AUS Submission on the PVC Science Plan for the College of Science (CoS)

AUS Submission on the PVC Science Plan for the College of Science (CoS) [1]
30 May 2007

The Association of University Staff (AUS) is the staff voice at the University of Canterbury. The collective represents 1100 staff, or about 75% of the University employees.

The AUS has considered the CoS Plan and has solicited feedback from members. Representatives of the AUS Branch Committee also have met with PVC Professor Shaw and Charmaine Atherfold (Human Resources) on three occasions. We see this as only the beginning of the consultation process and thus our views may evolve as members continue to feedback to the Branch Committee.

The consultation process.

the key elements necessary for consultation have not been forthcoming

The success of the College cannot be planned without first ensuring that the staff are generally agreed on the common goals of management, and believe in the process designed to achieve those goals. The first step in the process is, therefore, to agree to the rationale for the Plan. The second step is to properly consult with staff, including providing all the information that is necessary and pertinent to them making informed judgments. Finally, the Plan must hold the interest and trust of the staff. Our members are not convinced that a rationale exists and, if it does, that this Plan outlines a proper process for achieving a sustainable future for the College.

The AUS has not been satisfied with the consultation process despite the PVC’s recent efforts. While the PVC has shown the ability to respond to concerns during the process, the key elements necessary for consultation have not been forthcoming.

1. The AUS Branch was engaged only 24 hours prior to the release of the PVC’s Plan. This resulted in undue pressure on the Union.
   
   
2. Staff have not been given enough detail to adequately comment on the Plan. After a full-university meeting with our members on 11 May, we wrote to the PVC indicating that our members felt incapable of legitimately engaging in the consultation process without answers to fundamental questions and the data upon which they were based. The list of questions was given to the PVC on 14 May. The PVC responded the same day indicating that he did not want to make a “piecemeal” response, but would “reply to the other issues raised in your letter” on 15 May. In a meeting between the College and AUS representatives on 22 May, a reply to that request was again promised but not received as of this writing (and up to one day before the official deadline for submissions).
   
   
3. The length of the consultation period is inadequate, and flow-on effects are amplified by the lack of information to staff. The College persists in claiming that the length of the consultation period is designed to reduce staff anxiety. In contrast, the AUS has made the point both in meetings and in writing that ongoing delays in providing relevant and important information is causing staff anxiety. Most of our members in the College of Science have expressed a wish to participate, but only from an informed position. Sensitivity to this legitimate desire has, in our view, been lacking.
   
   However, we are aware that some staff have expressed a desire for the process to move swiftly. To the best of our knowledge, these members are primarily in the departments that face an amalgamation review. As a result, they members face a hiring freeze and other kinds of restrictions. The timeline for resolving those issues has become melded with this consultation on the College Plan.
   
   

4. If the PVC were to separate the amalgamation issues from the other issues, he would achieve a consensus from our members on what constitutes a reasonable consultation time.

   The above leads as well to our next point. It is not at all clear to us why the amalgamation discussion must be part of this Plan. Its inclusion appears to be supernumerary and could either be deferred until the Plan is underway or be considered in a process conducted concurrently with consultation on the Plan. The amalgamation discussion could easily be taken out of the Plan this consultation process and probably should be for a number of valid reasons. First, the PVC should build better relations with staff in those departments; a significant number feel that he has been inconsistent, sent mixed signals and reneged on past commitments by raising the issue yet another time. Second, the cost of the amalgamation alone might negate or reduce any short-term savings the PVC’s Plan might hope to achieve. Our members have estimated that the amalgamation could cost in excess of $1 million. While College has not provided an estimate of the actual cost, if this figure were even close to the actual, then the exercise is clearly something that should be considered in the long-term. To consider it now is to create a financial situation that is unsustainable and damaging. Finally, the PVC should consider undertaking formal reviews of past amalgamation exercises to evaluate the success of such processes.
   
   If the PVC were to separate the amalgamation issue from the other issues, he would achieve a consensus from our members on what constitutes a reasonable consultation time. In not doing this, the PVC is augmenting the divisiveness surrounding this consultation.

Sustainability via financial certainty or resilience?

The AUS considers that the PVC’s Plan is aspiring to a combination of increased financial certainty (called sustainability in the Plan) and growth. We agree that it is prudent and normal to make plans to address any financial problems and to evolve the CoS into a stronger and more vibrant academic group, if possible. We also agree that where future risks to the core activities of the University—namely research informed teaching and research conducted for the purposes of teaching [2] —these should be identified and minimised if possible.

In contrast to the documentation so far produced by the College, we argue for a holistic sustainability model. This model would acknowledge multiple factors required for a sustainable institution. The University is a human institution, not a collection of balance sheets, books and buildings, but mainly an institution of people who choose to serve the public good through their scholarship and support of scholarly activities. The first of our goals will always concern what makes a university a special or unique public institution, rather than financial viability (as listed in the Plan). This is because our members desire to work at a university rather than any of the many other kinds of “financially viable” institutions that are not universities. The membership of the AUS are not unrealistic about financial constraints, but equally we are not under the impression that the essence of this institution is assured just because it is “financially viable”.

The membership of the AUS are not unrealistic about financial constraints, but equally we are not under the impression that the essence of this institution is assured just because it is “financially viable”.

Sustainability goals can be met at any level of financial activity from subsistence to times of plenty. The present Plan implies that the rate of staff turnover at the lower end of the age profile of the College, the debt generated after application of a “contribution margin”, and the inability of the College to make unspecified strategic investments is leading to a state that is “unsustainable”. However, no particular financial state, age profile or staff turnover rate or investment fund is sustainable, because it is unrealistic, and likely undesirable, for the institution to aspire to some rigid description of these parameters. What might be sustainable, and desirable, is achieving a College structure that ensures some meaningful level of core activity at as wide a range of these parameters as possible. What AUS argues for is a plan that makes the College resilient to changes in one or more critical parameters over the likely range of variance in these parameters.

A resilient CoS is desirable to the AUS as it should be to management. Resilience requires attention to both financial parameters and the work force, but we fail to understand how it would evolve from many of the approaches suggested in the Plan. Our submission will address these approaches in turn below as well as offer some observations on specifics of the Plan.

Is there a financial problem to fix?

1. The PVC anticipates that the College will have a debt of $2.2 million in 2009 [3], and thus is asking for cost savings or increased income of that amount by the end of 2008. The AUS notes that this is an average annual debt of only $700,000, or 1.3% of the CoS’s $52 million budget. We think it unlikely that this forecast is robust. The VC has said that projections to an accuracy of 1% are unrealistic, and we agree. Feedback from our members suggests to us that the persistent mention of this debt is being used as an excuse to introduce a change proposal that is motivated by other factors. That perception, whether or not it is accurate, is damaging to the objectives of the Plan (as explained in more detail below).
   
   The PVC has not made a convincing case that there is a short or medium term financial justification for this Plan. There is perhaps more argument for long term planning, but this Plan is light on detail and analysis for the long term. By possibly over-emphasising a hypothetical fiscal shortfall, the CoS is risking a backlash of resentment from staff.
   
   
2. The financial “problem” seems to be largely a construct of the desire for a new, centralised, discretionary fund. The PVC’s additional requirement for a $1 million annual discretionary investment fund does create a significant “shortfall”. The total annual target would rise to $1.7 million, over 3% of the CoS budget. The question that arises is whether this centralisation of funds, effectively an additional tax on departments, would be more effective at making the CoS resilient. A comparative analysis has not been provided but should be if the management seeks a sincere and informed consultation with staff. Furthermore, indications are that the investment fund will more likely be applied to increase external research funding income. As addressed below, because the PVC has indicated to us that the margin on research income is negative, this appears to be a flawed strategy for incrementally increasing CoS resilience.
   
   

3. The cumulative financial impacts of appointments to and by College should be considered before the College looks to other measures of cost savings.

   The College Office is a cost-leader and savings should be sought there first. For example, our members have remarked on a number of issues surrounding College-level appointments, or lower-level academic appointments that have been “committed” to by College. The cumulative financial impacts of these appointments should be considered before the College looks to other measures of cost savings. What has been the relative cost-benefit of these appointments, for example, with regard to attracting CoRE funding? Have they been successful at attracting a qualitatively different and sustained contribution to the University, or have they augmented the capacity of the College/Department in an area it was already responsible for?

Is there a demographic problem to fix?

The PVC clearly has concerns about the age profile of the CoS academic staff. The underlying assumption is that the CoS is vulnerable to an uncontrolled high rate of turnover due to en masse staff retirements. The PVC’s preference would be a higher rate of turnover than has been the case in the recent past (~3%). This controlled turnover would allow for older staff members to serve as mentors for new staff members and ease the transition of newer staff who are also establishing their research careers, and still put in place a younger workforce in the medium-term.

This hypothetical turnover problem might not eventuate for a variety of reasons, including natural attrition. The putative CoS demographics problem appears to be based on speculation. Assuming that the speculation about staff turn-over is justified, we can still discuss the PVC’s most active management of CoS demographics, which is to create a special investment fund of about $1 million/year, that may be used to support newer staff that show exceptional research promise, recruit staff to strategically important areas at a rate that might not be justified currently by student numbers, and make capital purchases that could directly earn income or likely attract academics that would use the capital to more than recoup the costs. The discretionary fund therefore is meant to reduce the risk of a skewed age demographic by both accelerating the replacement of key individuals or individuals in key areas, and boosting the competitiveness of key researchers.

Thus the investment fund is largely a strategy of backing “winners”, whether that be at the recruitment stage or once individuals come to the attention of the fund managers. AUS believes that this strategy will change the risk profile of the CoS, but not necessarily change the underlying risks that concern the PVC. Winners of any age can leave the University. While it may be argued that younger winners are less likely to leave en masse (unlike those approaching retirement age), that argument is context-dependent. Perceptions of the University as an employer and head-hunting by other institutions can cause large fluctuations from time-to-time. Indeed many Anglophone universities will experience a demographic crunch in the next five years. Moreover, smaller fluxes in this workforce will be more important, because these individuals would likely also carry greater internal investment (e.g. as beneficiaries of the special fund, carrying students who may leave with them and so on) than those nearer the end of their careers, and hence their premature departures will draw more from the CoS than an anticipated retirement. Finally, some winners simply won’t live up to expectation.

The AUS recommends that the PVC consider mechanisms to raise the profile of teachers and better recognise the significance of the income they generate.

AUS is skeptical about this approach as a strategy for sustainability. The normal academic career in New Zealand is cyclic with regard to external funding, with few if any individuals growing their research income indefinitely and a very small minority with uninterrupted funding throughout their careers. In addition, the University is a significantly different research provider than are CRIs, which may be better models for a “winners” strategy, because the University can and should have a longer and more publicly-oriented research view. This different kind of research career generally requires lower absolute amounts of money (in comparison to the same research in other kinds of institutions) but does require continuity of funding and students to maintain institutional knowledge. A more realistic approach would be to use the fund to buffer downturns that all academic research groups will have (i.e. “prop the trench”) rather than further skew the difference between research and teaching staff (i.e. “raise the crest”) by picking winners.

The University’s primary taonga is its staff. An additional valuable skill of UoC staff is the ability to adapt to changes in workload, national funding regimes, student trends, working conditions and University financial cycles. This adaptation is evidenced by a sustained research output that maintains the UoC within the top three research universities despite ongoing financial strife, deep wounds to staff morale, and chronic restructuring. The UoC is in a fortunate position of having its largest resource also being the asset most resilient to a wide range of change in critical parameters.

EFTS vs. Externally Funded Research Income

According to the PVC, the margin on EFTS income is positive and large enough to mask the negative margin on research income. In other words, the CoS bears an actual direct loss on each dollar of externally funded research which is subsidised by EFTS income. This is an admittedly simplistic analysis, because the University is in part successful at attracting students because it has a credible research profile. [4]

This analysis, however, is useful for considering the best strategy for addressing the putative shortfall and generating a discretionary fund for the PVC. With EFTS earning approximately 65% [5] ($34 million) of the CoS’s $52 million budget, a small shift in EFTS income has much more impact than a shift in external research earnings. Because of the negative loading on external research funds, a small decrease in external research earnings could eliminate the putative debt. This is another unfortunate effect of the contribution margin model of funding distribution. The contribution margin is applied equally to all income, even if some sources of income are actually net expenses, driving the margin on external funding even further into the red. Thus, a small decrease in our success at getting external grants would improve our financial viability by the PVC’s measure.

The Plan is very under-developed with regard to EFTS funding and improving income generation through an increase in EFTS. The only strategy broached by the Plan was to suggest possible additional recruitment of students from overseas. The downsides of this strategy were superficially covered, being limited to the clash of academic cultures (a problem, but one that doesn’t cost money) and not discussing the additional funding necessary to support students with English as a second language.

The AUS recommends that the PVC consider mechanisms to raise EFTS funding. A specific EFTS income “think tank” of at least equal status and prominence to the proposed research income think tank should be created. This think tank should also be allowed to consider how investment in teaching innovation could be improved and applied to achieving better financial outcomes for the CoS, and greater satisfaction for both academic and general staff in this aspect of their jobs.

Other Comments

AUS questions why the Plan makes special note of using an external person to Chair the important Technical Services Review Group, but none of the other groups. AUS supports the inclusion of external persons to the committee, but believes that it should be up to the committee to agree on a chair. The message being sent to staff who already feel vulnerable to potential redundancies for cost savings is that the CoS is looking to build a case of redundancies through the use of external persons.

AUS also recommends that more “coal-face” technical persons be appointed to this critical committee.

Our members have indicated that they require more information (list reproduced as appendix). The AUS view is that proper consultation has not been initiated without this information.

Recommendations.

1. The AUS has been reassured that the College agrees with our view that staff cooperation in this process is pre-requisite for its success. However, among the various think tanks and proposals in this plan, none specifically address the need for monitoring and securing this fundamental component. We suggest that the College demonstrate its sincerity about engaging staff, and its rhetoric about trusting staff, by proposing a serious plan for how this may be achieved.
2. The Plan has potentially large financial consequences. The College has failed to provide a costing of the many “think tanks”, amalgamations and proposed reviews. Without this information, it is impossible for a reasonable submitter to consider if the plan is superior to the status quo. Indeed, sustainable cost savings may be achieved by other, simpler means (see recommendations below). The College should provide the financial information our members requested on 14 May, and then start the consultation period again.
3. The contribution of EFTS income to the financial goals of the College remains poorly described and developed. The AUS believes that the College should better acknowledge the role and contribution of the teaching done by staff, and submit a mature plan for developing this resource by better supporting that activity.
4. The PVC should immediately remove the discussion on amalgamating Gateway Antarctica, Geography and Geology from the Plan. This proposal is not only contentious, but by raising this issue the PVC creates an environment in which these three departments are singled out for undue attention from other departments.
5. The cumulative financial impacts of College-level and other College-directed academic appointments should be considered before the College looks to other measures of cost savings.
6. The College office is a cost-leader and, therefore, should be reviewed before sectors (e.g. technical staff), Schools and Departments enter yet another round of review. This review should be serious and independent, with members of the reviewing panel to include persons of at least the status that have been recruited from outside the University for School/Department reviews, and have an AUS nominated member. The AUS recommends that it include members from overseas, as was the case in the School of Biological Sciences, so that the chair does not have any actual or perceived conflict of interests (e.g., a chair from the CRI sector would be inappropriate because of intertwined funding). This review should include discussion on how College sets strategy and funding objectives and how well it has performed in attracting new funding to the University. Most importantly, the review should include in its terms of reference an open discussion on how to create financial feedback loops from Schools/Departments into College.

Respectfully submitted on behalf of the membership,

Dr. Jack Heinemann
Branch President


Notes

1. 4 May 2007
2. Research informed teaching is teaching that is provided by teachers who are active researchers and thus introduce the latest of the research frontier to students through teaching. Research conducted for the purposes of teaching is creating opportunities for students to learn through supervised research.
3. According to Figure in PVC newsletter of 21 May 2007.
4. The AUS is not advocating that the CoS becoming a teaching-only faculty, nor is it advocating for specialist teaching and research positions.
5. Figures supplied by PVC Science

Appendix (excerpt from letter to PVC Science 14 May 2007)

This is the information our members requested:

1. Complete annual budget statements for the College (e.g. December to December showing budget and reconciled actual) from 2004-2006 and the latest 2007 information. This information should include a breakdown of “teaching” and “external research/consulting” income (also as discussed in our last meeting).
2. A final definitive clarification in writing of the actual size of the projected deficit by year from 2007, indicating the total cumulative deficit by end of 2009 (not including the impact of your proposed $1M strategic investment fund).
3. A costing of the proposed “think tanks”, including staff time and any remuneration or honoraria (or the like) for external persons and a costing of departmental reviews.
4. A costing of the proposed merger of existing departments into a “Geosciences” school.
5. An estimate of 2007 PBRF income and estimated changes relative to end of 2006 budget.
6. An estimate of the three year teaching income under the Government’s new funding paradigm, with estimated changes relative to end of year 2006 budget.
7. A breakdown of the margins on teaching vs. external research income, as requested in our last meeting.
8. Comparative data of the age profile of other New Zealand and Australian universities including profiles of general and technical staff, and an analysis of UoC College of Science including all personnel. This should accompany a research-based (and not speculation-based), and sector-specific analysis indicating why and how our actual profile is a problem.
9. Information on any plans to have the CoS office reviewed, including the terms of reference for such a review.