A bright future tipped for the university
Things at the University of Otago might not be as bad as first feared, Sir David Skegg writes.
LIKE thousands of alumni around the world, I feel immense gratitude to the University of Otago for an education that was lifechanging.
Unlike most others, I have two further reasons for feeling indebted. The university took the risk of selecting me as a professor and head of department, when I was a 31yearold lecturer at Oxford. Later it took an even bigger risk, by choosing me as the vicechancellor to follow Graeme Fogelberg in 2004.
There is an unwritten convention that retired vicechancellors do not comment publicly on the affairs of their university, or attempt to interfere in other ways. I have followed that convention scrupulously. My successor, Harlene Hayne, thanked me for this on several occasions.
Nearly 12 years after stepping aside, however, I feel I must speak out against an impression that our university is somehow ‘‘on the skids’’.
It is often said that, whereas it takes decades to build the reputation of a university, that reputation can be trashed very quickly. Institutional reputation affects many things, including the recruitment of students and the ability to attract and retain outstanding staff. It also affects staff morale and commitment, which are even more important than the financial bottom line.
Recently there was national publicity about a notion that the University of Otago is facing a financial crisis because of a ‘‘plunge’’ in student enrolments. The reduction in student numbers turned out to be only by 0.9%, a tiny fluctuation. The reported decline in student numbers at Victoria University was by 12%.
Any financial crisis at Otago cannot be attributed to falling student numbers. Regrettably, creating an impression that students are turning away from Dunedin runs the risk of becoming a selffulfilling prophecy.
There is an element of fashion in student choice, as in everything else. Past surveys have shown that school leavers in every part of New Zealand feel a huge attraction to this university city. We must avoid damaging that reputation, by wrongly implying that students no longer want to come to Otago.
Last Friday morning, I woke up to hear (on RNZ) the ODT headline that the University of Otago is in a ‘‘downward spiral’’, because of falling global rankings and a declining share of research funding. Who would choose to study or work at a university that is in a ‘‘downward spiral’’?
I understand the acting vicechancellor was reported accurately, and I do not question the role of the ODT in reporting and scrutinising what goes on at the university. But let’s consider those two reasons for the claim that the university is in a ‘‘downward spiral’’.
We cannot ignore university rankings, even though anyone familiar with the subject knows they have little validity. For example, most of them make no assessment of the quality of teaching (except as indicated by staffstudent ratios) or campus experience.
All New Zealand universities are falling in international rankings. We are being overtaken by universities in Asia and elsewhere. This slide will continue, unless our Government invests a great deal more in both higher education and research. The various ranking systems produce quite different results, but nearly all continue to place Otago as one of the two leading universities in New Zealand.
What about research funding? The share of funding received by different universities, Crown research institutes and private organisations depends on many factors, including Government research priorities and policies.
For example, the recent Budget decision to create three new research hubs in Wellington will advantage some universities over others.
Apparently Otago’s proportion of total research funding has declined recently. But is it not more important that our external research income has been increasing steadily, from $123 million in 2017 to
$157 million in 2022? This 28% increase was well ahead of inflation. Anyone reading the 2022 annual report would be reminded that there are many stellar researchers in our midst.
Another source of doom and gloom is that staff were told that the ‘‘university as a group’’ had a deficit of $14.9 million last year.
This sounded alarming, but was misleading because few would realise that the ‘‘group’’ referred to the consolidated results of the university and two associated entities: the Foundation Trust and University of Otago Holdings Ltd.
The Foundation Trust looks after our endowments. While the funds are invested in a diversified, balanced portfolio, all such investments fluctuate from year to year. In 2022 the Foundation Trust had an operating deficit of $19.4 million, owing to the poor performance of financial markets. This was an unrealised loss, which will be quickly reversed.
Far from reporting a big deficit, the university actually achieved a surplus of
$3.1 million last year. That surplus was not large enough to ensure future financial health, so more must be done to increase income and reduce expenditure. How to achieve that should be the concern of everyone.
During the period since 2011, the number (fulltime equivalents) of academic and researchonly staff increased by only 15 people (0.9%), whereas other staff increased by 333 (15.6%). There has been a big growth in central bureaucracy, and this needs to be addressed before academic programmes or departments are cut.
Michael Shattock, a British expert on university leadership, argues that the essential vitality of a university must lie in its academic departments. He warns against topdown management, with multiple layers between departments and the centre. While he favours rapid action to address weak performance in any area, he says this must be done in a climate of ‘‘unquenchable optimism’’.
Echoing the economist John Maynard Keynes, Shattock notes that the most successful universities have ‘‘animal spirits’’. Such energy will not be enhanced by negative rhetoric, whether from university leaders or news media. Our university has great strengths, as well as serious challenges while government funding continues to track below inflation. We need to celebrate our strengths, so that the university can maintain the ‘‘upward spiral’’ that was such a feature of its first 150 years.