London Metropolitan University Parliamentary Debate

20 May 2009
Ms Diane Abbott (Hackney, North and Stoke Newington) (Lab): I am grateful for the opportunity to speak in this important debate.

A great many of my constituents attend the LMU, and I have had hundreds of letters about its financial crisis over many months. As we have heard, a disproportionate number of the students at the LMU are older students, women students and black and minority ethnic students. Far from having family support as they go through university, they often have to support families, and are the single head of their households. My concern is not the staff, although any redundancy is extremely regrettable, but those students.

LMU is one of a range of higher education offers for people who are older, or who have jobs and families: Birkbeck, a London university college that offers excellent degrees based on evening classes, the Open university and others are adapted to the needs of non-traditional students. However, let me say this: when we talk glibly about access to higher education, my view, as someone who spends a lot of time working on and paying attention to what happens in the black community in relation to education, is that it is not only about access to higher education, but about access to higher-quality education.

I draw the House’s attention to the unspoken apartheid in higher education in London. The Russell group, including Imperial and the LSE, is largely white, and some of the former polytechnics are largely black and minority ethnic. The LMU has many unique courses and excellent members of staff, and features in the top 10 of any league table one cares to mention. I strongly believe that schools should not use the class background or race of their students as an excuse for underperformance, and the same is true of higher education institutions. It is precisely because I am concerned about the life chances of older students—black women and people of all nationalities—who have struggled and beaten all their expectations and those of people around them to go to university that I am concerned about standards at the LMU going forward.

I understand that the funding problems stem partly from the much-higher-than-average drop-out rate and partly from the fact that the majority of students at the LMU complete their course in four years rather than the standard three. I also understand—people have talked about bad management and the funding council—that there was a degree of collusion between the funding council and the university in misreporting for years before the former finally decided to pull the plug. That may be the responsibility of management, but it is also the responsibility of the funding council, which could and should have addressed the issue in a much more measured way, much earlier, to avoid this crisis for students.

My concern is, first and foremost, that the students should not suffer in this time of financial crisis.

Mr. Rob Wilson: I asked the hon. Member for Islington, North (Jeremy Corbyn) why the drop-out figures, which the hon. Lady has mentioned, were not picked up by HEFCE or the university. Has she received any information that university departments were told to suppress drop-out information? My information is that that is exactly what they did. Far from being a cock-up, this was a conspiracy.

Ms Abbott: I do not dispute what the hon. Gentleman has said. As I have said, there was a degree of collusion between the funding council and management, which has now reached a crisis. Who is suffering? It is not the people at the funding council, but the students. That is my concern.

Going forward, I want the rights and aspirations of the students and the range of courses, as long as they are high quality, to be protected. That is particularly true of the specialities, whether cabinet making or the study of Cuba, for which the LMU is renowned. I want the quality of the education offer to my constituents not only maintained but increased. There is no reason at all—I do not care what people say about the class or colour of undergraduates—why the LMU should bump along in the bottom 10 per cent. I want standards to be maintained and driven upwards. The background of students should not be an excuse for failure in any of our educational institutions.

I want the funding council to help, by whatever mechanisms are available, the LMU to get through this period without the students suffering. I also want Ministers and the funding council to look at their funding systems and schemes to ensure that they properly reflect the realities of student bodies in such institutions.

Dr. Gibson: Given that we often look on universities as regional centres of education, and that students can move between them on exchanges, will my hon. Friend consider the possibility of financial collaboration between them, instead of rivalry? Why do they not work to support each other? The three universities should work together to serve the community—let us have some money from Imperial going into London Met.

Ms Abbott: More collaboration may well be part of the answer, but we must get the management and running of London Met right before there can be any notion of collaborating with other institutions.

Going forward, we must look at our funding mechanisms. The funding council has not treated London Met fairly; it colluded in the situation up to a certain point, but then there was a cliff-edge crash, and the university faces potential cuts.

I wrote to the Minister about this issue many months ago, but I was disappointed with the response that I received, because he simply referred me to the funding council. Let me make a general point. We in Parliament have seen all sorts of core Government functions outsourced to organisations such as the funding council over the past 20 years. Although those functions have been outsourced, they are wholly funded and owned by the Government, and Ministers cannot hide behind such institutions. I am not suggesting that, having set up the funding council, Ministers should second-guess every decision, but it should be possible for the Government to intervene in special cases, if Members of Parliament have come to them. London Met is a special case, and Ministers have hidden behind the funding council for too long.

There is a range of issues about the management of London Met and about how we can help it through the present period financially so that students do not suffer. However, there is also an issue about whether the funding council considers the circumstances of institutions that have high drop-out rates despite the best efforts of their staff. When colleagues come to the Minister with special cases such as that of London Met, I urge him not to brush us off by referring us to the funding council. I think that every Member present has written asking him to focus on the special issues at London Met. Although there may be singular problems at the university, events there also raise general issues about further and higher education, which it is wholly appropriate for a Minister to focus on and get involved in.

Jeremy Corbyn: In the many letters that my hon. Friend has had from her constituents, has anyone said whether they have an alternative place to go to in the event of their department or course closing? What are their thoughts for the future?

Ms Abbott: The reason why I am so concerned about this issue is that many of the students who have written to me are really in a panic. There may be alternatives, but these students do not know about them. They have often screwed up all their courage and got together every penny that they have to go to university, which is something that they never thought that they would do when they were younger. Now, thanks to a combination of the university’s management and the actions of the funding council, the rug has been pulled from under them in what are difficult times for all our constituents. People really are in a panic, and they deserve better from the management of London Met and from Ministers, because this issue has been bubbling under from a long time.

Redundancies may be inevitable at London Met, and more may need to be done to improve management there. We may also need to move away from an assumption that institutions can excuse underperformance—whether academic or management underperformance—by pointing to undergraduates’ class or race background. That is no excuse for anything. All those things may be true, but I ask Ministers at this point to focus on the students, for whom going to university means so much more than it did even to me, the Minister and other Members in the Chamber. The Minister should focus on the students and stop hiding behind the funding council. He should intervene to ensure that students do not suffer in this transition period and that the funding council knows that it cannot apply one-size-fits-all funding solutions to universities up and down the country whose demographics and social context may be very different.

We owe these students something. We should not have spent 12 years as a Government talking about education, education, education. We should not have spent 12 years as a Government talking about skills, the need to go forward and increasing access. Whatever problems it may have had in the past, London Met has reached a crisis, and we have not stepped in swiftly to protect the interests of the students and my constituents.
...
The Minister of State, Department for Innovation, Universities and Skills (Mr. David Lammy): I am grateful to my hon. Friend the Member for Islington, North (Jeremy Corbyn) for securing this debate.

Hon. Members have touched on important issues such as widening participation, particularly in London. I associate myself with what has been said about the contribution of London Metropolitan university to widening participation in north London. The statistics show that we have increased the number of young people and adults from poorer socio-economic backgrounds who go to university—my constituency, Tottenham, has seen an increase of 100 per cent., and there has been a commensurate expansion in widening participation in Hackney, Waltham Forest and Islington. We all acknowledge that alongside universities such as Middlesex, Greenwich, Thames Valley and East London, London Metropolitan university has made an important contribution to that in the London region.

London Metropolitan university has been important for women returners, black and ethnic minorities, people who are claiming asylum in England and those who speak English as a foreign language. It has achieved excellence in its research and contributions in architecture, the built environment, communication, culture and media studies, social work and social policy, education, pure maths and American studies. People rightly feel strongly about this university. I agree with my hon. Friend the Member for Hackney, North and Stoke Newington (Ms Abbott) that many young people at the institution were not lucky enough to go to grammar school and Cambridge, as she did. They have had very different opportunities, which is why it is so important that we ensure that that institution has a future.

I will describe the history of what has happened at the institution, as we understand it. The crux of the problem is that the information on student numbers submitted by London Metropolitan university for the three academic years from 2005-06 to 2007-08 were shown to be inaccurate by the subsequent audit. The funding council’s concerns escalated over time. Previous audit work had identified problems with the university’s returns, which prompted further investigation.

Adam Afriyie: The Minister has mentioned that concerns were flagged up in previous inquiries. Were he or his Department aware of those concerns before the major crisis arose recently?

Mr. Lammy: I will come to that.

The data on student numbers that form the basis for the capitalised teaching grant that HEFCE pays to universities contained inaccuracies. Those inaccuracies led to an overpayment to London Metropolitan university of about £36.5 million. Discrepancies in student number information of that scale were unknown in the higher education sector.

The Department and HEFCE are in regular dialogue. Concerns were expressed when the first audits began in 2005-06. However, the scale of the problem did not become apparent until the last audit period. As the hon. Member for Windsor (Adam Afriyie) would expect me to say, it is right and proper that the Department allows the funding council to deal with funding decisions in relation to institutions.

Adam Afriyie: I thank the Minister for being so generous in giving way. To press my point a little further, the Department was aware that there were concerns over the declaration of student numbers or completions before the final audit that caused the current crisis. Did it have concerns about any other higher education organisations at the same time?

Mr. Lammy: Given the breadth of our universities, it will not surprise the hon. Gentleman that the funding council keeps us informed of a number of issues in relation to a range of institutions. Students and staff write directly to the Department about institutions. We are aware of a range of issues in different institutions. As I have said, the scale of this situation is unique, and it is of particular concern.

Jeremy Corbyn: When was the Department first informed of these problems? What was its response to HEFCE and to the university? Why did the governors apparently keep this information secret from many people until this January?

Mr. Lammy: I will deal with all those points in my speech. I would prefer to do it in that way rather than through separate interventions.

Emily Thornberry: May I ask a question? The Minister may address it in the course of his speech. In order to build up the £36.5 million that is owed through overestimating the number of students going through the university, by how many students was the university short each year with nobody seeming to notice?

Mr. Lammy: I hope that I will address that point in my remarks.

The difference with London Metropolitan university is the scale of the problem. The overpayments were unusually large. The funding implications are so significant because the university claimed that large numbers of students had completed a full year, when the evidence shows that they had done substantially less. That is the central point in the case. The university was making returns that were false.

Ms Abbott: Does the Minister have reason to believe that at any point when the university started making false or falsified returns, it was given to understand by the funding council that doing so would be okay?

Mr. Lammy: I will come to that issue.

Non-completion is a significant issue at the university. HEFCE’s funding policies are rightly designed to encourage universities to help their students to complete the studies for which they have paid tuition fees. HEFCE has provided substantial funds to help institutions improve retention, and my hon. Friend the Member for Islington, North concentrated on that point. London Metropolitan university has received a substantial amount of money compared with other institutions to help it retain students. In 2007-08 it received £6.9 million, which was reduced to £3.9 million this year. That money was given to help students to stay in the institution, notwithstanding the over-reporting that has taken place.

Mr. Rob Wilson: I understand the Minister’s argument, but does he not find it strange, as I do, that the university was submitting non-completion rates 13 times lower than the norm? Rates of 30 per cent. should have been expected, so why did his Department not pick that up for years? It is incredible that his Department and HEFCE were not on top of the situation.

Mr. Lammy: I want to finish the entirety of my remarks. I have said that this is a serious situation, and I want to discuss where responsibility lies.

Under section 65 of the Further and Higher Education Act 1992, HEFCE has a legal power to reclaim grant money that is paid in error, and after due consideration the council decided to invoke that power in December last year. My Department’s agreement to that decision was neither required nor sought, but it is hard to quarrel with the reasoning behind it. We all know that times are difficult, and it is important that any funding body is cognisant of students in organisations as well as the method of funding that is allocated to other organisations in the higher education sector. For that reason, the council sought to discuss with the institution how it could mend and solve the problem.

The council was mindful that reclaiming such a large sum immediately could send London Met out of business, so it decided instead to recover the money in a phased and managed way that would both protect the continued viability of London Met and allow it to carry out the significant institutional restructuring that would be required. Accordingly, the council agreed with the university a schedule for recovering the grants that would spread repayments over five academic years.

Repayments on that scale cannot be made painlessly, but I hope and believe that the schedule of repayments that has been agreed will allow London Met to preserve its distinctive and valuable mission and to begin, through its restructuring programme, building for a more sustainable future. Nevertheless, I am aware that, on 19 February, the then vice-chancellor of London Met e-mailed all staff to inform them that the university would seek to reduce its level of staffing by up to 550 posts by July 2010. The university has since made it clear that more than half the posts will be lost through a mixture of voluntary and compulsory redundancies, and that the balance will be through natural wastage.

Ms Abbott rose—

Jeremy Corbyn rose—

Mr. Lammy: I shall not give way, because I want to make some progress. According to the briefing note that the university has circulated to hon. Members to inform this debate, further details about possible redundancies are likely to emerge later this month following consultation with trade unions.

Ms Abbott:
I am anxious that my right hon. Friend completes his speech, but he has spent a fair amount of time reciting facts that all of us know, and I would hate for him to come to the end of the time available without having responded to specific questions that have been posed to him from all around the Chamber. Let me remind him of a couple of them. What steps has he taken to make sure that the quality of teaching at London Met is safeguarded? What discussions has his Department had with the funding council about London Met? Finally, will it, or any other college in a similar situation, be allowed to go bankrupt?

Mr. Lammy: On the last question, I think I have indicated that I have no expectation that that college will go bankrupt. If my hon. Friend lets me progress, I can tell her that the university will be able to apply for a strategic development fund when it restructures and gets into proper discussions with the funding council about the way forward. That is the first thing, but the university has not done that yet.

My hon. Friends the Members for Hackney, North and Stoke Newington and for Islington, North are well aware that my constituents go to that university too—indeed more of mine do than theirs. They also know that many of us have campaigned, over many years, to ensure that universities in other democracies in other parts of the world are autonomous and free from government interference. It might be nice for the local Minister to go in and start organising a university’s finances, but we live in a democracy in which this Parliament has voted for that autonomy and maintains it. That means that the Government cannot intervene in any situation in which a university is in discussion with the funding council, but we are seeking to ensure that students at the university can complete their courses. The university has not applied for emergency funding for students, indicating that it is not worried that students will not be able to complete courses. We are seeking to ensure—this point was raised by the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith)—that the funding council is absolutely cognisant that where there are vulnerable subjects, which we must ensure are available across the university system.

Jeremy Corbyn: May I bring the Minister back to the redundancies and the financial model under which the university is working? It is funded enormously from the public purse, as are most universities, and it is pursuing a redundancy strategy that does not appear to be necessary in terms of its current financial difficulties. Many people from the university are concerned, as am I, that an excessive number of redundancies are being planned, and that there is an attempt to restructure without any real understanding of the need to maintain courses and staff and student numbers. I understand what the Minister has said about the autonomy of universities, but they are not autonomous; they are funded by the public. His job, as the Minister, is to take care of the public purse and ensure that moneys spent on higher education are spent appropriately.

Mr. Lammy: I take seriously the prospect of redundancies and the worrying risks that they place on people. It is probably premature to reach a conclusion on that issue, particularly given that the new leadership of the institution has come into place only recently. The university has not yet made a bid for strategic development funding, which will be important to how it reshapes and restructures its courses.

Even at the best of times, losing one’s job is a serious business for anybody, and I recognise what many lecturers have done over many years at that institution. I cannot guarantee their jobs, but I can promise that any person who is made redundant from London Met will have access to a full package of support for the unemployed, including training support, as one would expect the Government to make available. I also assure hon. Members that all London Met students who are currently enrolled will be able to complete their studies in the normal way. London Met has made no applications to the funding council for emergency support for students, but I hope and expect that any such request would be considered sympathetically.

That summarises where we have got to with the institution. The university has announced only recently the appointment of Alfred Morris, a vice-chancellor with tremendous experience of turning around institutions. It is for him to begin to determine the future of London Met.

Adam Afriyie: And the inquiry?

Mr. Lammy: There will, of course, be an independent inquiry, and an inquiry by the National Audit Office into the financial arrangements for universities, which will have particular regard to the London Met situation. With that, I hope that my hon. Friends in what is a difficult situation in north London will understand that all of us are doing our best.



back ⇢