BUSINESS Rhodes University clarifies memo on its financial difficulties

RHODES University yesterday moved to dispel any suggestions it was about to retrench staff because of its financial difficulties after an earlier report based on an internal memorandum speculated the possibility.

The internal memo to staff members issued on Wednesday said the university was under financial strain and was facing critical choices.

However, spokesperson Veliswa Mhlophe said it was premature to begin to speculate about retrenchments at the university based on the internal memorandum.

Mhlophe said what the memorandum sought to highlight was a need for continued internal engagement and creative thinking by stakeholders, not to to create a volatile situation and instil fear about job losses.

“The memorandum is part of regular information updates, which the university issues from time to time.

“This has been the case over the past 18 months to inform internal stakeholders about the financial state of the university and other matters,” Mhlophe said.

“The Labour Relations Act provides clear guidelines about retrenchment processes, which the university respects.

“The university has been loyal to its staff over the years and has engaged in all negotiations in good faith and with transparency in the context of the unique socioeconomic situation of Makana Municipality.”

The memo said the dire financial situation was due to the fact that over the past two years, the higher education sector had been grappling with the serious impact of declining subsidies and a combination of other financial pressures.

It also said the financial challenge of the university was compounded by a high ratio of staff costs, heavy reliance on student fees and significant maintenance backlogs which can no longer be deferred.

Further exacerbating the financial situation were the wage negotiations with organised labour that have deadlocked following a rejection by the unions of a 5% revised salary offer.

However, Mhlophe said the memo presented a number of austerity measures that the university was implementing to mitigate financial risk.

These include work and discussion around the academic size and shape needed for the university to become financially sustainable and a review of support operations with a view to reducing costs.

The memo proposes an improved approach to identify and harness alternative sources of income, also putting a partial moratorium on support staff vacancies, on re- grading of support staff posts, and a moratorium on non- essential consultancy contracts.

Limitations on travel, accommodation and catering, as well as the cancellation of year-end functions have also been suggested.

“We encourage members of the media to contact the university communications and advancement division for comment when reporting on critical and sensitive issues as required by the Press Code,” Mhlophe said.

“This is particularly required where supposition has become the basis for reporting.” – ANA