Relaunch as e-flagship flounders in stormy seas

Funding chiefs have ordered a restructuring of the UK's flagship online university venture because of poor student recruitment and cash problems.

The Higher Education Funding Council for England is due to discuss a revised plan for the UK e-Universities (UKeU) company at its board meeting on April 22.

The funding council, which launched the UKeU four years ago, said there was no risk that the business would be wound up but said a revamped venture would focus on "public good" aspects of virtual learning rather than on making money.

The UKeU has attracted 900 students in total. Its target for the first year alone was 5,600. It has raised £4.5 million selling degrees online, but had been expected to make enough money to match the £62 million of public cash it received from Hefce.

The e-Universities venture was launched four years ago by David Blunkett, who was education secretary at the time. The idea was that the venture would encourage collaboration between universities and the private sector.

Mr Blunkett said at the launch: "This is an innovative project with the intention of creating a new university venture with a difference to meet the competitive global challenge thrown at UK higher education."

Hefce blamed the UKeU's problems on the global economic downturn and slow growth in demand for online courses.

The UKeU offers 17 courses, including business, English language, law and science training, delivered by 16 UK universities.

A Hefce statement says: "There were inherent risks in the venture, but it was felt there were greater risks in not grasping this opportunity."