The announcement of global rankings of universities received no fanfare from University of Otago last year, for an obvious reason. The university lost its status as one of only two New Zealand universities listed in the top 200 by ranking agency Quacquarelli Symonds (QS). University of Auckland is listed 87th, while Otago University has fallen to 217th, down from 133rd in 2012.
The blow for Otago University, the oldest university in New Zealand which employs more than 4000 people, comes amid serious financial and cultural challenges, created by a "perfect storm of factors", according to one senior administration source.
Two weeks ago, the university announced a $60 million hole in the university’s $834.4 million operating budget for 2023 and indicated a significant part of the solution to the funding crisis would be staff layoffs. Staff had been warned in February that significant savings would be necessary.
A plan to tackle the funding hole will be discussed at the university’s council, its presiding body for management decisions, next Tuesday . At noon on the same day, the Tertiary Education Union (TEU) has organised a stop-work meeting for staff to discuss the crisis. Around 1300 of the university’s 4000 staff are TEU members.
Prof Helen Nicholson is holding the reins as acting vice-chancellor at Otago University, due to the sick leave of vice-chancellor David Murdoch, who had taken up the role in early 2022.
TEU branch president Associate Prof Craig Marshall said, in times of crisis, leadership at the top was essential.
He talked of deep-seated grumblings among staff, who feel they have endured uncertainties and lack of solutions for too long.
"The university’s senior management consults staff repeatedly, but then change doesn’t happen," he said.
"There is despondency, anxiety and concern among staff, and a sense of ‘us versus them’ and frustration that there is no way to contribute, which is a real shame.
"There is a strong desire for the university to succeed and for staff input to be harnessed to find the solutions. Working for the university isn’t a job, it’s a vocation we do for the love of it. Management must engage staff better," Mr Marshall said.
He added that the recent news that the university had spent $670,000 so far on its re-branding exercise was "terrible timing — it would have been wise to hold off."
Meanwhile, bigger decisions are definitely on hold for now, including plans for a new building on the university’s campus in Christchurch.
However, it is "highly unlikely", Mr Marshall said, that this step would solve the financial troubles. People who apply for voluntary redundancy are likely to be low in number compared with the cuts needed, and may not be the people the university wishes to lose.
The university said cuts to staff and in other areas would be based on strategic decision making — "doing less, better". It was understood by all that losing key academic staff was dangerous for any university; it strips the university of its most valuable asset.
Calls for universities to receive more funding from central government are also ramping up next week. Universities New Zealand, the organisation that speaks up for universities on behalf of New Zealand’s eight university vice-chancellors, will meet Minister of Education Jan Tinetti prior to the Government’s budget decisions later this month.
Prof Nicholson said Otago University was meeting with unions to approach the Government for extra funding and was holding a meeting next week to begin that process.
She said the university had a genuine desire to hear from staff.
"We very much value their input as we navigate current challenging times."
Staff had been advised this week the University Council had decided to delay a decision on the re-branding exercise until later in the year.
When it came to the university’s decline in the QS rankings, she pointed out the trend came amid increased global competition, particularly from Asia.
Six of eight New Zealand universities slipped in the most recent rankings.
Universities New Zealand chief executive Chris Whelan told the Otago Daily Times the organisation had "not called out too loudly" for larger funding because the university sector is aware of the many funding challenges Government faces, including across all public services, particularly health.
However he told the ODT: "We are making sure Government understands the pressures universities are facing. There has been long term under-funding that needs redressing to prevent a massive downstream bill. Graduates typically remain where they have studied and bring prosperity to those regions across all sectors and professions."
More than three out of every four dollars that fund New Zealand universities comes directly from, or is controlled by, Government, according to Universities New Zealand. Funding largely comes from a Government "tuition subsidy" and from fees that students pay. The level of both income streams is determined by government — student fees are capped. The income provided by subsidies and fees is not in step with rising costs. Universities New Zealand said that in 2023, overall government funding for universities has increased by 1.6% while inflation is running at about 7%. Over the past decade there has been a drop in real terms of 20% in university funding.
The overall situation is static student numbers in 2023.
The reasons are multiple. The pandemic resulted in some students choosing to leave, for a variety of reasons including sickness or a desire to travel. There is a demographic driver too — resulting in a decline in school leavers in New Zealand, likely to continue until 2025.
A strong job market is enticing school leavers and students who are mid-study at university, away from tertiary education, particularly in light of rising costs of living and the disincentive of large student loans. Dunedin is also notorious for having poor quality student accommodation.
An anticipated upswing in school leavers in 2025 in New Zealand is likely to result in higher entries. Staff will be needed to match demand, along with a healthy variety of learning opportunities to feed regional development.
As the president of Otago University’s student union, Quintin Jane, puts it: "I started my degree in health sciences and swapped to do chemistry and politics. If the university specialises in fewer areas of learning, the flexibility to decide gradually and carefully what you want to do, which is so important for students such as me, will be lost."
Students interviewed by ODT on campus this week most frequently expressed concern about the decision last month to scrap applied science degrees. While students of applied science have been reassured they can complete their degrees, they are not all happy.
Nadia Prasetyo, a second year applied science student studying molecular biotechnology, said: "I am worried about my degree’s quality as well as the degree no longer existing."
Within its planning, the university is considering its options for "innovation and investment" as well as seeking further government funding.
However, Mr Whelan points out that vice-chancellors should be focused on academic excellence not turning a profit. "Charging for knowledge is contrary to the mission of universities."
Speaking on behalf of vice-chancellors, Mr Whelan described a "collective frustration" about the inadequacy of public funding and lack of understanding of the economic importance of universities.
Regarding the meeting with the Minister next week, he said: "We will be listened to politely and get sympathy, but it will come down to budgetary decisions."
On behalf of union members and as a passionate advocate for the university, Mr Marshall was forthright about his views on university leadership at this time: "The university should make an embarrassing loss and then wear it proudly, proclaim it, explain it, and demand more money from Government. We should not be sacrificing staff to save money, and without government funding it is very hard to see what else the university can do right now."
