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Universities must look for other ways to save

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University speaker

This week’s unveiling of the Federal Government’s 2017 Budget may see universities looking for more ways to deliver organisational savings in light of proposed funding cuts.

The higher education package includes government funding cuts worth $2.8 billion, which is to be imposed via a two-year efficiency dividend on teaching funding only, as well as a fee increase for students.

It's expected that universities will see a direct cut of $384.2 million over two years, including an efficiency dividend to the Commonwealth Grant Scheme of 2.5% in 2018 and another 2.5% in 2019.

Belinda Robinson, Chief Executive of peak body Universities Australia, said the government’s funding reduction came on top of $3.9 billion in cuts borne by universities and students since 2011.

According to online website The Conversation, the budget’s series of cuts combined with changes to how grants are indexed, is a strong indication that universities will receive less per student in subsidies in the future, and will have to do more with less.

General Manager of Campus Travel, Cathryn Cole, said declining government funding for universities made it even more important for tertiary academic organisations to take a strategic approach to their major spend categories such as travel.

“As one of the longest university travel management companies in Australia we are seeing a number of our university clients proactively implementing measures to save in other operational areas such as staff and academic travel,” Ms Cole said. 

“We’re seeing universities asking for more advice on how to be commercially minded when it comes to managing the travel category. The hard dollar savings made in areas like this can then be funnelled across other operational priorities.”

Ms Cole said universities had been working with Campus Travel to consolidate their travel programs, introduce travel policies and mandate these policies.

“We’re not talking about universities reducing their travel, because we know that it is critical for academics to be networking and learning from their national or overseas counterparts – this is about being more strategic with policies, processes and the technology that’s being implemented. A strategic approach to managing travel can be a highly successful approach to boosting organisational savings,” she said. 

In other measures, the package also includes a proposal to tie 7.5 per cent of university funding for student places to university ‘accountability’ and ‘performance’.

“Universities are already highly accountable for their performance and heavily invested in the success of their students and alumni,” Ms Robinson from Universities Australia said.

“This is a complex area that will need to be handled with great care so as to avoid unintended consequences and perverse outcomes. This is particularly true for universities that serve the most disadvantaged students and communities,” she said.

 

Other proposed budget measures include:

• A proposed change to the repayment thresholds for HECS/HELP loans;

• A $1394 loading for government funding of vet science and dentistry places;

• Replacing subsidies for New Zealand permanent residents with access to FEE/HELP loans for all permanent residents;

• Teaching awards will be transferred to Universities Australia to administer;

• The creation of another six regional study hubs (in addition to the two existing hubs at Cooma and Geraldton);

• Reducing the number of post-graduate places in line with demand and the introduction of post-graduate scholarships from 2019;

• Enabling courses to be capped with a review on matching places to students needs to be undertaken every three years; and

• Replacing the $3,271 enabling course loading with the ability for universities to charge the same as a fee to be covered by HECS/HELP.

 

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