The Tertiary Education Commission and the Ministry of Education advised Tertiary Education Minister Penny Simmonds on August 2 this year they had little confidence in a cost-benefit analysis of the project that relied on untested assumptions, had "significant gaps" in financial data and did not fully consider alternative options.
But on September 28, Health Minister Dr Shane Reti called the cost-benefit analysis "encouraging" and progressed the project to the detailed business case stage, where it remains.
In the briefing, released under the Official Information Act, commission and ministry officials advised Ms Simmonds that if Waikato was responsible for any significant cost escalation in building the school, this would "risk the success of the school and the programme".
They were also concerned about Waikato’s ability to raise enough donations to fund its contribution — estimated to be $100 million — to the school and whether it could raise them in time, noting large-scale borrowing was not an option for the university.
The cost-benefit analysis needed more work, as many of the assumptions it was based on — including costs for building the school and delivering the programme and that there would be more graduates who went on to work in general and rural practice — were highly sensitive to change, the minister was told.
Alternative options not fully considered included the proposal "recently shared by Auckland and Otago Universities which indicates their operations could scale and provide their results more quickly ... with less upfront investment".
The report also flagged the potential impact on Otago and Auckland’s existing medical schools if there were funding shortfalls caused by the new medical school and noted that while the proposed new medical school was the preferred option, it required higher investment to achieve.
The briefing was not the only ministerial advice expressing concerns about the project before Dr Reti’s decision to plough on.
Times Higher Education (THE) reported on September 21 that another confidential report from the commission to Ms Simmonds warned Waikato was already struggling with a maintenance backlog on its existing buildings.
It questioned the university’s capacity to contribute its $100m share of the medical school’s establishment costs amid other pressing capital works, including earthquake strengthening, and other restrictions on cash flow that meant it would struggle to repay debts.
A Waikato medical school remained "a significant unknown", the commission report said.
A Waikato spokeswoman told THE the commission had assessed universities’ financial performance at a time of "significant impact" from Covid-19.
She said Waikato had "continued to invest in physical and system infrastructure during this period", albeit more slowly than had been anticipated.
Green MP Francisco Hernandez said the official advice highlighted the risk in the approach the government was taking with potentially setting up a Waikato medical school instead of increasing capacity at existing institutions such as Otago and Auckland.
"All in all, it’s painting the picture that the government is stacking the deck and cherry-picking evidence to predetermine the outcome it wants rather than being informed through an independent, evidence-based process."
Otago Medical School acting dean Prof Tim Wilkinson said he was not surprised by the concerns raised by the officials.
Otago remained ready and willing to train more doctors as early as next year if the government lifted the restriction on numbers it was allowed to train and provided the relevant funding, he said.
The University of Waikato was contacted late yesterday for comment.
Dr Reti’s office was also contacted for comment.
