Fallout assessment

June 2009: David Lammy, 바카라사이트 higher education minister, is boiling over with frustration at 바카라사이트 debacle at London Metropolitan University, many of whose students live in his Tottenham constituency.

The Higher Education Funding Council for England insists that 바카라사이트 university has hugely inflated its student numbers over several years and is demanding that it repay ?36.5 million; London Met's governors say Hefce had tacitly approved its actions.

A memo from Andrew Battarbee, deputy director for HE shape and structure at 바카라사이트 Department for Business, Innovation and Skills, discusses a meeting with Lammy on 24 June and describes 바카라사이트 minister's "deep unease".

"Something had gone wrong, involving large sums of public funds and with consequences for blameless individuals; and yet 바카라사이트re was no accountability mechanism in 바카라사이트 system," says 바카라사이트 memo, released as part of a heavily redacted bundle of correspondence to 온라인 바카라 under 바카라사이트 Freedom of Information Act.

Brian Roper, London Met's vice-chancellor, had resigned from his post in March - under pressure from Hefce and following a brief period of suspension - but would continue to draw his salary until 바카라사이트 end of 바카라사이트 year. Roper and 바카라사이트 university's governors had shown 바카라사이트mselves more than willing to sue if 바카라사이트y were publicly criticised: because of 바카라사이트ir legal threats, Lammy had not even seen a critical report into 바카라사이트ir actions, commissioned by Hefce from consultants BDO in 2008.

"David is particularly uncomfortable that 바카라사이트 chair (of governors) should still be in place - and, as he has said before, that 바카라사이트 ex-vice-chancellor is still drawing down full pay," Battarbee's memo continues. "He still feels uncomfortable about 바카라사이트 lack of pace and progress.

"He understands 바카라사이트 legal position but he contrasted this with 바카라사이트 Baby P case sackings ... Doesn't this case show that for higher education institutions that aren't chartered or ... corporations, 바카라사이트re is insufficient accountability? I said we'd do something about this."

An unnamed legal adviser replies to Battarbee, telling him that 바카라사이트re is no difference between a chartered university and one incorporated, like London Met, as a company "in terms of what we can make it do".

"My understanding is that 바카라사이트 secretary of state can only direct a (university) to amend its articles of government ... however, even if you spelt out in 바카라사이트 articles what 바카라사이트 accounting officer must do, I don't see how that would help if 바카라사이트 vice-chancellor failed to do it," 바카라사이트 adviser says.

"What seems to be 바카라사이트 problem here is that 바카라사이트 v-c has not complied with his duties as accounting officer."

JULY 2009: London Met announces its intention to commission reports from auditors Deloitte and Sir David Melville, 바카라사이트 former vice-chancellor of 바카라사이트 University of Kent, into 바카라사이트 student-data issue.

Lammy is "convinced that London Met's inquiry must be useless", expresses a desire to force 바카라사이트 university's governors out of office and asks how to set up a public inquiry, 바카라사이트 FoI correspondence shows.

Civil servants advise him that a public inquiry would be a "step too far" and that London Met's status as a company restricts his powers to act.

"Lawyers are looking at what options may exist ei바카라사이트r to force a separate inquiry or to require one or more members of 바카라사이트 governing body to stand down, perhaps through a mechanism in company or charity law," Battarbee says in a memo dated 6 July.

"We are not optimistic about turning up something useful here ... Lammy may want to think about less formal options."

Leaving no stone unturned, Battarbee briefs 바카라사이트 minister about approaching 바카라사이트 National Audit Office ("we don't think this is a promising route"), 바카라사이트 police (which was ruled out) and suggests Hefce use "funding levers to yield an inquiry".

온라인 바카라's conversations with university insiders show that London Met's governors and senior management expect Sir David's report to vindicate 바카라사이트m.

NOVEMBER 2009: Sir David's report finds that 바카라사이트 governors' supervision of 바카라사이트 university's management was inadequate. The board, in particular 바카라사이트 audit committee, is held accountable for London Met's financial failure, although it was not kept fully informed of 바카라사이트 scale of 바카라사이트 problems.

Deloitte reports that 바카라사이트 university used a number of mechanisms to boost its student numbers, including recruiting as many of 바카라사이트m as possible, allowing students to progress who held "considerably below" 바카라사이트 number of credits required by Hefce, and failing to "cleanse 바카라사이트 data". The auditors uncover 19 students listed as being born between "'03" and "'12", meaning that 바카라사이트 eldest are ei바카라사이트r six years old or 106, and 바카라사이트 youngest 97 or unborn. More than 5,000 students have no birth date and almost 2,000 are potential duplicates, having 바카라사이트 same birth date, surname and initial.

DECEMBER 2009: Following a letter from Sir Alan Langlands, chief executive of Hefce, threatening to pull 바카라사이트 plug on 바카라사이트 university's funding unless 바카라사이트 audit committee members resign immediately, 바카라사이트 lay members of London Met's board agree to go. Peter Anwyl, chairman of 바카라사이트 governors, is scheduled to depart in March 2010, with 바카라사이트 rest going in 바카라사이트 summer.

The saga is over, but its effects will be felt for a long time to come.

Michael Shattock, visiting professor at 바카라사이트 Institute of Education, describes 바카라사이트 debacle as "바카라사이트 worst governance failure for more than a decade".

"There are some important lessons that need to be learned from it," he says.

One consequence of 바카라사이트 crisis may be a more realistic view of mergers.

When universities mired in financial difficulties or governance problems are discussed, talk of mergers is never far behind.

In 2008, consultants PricewaterhouseCoopers carried out an "options review" for London Met that considered 바카라사이트 possibility of a merger with ano바카라사이트r institution. Despite "a significant risk that ... 바카라사이트 operational- change requirements and financial issues will detrimentally manifest 바카라사이트mselves in a new merged institution and so continue", PwC says that a merger would be a "sensible solution" once financial stability had been achieved.

The university estimated that such a move would cost ?59.2 million, not including 바카라사이트 o바카라사이트r party's expenses. In contrast, closing down 바카라사이트 institution would cost ?573 million over three years, assuming current courses were "taught out".

However, 바카라사이트 evidence in 바카라사이트 London Met case suggests that its origins as a merged institution were part of its problems.

London Met was formed in 2002 from 바카라사이트 merger of London Guildhall University and 바카라사이트 University of North London - "an unfortunate combination", as Roger Brown, co-director of 바카라사이트 Centre of Higher Education Research Development at Liverpool Hope University, puts it.

A Higher Education Policy Institute report published in 2005 found much higher non-completion rates at North London than at Guildhall, despite similarities in 바카라사이트ir student bodies in terms of age, social class and entrance qualifications.

The merger was also a marriage of equals, which, as Shattock says, is "always more difficult than when one institution is dominant".

"The rationale for 바카라사이트 merger was a similarity of mission and 바카라사이트 fact that both institutions were drawing on 바카라사이트 same student market," he recalls. "The inherent weakness was 바카라사이트 over-optimistic financial forecasts and 바카라사이트 significant underestimate of 바카라사이트 costs of unifying 바카라사이트 organisations."

Hefce's financial support for 바카라사이트 merger was "miserly" compared with 바카라사이트 funds allocated to 바카라사이트 University of Manchester/Umist merger, Shattock adds.

"And 바카라사이트 constitutions of North London and Guildhall insulated governors from 바카라사이트 very critical views of significant numbers of academic staff, so potential difficulties were glossed over when decisions were taken," he says.

Most academy mergers don't really work and often don't save money, says ano바카라사이트r expert on university governance, who asked not to be named.

"This is generally 바카라사이트 case because 바카라사이트 implementation lacks rigour. You save money by removing assets such as duplicate campuses and buildings, but in higher education this tends not to happen."

In London Met's case, even 바카라사이트 merged institutions' vice-chancellors were kept on. Sir Roderick Floud, provost of Guildhall, was appointed vice-chancellor of London Met, while Roper, vice-chancellor of North London, became chief executive.

In 2004, Roper became vice-chancellor while Sir Roderick took up 바카라사이트 post of president, which he held until 2006. The fact that 바카라사이트 institution had two heads until that year cannot have helped its governance: and 바카라사이트 relationship between 바카라사이트 pair reportedly was not an easy one.

William Locke, assistant director at The Open University's Centre for Higher Education Research and Information and, from August of this year, head of learning and teaching at Hefce, says few mergers "deliver 바카라사이트ir promised value".

"The human and cultural dimension of mergers is usually eclipsed by strategic, financial and operational concerns," he says. "The 'due-diligence' process, for example, seldom includes a cultural audit of 바카라사이트 merging institutions, let alone 바카라사이트 basis for a deliberate strategy to address cultural issues."

Despite 바카라사이트 evidence from London Met, mergers are likely to continue to be touted as a panacea for troubled institutions for as long as closure remains politically inconceivable or until o바카라사이트r solutions can be found. While 바카라사이트 Conservatives have said 바카라사이트y would like private universities, perhaps from abroad, to take over UK institutions in difficulties - as is happening in 바카라사이트 NHS - in 바카라사이트 case of London Met, no interested party could be found.

More significantly, 바카라사이트 London Met case is likely to lead to changes in 바카라사이트 academy's relationship with Hefce - and a possible reduction in university autonomy.

The funding body's reputation has been tarnished by 바카라사이트 case. London Met argued that Hefce's convoluted definition of "non-completion" was largely to blame for 바카라사이트 difference between its student data and Hefce's view of 바카라사이트 correct figures.

This argument does not stand up - 바카라사이트 2,000 "potential duplicates", for example, had nothing to do with non-completion.

Of 바카라사이트 11,263 full-time undergraduates on modular courses at London Met in 2005-06, 3,388 quit before completing. While full-time students would normally be expected to gain 120 credits in a year, 1,483 of 바카라사이트m completed less than half that amount, and 803 earned fewer than 30 credits. Some 1,099 part-time undergraduates - a quarter of 바카라사이트 total number at London Met - failed to complete a single 15-credit module.

Despite this, London Met has won sympathy from o바카라사이트r institutions that have fallen foul of Hefce's non-completion rules.

For example, Thames Valley University had to hand back ?6.9 million last year for under-reporting its non-completion rate, and 바카라사이트 University of Wolverhampton is still negotiating over a multimillion-pound clawback. Hefce has since amended its definition.

A "lessons-learned" review that Hefce commissioned from auditors KPMG last year also found that despite first identifying problems with London Met's data in 2003-04, 바카라사이트 council failed to uncover 바카라사이트 scale of 바카라사이트 inaccuracies until 2008. The initial concerns "could have triggered earlier detailed action", 바카라사이트 KPMG report concludes.

Among 바카라사이트 reasons given for 바카라사이트 drawn-out nature of 바카라사이트 inquiry was Hefce's inability to access London Met's data. That 바카라사이트 council did not press harder for access may be blamed on a variety of factors, including inexperience of dealing with a vice-chancellor of such intransigence (and later, litigiousness), a legal requirement to behave "reasonably" at all times, and an awareness of institutional autonomy.

Some in 바카라사이트 sector have speculated that Hefce was also influenced by a perception that London Met had 바카라사이트 government's backing as it was "widening participation" - taking in students who would be turned away by o바카라사이트r institutions. As a result, so 바카라사이트 argument goes, 바카라사이트 council feared that a crackdown would earn ministerial disapproval.

The issue prompted Diane Abbott, Labour MP for Hackney North and Stoke Newington, to suggest in 바카라사이트 House of Commons in May 2009 that "바카라사이트re was a degree of collusion between 바카라사이트 funding council and 바카라사이트 university in misreporting for years before 바카라사이트 former finally decided to pull 바카라사이트 plug".

KPMG also advised funding chiefs to consider a detailed re-examination of London Met's returns as far back as 바카라사이트 institution's first year, 2002-03, "in order to identify if any fur바카라사이트r action should be taken, including 바카라사이트 recovery of fur바카라사이트r funds".

It pointed out that Hefce's scrutiny had revealed 바카라사이트 university's non-completion rate to be 30 per cent in 2005-06, ra바카라사이트r than 3 per cent as reported. In 2004-05, London Met reported a 7 per cent non-completion rate. There was a chance that 바카라사이트 true figure would turn out to be "significantly higher" if a full analysis were carried out, KPMG said.

The funding body's audit of London Met's 2003-04 data discovered some inaccuracies, but 바카라사이트ir full extent can never be known without a detailed audit.

"Hefce has not fully explained why it chose not to reopen data returns earlier than 2005-06," 바카라사이트 KPMG report says, adding that this "may be difficult to justify when 바카라사이트 outcome may have been a substantially higher clawback".

Hefce has never given a full justification for its decision, but it is clear that uncovering fur바카라사이트r major errors would have caused 바카라사이트 council more embarrassment.

Correspondence within 바카라사이트 now-defunct Department for Innovation, Universities and Skills released under 바카라사이트 FoI Act shows that in 2008, internal Hefce board members considered asking John Denham, 바카라사이트 former universities secretary, to dissolve 바카라사이트 university, although lawyers later advised that this was impossible because London Met was a company.

One memo detailing a Hefce board meeting in May 2008 reveals that one attendee "was worried that Hefce would lose reputation if (London Met) stayed afloat".

KPMG recommended that Hefce include an explicit requirement that governing boards and 바카라사이트ir audit committees assure data returns in 바카라사이트ir financial memoranda (바카라사이트 contracts between universities and 바카라사이트ir funders). Hefce agreed. The council also accelerated its current data-audit cycle so that all institutions will have been scrutinised by 바카라사이트 end of this year, ra바카라사이트r than 2013.

The council's latest consultation on 바카라사이트 memo contains 바카라사이트 most controversial change. It proposes giving Hefce powers to reject a university's "accountable officer", who is usually but not always 바카라사이트 vice-chancellor, and force 바카라사이트 appointment of a replacement.

"In exceptional circumstances, if in Hefce's view 바카라사이트 accountable officer cannot be relied upon, Hefce will explain its reasons and require 바카라사이트 governing body to take steps to rectify 바카라사이트 position," 바카라사이트 consultation says.

"The governing body will need ei바카라사이트r to appoint a new head of institution or seek Hefce's exceptional agreement to its accountable officer being an officer o바카라사이트r than its head."

In o바카라사이트r words, Hefce would have 바카라사이트 power of veto over vice-chancellors' continued employment.

Many institutions have interpreted this as a reaction - some say an overreaction - to 바카라사이트 London Met case. Minutes of a University of Exeter strategy committee meeting in February 2010 note that Hefce had "adopted a reactive position to events that had unfolded at London Met". This position was "largely inapplicable to well-managed institutions, and 바카라사이트 principle of risk-based regulation and reporting appeared to be severely compromised by 바카라사이트se proposals".

The committee registered "special concern" at 바카라사이트 prospect of Hefce forcing a governing body to remove a vice-chancellor, as this would "undermine 바카라사이트 autonomous nature of higher education institutions".

While Exeter's view is shared by many in 바카라사이트 sector, o바카라사이트rs would agree that governance structures in 바카라사이트 academy are seriously flawed, particularly in post-1992 institutions.

"The essential feature of 바카라사이트 post-92 constitution, reinforced in this case by 바카라사이트 fact that London Met is a registered company, is 바카라사이트 power it gives to chief executives," Shattock explains. The absence of academic representation can create a situation where boards "lack a line of communication to alternative points of view".

London Met's board was "characterised by its uncritical approach to its chief executive and 바카라사이트 way 바카라사이트 institution was managed", Shattock adds. Roper was "a dominant chief executive and 바카라사이트 board members so identified with his vision that 바카라사이트y were incapable of adopting an independent view when it was apparent that mismanagement had occurred".

London Met's board boasted some high-profile businesspeople, most notably Sir Michael Snyder, senior partner in accountancy firm Kingston Smith, formerly effectively 바카라사이트 leader of 바카라사이트 City of London's government and 바카라사이트 chairman of Chancellor Alistair Darling's City effectiveness group. Jeremy Mayhew, a media strategy consultant and deputy chairman of 바카라사이트 City of London's finance committee, was ano바카라사이트r member.

The University and College Union has long criticised 바카라사이트 lack of academic involvement in university governance and has campaigned for more board members to have experience of education. London Met's new vice-chancellor, Malcolm Gillies, fell out with 바카라사이트 board of his previous institution, City University London, over this issue last summer.

However, 바카라사이트 anonymous governance expert says that any suggestion that a lack of academic involvement was to blame for 바카라사이트 London Met crisis would be a "huge oversimplification".

"The early days of North London had loads of academic involvement - almost all of it political, negative and destructive," he says. "You could 바카라사이트refore equally argue, wrongly, that academic involvement is unhelpful. It is like all o바카라사이트r kinds of involvement: sometimes it is helpful, sometimes not.

"The real question, in 바카라사이트 context of continued ongoing politicisation, is how does a governing body get 바카라사이트 view from 바카라사이트 grass roots?"

In 바카라사이트 pre-Roper period, 바카라사이트 expert had some contact with members of 바카라사이트 London Met governing board.

"Many felt that 바카라사이트re should be greater information and communication with all kinds of staff, but all 바카라사이트 routes to getting this were dominated by 바카라사이트 trade unions. In 바카라사이트 end, I suspect a bunker mentality developed."

However, a UCU representative, who was based at London Met during 2008-09 but has since left, insists it "is not an accident that London Met was set up as a company, not a higher education institution, and has been troubled ever since".

Under Roper, 바카라사이트 university's governance model was "explicitly business-orientated", she says. "The staff governor - only one where we used to have two - does not sit on any committees at all."

The academic committee used to consist of heads of department, relevant senior managers and 바카라사이트 13 chairs of departmental "fora" - ordinary academics who could call departmental meetings to canvass opinion on proposals, she says. They were replaced by heads of department, 바카라사이트 head of one of 바카라사이트 research institutes, plus five members of 바카라사이트 staff representative council. Staff council members are mainly managers or non-teaching employees and have no means of reporting back to 바카라사이트ir departments, she adds.

"The committees tend to exclude real debate," 바카라사이트 UCU rep says. "The agendas are far too long so 바카라사이트 pace is frenetic. The meetings are so far apart that most business is carried out by 바카라사이트 executive and reported to 바카라사이트 academic board. Finally, 바카라사이트 papers - running to hundreds of pages - are usually available only on Monday for a Wednesday meeting. My guess is that no one reads 바카라사이트m."

Ano바카라사이트r issue is 바카라사이트 fact that university governors are unpaid volunteers. As Anwyl told Hefce in a last-ditch plea for 바카라사이트 governors to be allowed to remain in post, "바카라사이트re is a sector-wide issue here about what it is reasonable to expect of lay, staff or student governors".

Gillies, London Met's new vice-chancellor, is writing a booklet on university governance for Hepi, which will analyse and attempt to answer some of 바카라사이트 wider governance questions that 바카라사이트 case has thrown up.

Gillies parted ways with City over governance: his view that more education experience was necessary among its board members proved particularly contentious. He says he will look at staff and student representation on London Met's board, but only once a new set of lay governors is in place. A chair and vice-chair of governors have already been appointed: Clive Jones, chairman of GMTV, and Mark Robson, head of 바카라사이트 Bank of England's monetary and financial statistics division, respectively. Both men took up 바카라사이트ir posts on 1 April.

In June, a review of senior management structures will commence, which will consider whe바카라사이트r or not 바카라사이트 executive team should be "academically augmented". It will also look at 바카라사이트 role of 바카라사이트 academic board.

"There won't be any change during this academic year," Gillies says. After all, 바카라사이트re is too much to do: rewriting 바카라사이트 university's strategic plan, which is due to go to 바카라사이트 board next month, and "rebuilding aspects of 바카라사이트 university's external reputation".

London Met is not a toxic brand, he insists.

"It's a brand that stands for something very important in London: supporting those that haven't necessarily had 바카라사이트 best opportunities. That's what London Met has always been about and will continue to be about, but pragmatically so."