MPs probe collapse of eUniversity
A group of MPs have begun an inquiry into the collapse of eUniversity- a virtual university announced at the height of the dot.com boom in 2000.
The virtual university was expected to attract 250,000 students and given an initial budget of £62 million. It did not actually get off the ground until 2003 and in the first year attracted only 900 students.
In February the Higher Education Funding Council for England (HEFCE) announced it was holding immediate talks on eUniversity’s future to restructure its activities. It decided that in future it would focus resources on developing e-learning in existing institutions and decided to pull the plug.
One of the conditions for the grant had been that the business should seek 50/50 public/private funding to put commercial drive and accountability into the venture, but no private partners had been found.
It had been aimed at providing UK university courses to students overseas.
The Education and Skills Select Committee announced earlier this month that they would be taking evidence about the university’s collapse, and today heard from Sir Anthony Cleaver, the company’s former chairman.
Sir Anthony said that he had only become involved in the project in 2001, and admitted at the time the business plan was “no more than a spreadsheet”, with “no substance”. There was no software at that time and little work had been done, he said.
He stressed that he had felt that UK eUniversity had a “strong future”, saying he put the software out to tender, selected courses to offer, and built up teams of local marketing experts. Sir Anthony added that if he had known the company would only have a two-year life, he would never have accepted the job.
Under questioning from committee chairman Barry Sheerman, he said that the decision of the Higher Education Funding Council for England (HEFCE) to terminate the project was “a complete surprise” to the board.
As to how much money has been lost in the project, Sir Anthony said that, when he left, £34.9 million had been spent.
Under questioning from MPs who noted the HEFCE’s criticism of the company for attempting an “impossibly ambitious project”, Sir Anthony agreed it was “plausible” that the HEFCE did not understand the risk of putting up the money, and got cold feet when they did not get a return as quickly as they hoped.
One of the most controversial elements about the collapse of the project was the large bonuses, of around £50,000 paid to the institution’s heads on top of salaries of £180,000.
Sir Anthony robustly defended the bonuses saying that they had been awarded against pre agreed criteria and said he had “not for a minute” considered not taking the bonus. He added that judging the value of the eUniversity on the first student numbers would be like building a hospital, opening it for a week, then closing it, and judging the value for money of the patients treated.
However, this attitude was sharply questioned by Mr Sheerman who said that it seemed to be a “tame” group of non-executive directors that would set these targets and say that they had met them.
