Hefce scrutinised London Met's completion data as far back as 2003-04

Inaccuracies in the student data reported by London Metropolitan University were uncovered by funding chiefs dating as far back as 2003-04.

Times Higher Education has learnt that the Higher Education Funding Council for England carried out an audit of the data reported by the university in 2003-04.

Hefce is in the process of clawing back £31.5 million given in funding to London Metropolitan. It says the university under-reported the number of student non-completions from the 2005-06 to the 2007-08 academic years.

London Met's recurrent funding has also been cut by £15 million, and more than 500 jobs are expected to be lost at the university as a result.

Hefce conducted the audit that led to the clawback in 2007 after the university reported a non-completion rate of 3.6 per cent during 2005-06. The funding council put the true figure at 30 per cent.

The University and College Union has questioned why Hefce did not take action sooner.

No one from Hefce was available to explain the level of inaccuracy found in the 2003-04 data, or what action it took following the discovery.

Last week MPs suggested that Hefce may have colluded with the university to overlook earlier under-reporting.

In a House of Commons debate on 20 May, several MPs called for an independent inquiry.

Adam Afriyie, Conservative Shadow Science Minister, said: "If there were nudges and winks - 'Well, we may overlook those numbers of non-completions for a couple of years' - that is a serious matter.

"It is the least that the Minister (David Lammy, Minister for Higher Education and Intellectual Property) can do to hold an inquiry.

"We should look not just at the role that Hefce thought it was playing, but step back and see whether any collusion took place," said Mr Afriyie.

The debate ended with Mr Lammy appearing to promise a new investigation when he told the House: "There will, of course, be an independent inquiry."

However, the following day the Department for Innovation, Universities and Skills said that Mr Lammy had been referring to a review already commissioned by Hefce into its role in the affair.

The review, which is being conducted by KPMG, the audit and professional services provider, is scrutinising Hefce's legal and regulatory powers and how these were used; the effectiveness of its audit processes; its internal reporting mechanisms and "resourcing and management implications of those institutions at higher risk that require intensive support".

A spokesman for Hefce said: "The period of the review will be from the first data audit reported on the 2003-04 Higher Education Students Early Statistics Survey data.

"This will be a thorough, robust and independent review ... on the way Hefce managed its dealings with the university over the reporting of data, the associated audit work and the recovery of funding from the university."

KPMG will report its findings in July to the Hefce board.

The UCU accused the Government of misleading the public.

It said the Hefce inquiry would "neither expose the root of the problems at London Met, nor allow the sector to learn lessons from the mistakes made".

melanie.newman@tsleducation.com.