Lincoln defends finances
Lincoln University’s ‘‘first financial surplus in a decade’’ was less than half a million dollars, its 2016 annual report shows.
A $17m surplus fell to just $493,000 once ‘‘unusual items’’ were taken into account. These include a $25.7m insurance payout and the costs of its restructure, earthquake recovery and the upcoming Lincoln Hub.
The university defended its long-term financial viability after a report, jointly commissioned by Lincoln and the Tertiary Education Commission (TEC), predicted it would not reach surplus in the next 10 years.
Lincoln rejected the report’s suggestion that merging with a larger institution was its best chance at survival.
Lincoln’s chief financial officer Howard Gant said the university increased its revenue by about $10m while cutting expenditure by $5m last year.
Staff and course cuts, particularly at its Telford campus in Balclutha, pulled Lincoln’s finances back into into shape last year, despite a land sale netting $1.5m less than expected.
The report writers said Lincoln’s merger with Telford affected its financial position.
‘‘The retention of LincolnTelford division is almost certainly impacting on Lincoln’s pathway to viability.’’
It recommended alternative ownership be looked at in 2017.
TEC provided Lincoln, and other Canterbury institutions, with a post-earthquake per-student subsidy while enrolments recovered. It was expected to end in 2018.
Lincoln should plan for a merger, if not now then in future, as it was a solution with the ‘‘lowest risk and highest reward’’, the report said.
Vice-Chancellor Robin Pollard called the idea ‘‘naive’’. He said Lincoln needed to ‘‘go deeper into [its] specialist niche’’ instead.
‘‘People think in New Zealand that universities need to be large and comprehensive, that’s the current model of a university that’s in everybody’s mind ... but that has not always been the case.’’
Universities New Zealand executive director Chris Whelan said a merger of Lincoln and University of Canterbury was seriously considered before the Canterbury earthquakes.
It would be ‘‘entirely appropriate’’ for any university to consider a merger as they became more common internationally.
The whole tertiary education sector faced considerable financial challenges and ‘‘we’re now seeing a number of institutions having to look very carefully at long-term viability’’, he said.
Lincoln as a smaller, specialised institution faced similar issues.
Whelan said sharing services, like financial and human resource systems, was a better way to combat financial pressure than a merger.
Lincoln had developed a strong reputation in land-based sciences. Merging with another institution could put that reputation and profile at risk, he said.