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March 3, 2014 | by  | in News |
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Allocation Allocation Allocation

Universities and students’ associations are alarmed at comments made by the chair of the Tertiary Education Commission that universities should be run like businesses.

The Tertiary Education Commission, which is responsible for allocating $2.7 billion of funding across eight universities every year, is preparing to change from a competitive allocation model of funding to an investment model.

The current model allocates money to universities primarily through the Student Achievement Component (SAC), which is government funding based both on the number of students enrolled in courses and the types of courses they are enrolled in. Universities are therefore in competition to attract students and the funding that comes with them.

In 2013, the SAC received $2.04 billion. Certain courses, such as Engineering and Medicine, are allocated more money than others, such as Film and Art History.

TEC Chair John Spencer said that the current system needed to change or else the Commission would cease to exist.

“It’s become very bureaucratic and I don’t think it’s adding value where it should.”

An investment model would require universities to “clearly articulate where they’re going and what their place is”,  and to be run like businesses, Spencer said.

“Those institutions that aren’t performing have to suffer.”

Labour’s Education spokesperson Chris Hipkins asked why New Zealand’s eight universities offer the same courses and whether anything was being done to change that.

Spencer agreed that universities would need to specialise as New Zealand is small and has limited resources.

VUWSA President Sonya Clark said that she was “alarmed and concerned” by the comments from the “out of touch” Tertiary Education Commission.

“Universities are important learning communities with a duty to be the critic and conscience of society. Higher education needs to be cherished, not commoditised under a profit-driven model.”

“Subjects such as English Literature contribute immensely to our understanding of society. Will English Literature be under threat if it can’t be tied to specific financial outcomes?” Clark asked.

Universities New Zealand, which is handling university media comment on the matter, said that universities are not analogous to corporations “and should not be run like a business”.

Universities New Zealand also criticised the changes in the context of recently announced government changes to university councils.

“The world’s leading universities have councils that are larger than company boards and are not based on a business model. This is a strength, not a weakness.”

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