Secret ‘at-risk’ list set to grow, MP claims

Up to 30 institutions face ‘significant deficits’ next year, Tory states in Commons debate. Melanie Newman reports

July 16, 2009

Up to 30 higher education institutions could join a secret list of universities at risk of financial failure, an MP claimed in the House of Commons today.

Rob Wilson, Conservative MP for Reading East, asked David Lammy, the Higher Education Minister, whether he was aware that “dozens” of institutions were facing “significant budget deficits” next year, including London Metropolitan University and Thames Valley University.

“According to the [Higher Education Funding Council for England], seven… institutions are already described as at high risk of financial failure, including London Met and Thames Valley University in my constituency,” he said. “According to sources at the funding council, that could increase to as many as 30 next year. Can the minister confirm the scale of the financial crisis and tell the House exactly what he will do about it?”

Earlier this month, Times Higher Education revealed that there were seven institutions on Hefce’s list of “at higher risk” institutions, which is not publicly available. The list included four post-1992 universities and three specialist colleges. One institution had been on the list for 11 years.

Mr Lammy said that his own sources within Hefce were “slightly better” than Mr Wilson’s.

“The situation at London Met is very serious – and extraordinary,” he said. “It is not unusual for institutions to have problems during the course of a year in relation to students who drop out of courses. In that case, money has to be clawed back… However, the scale of the problems that has been revealed at London Met is unusual. The review that is now being conducted is therefore important.”

Hefce told London Met to repay £36.5 million after it uncovered huge inaccuracies in the university’s data on student completions.

Mr Lammy was also criticised by Adam Afriyie, Conservative MP for Windsor and Shadow Minister for Innovation, Universities and Skills, for promising an independent inquiry into the London Met situation, but then saying that the inquiry he referred to was Hefce’s own investigation, commissioned from accountants KPMG.

Mr Afriyie said: “On 20 May in a debate in Westminster Hall, following serious allegations of collusion between Hefce and London Met… over the dropout rates that led to the crisis, [Mr Lammy] gave a clear and unambiguous commitment to the House.

“He said: ‘There will, of course, be an independent inquiry.’ When will that independent inquiry begin? The minister has a choice: he can either confirm the inquiry or apologise for the misinformation.”

Mr Lammy said: “There has been an independent inquiry by KPMG, commissioned by the funding council. It will report to the board of [Hefce] and be published in due course. Sir David Melville, the former vice-chancellor of the University of Kent, is undertaking another inquiry into what happened at London Met. That, too, will report in the autumn. At that point, the Government will consider the recommendations and, if there is something for us to do, we will do it.”

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