The Spark - newsletter from the Open University Branch of the Univesity and College Union.
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OU UCU - The Spark, May 2016

Regional dispute – ballot and agreement

The ballot on the regional dispute remains open until 12 noon on Friday 20th May.  If you haven’t yet voted, please remember to do so in good time.

The Executive is recommending that you vote to accept the agreement, as it includes real and substantial gains over the initial offer.  We have produced FAQs and a commentary on the proposed agreement, which you can see at  If you have any queries please contact

Rejecting the agreement would mean that these negotiated improvements would not be available to members.   We believe that only prolonged, sustained industrial action would have any chance of moving the University further and improving the offer.

Please be sure to cast your vote, whichever way you vote.  It is very important that the whole membership makes a collective decision this dispute.

Contents of this issue:

UCU National Pay Claim 2016 and Industrial Action

You will have seen the emails from UCU national office announcing that the membership has voted to take industrial action over pay.  We are still in a local dispute over the regional closures and recognise that this has inevitably had an impact on members.  However, we have had another terrible pay offer, coming after years of below-inflation increases. This has led to a real-terms fall of 14.5% in the value of your pay packet since 2009.  The money is available in the sector, and UCU believes that if finances are buoyant enough for senior management to take significant pay rises, then staff also deserve to make up some of the lost ground. Vice Chancellors have accepted an average of 3% over the past year, so it’s time to acknowledge the hard-working staff who have suffered real-term pay cuts year after year.  

We are asking all members to take part and show determination to achieve fairer pay.
  • We will be updating guidance on Action Short of a Strike (ASOS), and we will forward a link as soon as it is available.  If you have ideas about how action in your area could have an impact, please contact so that we can check that it falls within legal limits for ASOS.
  • Strike days have been announced for 25th and 26th May. We ask you to take strike action on these days.  If your manager asks you in advance whether you intend to take strike action, you do not have to answer.  Not answering can increase the impact of the strike by making it more difficult for the management to plan around it.  When asked after the event whether you took part in the strike, you should confirm that you have.
  • Separate advice will be issued for ALs over what to do if you have a tutorial or other student activity scheduled for a strike day.
We will be setting up pickets on strike days as usual at Walton Hall and regional and national offices.  Please send a strong message by joining the pickets and showing your support.  
Visit for updates on the national pay claim.

Pay information
UCU’s new ‘Rate for the Job’ tool shows how pay in HE has been eroded. It also provides gender and role-based comparisons. Be sure to have a look and see how your pay compares.
Picket line outside the OU offices in Gateshead, December 2015
Picket line outside the OU offices in Bristol, December 2015

Regional Members: Offer Letters

At-risk regional staff were asked to submit their indications of preference by 4th April.

CAU members have been receiving their offer letters over a period of time as decisions were made.  Some staff who have opted for homeworking have been given start dates in the near future, and this is fine for those staff who choose to start homeworking early.  However, if you would prefer to stay office-based for longer, up until the date that your regional office closes, then do make sure that you specify a homeworking start date that suits you. If you experience any difficulty getting agreement, let us know.

Non-CAU staff have now also received their official offers from the University.  We are aware that there are members who have not been offered their first preference.  Under the proposed agreement there is a clear process for the University to follow when considering individuals’ circumstances and preferences and making an offer.  We have made it very clear to management that although the ballot on the agreement is still open, we expect the University to act within the spirit of that agreement in the meantime.  We have told management that we need an urgent response on how it intends to help staff through this process and address their concerns, and we are expecting a response shortly.

In the meantime, we are offering the following advice to members who are unclear, unhappy or unsure about their offer:
  • If you cannot meet the deadline stated in your offer letter, contact to ask for an extension.
  • If you have questions to ask about what you have been offered, including the terms of your offer, contact
  • If you are unhappy with the offer, contact and ask for details of the appeal process.  Explain what you wanted to be offered.
  • Remember that you can request further 1-1s if you need them, and that you are entitled to be accompanied by a UCU rep.  If you think a 1-1 would be helpful, request one through  Tell them if you want a UCU Rep to accompany you and they will arrange this with us, or you can contact directly to ask for one.
  • Check our FAQs at to see if your question has already been answered.
  • If you have any remaining queries or need any advice on how to proceed, contact  We will answer your queries (please bear with us as we work through them) and if you need further help we can assign a caseworker to work with you.
OU UCU recruitment table outside the Hub, 17 May 2016
Branch President, Pauline Collins, May 2016

New SRSCs: Extended Hours and Shift Work

The proposed agreement defines a process for the University to discuss extended hours and shift work with staff in SRSC roles, balancing business needs with individual needs and the right to a healthy work-life balance.  We were extremely concerned to hear from members in Manchester and Nottingham that management were trying to force through the variable 8-week shift patterns, without listening to staff concerns and absolutely against the spirit of the agreement.

Our negotiators called an emergency meeting with senior management and left them in no doubt that we saw this as a breach of the agreement, and that we would not stand for it.  We believe that this situation has now been resolved.  If there are concerns or queries remaining after this, let us know.

We will continue to monitor the way that the extended hours are implemented, and to make sure that the University keeps to the spirit and terms of the agreement.  If there is any backtracking we can and will challenge management and take action to protect the rights of our members.

Staff who are relocating to an SRSC role affected by extended hours will be brought into the same consultation process as equivalent staff in Manchester and Nottingham.  This should be explained with your offer of relocation.  (If you were expecting an offer of relocation but instead received an offer of redeployment, please get in touch.  We are aware that some members were not offered relocation in SRSC roles because of the shift patterns, and we can work with you if you want to challenge the decision.)

If the university decides to implement extended hours and shift-working in other offices / areas, such as the national offices, this would trigger negotiations with the unions. We would seek the same arrangements and considerations as for SRSC staff.

NB: SRSC stands for Student Recruitment and Support Centre
OU UCU members on a picket line at the OU office in Oxford, well done ladies!
UCU National President joins one of the picket lines outside the OU office in Camden, London

Locations and Equality: Everyone Has a Place

This blog on equality issues was written by a member involved in the Regional Campaign:

Reconfiguration of Faculties

UCU has received regular updates on faculty re-configuration.  Information packs have been made available and faculties have been communicating with staff both face to face and via intranet sites.  No faculty is yet able to answer specific questions about what this may mean for individual members of staff.  Reassurance has been given that this re-structuring is not about reducing head-count and therefore no compulsory redundancies are expected.  There may, however, be changes to some roles.  UCU will be briefed on new full structures ahead of any discussions with staff about how their roles map onto the new structure.  
Members should raise any concerns they have with their Faculty reps and directly with the Branch office

Faculty of Business and Law (FBL): Review of the Programme Co-ordinator and Student Experience Academic-related Resource

FBL has announced a review of selected academic-related roles on the basis of a claimed ‘duplication’ of work and extra costs. This started in early April, meaning that some of the regional staff affected turned in their preference forms for the Locations Closures only to be told that their posts are now under separate review. UCU held a meeting in FBL on April 20th to hear from over 30 affected staff and others concerned about trends in FBL.  This included the inflexible approach to staff preferences affected by the closure of regional centres. Ahead of this meeting, the President was outraged to hear by email that staff members felt intimidated about attending a union meeting in case this was noted by management.  Despite a UCU request, the Interim Executive Dean declined to send a reassurance to staff.

UCU is now holding regular coffee events in FBL to show support for staff and campaign against alleged intimidation.  The next scheduled event is on 9th June.  Please contact UCU if you’re able to come along. (Further information to follow.)
OU UCU members on a picket line outside the OU office in Leeds, with our rep's beautiful Guide dog.
OU UCU members on a picket line outside the OU office in Belfast.

Recruitment: Volunteers Needed

The branch Recruitment, Organising and Campaigns Committee (ROCC) is being re-energized.  We are looking for volunteers to help organise recruitment events and raise the profile of the union. It’s not a huge commitment—we just need your enthusiasm! There are 5 or 6 online meetings per year, so this isn’t more than 1 or 2 hours per month. Please phone 01908 6(53069) or email

For national recruitment week (w/c 16 May), all eligible staff (grade 7 and above) who were not currently UCU members received a recruitment email from Sally Hunt, and we also handed out "10 Reasons to Join" leaflets in the wind tunnel, Walton Hall.

Update on the Negotiations for a New AL Contract

The negotiations began in 2015 with the aim of providing greater job security for Associate Lecturers.

Both UCU and the management side are confident that good progress is being made on the contract negotiations. The majority of issues surrounding the development of the new terms and conditions that underpin a new AL contract have been discussed and largely agreed. The calculation of AL workload at both a module and a whole-contract issue remains a large area still to be agreed, but both sides understand each other's respective positions on the matters of substance. This will have material impact on what salary an AL would receive for what amount of work, so we have to get it right.

The negotiation process is focussed on developing a position acceptable to both parties. The transition from the current to a new contract has been covered in a fruitful workshop. This explored the concept of 'no detriment' for ALs in relation to a guarantee of salary of ALs coming into the new contract, and with no additional workload expected for the same salary. We are currently exploring the provision of IT services and equipment for ALs.

There is a strong commitment by both parties to conclude the negotiations by the summer. This would allow a ballot of members and implementation for August 2018.

There is further information in a Snowball article published in the March issue:

OU UCU AL negotiators
(Bruce Heil, David Knowles, Judy Ekins and Lydia Richards, UCU Regional Official)

Full list of OU UCU negotiators is on the branch website:
OU branch of UCU stand at the OU's Learn About Fair on Charter Day, April 2016
OU UCU members in the wind tunnel on a very cold day

UCU's "Cradle to Grave” Conference on 6th Feb 2016

The OU branch was very well represented at this event, with 16 OU branch members present. This is hardly surprising given the central importance of lifelong learning to the OU’s mission, which for many branch members remains at the heart of what we do.

Video highlights of the conference, including Jeremy Corbyn’s contribution, can be found on the UCU national website: including short interviews with participants, one of which is with Rafael Jelic, an OU branch AL rep.

We have several short articles from branch members who were present, but due to the amount of material in this issue we have decided to hold these over.

Lesley Kane, Hon. Secretary

AL Salary – Correcting Some Myths

The current AL contract and salary system have survived far longer than anyone expected back in 2002, or even at the time of the National Framework Agreement in 2005.  Myths are taking hold, based on outdated information, or on ignorance of what AL salary pays for. Here are three of the most widespread misconceptions:

Myth number 1
“ALs are paid to tutor a standard-sized group, and student drop-out means they are marking fewer TMA scripts. Hence the university is paying them for more hours than they put in.”  Actually AL salary is based on the assumption that ALs will not mark a full quota of scripts for each TMA. Every faculty and level has an assumed TMA submission rate given in the table on our
branch website. At Level 1 the assumed TMA submission rate is a bit above 60% in most faculties. This usually corresponds to an attrition rate of around 50% during a module presentation. The attrition rate is not something to be complacent about, but one should be aware it is already factored into AL pay so it is simply not true that ALs are being paid for work not undertaken.

Myth number 2
“ALs are paid for 2 staff development days per module presentation.” The
AL terms and conditions make it clear this is 2 days a year per AL, not for each module appointment held: “All continuing Associate Lecturers will be expected to undertake the equivalent of up to two days per year of pedagogical skills development that covers areas of learning and teaching that are wider than the teaching and conduct of a specific course.”  ALs should be paid for module-specific staff development if it is required. The two days were originally intended for ALs to work for accreditation as HE lecturers. In spite of assertions that AL salary covers these two days, no money was provided to pay ALs for this time.

Myth number 3
“AL salary is enhanced by about 10% over and above the normal HE pay rates.”  Leaving aside that most ALs put in more than their nominal hours, there are several reasons why this is not true:
  1. The so-called “enhancement” includes a very small salary component to cover email communication with colleagues and the OU, which is a genuine workload not otherwise included in AL pay.
  2. One must remember that the salary bands are just figures to which the OU rounds module salaries, and as such they cannot confer a salary enhancement. Modules are assigned to bands according to their "theoretical earnings", mostly calculated in a similar way to the average pre-2002 piecework pay for a standard sized group. This is rounded (usually downwards) to the nearest Point 1 (national point 30) salary band. This means that increasing the Point 1 pay for a band would simply move the goal posts and some modules would fall into lower bands. Moving the banded salaries up or down would make little difference to the overall salary costs, because the winners and losers balance out.
  3. The claim of a 10% enhancement goes back to 2001, when the theoretical earnings were calculated for the first time. In 2001 the rolled up expenses, plus the salary component referred to in (i) were about 10% of the total AL salary costs. However, the expenses have been frozen since 2001, and now amount to about 5% of AL salary costs. ALs do of course provide their own computers, printers, stationary and other bits and pieces out of this, so it’s hardly a handout.
More detailed information on this can be found in the second document on the AL page of our branch website.

Lesley Kane, Hon. Secretary
OU UCU members at an AL staff development event in London, March 2016
Deb's new homemade banner on International Women's Day - March 2016

AL Issues - Postcode Recruitment

Our UCU branch has received repeated complaints from AL members who are not being considered for replacement work in locations they can easily reach, and where they may already have work.

This is now an acute issue in FELS and at least one other faculty. In cases where an AL with PC or MOLD status is being told they can only apply in their ‘home’ region, the university is breaching its AL redundancy agreement with UCU, and is in danger of acting unlawfully towards ALs who are potentially redundant. The university’s stance is also unnecessary in view of the increasing importance given to online tuition which is independent of geography.

Postcode recruitment became an issue after the AL Interim Agreement was misinterpreted in 2012. The text agreed with the university states:

“Management have also adopted a new approach to AL recruitment which introduces a number of additional benefits to ALs.  There is no longer a need to apply to each location and module presentation start in order to be considered.”

This is the opposite of what is actually happening. We feel it is particularly cruel to dismantle the workload of longstanding ALs with multiple appointments when we are in sight of a new contract that will protect their workload. In some cases the university is bringing in external applicants while reducing the workload of experienced ALs against their wishes.  This is not in the interests of the university and goes against the direction of travel in creating a new AL contract.

We have had several years of hedging from OU management over postcode recruitment, with responsibility said to lie in the faculties or the computer system.  Through our redundancy consultation process we have proposed that there should be a national recruitment process for new modules, with ALs interviewed in one region only and then considered for appointments in all locations they can reasonably travel to.

We have also logged disagreement at the OU-UCU Joint Negotiating Committee over postcode recruitment, with the intention of invoking arbitration if a reasonable solution is not found.

In the meantime we advise AL members to ask if they are being considered for work in locations they can reasonably travel to, especially if they currently work there, and contact UCU at for further advice if necessary.

Lesley Kane, Hon. Secretary and Judy Ekins, ALs Officer
Here is our Branch AL Officer Judy Ekins asking the Vice Chancellor a question at an event in the Berrill Lecture theatre - Judy has been an OU AL since 1973.

Module Pay and Workload – Time For a Reality Check?

Over the years we have not been short of complaints from AL members, saying that the time required to tutor their modules is not reflected in their pay.

The workload surveys we conducted last year confirm that on many modules these complaints are justified. Moreover, the lack of reality-checking by the OU where AL workload is concerned has left ALs open to pay cuts when modules are replaced, and often ALs find there is not a real reduction in workload. This is particularly acute when new 30-credit modules are pushed down into salary band 2.

We have reason to believe that there is likely to be some good news soon about the AL salary on two such modules, for which band 2 pay has proved clearly unsuitable. We hope the university will learn from these cases. UCU believes that salary band 2 pay is unsuitable for mainstream 30-credit modules with 15 or 20 students, because it means that ALs are doing unpaid work in order to give students the minimum feedback and support they need.

Another area that needs addressing is the inadequate pay for student support on many modules. More and more is expected of AL staff, and yet the pay for student support is just 45 minutes per student (over an entire presentation) on many 30-credit modules at Levels 2 and 3.

The university needs to do better than this, and there is clearly a need for a review process of AL workload after modules have gone live to cater for cases where the real workload for real students is greater than anticipated.

Please note: The OU UCU AL Reps Committee is constantly addressing AL issues and if there’s anything you want to raise with them please contact

Lesley Kane, Hon. Secretary

Contingency Leave and ALs

The OU’s contingency leave policy has been re-drafted to include ALs, and with a form of words that was agreed with our AL Reps’ committee.  In the event of a death in the family, or other serious crisis that prevents you from working, you should refer to the policy which can be found at the following address and speak to your line manager if necessary.

Learn-About Fair’ and International Women’s Day

UCU was visible at the ‘Learn About’ Fair for the first time, highlighting the training and professional development on offer to members. Of course this includes ‘traditional’ union programmes on employment law, equality issues, health and safety and casework, but we also offer training on leadership, time-management, academic publications and building a research career.  For more information see:

We also had a stall for International Women’s Day at which we gave out UCU’s wall chart on international women’s activism. For a copy please contact or drop by Room 015, Wilson C block.
UCU members in Bristol with their Charter Day cake and Pledge!
UCU's alternative Charter Day cake

Our Voice: How to Contribute to Setting Union Policy

Unions have lots of procedures that can be alien to new members. Once you understand how it’s done, you too can help to set policy and put forward your ideas about important issues that the union should tackle.  
UCU policy is made by its members, and any member can suggest a policy.  Proposals are written as “motions”, normally following a standard format:
  • the title
  • A brief summary of the facts relevant to your policy suggestion, which must be evidently true.  This can be written as “This branch (or Union) notes...”
  • Your opinion on why action is needed, written as “This branch believes…”
  • The policy you are suggesting, written as “This branch resolves…”.  To instruct a UCU branch or Officer to take a specific action, you can say “This branch mandates X to do Y”.
Here’s a made-up example:
This branch notes that only 10 members have submitted motions to branch meetings within the last year.  This branch believes that:
  1. Policy should be driven by the full breadth of the membership, and
  2. More members need to know how to write policy motions.
The branch resolves to encourage members to send policy motions to the branch general meetings.  The branch mandates the Exec to publish an article on how to write a motion in the next edition of Spark.
Send your motion to the Branch and it will be considered at the next available general meeting.  You will be asked briefly to explain the idea at the meeting before the membership votes on it.  If writing motions is not for you, just send your policy idea and we can turn it into a motion for you.
Motions on local policy can be sent at any time. For national policy, motions normally have a deadline in mid-March. This is because national motions are sent around to local branches for consideration well in advance of UCU Congress, which is in early June.  For further advice or to submit a motion, please contact

General News: Reps and Casework

We are very pleased to report that Lindsay Brigham has volunteered to be the UCU rep for Gateshead.  Chris Williams is a second UCU rep for Arts with Caitlin Adams being the other one.  Julian Ziegler has agreed to be the UCU rep in IT while Kate Servant is on secondment to UCU for 6 months to help with Regional Casework and the negotiations.  Thank you to all!  

There is a full list of all OU UCU reps on this page on our branch website:  Want to be a UCU rep or publicty contact then contact

Financial advice for UCU members

UCU provides a range of financial services along with other membership benefits and it has recently signed a contract with the Lighthouse Group to provide financial advice.  Further information is available at this address:

Letters to the Editor

The OU branch of UCU welcomes submissions from members for inclusion in this newsletter, which is published 3-4 times a year.  Please contact if you would like to submit something or have an article or item to suggest.

The editorial policy for the Spark newsletter is on our branch website along with all the past issues of the Spark:

10 Years of OU Student Recruitment & Retention (000s)

"From a peak in 2010 the chart below shows a considerable, and continuing, fall in student recruitment and retention.  In headcount we’ve lost 34% and in FTE we’ve lost 21% of students.  The OU senior management undoubtedly have a very good idea about the 2015-16 student numbers but the OU community is only, fatuously, told that we are ‘on target’.

Rather than trying to close down most of the Regional Offices and reducing our student support to ‘call centres’, the OU’s senior management should examine this chart.  The management should be concerned with increasing student support rather than sacking hundreds of experts and turning Staff Tutors and Faculty Managers into remote and isolated homeworkers.

An anonymous member

Not Quiet on the North-Western Front

"Our previous Manchester office UCU rep had just left the OU before the Locations report was to be I volunteered to stand in as the rep just days before the announcement.  In at the deep end!

When the outcome was announced there was no sense of relief in Manchester. To state the obvious, we were clearly in a slightly different place from those that had been dealt the bitter blow of being told their regional office was closing. However, we were angry and felt devalued. It was obvious there was no proper logic in what we were being told about the reasons for the closures. It felt as though the regional offices were an inconvenience: best to get rid of them. We had dodged one bullet, but we felt (and still feel) we would be next in the firing line.

We felt deeply for our colleagues facing losing their jobs. It brought us closer to our colleagues in all the regional and national offices and more distant from those making the decisions at Walton Hall.  We have tried to do our part. Going on strike, signing letters, writing on Yammer, taking every opportunity to raise questions with any manager that visited us. Keen to try what we could in the faint hope that the regional structure could be saved.  To us the expertise that all our colleagues had was critical to the success of supporting students. The ease with which that was dismissed sent a clear message of how little we are all valued.

Our morale is very low, and there is no effort to address this. Senior managers seem to find this puzzling. There is a clear view that we should be grateful we have jobs. Unlike some elements in the OU we care about this institution and its students, so of course we find this sorry state of affairs demoralising.  We are heavily affected.  Our jobs are changing.  Our physical surroundings are changing.  The management of our work is changing.  And potentially things like hours of work are changing.

By the time you read this, our old desks in learner support will have gone, and a new arrangement more suited to battery hens will be in place. We will be squeezed into one half of the room for about a month whilst building work takes place at the other end….

The physical layout is on the basis of squeezing most people in. Only after that they are going to work out how we are to work together, and the organisation and size of the teams. You might think that a more sensible approach might have been to decide how the teams might work, and then design the space to accommodate that. But that would be logical, and in this project that is noticeable by its absence.

Our library has gone.  A small space, but part of what made us a university.
One moment we were told, you won’t have to work longer hours to 8pm in the evening and on Saturdays. Then they change their minds. And not only that, here is the sort of shift pattern you will work, which is different each week and quite often each day! Not exactly conducive to a work/life balance.

All the decisions are made by faceless and nameless people who have displayed no knowledge of what is needed to keep students on board. They have thought up an idealised perfect system. The fact this won’t work in the real world with real students is irrelevant. We have no say.

Staff are normally valued as the key resource that will make the institution successful. But here we are just seen as disposable. Just like battery chickens, the OU no longer cares what happens to us.

The one good part is that the union has given us a focus for support, and our bonds have become tighter. So thanks to our union negotiators for trying so hard not only for our colleagues who are losing their jobs but for those remaining to try and negotiate better terms and conditions. And we really do hope that some colleagues from closing locations will come and work in our office, because we at Manchester do value what they have to offer very much."

Elaine Walker, UCU rep for Region 8 Manchester
The Library at hte OU office in Manchester is now closed.

FutureLearn: Alarm Bells?

"A trawl of the OU’s Council Minutes and Financial Statements (those which have not been, in effect, redacted) suggests that the OU’s FutureLearn is growing into a very large and loss-making venture.

FutureLearn has attracted 3 million students to its courses, including 300,000 to the OU produced MOOCs.  These are certainly headline-grabbing numbers but research indicates that between 90-97% of these students do not finish the course (courses are usually 6-8 weeks duration).  Also, the overwhelming majority of students taking a MOOC already have a degree or above.  David Willetts said MOOCs "will revolutionise conventional models of formal education" but others see MOOCs as a “lousy product”, one which strips out teaching and assessment as it conflates information with learning.  MOOCs are the outcome of the careless precedence of technology over education - and they are, plainly, not working.

Is anyone else putting in any cash?
The OU’s FutureLearn Ltd is a large consortium of Universities and other institutions.   However, only the OU has actually provided any hard cash.  The OU has made a virtue out of this situation by saying that it “avoid(ed) creating a potentially intrusive and time-demanding group of shareholders.”  However, others may be reluctant because no-one has discovered:
  • a way to make revenue from MOOCs (although anyone can buy a ‘completion certificate’ for £24)
  • how to transfer students from MOOCs to fee-paying university courses
  • how to retain students without tutor support, teaching and assessment.  
Despite this, it looks like the OU has decided to pursue the MOOCs no matter the costs or risks.

External assessment: doubtful
It is not easy to follow the convoluted trail of disjointed minutes and notes but it appears that the OU’s FutureLearn started out in 2012 as a MOOCs venture to “embrace the opportunities of the digital age”.  KPMG was engaged. It noted that the projected income was “uncertain” and that the “earliest point of demonstrable revenue would be 2014”.  KPMG would not recommend the OU proceed but they did say MOOCs were a significant opportunity for the OU and that the risk was small in relation to the OU’s reserves.

Early days and escalating costs
This was less than a ringing endorsement from KPMG but the OU decided to set up FutureLearn as a separate limited company and fund it with £2m, plus another £1m for any potential closure costs.  At the time this £3m was said to be the OU’s “maximum exposure”.  However, it transpired that this funding was only for the initial set-up phase and that further tranches of cash would be necessary.  At one point it was suggested that the funding be raised to £7.5m to allow for closure “after 18 months” if no revenue had been achieved.  The initial set-up costs were later revised to £4.9m.

Is a business plan being scrutinised by anyone?
The OU’s Finance Committee is the only shareholder, so it oversees FutureLearn and reports to the OU Council.  Although an outline of FutureLearn’s finances (including FutureLearn’s staff costs) are reported in the OU’s own annual Financial Statements, the following are not publicly available: FutureLearn business plan, benchmarks of development, milestones, objectives or targets.  This is deeply worrying.  All we have is a note which says that FutureLearn aimed to break even in 2017 and that it estimates its “maximum costs” would now be £12.6m plus £1m for any closure.  Later on this was revised to £15m plus the £2m already approved.  In January 2015 , it was reported that FutureLearn was “focussed on delivering the significant increase in revenue in 2015-16 forecast in the business plan…”  What this “significant increase” could be is unknown.  

But we do know that FutureLearn’s turnover appears to be only £100,000 per year.  Given this level of turnover a significant increase in revenue in 2015-16 is unlikely and it’s also highly unlikely that FutureLearn could break-even in 2017. In fact, it appears to need a £4 - £5m injection each year just to stay afloat.  There’s also no mention of paying back any of the £12m already ploughed into the company by the OU.

Student transfer and income generation?
Early on the OU said that it would track entry from MOOCs into formal OU learning. This is important because the revenue from Futurelearn is supposed to be derived from those “who may choose to pay for additional services’” and through the “interest it may create in [the OU’s] core credit bearing curriculum” especially as the academic staff time invested from the OU is paid for by the OU’s teaching income.  Basically, FutureLearn is designed to act as a pathway for a transfer of students to the OU, intended to be “significant driver of revenue”.  To date, there is no evidence showing student transfer from MOOCs to the OU’s credit-bearing and income-generating courses.

The cash and share details
The OU’s Financial Statements show that FutureLearn was launched in December 2012 and funded with £1.9m from the University.  The OU issued share capital of £2.5m.  In 2013-14 it was given a further £4.8m.  The OU issued £7m of share capital.  FutureLearn received another £5.4m in the financial year 2014-5.  The OU issued £11.6m in share capital.

The actual costs (losses)
FutureLearn losses were reported as £4.7m in 2013-4 and £4.5m in 2014-5 (plus presumably, the initial £1.9m).  In other words, FutureLearn has lost everything the OU has put into it.  We do not know the additional costs of the OU staff resources and expertise ploughed into FutureLearn. In June 2013 the FutureLearn financing limit was set by the OU at £17m, and despite (or perhaps ‘because of’) these losses, this limit was increased to £30m in July 2015.

Some significant top salaries
The Vice Chancellor recently noted that the OU’s investment in FutureLearn was “not that significant”.  This is debateable.  What is clear is that the losses do not appear to have affected senior salaries.  The OU’s Financial Statement for 2014-5 shows 3 FutureLearn employees each receiving between £100,000-120,000.  Another has a salary of £140,000-150,000 and another earns £240,000-250,000.

A donation
In 2015, the Exilarch Foundation (a large charity giving money to education and health) donated £1m to the OU to develop MOOCs.  This may also have been given to FutureLearn.

Perspectives, deficits and Regional closures
To put FutureLearn’s costs into some perspective. They could easily be £17m plus by the end July 2016. This is more than double the OU’s reported deficit of £7.2m in 2014-5, which led to a programme of targeted voluntary severance to reduce the staff base.  The current Regional Closures programme is estimated to cost £19m and ‘save’ the OU £4.7m per year (savings that have been disputed given the lack of implementation planning).

By way of a conclusion? It looks like:
  • the OU have already spent a fortune on FutureLearn and the costs will continue to grow at an accelerating rate
  • there is no discernible transfer of students from MOOC courses to OU credit-bearing and income-generating modules
  • FutureLearn has generated no income from its MOOCs – and there appears to be no prospect of any money coming back to the OU.

In this author’s opinion, if it looks like a vanity project that is getting too big to fail, then clearly it is a vanity project that will fail.  Taken together with the Regional Closure programme, it’s not unreasonable to conclude that we have a senior management and a Council out of its depth. They appear to be spending vast amounts of OU money on the wrong things.  The costs to the OU will be very considerable indeed."

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