were continuing.

The e-China programme will be transferred to Cambridge University and the e-Learning Research Centre will be operated by Southampton and Manchester universities and the Higher Education Academy.