Opinion- 05 June 2012 |
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Tony Guttmann*-- Busted: The Broken Business Model of Australian Universities |
Professor Tony Guttmann |
Australia’s universities, according to a recent piece in The Economist, are ‘decent and dependable, but seldom excellent’.
What is required to foster excellence in our universities? One common
answer to this question would be funding, and the assumed realm of
battle would be public funding: universities facing off against
parsimonious government bean-counters; inadequate resourcing called on
to explain lack of excellence in Australian tertiary standing.
Contrary to this straightforward narrative of external constraint, it is
easy to identify a crippling internal problem, requiring internal
solutions in order to rectify the current imbalance in university
funding. I speak here of the dominant business model adopted by Go8
universities, and many others besides.
Let me take a step back. The widely recognised core functions of a
university are: to provide education; to conduct research; and to engage
with the community, government and business, providing expertise and
informed comment. The reputation of a university is based almost
entirely on its success in achieving these three goals.
It seems self-evident, then, that a university’s first priority should
be to support and enhance these activities, providing sufficient
resources for the employees who carry them out: academics and research
staff. This, as almost anyone who works in a modern tertiary institution
will tell you, is far from what happens in practice.
Speaking here about the larger Go8 universities, with budgets around the
$1 billion mark: administrative, infrastructure and support costs are
taken ‘off the top’ of this money, and drain about two-thirds of it. The
remaining third is then made available for servicing the core functions
of the university: in effect, for Deans to fight over in a zero-sum
game.
It hardly seems necessary to point out the incongruity of this
situation. The idea of spending only one third of an organisation’s
resources in conducting its core activities – and, furthermore, of even
that amount being contingent on the needs of support activities
(effectively, the ‘leftovers’) – would be unheard-of in any private
sector business context. And yet this nonsensical allocation process has
been entirely normalised in the Australian tertiary sector (as well as
in many overseas institutions, but it is our own patch we should be
focusing on).
Under the present allocation of resources, many departments –
particularly those that don’t reliably attract full-fee paying or
overseas students – are compelled to slash staff; and even those
departments that do benefit from full-fee enrolments are badly stretched
in terms of workload and student capacity. My own department in a
leading Go8 university is typical. In the past 10 years, student:staff
ratios have increased from 14:1 to 24:1. Obviously this blowout must
seriously affect the educational experiences of the students, as well as
pushing staff to their limits. And despite the blowout, the Department’s
budget allocation currently fails to meet the salary bill, let alone
covering any other expenses. In the same decade, meanwhile, there has
been a well-documented increase in the administrative burden on academic
staff. Additionally, there is escalating pressure to publish highly
ranked research, to increase the number of higher degree students
supervised and to attract more external grant funding.
This untenable situation prompts the question: what would be a more
reasonable process for allocating resources, and a more justifiable
distribution? Firstly, it seems self-evident that academic departments
should have the priority call on resources, with departments’ immediate
administrative support bases – usually faculty or school offices – next
in line, and the remainder allocated to central administration.
Secondly, on the issue of proportional allocation: the current
distribution, whereby two-thirds of a university’s budget goes into
administrative and support services, should be changed to a ratio of
50:50.
I am not claiming that two-thirds of university budgets are presently
wasted –\ many fine buildings and innovative programs are created under
the current funding allocation. But a university is not judged primarily
on the opulence of its student lounges or the technical innovations on
display in its lecture theatres. It is judged on the quality of
teaching, the research excellence of academic staff, and the quality and
quantity of interaction with stakeholders in the community, government
and business. Allocating 50% of university resources to academic
departments would enable Australian universities to excel in these
defining activities.
Now is the right time to confront the necessity for change. The funding
situation seems to be getting worse rather than better – I am often
reminded of the ‘Yes Minister’ episode in which staffers defend the
generous funding of a hospital without patients. However, if we make the
necessary shifts now, we will be in a unique position to build academic
departments that are truly world class, hiring teaching and research
staff of a calibre not previously available. With the fallout from the
GFC, the academic job market is appalling in both Europe and North
America, and not much better in Asia or South America. Universities that
position themselves to enable academic appointments have been
overwhelmed by the quality of applicants.
If there is any substance behind the rhetoric we hear from Vice
Chancellors about building world-class institutions, now is the time for
decisive action. A reasonable re-allocation of resources to the academic
coalface is the strategy that will make our universities not merely
decent and dependable, but excellent.
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*Tony Guttmann, FAA is Professor in the Department of Mathematics and Statistics at The University of Melbourne and Director of the ARC Centre of Excellence for Mathematics and Statistics of Complex Systems.