The Open University has lost more than a quarter of its total student numbers over the past five years amid a national collapse in part-time study, leaving the institution wrestling with a ?17 million deficit.

The drops in the OU¡¯s recruitment and income, revealed in recently published accounts for 2013-14, came as the institution increased expenditure, notably on FutureLearn, its platform for massive open online courses.

The total number of students at the OU fell from more than 260,000 in 2009-10 to just over 187,000 in 2013-14. In terms of full-time equivalent enrolment, the decline was 10,000 over the five years to about 73,500 last year.

The number of FTE students fell by more than 6,000 in the 12 months to July 2014 alone ¨C a year in which the institution also posted a deficit of ?16.9 million, equating to 4.2 per cent of its ?404.2 million income.

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The figures continue a downward trend for the OU: in 2012-13, the institution returned a surplus of ?18.8 million, while in 2011-12 it registered a ?37.9 million surplus.

All the OU¡¯s students study part-time, and the institution said that the ¡°most significant driver¡± of the fall in income was the national reduction in student numbers.

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¡°While it is true that the part-time sector faces a challenging time, our performance remains strong and we continue to perform better than the sector,¡± an OU spokesman said, adding that 60 per cent of part-time undergraduates taking their first degree in England do so with the OU.

In its 2012-13 annual report, the OU had predicted a ¡°small deficit¡± for 2013-14. This, the spokesman said, was due to ?28 million of additional expenditure on ¡°a number of strategic projects¡± including FutureLearn, the UK Mooc platform that currently offers free courses from 44 universities and organisations.

The OU has invested ?7.3 million in the company over the past two years, the accounts show, while an increase in the number of staff across both the university and FutureLearn as a whole resulted in a ?2.8 million rise in personnel costs last year. Offering free courses on the platform is ¡°expected to create interest¡± in the OU¡¯s ¡°core credit-bearing curriculum¡±, for which fees are charged.

A source at the university told Times Higher Education that there were questions about why the OU had led on the expensive development of a platform that is also used by 26 other UK universities.

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The OU¡¯s spokesman said: ¡°The OU has received thousands of additional enquiries from students who have taken our courses on FutureLearn, with a proportion going on to register for formal qualifications.¡±

In May, the OU will welcome a new vice-chancellor when the current director of the BBC¡¯s World Service, Peter Horrocks, takes over from former Microsoft executive Martin Bean, who left at the end of last year.

Several sources at the university told THE of concerns that the new vice-chancellor, like Mr Bean, has been recruited from outside the higher education sector.

¡°Peter brings with him significant experience of managing similarly sized organisations and demonstrates a real understanding of the academic life of the university,¡± said the OU¡¯s spokesman.

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After THE enquired about its finances, the OU circulated a letter to staff stating that although the institution ¡°had planned to return to surplus¡± in 2014-15, it ¡°will now remain in deficit¡± to the tune of up to ?6 million. A higher-than predicted number of student withdrawals and a failure to hit the February student recruitment target are blamed.

chris.parr@tesglobal.com