The magazine for alumni and friends of Massey University.
Issue 14, April 2002

The threat or promise of change? Grappling with the demands on tertiary education providers

Excellence, relevance and access – the current mantra in tertiary education institutions throughout New Zealand – points to the means by which tertiary education is to be reshaped and the national economy transformed. By increasing the quality

of tertiary teaching and research, enhancing the value of educational outputs, and

widening access to learning at a tertiary level, New Zealand’s reliance on commodity markets will be reduced and the country’s ability to compete in the high-value end of international markets significantly improved. At least this is the Government’s goal.

Will it be achieved? It depends on the Minister of Education, the newly formed Tertiary Education Commission (TEC), the agency charged with implementing the Government’s tertiary education reforms, and the tertiary institutions themselves.

Government legislation in the form of two recent pieces of legislation – the Education Standards Act and the Education (Tertiary Reform) Amendment Act – has been passed and linked policy documents have been developed. Under the legislation, the TEC is to create a cooperative and integrated sector committed to the Government’s tertiary education strategy. Student demand is no longer to be the driver of tertiary education. The short-term effect is apparent; the long-term consequences are unknown.

How New Zealand’s 800-plus tertiary education providers – the universities, polytechnics, wananga, and private providers – operate within this new environment is largely up to them. But institutions are well aware that there is unlikely to be any more funding for tertiary education under this or any future government, and there could be financial penalties for those who act injudiciously in the new environment.

Though the TEC is not over-resourced and its task considerable, the agency is already making its presence felt. For Massey this means government-initiated consultation exercises to contribute to, data collection methods to be revised, a research office to be reshaped, increased compliance costs to be budgeted for, and academic staff to be placed under pressure for increased research productivity.

Finding additional sources of external income has taken on renewed importance too. Many institutions are now seeking new collaborative opportunities with industry and business and, in some cases, exploring the possibility of cooperation with erstwhile competitors.

For universities, their students and the communities they serve, the tertiary education reforms will have pluses and minuses. How significant the pluses are, and how distracting the minuses, will depend on how well institutions are able to initiate and embrace internal change, and to anticipate and positively respond to wider environmental change.

For the first time, tertiary education providers are being required to produce revised charters and profiles that will publicly commit them to a strategic direction. This is a chance for an institution to define what it is that makes it different, and to cooperate with other local providers to become still more efficient. It is also a chance to signal to potential students, to local government, and to regional industry and business interests, those areas of teaching and research excellence which the institution is committed to growing.

Financially, New Zealand’s universities have had hard times in recent years. The effect of a freeze on student tuition fees from 2001 through to this year has not been offset by increases in government funding, as anticipated. Funding increases have failed to meet inflationary pressures, particularly in areas such as library purchasing and salary costs. The proposed introduction of fees maxima and the progressive diversion of some current funding to a contestable performance-based research fund (PBRF) will add to the already significant financial pressures on institutions.

The trick will be for institutions to sustain both those academic areas that have potential for growth as well as those essential for programme integrity and necessary for student choice, while concurrently allocating resources efficiently. Much will rest on increasing market share in those areas that have growth potential, enhancing intra- and inter-institutional cooperation, earning back funding diverted to the PBRF through increased research productivity, and increasing the level of external income. This task will be made easier if institutions genuinely focus on delivery of high-quality academic services and research outputs, and succeed in achieving a balance between entrepreneurship and astute risk management.

But ensuring that universities thrive in the new environment will not, in itself, be easy. Targeting some areas for development at the expense of others could affect staffing and reduce student choice; cooperation and collaboration require compromise and negotiation as well as time and effort; and increased teaching quality and enhanced research productivity usually have large price tags attached, at least initially, and often require an increase in already high staff workloads. Nor will simply responding positively to the Government’s tertiary education priorities be enough. The TEC will require hard evidence of each institution’s performance, and that adds yet more to compliance costs.

Why then would a university choose to follow the course set by the Government? Perhaps first because, while the competitive model of tertiary education provision, driven by student demand, is preferred in principle by many in the sector, the associated costs of a competitive market have proven difficult to sustain in an environment where student numbers have begun to plateau and government funding has been significantly reduced.

So focused have institutions become on competing for government funding that it has often been difficult to find funding for new initiatives, such as the challenge of e-learning, or to add to research capacity. An alternative model for delivering tertiary education that provides greater funding certainty, and that acknowledges and rewards innovation and research excellence, holds more promise for the future growth of universities in New Zealand than the current model, at least under existing circumstances.

A second reason why a university might support the Government’s agenda for tertiary education is that for the first time research has been accorded a priority. A high level of research activity and research-led teaching are the characteristics that commonly distinguish universities from other tertiary education providers. The Government’s acknowledgement of, and support for, research excellence is unanimously applauded by universities – though this support comes at a price.
Lastly, universities have already benefited from the tertiary education reforms and linked Government initiatives. The Minister’s awards for teaching excellence have drawn attention to teaching quality, while the establishment of centres of research excellence and incubators has brought more funding and has helped establish new and enduring intra- and inter-institutional research partnerships. There is also the promise of further positive outcomes attached to the priorities set by the Government. Support for joint developments with local authorities and businesses is already generating opportunities for creative partnerships between tertiary education providers and regionally based interests; the drive to increase student access to tertiary education through the provision of foundation-level programmes is opening up opportunities for stair-casing between institutions; and the Government’s commitment to growth and innovation is providing greater assurance in institutional long-term planning than was previously the case, thereby acting as an incentive to long-term investment in linked activities.

But, yes, the devil is in the detail, and at the time of writing much of the detail still rests in Cabinet papers and working group minutes. The Government’s agenda is ambitious, the resources constrained. Right now, institutions do have choices; the options may be more limited in the future. Institutions can choose either to await the outcome of the many decisions still to be made and be subject to potential government direction in the future, or they can choose to take the initiative and grasp the opportunities now. This last option cannot be based on “business as usual”. Our ways of doing business, both within and outside the organisation, must change, but the ultimate benefit to a university choosing to take advantage of the signals from the Government is that the institution can take a lead strategic role in shaping the future reforms, rather than becoming shaped by them.