Otago Uni cuts still on agenda

University of Otago staff leave a meeting yesterday where they were informed staff and course...
University of Otago staff leave a meeting yesterday where they were informed staff and course cuts are still on the cards. PHOTO: STEPHEN JAQUIERY
Cuts at the University of Otago are set to go ahead despite a government bailout of an estimated $21 million over the next two years.

The figure was announced yesterday as the university’s share of a $128 million tertiary funding boost spread over two years while the Government reviews the funding system it says has proven "unsustainable".

In a staff meeting shortly after the announcement, acting vice-chancellor Prof Helen Nicholson said 189 staff had applied for voluntary redundancy, and 35 had so far been approved as the university processed applications as part of its bid to save $60 million.

A further 27 applications had been declined, and more were "in the process of having a letter sent to them".

It was not yet known what the funding boost would mean for the institution, which in April announced its intention to cut up to several hundred staff.

"There is still likely to be some redundancy," she said.

She also continued to stress the need to reduce the papers which had low enrolment.

The funding increase was for next year, and the university still had a deficit.

"We are beginning to find ways of identifying some of the savings, but hopefully we won’t have to cut as deep as we thought we may have to."

Prof Nicholson also told staff she would be retiring once a new vice-chancellor arrived at some point next year.

The funding boost will provide a 4% increase in tuition subsidies for all institutions that grant degrees, including universities and polytechnics.

This follows a 5% increase in tuition subsidies announced in Budget 2023, meaning the subsidy will increase by a total of 9% from next year.

"Chronic underfunding" has been cited by the university as a cause of its financial woes, with government spending failing to keep pace with climbing inflation.

Earlier this month it joined forces with Victoria University of Wellington - also facing significant cuts - to plead a case to the Government, which it said controlled nearly 80% of university funding.

The Tertiary Education Union (TEU) and Victoria and Otago’s student associations also urged the situation be addressed.

Education Minister Jan Tinetti said the Government had heard the concerns of the sector.

"When we began our Budget process, universities and other degree providers were forecasting enrolment increases.

"The opposite has occurred, and it is clear that there is a need for additional support."

The additional funding would not resolve all the issues faced by universities, but should make a positive difference, she said.

The Government would also review higher education funding, including the Performance Based Research Fund.

"Today’s funding announcement is a temporary boost for two years. We need to take a thorough look at the funding system during this time."

Decisions on the scope and approach to the review would be taken before the end of this year.

Finance Minister Grant Robertson, who rebuffed the term "bailout", said the current funding model had proved itself unsustainable.

Tertiary institutions were autonomous and made their own decisions on how best to respond to their financial situation, but the Government asked them to "look again" at their current proposals and consider the increase when making decisions for 2024 and 2025.

"The funding announced today is coming from a transfer of underspends in Vote Tertiary Education, including from the fees-free scheme caused by lower than expected enrolments," he said.

TEU co-branch president Brandon Johnstone said the bail out was a victory in collective action, but only went a small way in addressing the shortfall.

"As a united front - staff and students - we need to go back to Government and ask for a lot more - and achieve a proper injection of funds.

"In the meantime, the university should consider how the money could be best used to buy it time, to create a more sustainable plan and not push forward with management of change processes or redundancies."