Thursday, 6 September 2012

The business at London Met

There are so many issues in London Met’s unfortunate encounter with the UKBA that I scarcely know where to start: so much blame to be distributed, so many consequences to be guessed at. You have to eat the elephant one bite at a time.
Firstly, then, in case there are any potential international students reading this blog who are currently studying or holding offers at London Metropolitan, how can they hope to begin (or continue) their studies? If you are in this situation, or know anyone in this situation, you should have every assurance that pretty much every other university in the UK is eager to help you.

For students intending to start at London Met this autumn, the situation is relatively straightforward. This is the UCAS statement released on Friday 31 August:
London Metropolitan University has today started to release, reject or withdraw UF, CF and CI 2012/2013 applicants into Clearing, and aims to complete this process as soon as possible. All eligible applicants will move to their insurance choice or will be released into Clearing. We have put a message on our website to inform applicants of this issue.

If you are in Clearing (whether released, rejected or withdrawn), you can approach any university of your choice and it can make you an offer instantly. The University of East London has already opened a specific helpline. Other London Universities have only held back from this step for fear of seeming desperate, but their Clearing helplines are still open. You can find some here, here or here. Many of these universities have not filled all the places they hoped to fill with Home/EU undergraduates this year, so they will certainly have places for Overseas students. There may be delays issuing your visa in time for the start of term: this isn’t my specialist area. However many universities can offer you a programme which starts in January or February if this is an issue.

British universities are acutely conscious of the damage this UKBA decision could do to their own future recruitment in your home country: they will be very keen to help.

If you are part way through your programme, the issue is more complex. The UK does not have a well-developed system of credit transfer. Most British universities will recognise the credit you have accumulated in your studies at London Metropolitan, but there might be issues matching the specific curriculum in your course to similar courses elsewhere. There might also be issues where you have studied a module but have yet to pass it – perhaps you are waiting for an opportunity to resit. There is help: you are one of the group of people for whom HEFCE’s task force has been designed. There is also time. If you have read about having to leave this country within 60 days then do be aware that the 60 days haven’t started yet. You will receive a personal letter from the Government to tell you when that clock starts to tick.

The Home Office clarified that the 60-day deadline would only begin once the letters had been delivered to individual students. The Guardian understands it could be weeks before the notices, which are a legal necessity, are sent out in order to give genuine students more time to relocate.'
 That letter will not be sent to you until after 1October so you have plenty of time to identify an alternative course. Again, many other British universities will be eager to help you even if only in order to limit the damage to their own future recruitment in your home country.
London Metropolitan University’s helpline is on 0207 133 4141

My final word to any London Met international student or applicant who may happen to read this is: sorry. I am old enough to remember when the British used to pride themselves on living in a free country. Now we native-born Brits just as much as you visitors have to continually prove to the state that we are legally permitted to remain in our own country.

Those 630 words were written to somebody who could only have found this blog through a misdirected Google search. The next 600 are for a more credible readership – people interested in the future of London Met because they work there, or work elsewhere in the sector. The question is: does London Met have any future now? The answer – surprisingly – is maybe, which shows just how much ruin there is in an institution.

The most recent published accounts are for the year ending July 2011. In that year, London Met’s financial situation was very precarious indeed. The business generated just £2.909 million in cash from operating activities. The previous year it was £2.721 million, and in 2011/12 there will have been even more pressure on this figure, because London Met very significantly over-recruited home/EU students and (after paying the relevant fine) had to teach those students effectively for free. If you subtract the £22.578 million of overseas fee income from this figure, you would have had a business spending nearly £20 million more cash in the year than it was earning. You go bust when you run out of cash.

I don’t want to understate how bad this cash position is. The equivalent figure to that £2.909 in my own institution (also an unpretentious London new university of much the same size) was ten times as much – £26.495 million. However London Metropolitan’s balance sheet on 31 July 2011 showed £4.5 million in cash and another £35.5 million in ‘current asset investments’ (i.e. investments which will take more than 24 hours but less than a year to turn back into cash). On 18 August 2011 (i.e. after the balance sheet date) they gained a further £18.3 million from selling property on Tower Hill. So that is in all nearly £60 million of cash or almost-cash. That is nothing very special: my own institution held £62.605 million in cash at bank or in hand (as the accountants say) on 31 July 2011, without having to sell off our assets. But simple arithmetic shows you that it will take three years to run out of cash if you have £60 million of the stuff, and lose it at £20 million per year. Plenty of time, then, for yet another round of severance and course cuts to take effect.

The other reason to expect that London Met may survive is to consider the alternatives. If a publically-funded university such as London Metropolitan, becomes insolvent then it is likely that the Government will be liable. The NAO put this in measured tones:
There is uncertainty about whether, in law, the taxpayer might be liable for the liabilities of an institution should it become insolvent.
If you ask HEFCE executives for their view on this question they change the subject.

We can be sure, then, that London Met will not be allowed to become insolvent. 

There are really only two alternatives to insolvency, and both are hallowed by tradition: provide grant funding to London Met to prop it up, or provide grant funding to someone else to take it over. Option two suffers from a very serious who-will-bell-the-cat problem. London Metropolitan is a large institution, with a complex structure. It is difficult to think of any single London university which could successfully absorb it, or would even be willing to try. Perhaps some kind of deal could be constructed to split the assets between a number of other institutions, but I think it would be difficult to negotiate.

Privatisation strikes me as a complete non-option. Investors willing to burn cash at the rate of £20 million a year certainly exist, but they tend to be looking for high-risk high-reward projects like Udacity, not old economy institutions like a university. There has been speculation about the development of a shared services model at London Met as a back-door route to privatisation. I think it was always dubious that any HEI would want to share services with such a partner, and much more dubious now.

So that leaves propping the institution up, and waiting for it to turn around. This has worked in the past for institutions like Middlesex and West London (Thames Valley, as was) or, on a smaller scale, for Ravensbourne. HEFCE has shown the patience in the past to support an institution for more than a decade, if need be. Moreover the HEFCE Board now has one of London Met’s Governors on it, so the oppositional relationship that developed between HEFCE and London Met’s senior team ought to be a thing of the past. This is therefore the single most likely outcome for London Met. For staff and students (Home/EU students at least), I'm afraid that means yet more of the same.

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