Scots web college set to shut up shop
The decision comes after it failed to attract participation from the majority of Scottish universities and a bid for a lifeline 1.5 million from Scottish Enterprise was refused.
IU, established in 2002 with 3.7m in funding from Scottish Enterprise and which has since received 1.2m from Heriot Watt, was initially projected to bring millions of pounds of revenue to Scottish universities, who would use it as a means of offering supported learning at partner institutions in a projected 40 countries around the world.
But the model, which was supposed to improve on an earlier e-learning facilitator called Scottish Knowledge, did not attract a critical mass of participant universities, with only seven undergraduate and 11 post graduate courses in 14 countries, attracting less than a quarter of anticipated students.
The 7.5m of revenue it did earn since 2002 has proved insufficient to compensate for the planned cessation of Scottish Enterprise funding this year.
In 2005, IU booked losses of 645,551, after almost 600,000 of SE funding was phased out.
Prof Roy Leitch, the former assistant principal of Heriot Watt, who received a salary of up to 120,000 as chief executive of IU, said that talks were still in progress about the future of the 22 staff remaining from the 42 who were employed by the company in 2002.
Murdo Fraser, the Scottish Conservative Enterprise spokesman, said yesterday: "I have asked questions in parliament about whether or not IU was using public sector grants to compete unfairly with private sector providers of online learning. My concern is that if IU's financial model was not workable, why have we been spending taxpayers' money on it?"
Many of the claims and projections made by the IU, and by Scottish ministers on its behalf, have not materialised.
In October 2003, then deputy first minister Jim Wallace announced that 1,500 students from Nanyang University in Singapore would enrol in IU, generating 6m of revenue. In fact no students from that university enrolled, after the Singaporean government refused to license the collaboration.
Ian Ritchie, the serial IT entrepreneur who chairs IU's board of directors, insisted that the venture had "not been a failure" in that it had built strong relationships between Scottish universities and prestigious counterparts in countries such as China, Egypt and Indonesia.
"Collaboration between Scottish universities is always very difficult as, while they are not always business-like, they are fiercely competitive.
"With time it has been proven that IU did not have the right format, but we have opened up areas of extra revenue for Scottish universities that I hope they will continue to exploit."
A spokesman for Scottish Enterprise said: "As part of the 40m additional funding awarded to SE by the Executive earlier this year, 1.5m was set aside for the IU, provided a business case could be made to justify further funding.
" The IU were unable to make this case so the 1.5m was returned to the Executive."