AUS Submission on the College of Arts Restructuring
You can read, below the fold, the text of AUS's submission on the College of Arts restructuring.
Association of University Staff - Submission
College of Arts - Financial position and effect on staffing
Introduction
This submission has been prepared following a mediated agreement between the University of Canterbury and the Association of University Staff (AUS) that there would be consultation and an attempt to reach agreement over current proposals to reduce academic staff numbers in the College of Arts. This submission is provided as a basis for formal consultation in terms of the obligations set out in the Academic Staff Collective Agreement and the Employment Relations Act 2000.
Our submission is guided by the general principle of protecting jobs and ensuring that front-line services and the academic standards of the university are maintained. Without adherence to such a principle there is a strong risk that the reputation of the College of Arts and University of Canterbury may be irreparably damaged.
In preparing this submission we have sought views from our membership and have incorporated a number of those. It is also informed by the fact that the University has already called for expressions of interest in voluntary severance from potentially affected staff and that, in itself, has created some expectation. Although the voluntary severance process has been suspended while consultation occurs, pressure remains because of advice that central funding available to finance a severance programme in 2005 would not be available in 2006. Thus, if the process is not completed by 31 December the financial situation will be compounded.
We understand that we have been provided with the information upon which decisions taken to date by the College and University management have been made.
Background
We understand that, after accounting for operational savings negotiated with Heads, a projected deficit of $1.3 million for the College remains. The University administration has agreed to absorb $300,000 of that deficit, leaving $1 million still to be found within the College.
In general, the situation presented by the College appears to be:
On this basis, a decision was taken to achieve savings of approximately $1 million through a reduction in academic staffing numbers, initially by seeking expressions of interest in voluntary severance. This amounts to about fifteen staff.
We understand this decision has been made in the absence of any:
We also note that there is no current proposal to cut academic programmes until there has been an assessment of the voluntary severance process.
Observations
Current budgeting is based on EFTS forecasting, yet there are significant variances in EFTS figures which have been supplied.
The initial 2005 budget was predicated on EFTS of 3,851, with the May revision presumably altering this to 3,363.8. The July actual figures show 3978. Thus there is a difference of more that 600 EFTS. Taking account of EFTS transfer and BTL EFTS, the variance may be around 400 EFTS, representing an income of approximately $4,000,000. Accurate analysis is hampered by such variance.
The 2006 Budget is based on a forecast of 4011 EFTS, expected to generate government grants, tuition fee income and BTL contract fees of $39,151,777. We note that this is a higher figure than the BAC parameter. Income projections are predicated on an increase of 3.2 percent increase in tuition fees, although these have not yet been set by Council for 2006.
The 2006 budget is based on returning an operating surplus of $17,037,782 (or 38.8 percent) of income over expenditure. The level of return, or contribution margin, is determined by the central university administration.
The 2005 average academic staff to student ratio in the College is 1:22.5, with a variation ranging between 1:38 and 1:09.9. The national average is 17.5. The University of Canterbury has the second worst staff to student ratio at 1:19, with four universities (including Otago and Auckland) having a ratio of less than 1:16.
The median staff to student ratio in 110 UK universities is 1:16, while the figure in the Australian G8 universities is 1:17.8.
PBRF income to the College is set to increase from $883,385 in 2005 to $2,353,224 in 2006, a net increase (when allowing for the decrease in tuition subsidy) of $700,000. The PBRF income is budgeted to increase to $4,149,124 in 2007, and more beyond, but there has not been any analysis of the net benefit.
The University is currently preparing for the interim round of PBRF assessment. We are unaware of any analysis or projections on the impact this may have on the College budget.
There are also ongoing and collaborative interdisciplinary research programmes and initiatives that transcend college boundaries, hence changing staffing levels in the College of Arts could not only affect current relationship but also the University’s potential for future funding and growth.
Principles
All decisions relating to reduction in staff numbers and/or academic programmes should be based on long-term planning, not just for 2006, and on academic reviews of individual programmes.
Cutting staffing levels should be a last resort when acting to alleviate the University’s financial position. Other areas of saving should be considered before staff numbers are reduced.
All decisions to reduce staff numbers should be consistent with, guided by, and tested against the University Charter and profile.
Account should also be taken of likely future funding, particularly given the establishment of the University Tripartite Forum which has, as a priority, the task of considering and resolving salary and funding issues. Account should also be taken of the decision taken by Government to move funding from areas of low-quality and low-priority provision to areas of high strategic relevance.
Relevance is defined in the Tertiary Education Strategy as including: ... a comprehensive tertiary education system that contributes to the development of New Zealand’s cultural and intellectual life, while also playing a crucial role in helping build and sustain an inclusive and vibrant society.
... national goals of ... economic transformation, social cultural and intellectual development
The proposed changes to the funding regime are outlined clearly in the Government’s Statement of Tertiary Education Priorities 2005-07.The Government will continue to invest in tertiary education to support its contribution to New Zealand’s development ... we are emphasizing, and will place funding priority on, the quality and relevance of New Zealand Tertiary Education ... Where the teaching, learning or research is of poor quality and where it has relevance to New Zealand’s needs, it will be challenged.
Any decision to reduce academic staffing levels (and/or courses) should be approved by a sub-committee of the Academic Board and not by University or College management alone. It is important that Academic Board rather than University management determine the academic direction of the University.
Attention is drawn also to s182 of the Education Act 1989 which prescribes that the Council shall consult with and board or committee in determining policies of the University and shall not make any decision or statute in respect of any academic matter referred to it unless it has requested the advice of the academic board and considered any advice given by the academic board.
Any formula used to cut numbers in academic departments should not be solely EFTS based. Account should be taken of the value of the academic discipline to a fully rounded education and of individual staff members’ contribution to the University’s research capability and overall profile.
If a final decision is made to reduce the number of staff, we believe this should be achieved, in the first instance, by attrition, then by examining alternative employment practices, and then by enhanced voluntary severance or (early) retirement. Compulsory redundancy should be avoided.
Any process adopted to make and implement a final decision should be designed to avoid reducing staff morale.
The selection process for voluntary severance or retirement should be made on a strategic basis to ensure the academic viability of the University. Clear guidelines should be agreed for the selection process and negotiation needs to occur to determine the form of enhancements to supplement the standard severance or retirement options.
Alternative forms of employment, such as reducing from full-time to part-time work, should be actively considered, although care needs to be taken to ensure that staff working reduced hours have reduced workloads rather than the University simply paying them less for the same amount of work. Care also needs to be taken to ensure that an establishment of full-time continuing staff forms the basis of the University workforce.
Where reduced hours or part-time work is agreed, affected staff should have the option of returning to full-time duties should circumstances permit. Pro-rata severance arrangements could be entered into where this occurs.
Conclusion
In 2004, the University returned an operational surplus of $6,095 million, well ahead of budget and which, at 4.8 percent of income, is at the high end of TAMU guidelines which recommend a return of between 3 and 5 percent. The Chief Operating Officer is currently forecasting an even larger surplus for 2005 of $8 million according to the UC Diary of 30 September 2005.
It is our submission that the decision to reduce academic staff numbers by around fifteen has been made as a result of an immediate crisis caused by the requirement to return a contribution margin of around 40 percent to the central University administration. The level of contribution margin is an administrative decision which can be amended in these circumstances.
The current crisis has, therefore, resulted from an operational decision rather than an actual financial crisis. Any decisions should be based on long-term projections. Our recommendation is for five and ten year forecasting.
There also seems to be an assumption that staffing levels should be cut in programmes that are not meeting contribution margin requirements. Balanced against this assumption should be a measure of other values including the academic merit of the programme, the PBRF achievement and potential in the programme, the value and benefit of library collections, the value of national and international academic links and reputation and the wider benefit to students of a broad range or offering of subjects upon which to base degree courses.
It should also be noted that, while we do not have a benefit analysis, the costs of establishing and maintaining the bureaucracy of the College diverts funding away from front-line academic services.
Attention is drawn to the broader negative effect of the contribution margin requirements. Where an impression exists that the University takes a significant proportion of external income derived by individuals, there is a disincentive to generate such income, especially if staff have no influence over the spending decisions of management. Our advice is that consultancy incomes and external grant applications have reduced in some areas of the University as a result of precisely this form of discontent.
We also understand that a contribution margin remains at the predetermined budgeted level, even where the School income does not meet budgeted levels.
Given that the Government, unions and the New Zealand Vice-Chancellors Committee have embarked on a process to alleviate the funding crisis, it is our submission that any move to reduce staff numbers, particularly without any analysis on the academic consequences, is premature. The university has sufficient flexibility through its projected surplus to avoid short term actions which may later be regretted.
The current offer of voluntary redundancy has raised expectations among some staff. If a decision is ultimately made to proceed with the voluntary redundancy process, we suggest that moves to continue the process are suspended until all long-term planning has occurred.
We also believe that more time should be taken over this process. The deadline of 31 December to have the process completed in order to receive central administration funding for severance purposes is an arbitrary one and we do not accept there is any impediment to the preferred course of carrying this funding over to 2006 or beyond. It should be noted that there are significant taxation implications if individuals receive a voluntary severance payment towards the end of a financial year, in which earnings will already be attracting the maximum tax rates.
Recommendation
That consultation occurs between College management and AUS, based on the principles above, with the objective of alleviating any prospect of reductions in staff numbers within the College of Arts.
Association of University Staff
10 October 2005
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