Only The Sangfroid

Mark is of fair average intelligence, who is neither perverse, nor morbid or suspicious of mind, nor avid for scandal. He does live in an ivory tower.

These are his draft thoughts…

No more pencils, no more books… University funding and job cuts #auspol #highered

Earlier this week, Australian National University announced that it was going to slash jobs in order to find savings.  This follows from several other universities announcing similar cost cutting exercises, the most notable of which was the University of Sydney.

There is a large amount of garbage commentary on the issue.  How universities in Australia are funded is a complex issue.  Extraordinarily complex.  There are several different mechanisms by which universities receive funding from the government.  The least straightforward way is the way most people know: block grants.

Block grants are a lump sum handed over by the government to support infrastructure and basic running costs.  There are a few different types of block grant, all with their own stupid-sounding name: Joint Research Engagement (JRE), Sustainable Research Excellence (SRE), &c. &c.  The government sets a total amount to be spent under each type of block grant and then uses complicated sums to work out how much of that total should go to each Higher Education Provider (HEP).

For example, here is the procedure for calculating a university’s share of SRE.

The SRE final grant amount is comprised of three elements, each of which has a
funding amount set as a percentage of the SRE total funding for the Grant Year:
SRE Base (20%)
SRE Threshold 1 (13%)
SRE Threshold 2 (67%)


All HEPs are eligible for inclusion in the Base performance index.
DIISRTE determines each HEP’s SRE Base grant amount on the basis of the Base
performance index applied against the SRE Base funding amount for 2012.
The Base performance index is the relative share of Category 1 ACG research
Category 1 ACG research income data is the average of the most recent two years
for which data is available and is sourced from the Higher Education Research Data
Collection (HERDC). The income data is unweighted.
For all HEPs, their allocation for the SRE Base element is rounded down to the next
whole dollar. The difference between a HEP’s rounded and unrounded SRE Base
grant amount is the remainder. The sum of all remainders is the unallocated dollars
of the SRE Base element.
Each HEP’s remainder is ranked in descending order based on its remainder’s
closeness to one. One dollar is assigned to each HEP according to its ranking until
all unallocated dollars are exhausted.
Each HEP’s SRE Base grant amount is equal to the rounded SRE Base allocation
plus any whole dollars assigned.


The whole point is that established universities (for ease of reference, the ‘Group of Eight’) should be forced to compete with all the other HEPs for funds.  There’s no such thing as a university’s entitlement to public funds: everything has to be a competition.

In that block quote, it mentions ‘Category 1’ funds.  This is another way the government makes universities dance for its amusement.  Category 1 funds are funds distributed under the National Competitive Grants Scheme.  Universities don’t choose what research gets funded (because governments don’t take academic freedom seriously).  Instead, universities compete in an expensive, counter-intuitive, bureaucratic, and extraordinarily frustrating exercise to receive funds for research.  Apparently, a study was done which showed that, for the NHMRC grants alone (the grants for health and medical research), 75 years worth of researcher time was guzzled in preparation of grants.

For grants administered by the Australian Research Council, proposals are assessed by an expert in the field before being handed over to the ARC College (formerly the ‘ARC College of Experts’).  The College makes the final decision about whether a particular proposal should receive funds.

It is a complete joke.  Instead of trusting universities to work out what’s the best and most worthy research, they’re forced to play games.

This is only a fraction of the story when it comes to university funding.  Already, it’s a boring and turgid tale of mouth-breathing bean counters and futility.

In response, universities try to diversify their funds.  Hoping to rely less on government sources, universities started investing more heavily in the market.  Lo and behold, when the markets crashed, these revenue streams tanked with them.  To add insult to injury, the market crash also reduced the available resources of government to spend on universities.

This drop in revenue revealed deep structural issues in the budgets of major universities.  Unlike a business, the attrition rate of academic staff is nearly non-existent.  Once you get a continuing position, you stay with it until you die or get a better offer somewhere else.  If you factor in incremental salary increases, &c., &c., there are scarce resources to employ younger academics.

Remember the block grants I mentioned earlier?  As well as covering salaries, that money is supposed to cover infrastructure costs like buildings and IT systems.  Some universities have next to unusable buildings and IT systems so painful they’d spray acid in your eyes long before they gave you useful information.  If you’re the Vice-Chancellor of a university, do you spend your block grant on employing new academics?  Or do you spend your block grant on improving buildings?  Some combination of the two?

When University of Sydney decided to refurbish some of its buildings and construct new infrastructure, the result was a lack of funds to spend on staff.  The academics went into a paroxysm with some even stating that the university was prioritising buildings over academics.  One input measure for calculating block grants is Category 1 funding (as mentioned above).  Another is the volume of students.  If you have academics who aren’t succeeding in Category 1 funding schemes and you have the option of spending those funds on buildings in which to teach students, do you really need to be a distinguished professor to work out which is your more profitable option?

At the ANU, it has transpired that basic infrastructure services were being paid for by returns on investment in the markets.  There are some fundamental problems with the financial structure of an organisation if it can only survive on the fortunes of invisible hands in the market.

When the University of Sydney issue arose, the Greens jumped into action with a media release:

Reports that 150 academics and 190 general staff jobs at Sydney Uni will be axed is a serious blow for student learning, directly linked to government underfunding of universities, said Greens Senator for NSW and higher education spokesperson Lee Rhiannon. [Source]

Well… no.  First, I doubt many people in teaching-only positions will be axed if one of the measures was research output over the past three years.  Axing 150 under-performing academics means there will be more resources for infrastructure, improving student learning.

“The bean-counters have taken over Sydney University but it is the government that has invited them to the party with inadequate funding and a push to deregulation.” [said Senator Rhiannon.] [Source: Ibid.]

That’s a charming view of the world, isn’t it?  People who balance budgets and make sure institutions remain viable and sustainable are just penny-pinching bean-counters.  Universities should be able to take risks on the market in order to fund expansions and, if those risks don’t pay off, the taxpayer should foot the bill.  Because the Greens are all about privatising gains and socialising losses, aren’t they?  No, wait…

Universities don’t need more money, simpliciter.  What they need is a better system of allocating funds.  But that’s a lot harder than screaming, ‘Throw them more money!’:

Senator Rhiannon will give notice of a motion in the Senate today calling for the government to immediately increase public funding by 10 percent for government supported university students [Source: Ibid.]

So if you’ve got a research-intensive institution with lower numbers of undergraduate students, the Greens aren’t interested in you.  Because the Greens are all about the students and not about the academics… or something.

If you want a sensible funding model for universities, go with the conservatives: block grants to the public institutions.  Let the private universities find their own funding.  This model of metrics, merit, and measurables is not supporting research excellence.

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