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However, uncertainty remains regarding how this will be achieved and the university’s latest financial review says the target is "at risk" of not being reached. The review also reveals the university’s operating budget is sliding further into the red.
In a statement to Otago Daily Times while stepping out the door to retirement this month, finance chief Sharon van Turnhout said: "Work continues to identify initiatives to address the target. The university is confident it will be delivered by the end of 2023."
Staff were told about the savings target in April — despite uni bosses knowing about it since last November.
The news was included in a bombshell announcement by acting vice-chancellor Helen Nicholson, who said a total of $60 million had to be slashed from her operating budget to get the university out of the red and have a healthy surplus to support its large, debt-creating building programme.
The university’s financial review to the end of April 2023 says $12 million out of the $25 million savings required are "still to be identified" and "the delivery of the target is at risk".
The university has previously told the ODT that most of the savings already achieved are "temporary", including due to staff vacancies, and the university does not expect to get out of the red either this year or next.
The end-of-April finances also reveal a further slide in the projection for the end-of-year deficit position — a $24.2 million projected deficit compared with a $20.5 million deficit projected last month.
The latest projection is nearly double the $12.4 million deficit agreed by the University Council last November.
The university blames the further slides on lower-than-anticipated student numbers.
The end-of-year deficit is contingent on the $25 million savings target being achieved.
The $12 million savings still to be found are expected to include staff cuts.
The original 2023 operating budget, set last November, said $12.8 million was being sought in savings to salaries and in April, Prof Nicholson said a few hundred roles were likely to go.
However, there is still no news about how many staff have applied for voluntary redundancy, nearly three weeks after the application deadline.
The voluntary redundancy call is the second in 18 months — in early 2022, 103 jobs were slashed through voluntary redundancies.
In an all-staff meeting earlier this month Prof Nicholson said cutting back on building use was preferable to losing staff, saying "the take-home message is we would much rather lose space than staff".
However, the university is conducting "management of change" exercises within departments, which is expected to result in redundancies.
The university’s latest finances show a slowdown of capital expenditure, as the university tries to constrain its spending on new and refurbished buildings — to reduce risk to its liquidity.
In the first four months of 2023, the university spent $20.9 million on building works — only 12% of the $168.6 million it had budgeted to spend in 2023.
The redesign of the food science Gregory Building was "temporarily paused".
The university has previously said, however, that it expects to be borrowing within weeks to fund its building works — which include urgent remedial building code work.
This will be the first time the university has been in debt in living history except for two weeks in December 2022.