Universities' Risk Management -- if the Roof is Leaking... Cut Staff. (May 14, 2012)

Harry Rosenthal* is Regis Unimutual General Manager of Risk Management Services.

Interviewed last week by The Australian's Andrew Trounson he warned that neglect to properly maintain university buildings was leading to increasing costs of repairs.

He told Mr Trounson: "I don't think we can blame this entirely on the weather. It a reflection of deferred maintenance, ageing building stock and the selection of less robust construction materials for energy conservation.'' And is his view: "This deferred maintenance issue is indirectly forcing unplanned strategic HR decisions, as universities attempt to find funding for needed asset repairs and improvements." Then speaking more bluntly: "When added to other financial pressures such as fluctuating domestic and foreign student numbers, it is forcing people to lose their jobs, and it is forcing universities to make difficult strategic decisions."

On 8 December 2011, the Minister for Tertiary Education, Senator Chris Evans, released the final report of the Higher Education Base Funding Review. Among its findings it noted that the collective maintenance backlog across the higher education sector has reached two to three billion dollars. It has recommended that the government regularly allocate the equivalent of 2% of base funding to universities for maintenance, refurbishment and updated learning spaces. No mention of the government's response to the Review was included in the Budget brought down on May 8. However, the government has promised to issue its response later this year as well as a full response to the Chief Scientist's report regarding increasing participation in STEM education by Australia's students.

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*Harry Rosenthal had been Director of the Risk Management Unit of the University of New South Wales prior to joining Unimutual in 2008 which was founded in 1989 as "a discretionary mutual operating on not-for-profit principles formed to offer higher education and research institutions a cost effective alternative to insurance".