University on the ropes: Is it the beginning of the end for London Met?

A dispute that, according to MPs, threatens the very survival of London Metropolitan University, the capital's biggest higher education institution, is spilling over on to London's streets. Last week lorry drivers on Holloway Road in Islington watched as a group of students and staff picketed a meeting of London Met's governors.

"Save our Staff" and "London Met on the Roper", a reference to the university's vice-chancellor, Professor Brian Roper, screamed the banners.

The university, which has 34,000 students, has long attracted controversy for the militancy of its staff and students, but the latest row is a more serious matter. This crisis is over an attempt by the Higher Education Funding Council to claw back more than £50m of money that London Met should not have received. It is believed that as many as 500 jobs could go as a result of the university having been overpaid for student dropouts since 2005, and the unions are furious, claiming at the same time that the university is being unfairly treated by Hefce but that neither the managers nor the governors have explored the alternatives to redundancy.

"The University and College Union are very concerned that the Hefce regulations appear to discriminate against widening participation," said a UCU spokesperson. "But we also feel very strongly about the fact that the management are not consulting the unions as they are required to do in law and that they have not considered alternatives like a freeze on new appointments."

One of the issues in dispute is whether students who did not take their assessments at the end of the year but were intending to take them the following year should be classified as drop-outs. Hefce considers them to have dropped out and says that its funding definitions apply to all universities regardless; UCU believes they should not be classified in this way on the grounds that they need all the help they can get to complete the course.

London Met, which has two campuses, one in the City and the other in north London, close to Highbury Fields, runs programmes with a strong professional and vocational emphasis and has a lot of ethnic minority students. For a long time it has also had a high drop-out rate.

Four years ago it commissioned a report into its drop-out rate, which was much higher on the north London than the City campus. This reflected the historic drop-out rates of the two universities – North London and London Guildhall – that were merged to form London Metropolitan University in 2000.

The report, by the think tank, the Higher Education Policy Unit, concluded that north London's higher drop-outs were due to the fact that it sees itself as a neighbourhood institution, with a very open access policy. It has relatively high numbers of students with GCSEs as their highest qualification.

The current furore stems from an audit that Hefce conducted last year. The funding council carries out regular audits of all universities on a five-year cycle. "Every university has to make an annual data record to show how many students they have, full-time and part-time, each year, and whether they have completed the year," said a Hefce spokesman. "It is in those records that we found they were misreporting."

Professor Brian Roper, who runs London Met was not available for comment. But Beth Elgood, director of marketing and communications, would not confirm any of the figures concerning the amount of money that Hefce wanted to claw back or the number of redundancies the university was considering. Talks were still going on with Hefce, she emphasized. "We have not agreed or specified a number of job cuts yet," she said.

However, Barry Jones, the London regional official for the University and College Union, said that UCU had been given some fairly solid figures. "We are disappointed that things have got to this stage," he said. "We are very determined that we will participate constructively and openly in consultations, the objective of which should be to enable the university to get out of this pickle in a way that preserves jobs of our members and the education of our students.

"It has got to be a strategic discussion as well, which at the moment it hasn't been."

The dispute has also hit the House of Commons. An early day motion signed by MPs says that the scale of the cuts – an £18m reduction in teaching budgets and £38m in claw-backs for previous years – "throws the future viability of the university into doubt at a time when education and training are vital to the capital's economic health".

Many in the union and the university are hoping that Hefce will give London Met five years in which to pay the money back. But other observers are not so sanguine. Professor Roger Brown, the former vice- chancellor of Southampton Solent University, believes that London Met could have long-term problems of viability.

"After 2011, because of demographic factors and the bill for the credit crunch arriving, we will see a number of the more vulnerable institutions facing very serious problems," he says. "We need to get ready for that now."