Our ‘anomalous, inconsistent and irrational’ higher education system

The SMH report of the higher education review discussion paper picks out one of its very few quotable quotes, describing the funding system as:

at best complex and at worst anomalous, inconsistent and irrational.

This will come as no surprise to readers of this blog.

There are a few instances of this kind of frank analysis. The discussion paper summarises the research on what effects increases in student charges have had on low SES groups or particular disciplines (ie, none), so we now have a government document that effectively admits that the hundreds of millions of dollars the government is spending reducing charges for maths and science students is money wasted.

The government’s rhetoric about cuts to per student expenditure is also put into context. Labor has preferred out-of-date OECD data which ends in 2004, conveniently missing the surge in spending per student since then. Here is the key sentence (p.15):

From 2005, income per place has increased and in 2006 was $15,090, or 7.2% above the 1989 level (in real terms).

Despite these useful admissions, and helpful summaries of some issues, some matters were so hidden by bureaucratic euphemism and vagueness that only people already familiar with higher ed policy would understand what was being said.

For example, the sentence ‘some commentators have noted that there are constraints on the flexibility and responsiveness of universities’ does not reveal to readers that in some cases universities are told how many places they will offer down to details of course and campus. The current system of distributing university places is not explained, though about 40 pages later there is a paragraph on ‘student-centred’ funding, which by implication reveals that the current system is not student-centred.

And for all the debunking of myths about the adverse effects of past fee increases, the critical issue of future fee deregulation remains almost unspeakable. Given the unreliability of governments as funding sources even if this was a good idea in principle, any review which omits to recommend at least partial deregulation must be considered a failure.

That the discussion paper does not deal with this issue directly and in detail makes it, despite some strengths, a disappointing document.

11 thoughts on “Our ‘anomalous, inconsistent and irrational’ higher education system

  1. I agree that fee deregulation is a critical issue. I also think that doing nothing (which I imagine is rather likely to happen) means that getting an education will cost everyone more, because it will turn post-graduate degrees into the norm more than now due to the further devaluation of undergraduate degrees. Perhaps the alternative would be to rely on immigration to a greater extent to fill all the professional positions Australians are either too dull, cheap, or uneducated to do, although I can’t imagine that being too popular (although perhaps people wouldn’t notice).

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  2. For a bit of reciprocity, can you pl write an article or analysis not on Govt funding but on the “Spend side” of Higher Ed. You could address matters like:
    – explaining why a VC ought to be paid $1m per annum ($2m for the VC of UQ) plus house, plus car, plus driver, plus housekeeper, plus first class travel, etc. Indeed, how do you justify an academic making that kind of money with no commercial risks attached?
    – I am part of the uni system (although not a VC or DVC) but I would like to draw your attention to my observations of executive office fitouts that would make Don Argus blush; uni lunches that always include Penfold Grange and offices decked with original paintings. For example, look at where the old AVCC used to meet and their total expenses just for a day of meetings. Note also that our billionaire Gerry Harvey has an office in a warehouse and conducts his meetings at work (instead of resorts).
    – the incredible losses made by IDC overseas.
    – why on earth does my uni have a campus in Spain? Is it a 3rd world country?
    – I am appalled at Steven Schwartz’s statement that if you walk thru a campus you see decomposing buildings etc, I suggest you walk thru the executive car park in universities. The one in La Trobe has a Mercedes 500, the one in MQU has AUDI, BMW 7 Series, and I will not mention anything about Sydney. I don’t oppose show of opulence, but please, unis do have money – it is just being spent on the wrong thing.
    – Deakin has an 18 hole golf course and a golf driving range.
    Too many other things to list – but you get the idea.

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  3. Will – The media runs regular stories along the lines you suggest. Basically VCs are well paid by public service standards but not by the standards of corporations of similar size. I think being a VC is a tough job – dealing with difficult political, bureaucratic and commercial issues without full CEO authority. Your complaint is essentially a governance one; while perhaps on average Councils/Senates are not tough enough on management I donn’t think this is the key problem in higher ed, which remains govt regulation,

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  4. Andrew – disingenuous. Yesterday my VC issued an email asking 6,000 staff to donate an average of $100. He wants to immediately raise $600,000. Can you now understand the cocoon of unreality most of our VC’s live in? We just lost $140m on a failed campus in Singapore. My VC is on a 7 figure salary plus perks. How tough is a VC’s job? Tell me Andrew, how many VC’s have been dumped for incompetency or made liable for 9 figure losses? I pay $1.80 per litre for petrol, hundreds of dollars for parking on my campus as a part time lecturer and my 7 figure VC asks me for a $100 donation – give me a break. Why don’t you write an article about how most universities’ councils are dysfunctional and are unable to rein in the most egregious behaviours of their VC’s? Then, I will consider your comments as balanced ones.

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  5. Jacqui – I would have thought UNSW was the example of a Senate willing to get rid of VCs, with two gone in quick succession before the current incumbent.

    The difficulty with writing about uni governance is that it requires massive amounts of research to prove anything, and because of the inherent complexities of the task – unis have multiple goals and unlike profit-making companies have no common metric by which to measure success or failure.

    The many reforms over the last decade have focused on the size and composition of governing bodies, but it’s hard to say whether their performance is better or worse as a result.

    The policy reforms I write about could, I believe, deliver big benefits in a relatively short time period (including removing any need to ask staff for money).

    While I suspect that stronger scrutiny of university executives could be beneficial I doubt that the benefits would be large across the sector.

    Indeed, neither VCs nor Senates are able to make critical decisions about price and quantity that are essential to proper management. There is no point holding people accountable for factors beyond their control.

    Given my research and writing time is very limited, governance issues are a low priority.

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  6. Andrew, I feel compelled to comment on your reply.

    “The difficulty with writing about uni governance is that it requires massive amounts of research to prove anything,….”

    In theory true, but in practice, I can give you 2 dozen decisions that drains money from academia faster than a rat up a drainpipe. Will Estcourt’s examples only touches the surface. I suspect you know what I am saying.

    “…unlike profit-making companies have no common metric by which to measure success or failure.”

    Easy to solve. In the UK, universities embark on Student Satisfaction Benchmarking and Financial Benchmarking. The data is compared amongst universities as well.

    “..but it’s hard to say whether their performance is better or worse as a result.”

    It is worse. Our Chancellor is trying to sack our VC. Why don’t you interview our Chancellor to analyse the largesse.

    “…I doubt that the benefits would be large across the sector.”

    You are wrong. I am in my 30th year of uni administration and accumulated losses do add up! Your comment reminds me of a DoD presenter at a careers advisory session on campus who said, “Yes but the losses on the Seasprite helos at $1.6bn are so small it doesn’t matter”. Yes it does. Commit 20 goof-ups and you blow $32bn – enuf to right many wrongs in society and academia. Look up the losses in an ANAO report – you will fall off your chair.

    “There is no point holding people accountable for factors beyond their control.”

    For the $2m package UQ’s VC got and the $1m+ packages that is now prevalent we should change this.

    Here’s the heart of the problem, Andrew. A fish rots from the head down. The composition of our Council is a joke. No one speaks their minds. It is as though this smart group of people had their IQ halved everything they sit in that huge office full of pomp and ceremony.

    I suggest you attempt an article on whether an academic ought to be the CEO of a university. Thanks. Pete.

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  7. Peter – Your remark that things are worse despite doing obvious things that should improve governance – replacing interest groups with independent people, requiring certain qualifications (including business and financial experience) of some Council members, and reducing the size of Councils (though they are still quite large) – rather highlights the problem. What are your solutions? More of the same? We could give Council members the same responsibilities as company board members, but that would mean few people other than corporate types would take the job, which may not be appropriate for bodies that are essentially non-profits.

    I don’t doubt that uni management and governance could be improved, but despite having read the numerous reports on this subject over a decade plus am not confident there are easy top-down solutions.

    Exposing unis to the market will create strong internal incentives to put the systems in place to deal with a system where student numbers are not near-guaranteed each year, It will also create the freedom to try a wide variety of strategies to achieve targets for student numbers and dollars.

    I’m pretty sure that this would trigger governance change, but change engineered to suit the institution rather than ticking the boxes to meet state or federal requirements, which is what has happened in previous governance reforms.

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  8. I think some of the discussion here is biased in some ways. It’s always looking at bad things. Some VCs do nothing (which may be good or bad), and some VCs do good things as well bad things — most Australian universities for example have made the huge transition from public universities in the 80s to the money making enterprises that they are now (as basically requested by the government, whether you happen to like it or not). Thus whilst some VCs are certainly bad (and perhaps humerously so, such as whoever is at UNSW), it isn’t always the case, especially given many have essentially been forced to risks. I could point to the Melbourne model here — that’s a huge risk. If it goes wrong, no doubt Glyn Davis will be blamed for it, but that will be in hindsight — some of the decisions are simply hard to make, and you have to make hard decisions with risk to get somewhere. I therefore don’t think we should be evaluating them on every wrong decision — its the proportion of good to bad which is important — which is how everyone one else gets evaluated.

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  9. Thanks for your thoughts, Andrew. Here are mine.

    “What are your solutions? More of the same? We could give Council members the same responsibilities as company board members, but that would mean few people other than corporate types would take the job, which may not be appropriate for bodies that are essentially non-profits”.

    The Chancellor cannot be an academic. Neither should Vice Chancellors. We need street wise business people with a strong empathy for academia. A council only needs 8 to 10 dedicated people. Meetings should be held in a meeting room where people can speak freely. No circus rooms like what happens now. Pay Chancellors a base plus incentives. Make them accountable both fiscally and strategically – like striving to be listed as the world’s top 30 unis. Pay VC’s no more than 2 or 3 times a senior lecturer’s pay with the rest paid out as incentives (Don Aitkin once wrote a paper on this). Instill a culture where anyone can be fired for incompetency.

    “…but that would mean few people other than corporate types would take the job, which may not be appropriate for bodies that are essentially non-profits.”

    Not really. I would like unis to be non profits but I also expect them not to pay their execs like commercial entities, or to lose hundreds of millions of dollars with impunity.

    “Basically VCs are well paid by public service standards but not by the standards of corporations of similar size.”

    They are too well paid, Andrew. A battalion commander in Iraq or say a Base commander at Williamstown, NSW incharged of lives, B-17’s Globemasters, F-111, F-18 is paid well below $200k er annum for responsibilities that exceed a VC. VC’s pays make them disconnected from reality and the pains that their staff go through – ala the discussion that Fred Hilmer sent to all UNSW staff asking for $100 ea. A joke, really. If he donated $600,000 of his package, he’d still have his $500,000 plus driver, car, varsity home, etc.

    BTW Andrew, I have declared my hand. Are you involved in academia, paid for by a university or are highly sympathetic to universities’ perks and salaries? Is this why you “poo bah” efficiency measures within the existing system of funding?

    Thanks, Pete.

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