Bosses to blame, say Otago University staff

Frustrated University of Otago staff are pointing the finger at the organisation’s management for a financial crisis expected to lead to hundreds of job losses.

With a $60 million shortfall in its budget, the university is investigating a range of ways to save money, including asset sales, reduced course offerings and potentially several hundred job losses.

A round of voluntary redundancies opens on Monday and compulsory redundancies are expected to follow.

One staff member speaking to the Otago Daily Times on the condition of anonymity said he had been made aware last year that management was "panicking" because enrolments were not looking good for this year.

The university this week confirmed overall enrolments were down by 0.9% on last year. 

The school had budgeted for 4.9% more students than were enrolled.

"Why would 5% more people choose to come to the University of Otago in 2023?" the staff member asked.

The university made promises of a bright future, "kept the balls in the air last year", and the dubious 5% increase forecast failed to materialise.

"Now they’re in the financial s..."

Acting vice-chancellor Prof Helen Nicholson. PHOTO: GREGOR RICHARDSON
Acting vice-chancellor Prof Helen Nicholson. PHOTO: GREGOR RICHARDSON
The university depended on quality faculty for its international ranking, and this type of treatment would not attract quality staff, the staff member said.

Another staff member called the expected staff cuts "undoubtedly ideological".

"The forecasted growth was preposterous under economic conditions and has only set us up to fail; had they been more realistic, we wouldn’t be in this position," they said.

"Yes, staff costs account for 60% of the university’s expenses, but a university is nothing without its staff, just empty [multimillion-dollar] buildings filled with middle management.

"No-one in senior management is taking responsibility for mismanagement of funds, and it will come as no surprise that these austerity measures won’t affect those earning upwards of half a million dollars a year."

Acting vice-chancellor Prof Helen Nicholson told media yesterday a strategy that outlined which areas to strengthen and which areas it "may need to reduce" would go to the university council in May.

She could not say how many voluntary redundancies were expected, nor how many total redundancies were anticipated.

Otago Tertiary Education Union (TEU) organiser Philip Edwards said the response was "illuminating".

The union was in a holding pattern because so much was unknown about the present process, Mr Edwards said.

During bargaining in the first round of Covid lockdowns, members voted to take a "zero pay increase" to protect the university in the future.

"Now they’re being repaid with redundancy as a result of that," he said.

"Yes, we will want to save every job that we possibly can and yes, we will engage in some kind of action — but we don’t know what that action is yet because we are still in the early stages of understanding what the process forward is.

"The problem for us is, if they are talking about hundreds of jobs ... what does a university that has 4000FTE [full-time equivalent staff] look like when you remove 500 or 600 staff from it?

"It’s unthinkable."

However, it was not all the university’s fault — there was a "crisis in tertiary education" in New Zealand, as the tertiary sector had been underfunded for years, he said.

"The student component of funding has diminished over time while the CPI [consumer price index] has been accelerating away from it."

Education Minister Jan Tinetti did not answer ODT questions about whether the university’s situation was because of chronic underfunding, nor whether she was concerned about tertiary job cuts at other universities.

She also did not answer whether the way the government funds universities should be reviewed.

Instead, she said the Education and Training Act 2020 required tertiary education institutions to ensure they were operating in a financially responsible way with long-term viability.

"Universities have the autonomy to determine how they manage their financial performance, course offerings and organisational structures.

"As minister, I do not get involved in any such decisions.

"These processes are not easy for anyone involved.

"My expectation of all [universities] is that they undertake these processes in good faith and treat staff with respect, and that staff are given the support they need," she said.

Prof Nicholson yesterday confirmed the university was identifying what assets might be appropriate to sell and said a plan would go to the senior leadership team in the next 10 days.

She said the school had budgeted for 4.9% more students than were enrolled.

Answering questions about the timing of the university’s present re-branding exercise and consultation on a proposed new logo, she said the process had been under way since 2019.

"On balance, our 2023 forecast was actually reasonably accurate ... but there were a few assumptions that weren’t quite what we forecast.

"One of those was around the number of students who passed the university entrance ... that’s affected most New Zealand universities.

It also had lower retention of existing students than expected, she said.

For the voluntary redundancy, the university was hoping people would have left by the end of this year.

If the process required compulsory redundancies, those would take place over the next 18 months, she said.

In an email to staff obtained by the ODT, she said the university would be holding another all-staff forum in about six weeks to outline its next steps.

"This will include a clear direction on where we can increase our revenue and cut our costs.

"We need to stop ‘doing the same or more with less’, and move to ‘doing less and doing it better’ if we are to give ourselves the opportunity to excel at what we do best."