Blunkett's web 'fiasco'

There were great hopes for the UK's e-university, when it was announced in 2000. But now, after a year in operation, the plug is being pulled on the £62m investment. Lucy Hodges finds out why

It was exactly four years ago that David Blunkett, the former Education Secretary, announced that the UK was to launch its own e-university beamed at students around the world to meet "the competitive global challenge thrown at UK higher education". The idea captured the spirit of the time - bold, entrepreneurial and optimistic. How different things look today. After only one year in operation, the UK's e-university is to be revamped, according to the Higher Education Funding Council (Hefce). It failed to raise the private finance envisaged in the business plan, and it has failed to find enough students to be viable.

So the plan is to relaunch it. "We are looking at restructuring a company set up along commercial lines to become an organisation that supports the public good," said a Hefce spokesman. What that means is that the £62m enterprise has been a miserable flop, having recruited only 900 students internationally in its first year compared to the 5,600 envisaged. The hope must be that something can be salvaged from the wreckage, which is why Hefce is planning to turn it into an outfit that supports universities and colleges in their e-learning activities. The £30m of taxpayers' money remaining from the original £62m will be spent on that, according to Hefce. The interests of students on existing courses will be protected, it adds, and collaborative ventures such as the e-China project will go ahead.

Who are the students that have been recruited? The e-university is answering press queries only by e-mail. A spokeswoman said she didn't have a breakdown of students by region but that they came from 38 countries, including China, Hong Kong, Singapore and the UK. John Beaumont, the chief executive, who was only too happy to talk a year ago, was unavailable for interview.

The e-university's website reveals that, of the three initial Masters degrees launched a year ago, two have survived. They are a Masters in public policy and management from York University, an already established course adapted for the global market, and an MSc in information technology and management from Sheffield Hallam University. A brand-new course in e-learning from the Open University and Cambridge has been renamed. The e-university's spokesman says that this is now called a postgraduate certificate in online and distance education. The website also shows a host of new courses, 11 of which were due to start last week. No mention is made of the changes taking place to the company. According to the spokeswoman, the e-university is still receiving applications from students and courses are still running.

It is not surprising that the funding council wants to protect the e-China venture: it must be lucrative and is certainly useful in fostering co-operation between the two nations. Lasting three years, it exists to train secondary school teachers in how to teach and train teachers of English as a foreign language at secondary and university level. University staff will also be trained so that they can teach their subjects in English and take part in international conferences.

If that is successful, something valuable will have been rescued from the e-university episode. Asked what taxpayers had got for their £62m investment, a Hefce spokesman replied, "Quite a lot of learning and understanding about the problems encountered in an exercise of this kind, and how to take that forward. And you have a platform, partly financed by Sun Microsystems and partly by us, that is working."

The e-university is proud of its platform, an expensive piece of software that delivers the courses to students and provides them with their materials. But higher-education observers are highly critical of the decision to invest so much in it. And Professor Mike Kelly, the director of the e-languages consortium at the University of Southampton, says it is still not finished. "It needs another £10m to £20m spending on it," he says. "It's an elaborate and ambitious piece of software and very innovative. But it probably needs another two to three years of development before it's workable."

To focus on investing so much in this platform was a mistake, says Paul Leng, a professor of e-learning at Liverpool University, which has two online degrees that it runs itself, quite separately from the UK's e-university. "We took an off-the-shelf platform for our degrees, which was quite adequate for our needs. If you put a large amount of money into the platform, it becomes very hard to cost the degree at a level that is realistic without cutting corners elsewhere."

E-learning, he says, should not be driven by the technology, but by the learning needs. "The key factor is the creation of learning communities, an environment in which students can interact successfully with each other and their teachers," says Professor Leng. "What makes our degrees successful at Liverpool is that students find the mode of learning stimulating, because there's a lot of interaction between the students and the teachers. The platform is very basic, but that is all we need."

Universities signing up with the e-university are having to teach the degrees from within their own resources. That presents another problem because international students studying, say, an MBA online may need access to experts around the world. The fact that the universities are not given the money to provide these extra tutors may mean they have to keep their courses small. And that works against recruiting large numbers of students to make the e-university viable.

Stronger criticism comes from Professor Steve Molyneaux, the director of the Learning Lab and one of the UK's leading experts on e-learning, who says that the e-university has been worse than a failure. "It's been a fiasco," he says. "The signs were there from day one when people turned around and said the business model wasn't right."

Pearson was one company that pulled out of the venture early on. It would have been better, says Professor Molyneaux, if individual universities had been given the money to develop their own online courses with whatever private partners they could find, and the Uke-u had been the portal. The problem was that the e-university was a hybrid, according to Professor Mike Kelly, the director of the e-languages consortium at Southampton University. It tried to link technology, academe and commerce and was pulled in three directions as a result. "It didn't know whether it was a commercial start-up company, a university or a commercial company," he says. "Each of these three components was in conflict."

Other organisations have also struggled to establish online degrees. Scottish Knowledge, originally bankrolled by Rupert Murdoch's NewsCorp, was in effect taken over by Stirling University after NewsCorp pulled out. Universitas 21, the collection of top international universities, is also having difficulty getting its online degrees going. One of the problems has been that students have preferred to sign up for degrees where they get face-to-face contact in addition to online work - what is called blended learning. Another problem was the competition the Uke-u faced from other online universities such as Phoenix in the US. Professor Robin Middlehurst of Surrey University says that the most successful e-operations are built on the back of successful face-to-face ventures. "They have been in the business for a long time. The evidence is that people who have been successful have had to keep investing and expanding for a long time."

It was difficult for the UK e-university to differentiate itself in a crowded marketplace. Part of the reason was that others got going faster because the Uke-u was concentrating on its platform. And the number of students it planned to recruit was always over-optimistic, says Richard Garrett, the deputy director of the Observatory on Borderless Education. "It suffered from hype and a lack of realism. There was this feeling that if we didn't set up our own national virtual university, someone else would. Everyone was overestimating the impact of the internet."

Richard Garrett and others think that Hefce should have had a reality check two or three years ago, after the dot.com bubble burst and when the private sponsors failed to materialise. If, at that stage, the e-u had been turned into a centre that all universities could use rather than a commercial venture, money might have been saved. Concern is being voiced about the amount of cash that has gone in wages, particularly considering how unsuccessful the venture has been. John Beaumont, the chief executive, earned £180,000 in 2002/03. He also received a bonus of £44,914. Staff costs for the company that year were £2.5m.

The question is whether David Blunkett was right to get fired up - together with Sir Brian Fender, the former Hefce chief executive - with the whizz-bang idea of a global online university. John Fielden of Chems Consulting thinks he was. "It was right to have tried, even if it didn't work," he says. But whether the precise form it took - that of a purely commercial company - was right is another matter, as is the question of whether an expensive and elaborate platform should have been built in place of something off the peg.

l.hodges@independent.co.uk