The Government has rejected an advisory group’s call for a more elite university system with tougher entry requirements and a separate funding system from other tertiary institutions.
Universities Minister Shane Reti on Tuesday announced changes informed by the University Advisory Group, which reported to the Government in April.
The group’s report, also released on Tuesday, warned that failure to treat universities as a system that worked in the national interest was a “fundamental weakness”.
The report queried whether universities should provide the entry-level qualification for nursing and “several caring professions”, cast doubt on the need for two separate universities in Wellington, and suggested blocking polytechnics and private institutions from offering research degrees like thesis-based masters degrees and PhDs.
Reti said the Government would develop a new tertiary education strategy, set up a University Strategy Group, change the system for allocating $315 million a year from the Performance-Based Research Fund, and make changes to regulatory and governance settings.
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He said the overall goal was to improve university performance, ensure students were prepared for the workplace, and support research and development which would improve economic growth.
Asked whether the Government would increase university funding, Reti said the 2025 Budget included a boost for universities and “we’ll make our way through our Budget 26 as well”.
“But I’d have to say, at this period of time, actually focusing the system on what’s important and what matters and what will be measurable, I think is more important,” he said.
The advisory group recommended “as the highest priority” creation of a Higher Education Council to allocate funding, monitor and encourage quality, and provide strategic oversight separate from the rest of the tertiary sector.
Reti told RNZ that was a no-go.
“It would have been complex first of all, to set that up. That would have taken years to set that up and creating new new tools and machinery of government that would have been very expensive as well,” he said.
“We didn’t want to pull universities out by themselves and start deciding who is the best and who is not … They need to be inside of the general learning and knowledge framework.”
Reti said the Government would instead set up a University Strategy Group, chaired by himself and including university vice-chancellors, the Education Ministry and the Tertiary Education Commission to “drive collective decision-making, improve policy and regulatory settings, and coordinated action”.
He said the group would address issues such as increasing differentiation and reducing duplication between universities.
Retti said the Government agreed with the group’s recommendation for simplifying the Performance-Based Research Fund by ditching a time-consuming assessment of academics’ research every six years, and replacing it with measuresments such as the number of times a university’s researchers were cited by other academics.
He said the change would save universities tens of millions of dollars and hundreds of hours of work.
Universities New Zealand chair Grant Edwards from Lincoln University said: “Although no immediate changes to the funding of universities have been announced, we hope that remains a priority for government.”
“Better strategies and different measures will not be enough by themselves to help universities deliver the teaching and research that underpins economic growth and prosperity for this country.”
Edwards said universities’ funding was challenging, especially for domestic students.
“Since 2018, during a period when inflation has risen 29%, funding subsidies for teaching has increased only 18% and funding for research has not increased at all, meaning a real decline of 29% in the activity that the Government agreed was core to economic growth with the release of the Science System Advisory Group Review report earlier this year,” he said.
Report warns of duplication, financial stress
The University Advisory Group (UAG) report said universities were funded in a way that encouraged them to compete to maximise enrolments rather than the quality of education and some were experiencing “financial stress from shifts in student preferences”.
“The UAG has noted that some universities, acting with the high degree of autonomy to which they been accustomed since the 1989 reforms, have been diversifying into areas which are already well provided for and not fully utilised, nationally and even locally,” it said.
The paper said universities should continue to provide a broad range of courses, but at graduate level differentiation “becomes essential”.
“Quality is more likely to be assured where a critical mass of academics and researchers are co-located.”
The paper said lack of strategic coordination between the eight universities was causing problems.
“There is now a significant mismatch between the size of the system, what it offers and the way it is currently funded and how the system might evolve. Hence our argument for more strategic oversight of the system,” it said.
“The relative lack of strategic oversight at the national level has led to some less-than-optimal outcomes when viewed by the national lens rather than by institution.
“For example, there is little logic in two universities in Auckland offering professional entry-level courses in physiotherapy which is an intensive practicum-based programme.
“Similarly, there are no compelling reasons for Wellington to have two expensive campuses of two different universities offering numerous overlapping courses.”
The report warned against qualification creep, where qualifications expanded from diploma to degree or from Bachelor’s degree to masters resulting in higher rates of government funding, but with the same outcomes.
“There needs to be closer examination of the qualification paths for several vocations, especially those where there is a large workforce requirement. For example, what is the role of university versus polytechnic training for nurses? Several caring professions and their professional bodies are requiring university graduates when shorter forms of education may be more appropriate,” it said.
The paper said universities should consider whether to apply entry limitations based on academic standards in order to “advance their standing”.
“One relatively compelling argument is that the easiest way for universities to advance their standards and reputation is to limit their entry.
“The higher the entry standard, the more likely that the university’s reputation is enhanced, with flow-on effects for the marketability of graduates, the retention of high-quality faculty, and research intensity.
“The issue for New Zealand is compounded by the quality of compulsory education, evidence of educational disadvantage for some societal groups, and growing issues of youth mental wellbeing.”
The group said universities should be free to address concerns about educational disadvantage, including to ensure representation on an ethnic, rural or disability basis.
It also queried the wisdom of building programmes “that have comparatively high construction cost arising from their generous architecture”.
“In the current and future climate of tight economic conditions, there are opportunities to better coordinate university capital programmes within a national strategy for investment in New Zealand’s university system.
“The combined university capital plans currently indicate a desire to invest over $8 billion over the next decade. This figure alone suggests the need for greater coordination and strategic clarity,” it said.
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