Failed partnership costs London Met £2m

Minutes reveal huge write-off and continuing dispute with LSBF

September 12, 2013

London Metropolitan University lost £2 million after a partnership with a private college collapsed, it has emerged, and as recently as last month was seeking more than £750,000 in a continuing dispute with the institution.

In April 2012, London Met announced that it would validate business courses and sponsor international students at the London School of Business and Finance.

But in December 2012 the deal was abruptly terminated, partly because the previous August the Home Office had stripped London Met of its licence to sponsor international students.

Minutes of a senior management meeting at the university, leaked to Times Higher Education, show that after the collapse of the partnership, a deed of settlement was signed “and a write-off of £2m taken”.

Despite this, “the dispute with LSBF continues”, say the minutes of the meeting, held on 7 August this year and chaired by Paul Bowler, the university’s deputy chief executive.

“Two invoices of £3k and £429k have been issued but no payment has yet been received from LSBF,” the minutes say.

Malcolm Gillies, London Met’s vice-chancellor, who negotiated the original deal, had attempted to resolve the “payment situation”, the minutes explain, “but with no success to date”.

“The next step is likely to be litigation to recover the amounts owed,” they add.

The £2 million write-off came in December 2012, the same month that London Met announced it would cut 40 per cent of the staff and three-quarters of the courses at its business school in an effort to save money.

‘Difficult market’

Accounts released at the beginning of the year show that London Met was expecting a £37 million cut in income – more than a fifth of its total – in 2012-13.

It blamed this on the licence problems and a “difficult market” for domestic students.

The university is currently pursuing a judicial review case against the Home Office for revoking the licence (which was reinstated in April this year).

“Preparations are in train” for a hearing in October, the minutes state, but add that “there remains the possibility for a deal” with the government, although “our current position is that we press on with the expectation that the Hearing will go ahead”.

The minutes also detail the university’s recruitment woes this academic year. “As of today, we have 106 international students who have paid deposits, against a target of 506. Disappointing, but a long way to go,” they state.

They also set out plans to recruit 1,700 students through clearing while acknowledging that the process would be “tough”.

A spokeswoman for London Met declined to comment on the minutes, while a spokesman for LSBF said the revelations were neither “correct or relevant today”, but declined to elaborate further.

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