Embattled board refuses to resign

10 December 2009

By Melanie Newman

London Met governors claim damning report isn't based on the evidence. Melanie Newman writes

The governors of London Metropolitan University are resisting calls for their resignations, claiming that a damning report into their role in the institution's funding crisis is not based on the evidence.

Their stance suggests that a long-running dispute with the Higher Education Funding Council for England over responsibility for the errors in London Met's student-completion data is at an impasse.

The row centres on data inaccuracies that prompted the funding council to claw back £36.5 million overpaid to London Met between 2005-06 and 2007-08. The university reported a non-completion rate of 3 per cent compared with Hefce's figure of 30 per cent.

A report by Sir David Melville, the former head of the University of Kent, which was passed to the board last month, says that the governors' supervision of the executive team and Brian Roper, the former vice-chancellor, was inadequate.

Sir David's review and a draft report by Deloitte into the affair prompted Sir Alan Langlands, Hefce's chief executive, to call on the governors and senior management to consider their positions. He said Hefce doubted the university's ability to safeguard public funds.

In a written response, Peter Anwyl, chair of London Met's board, says there is no evidence to support this concern, and claims that parts of Sir David's report - commissioned by the governors - are not based on evidence. He adds that an investigation into senior management's role in the crisis will be overseen by Malcolm Gillies, London Met's incoming vice-chancellor.

He writes: "Your precipitate remarks serve only to prejudice and compromise this action."

Mr Anwyl says the governing board acted in good faith and could not have been expected to "second-guess ... audit opinions, including those of the Hefce auditors".

"There is a sector-wide issue here about what it is reasonable to expect of lay, staff or student governors," he adds. He says the university will act on the recommendations of the Deloitte report.

The report criticises the flow of information from the executive to the governors, identifies a lack of formal policies and control of data assurance, plus an over-reliance on external audits and Hefce reviews.

Sir David said: "All of my conclusions are firmly based on the evidence in the Deloitte report, along with the interviews I carried out and the submissions I received."

Times Higher Education understands that the board and senior management continue to maintain that Hefce condoned the university's actions over non-completing students for several years, as its auditors were aware of London Met's stance but took no action. Hefce said it acted as quickly as possible.

A KPMG report commissioned by Hefce in 2009 says action could have been taken earlier, but that London Met and its governors were ultimately responsible for the errors.

If Hefce wants to force the governors out, it could withhold funds from the university, pushing it into insolvency. London Met is a limited company and its governors are directors, so if they allowed the university to continue "trading", they would be in breach of their duties under corporate law.

Sir Alan has already asked the board to consider whether Mr Roper, who stepped down in March, breached his fiduciary duty.