Whistleblowers: Luton lacks contracts

September 14, 2001

Concerns about accountability for taxpayers' money and quality control at Luton University have been raised by the university's in-house solicitor and pro vice-chancellor.

In memos seen by The THES , university solicitor Cathy Wall warned managers at Luton earlier this year that the university was breaking funding council and Quality Assurance Agency rules in the management of a number of collaborations with outside partners.

She said the university was running partnerships without contracts and financial models and was unable to demonstrate that it was not subsidising an overseas business with public money. Pro vice-chancellor Stephen Mortimer concurred, stating in a separate memo that funding arrangements for a franchise with a college in Oman "do not cover direct costs and are in contravention of the National Audit Office (recommendations)".

The university insisted this week that "there can be no question of any misappropriation of public funds" and that the solicitors' comments were "merely designed to remind the university of its obligations under the relevant regulatory guidelines".

In one February 2001 memo, Ms Wall says she is worried about a franchise arrangement with the College of Administrative Sciences in Oman: "I am extremely concerned that our involvement with CAS does not provide the university with income that reasonably meets the expenditure involved in delivering our part of the contract... It is abundantly clear in the Hefce (Higher Education Funding Council for England) guidelines that overseas activities must not be subsidised from Hefce funds."

A further memo from Stephen Mortimer, the pro vice-chancellor and dean of science and technology, explained that in a 1999 contract with the college, a fee of £350 per capita had been agreed for the provision of franchised computing courses. "Unfortunately, without my knowledge, a second contract was agreed for the whole university which superseded our 1999 contract and reduced the fee to £90 per capita. The current arrangements do not cover direct costs and are in contravention of the National Audit Office report following Southampton Institute's investigation." This condemned the institute for subsidising its overseas business with Hefce funds.

Patricia Murchie, the university's director of communications, told The THES this week: "In the event, we are able to show decisively that we do recover all our expenditure." But she said that financial reports that showed this were not yet in the public domain. She said the university had been renegotiating its contract with the college to reflect a move from a franchise to a lighter-touch validation agreement and that the university had charged fees on top of the per-capita fee.

Another February 2001 memo concerns a number of collaborations between the faculty of healthcare and social sciences and outside partners.

Ms Wall then wrote: "I am very concerned that, at first sight, there appear to be no contracts in place for any of the arrangements as this is a clear breach of the QAA guidelines on collaborative partners... I am also concerned that there appears to be no formal costing carried out for these arrangements and, in the absence of a contract, there is also no financial model."

The memo was accompanied by an attachment that listed three validated programmes apparently lacking a contract. The university did not deny that one scheme lacked a contract, and said that another had a long-standing contract but "it is the revisions which have yet to be signed by both sides".

Ms Murchie said draft contracts lacked formal costings because they were being negotiated, but she "categorically rejected" the notion that there was no financial model.

Ms Murchie said the documents had been "taken out of context and relate to partnerships in transition where there are long-standing agreements".

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