Funding crisis

This is a brief synopsis of the funding issues currently confronting Irish universities, and the main proposals for resolving them.

It is easy to forget, in all the general economic furore, that financial reorganisation of the Irish universities was already on the agenda long before the current crisis. While for many people the issue is “Will they cut my salary again?” or “Will I still have a job in six months’ time?”, most of those involved in policy issues have a considerably longer time-horizon. The question is not so much what will get us through the next few months, as what is sustainable in the long term. This may seem rather like fighting the next war before we have settled this one, but such is politics: university administrators and civil servants are in it for the long haul, and while politicians necessarily have shorter horizons, most would prefer a solution of lasting impact to a mere temporary fix.

Irish universities, then, had a serious problem even in the Celtic Tiger years. Massive expansion in student numbers, encouraged by government, was not accompanied by commensurate increases in funding. Improved administration and stronger legal rights for staff and student had costs, which universities had to absorb without any special allowance. A few universities were in serious deficit, the others rather precariously solvent. University dependence on government was acknowledged as a problem but not one that could easily be solved. For the short term, matters seem to be on the mend, or at least are not as desperate as they were: significant cuts have been implemented without too much pain (yet), deficits have reduced, and some awkward pension liabilities transferred away. But the long-term picture does not look good.

Not one but several re-thinks about university policy are in progress – and it is hard to see a single agenda behind them. An Bord Snip (“the McCarthy Report”, July 2009) (volume 1 and volume 2) (for summary and comment see herehere, here and here) has proposed many cost-cutting measures; pay was not within its remit, but an ESRI report has recommended substantial cuts there too. A Strategic Review of Higher Education was established by the government in March 2009, and an ‘Innovation Taskforce’ the following July.  (It reported in March 2010.)  Other exercises are also being considered with rather less fanfare, but perhaps with important later effects, including the ‘forsenic audit’ of university spending by the Comptroller and Auditor-General. Also, the issue of university fees and who should pay them was already under discussion – probably the most important in the public eye, but of relatively little importance within the universities themselves. The question is not who pays the fees, but rather, assuming that someone does, how large they are, and what universities can do with the money.

There are many players in this debate. Beyond the obvious influential individuals – University presidents, leading politicians, civil servants, and trade union leaders – there is also the broader context in which universities work. A coherent university policy requires a collective view of what universities are for and how well they are performing; crucially in current circumstances, whether they provide a means for economic recovery or whether they are merely a drag on public funds.

At present there seem to be six main ideas in play for putting Irish universities on a sounder financial footing:

  1. Reducing grant and introducing fees
  2. Rationalising institutions
  3. Reducing research budgets
  4. Reducing headcount
  5. Reducing pay
  6. Increasing central government control

It is not always easy to see what simply a short-term measure and what is intended to be permanent, though in all of these cases major decisions will clearly have an impact beyond the current fiscal year.

1. Fees and maintenance grants. Abolition of “free fees” is on the political agenda, but is wildly unpopular with those who seem likely to pay them. While the former Education minister, Batt O’Keeffe, strongly supports abolition, the Greens have made it clear that they would oppose it, and a move with such obvious electoral impact requires much more to have any chance of implementation. Nor is it clear what regime would replace it (see “The fees issue”). The system of maintenance grants is also in turmoil, with a freezing of benefits and various technical changes to the system, and the dawning realisation that the economic crisis puts it (with all means-tested benefits) under huge pressure. From the point of view of university management, the effects of all of this are important but extremely indirect: universities are paid their fees whatever, and changes to the system have little effect on how much, though they greatly affect the timing and the administration involved; also, more subtly, they affect public perceptions of who is paying for the universities.

2. Rationalising institutions. While several proposals have been made here, probably this area is the least threatening to the universities, as opposed to the ITs, who are threatened with major amalgamations (particularly the Dublin ITs). No university mergers are currently threatened. Earlier in 2009, much media fanfare announced a “research merger” of UCD and Trinity, but in practice this seems to mean merely a shared research facility and increased collaborative efforts in certain areas of scientific research; nothing that would seriously question their separate identities seems to under consideration. The touted “merger” of NUIM, DCU and the RCSI seems even more vestigial; the NUIG-UL alliance, while a bit more substantial, is not obviously repeatable elsewhere. Some relatively minor bodies may be rationalised out of existence: the continued existence of the NUI has been questioned by An Bord Snip, which also suggested a merger of the HEA into the Department of Education.

3. Reducing research budgets. Cuts to major research funding bodies are urged by An Bord Snip (PRTLI and SIF programmes are under threat), as are various changes to the administration of such funds. This will have an obvious and direct effect on universities, both reducing their overall funding and in shifting the balance of power away from research centres reliant on such funding.

4. Reducing headcount. This is probably the most important of An Bord Snip’s recommendations in relation to the universities: a reduction in the order of 10% in those employed by Irish universities. As staff costs are the major part of each university’s budgets, a proposal of this sort was probably inevitable. The 10% figure however appears to be plucked from the air; nothing in the report explains why it is the right one, or how many of the 10% should be academics and how many administrators, and indeed the general tenor of that part of the report is that there is a lack of performance management in that area (in other words, An Bord don’t know what’s going on!). The report protests that academic contracts typically have no specific provision in relation to teaching hours, and demands as necessary reforms:

  • “the introduction of a formal academic workload management system across the sector”;
  • “agreement on increased teaching hours for non-research active staff and minimum undergraduate teaching commitments for senior academic staff”;
  • “implementation of performance management across the system”;
  • “more flexible staff transfer arrangements to enable redeployment of staff to areas of priority”;
  • “under-utilisation of resources, both human and infrastructure, over the extended holiday period”.

How all this increased management of staff time is to be achieved with fewer administrators is not explained; nor is it clear how much use redeployment is with academic staff. (Even if it were clear that we need fewer literary theorists and more engineers, it’s not possible to redeploy the first to do the work of the second.) This portion of the report certainly does not impress with its understanding of how universities work; and the reference to the long vacation as “the extended holiday period” simply recycles tabloid prejudice about how academics spend their time.

The elephant in this particular room is the public service redundancy issue. The major public service unions do not accept that the concept of compulsory redundancy can properly be applied to their members, and indeed it is not very clear that the legal system does either (amending legislation is possible, but would be frantically controversial). Related to this is the tenure issue – all permanent full-time academics have their tenure guaranteed by statute, but no-one knows for sure whether that rules out compulsory redundancy – and it would take either legislation or a new legal precedent to answer that definitively. If these issues are dodged – and many people would like them to be – then headcount reductions can only be achieved by more limited methods: non-renewal of temporary contracts, “natural wastage”, and encouraging voluntary retirement.

5. Reducing pay. Coinciding with the report by An Bord Snip Nua, the Economic and Social Research Institute (ESRI) issued its quarterly economic forecast, which it based on the assumption that Public Sector pay would reduce by 3%. A statement by one of the economists involved (Alan Barrett) argued that pay cuts, rather than headcount reductions, was the preferable way to reduce the public sector deficit. As public sector wages are demonstrably not all very high, more nuanced solutions are being suggested: there is some political support for a new bench-marking process, as well as reconvening the Review Body on Higher Remuneration in the Public Sector (which recommends salary levels for the more senior jobs, relying heavily on international comparisons). While all of this would be determinedly opposed, it is probably less politically painful than sizeable headcount reduction, and so may turn out to be the preferred solution.

6. Increasing control from the centre. It is one thing to insist that universities stay within their means, another to suggest that they are incapable of doing so and must submit to a deeper level of control. Several of the reforms urged have crossed that line, and there is already in place an Employment Control Framework under which universities need permission to create any new posts (technically from the HEA, though it is the Department of Finance that is driving this process). The approval process is not rapid, and is a considerable brake on universities’ ability to adapt to new circumstances. (For comment see here, here, here and  here.) There are strong arguments suggesting that this Framework may be illegal, as it is in conflict with university autonomy as described in the Universities Act, 1997, but the university heads probably do not think these arguments are the strongest weapon they have available to them. Rather, the argument is over whether universities are seen as responsible to govern themselves, or whether a greater level of bureaucratic control would be necessary.

Most of the controls suggested cluster around the idea of a workload model, which would identify how university staff use their time, and so make it easier to identify both waste and opportunities for redeployment, as well as providing a better guarantee that the money spent on employing them is well-spent. Probably mostly university heads want such a model to, for those reasons but also because it allows a more concrete projection of the universities’ image both on general terms (slaying the myth of the workshy academic) and in specific contexts (identifying the real costs of possible new projects). However, there are many sensitivities here, so much so that grass-roots opposition is likely to be fatal. Few academics would be prepared to submit to a timesheet regime. Any conceivable system is likely to be thoroughly arbitrary (teaching, research and administration are not really as easy to separate as all that). And differences in strategy are often translate into irreconcilable practical differences. (Should we be recording hours worked on particular categories of task, or percentage of time for each? University heads prefer the second, as it is easier for each staff member to estimate; IFUT prefer the first, as it makes it clear how hard-worked academics are. Until this is resolved, IFUT has ordered its members not to co-operate.)

The other big control idea would be a Research Assessment Exercise, as practised in several other jurisdictions. This was mooted broadly in the late Celtic Tiger years. However, the UK experience seems to show that the only type of RAE broadly acceptable within academia is peer-review of each of the units under review. (The hopes of the UK Treasury that bibliometric indices could take up the whole burden have been dashed, even in those areas of science where such indices are influential and well-understood.) However, such peer-review exercises are expensive, consuming a significant proportion of the funds they are meant to distribute. In current circumstances, this is a non-runner.