The legacy of UKeU's failure is revealed

Rising wages, growing losses and a large collection of creditors are the legacy of UKeU.

A confidential document, leaked to Computing, reveals the extent of the problems at the government-funded online learning scheme.

The document has been sent to creditors and paves the way for a wind-up of UKeU.

The £62m project was announced in 2000 in a bold attempt to engage the UK's 100-plus higher education institutions in online distance learning.

It was hoped that UK universities would use the platform to cash in on the increasing demand from foreign students for a UK education. But four years on, UKeU failed to fulfil its aims.

The leaked document shows that staff costs at the company almost doubled during the final financial year of 2004, from £2.6m to £4.8m, as annual losses reached £13.4m.

As early as May 2003, Computing was the first publication to sound an alarm bell.

We revealed how UKeU had launched only a handful of online courses after already committing nearly half of its funding.

The investigation detailed how just two courses were live - and only 15 of the UK's 100-plus higher education institutions had signed a contract to produce a course for UKeU.

Even at that early date, the company was eating through its budget fast.

It needed to spend £20m through to March 2004 on infrastructure development, and another £8m had been committed to the creation of more university courses.

We continued to follow the project as UKeU announced a series of degrees through partner universities, including the University of Southampton, the University of Ulster and King's College London.

UKeU chief executive John Beaumont told us that elearning would continue to 'evolve'.

But progress began to grind to a halt when we reported that funding body, the Higher Education Funding Council for England (Hefce), was to 'hold immediate talks' with UKeU after it failed to meet its first-year target of 5,600 students, (Computing, March 4).

We then revealed that almost £40m had been spent on UKeU to attract just 900 students - £12m more than was suggested a year before. (Computing, 1 April).

We also detailed how Hefce had provided £32.6m for UKeU, mainly to support the creation of an elearning infrastructure - and a further £7m to set up the project and various online learning programmes.

At that point, Computing called for a review of the money spent on the organisation.

Problems began to stack up even further for UKeU.

We reported that the initiative was to be scaled down (Computing, 29 April) and its work transferred to established universities with the business and assets of UKeU put up for sale (Computing, 13 May).

In May, documents leaked to us revealed how the elearning scheme responded to a critical report on its progress from PA Consulting by asking for a further £15m funding (Computing, 27 May).

The report concluded that the project lacked focus in planning and management, that UKeU's bespoke infrastructure had no clear competitive advantage and no provision had been made for private sector funding.

Just two weeks later, MPs announced an inquiry into UKeU, following our-year-long investigation into the failed online learning scheme (Computing, 10 June).

We continued to keep the pressure on the organisation as the final cost of the failed elearning programme was confirmed as £50m (Computing, 24 June).

An Education and Skills Committee's inquiry showed that UKeU's directors received performance-related bonuses of more than £100,000 in 2002/03 (Computing, 1 July).

Finally, came this week's revelations - and the news that UKeU's losses and wages reached a new high in the final year of the company's operation.

'If they'd have listened to the alarm bells Computing sounded last year, how much money could have been saved?' said elearning expert and director of the LearningLab, Steve Molyneux.