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In this episode of the World of Higher Education podcast, host Alex Usher speaks with Chris Whelan, Chief Executive of Universities New Zealand, about the country's new University Advisory Group. The discussion covers the challenges facing New Zealand's higher education system, including declining government funding and the impact of COVID-19 on student numbers. Whelan explains the purpose and scope of the advisory group and outlines the potential obstacles to implementing its recommendations. Tune in to understand the complexities of New Zealand's higher education landscape and the government's efforts to seek expert advice for its future.
Creators & Guests
What is The World of Higher Education?
The World of Higher Education is dedicated to exploring developments in higher education from a global perspective. Join host, Alex Usher of Higher Education Strategy Associates, as he speaks with new guests each week from different countries discussing developments in their regions.
Produced by Tiffany MacLennan and Samantha Pufek.
You're listening to the world of higher education podcast. Season three, episode nine.
Hi everyone. I'm Alex Usher, and this is the world of higher education podcast. We live in a time when governments seem to have few ideas about how to manage massified higher education systems. One playbook in this situation, often used in the UK and Australia, is to punt the question to a group of experts in hope that they might find some policies to make higher education more useful, productive, and, let's face it, cheaper. Today we're going to take you to Wellington, New Zealand, where the new government, led by the National Party, has created exactly such a process to cover for its own profound lack of ideas on the subject.
This isn't the first time our podcast has been to New Zealand. In one of our very first podcasts, higher education expert Dave Guerin walked us through the country's post COVID landscape. And earlier this year, consultant Roger Smyth talked to us about the country's not very successful experiment with free first year university education. Now we're going back to Wellington again to speak to Chris Whelan, Chief Executive of Universities New Zealand, about this new process which has been dubbed the University Advisory Group.
It's a quick interview that covers all the major bases of the new initiative and who set up the advisory group, what we can expect from it. Chris is refreshingly direct, I think, in outlining the limitations of an exercise like this and why the group's eventual recommendations, and at the time we recorded this it was already a few months behind schedule, might not become policy in the face of various interests, not least of which is the country's treasury department. But now let's turn it over to Chris for the details.
Alex Usher: So Chris the new government in New Zealand is just past its one year anniversary. Could you take us back maybe just before the last election though to 2023? What was the state of New Zealand postsecondary education then? How well were institutions doing financially?
Chris Whelan: It's a sort of complicated story, but it's probably easiest to boil it down to say New Zealand's got eight universities, all public universities, about 70 percent of our funding is either from government or controlled through regulation by government. The biggest challenge that we were facing was a long run decline in that government funding. So we've had inflation at about 19 percent between 2019 and 2023, but government funding had only gone up by 9 percent over that period, leaving universities with quite a big hole to fill. We'd of course been through COVID. We were one of a number of countries that closed our borders. So we've seen a significant drop in international student numbers.
Ironically, we've seen an offsetting increase in domestic student numbers. About 10 percent of our young people, our school leavers, tend to go overseas to do their university studies and they couldn't when borders were closed. So universities were kind of okay in 2020 and 2021. It was 2022 when borders reopened we suddenly saw domestic students going overseas and we were down at about 35 percent of our pre-COVID international student numbers. Government funding hadn't kept up. So for the first time in as long as I've got records six of our eight universities made losses and really started quite a long process of, you know, doing some quite serious cost cutting and talking to government about what the long term future looks like.
Alex Usher: But that didn't end up as a feature of the election campaign in 2023 is my understanding. That wasn't really something anybody, it wasn't big enough of a deal to make the you know, to make the headlines, to make anybody make any promises. So when the new government came in, the national party led government what were their priorities around higher education? So did they, what were the commitments, if any, had they made to universities in their run up to the election?
Chris Whelan: Almost none. So, the previous government, the Ardern government had actually recognised it was going to be an election issue. They'd announced some fixed term increase in funding equivalent of about $120, $140 million. It was basically gonna tide us through for what they'd announced at the same time, which was gonna be a higher education funding review to be carried out at some point after the election.
Of course the government changed and so, it wasn't a big election issue. The incoming coalition government made up of three parties had almost nothing actually about higher education. Big focus on the compulsory education, so primary and secondary level education. They really wanted to significantly lift achievement in that end. They wanted to walk back a lot of reforms that have been done to vocational education but about the only thing they actually had in their higher education policy was one of the parties got into the government's coalition agreement that there would be free speech policies required of all universities. And that was it.
Alex Usher: That was it. Okay. So, fast forward a year and the government wants to create something called a University Advisory Group. And I take it, this is a kind of, this isn't a million miles from the Universities Accord in Australia, right? Take a hard problem and punt it to a group of experts. I mean, is that right? Is that what the government is expecting? Something like the Universities Accord?
Chris Whelan: Broadly, yes. So, as you say new government came in. The previous government had committed to a higher education funding review. The new government turned that into a two pronged process. They set up two advisory groups, one to advise on the science system in New Zealand and one to advise on the university system in New Zealand. So, both of them chaired by the same person, Sir Peter Gluckman, who will be reasonably well known for, he's had, obviously, a number of very high profile international roles as well as having been New Zealand's chief science advisor to the Prime Minister.
Basically, both reviews were to broadly run in parallel. The science system review was to report before the university system review because it was expected that the settings around the science system and research investment generally, you know should inform the shape of the university review. Both reviews had, you know, fairly ambitious timeframes. So the science system review was to have completed by October this year with an interim report leading to a final report by now. In fact, we haven't yet seen the interim report. The university's advisory group was on a slightly longer time frame with an intention it would report by around February or March next year. With the expectation there'd be at least two interim reports. One back around about July, another one around about October. We haven't yet seen the first report. So, you know, we know some, we've got some sense of roughly the sort of things that are in them. We know that the science system report is looking at the kind of the architecture of New Zealand science system, which hasn't really been looked at in detail, probably for about 30 years, and is not unreasonably pointing out that, you know, it's structurally baked in some science and research priorities that were certainly flavor of the day in the 1990s, but don't necessarily reflect some of the priorities of the world now.
The university's advisory group, the initial report is much more around what's the problem definition. What are they sort of seeing or hearing from extensive consultations, submissions and feedback. And, you know, we're picking up some sort of key themes around that at the moment.
Alex Usher: So did, well, it's interesting, you say that they're consulting widely about what the problem is. The Universities Accord you know, like many of the briefs that we've seen out of Australia, UK over the last couple of decades, government's usually pretty directive about, we want you to look into this, these specific issues. Was the UAG's brief really that wide — just go look at universities? And I guess the second question is who's on this committee, who's on this group? Like, is it a dozen? Is it half a dozen? Or is it as is often the case in the UK, is it just this one chief inquirer who's writing this more or less on, on his own brief.
Chris Whelan: No, it's an advisory group of eight people. They're generally very well known people with a long history with the sector or you know, having, who have had high profile roles around, say, the public sector in New Zealand. Chaired, as I say, by Sir Peter Gluckman Deputy Chair Alastair McCormick, who has been Deputy Chair of our Tertiary Education Commission, but prior to that was a Dean of, I think, Business at one of our larger universities. So, you know, good academic background. We've got an ex Vice Chancellor on there. We've got a current University Chancellor on there. It's that kind of group. High powered a lot of experience and hopefully able to bring some insights to it.
Yeah, there are pros and cons, you know, within the group. You can always sort of say that, but the brief itself, it's reasonably broad. So when you look at it, it says, really have a look at universities, and you know, you tell me what's missing from this list, and I don't think you'll find much, but look at the funding policies, look at the effectiveness and efficiency of the governance administration, assessing how they assess quality and value of teaching, the the research and their broader engagement with society, the shape of the university sector, you know, what are they doing around collaborations, joint program delivery, et cetera? How are they using technology efficiently and effectively? And what are the kinds of the regulatory frameworks and incentives and disincentives that sit around the university sector? So, not a lot really missing from that really looking at, effectively, can you derive more value from your universities what's getting in the way are there better funding settings, and the usual question that every system asks, can you achieve more with existing or less resourcing?
Alex Usher: Okay. So that was a, there was a really long list of potential things to talk about, but I'm guessing from the university side, the funding piece is paramount. I mean, from your perspective, what are the key aspects that the government needs to focus on? Is it the size of the government grants? Is it the distribution of the government grants between institutions? Is it about more freedom to set tuition fees, which have been, I mean, obviously you've had a free fees for first year for a while, but very moderate, tuition increases for many years before that.
Chris Whelan: You know, look I mean, I think I can't say where they're going to end up. I can pick where they're likely to end up. So, they've been focusing on a number of things. They've, you know, identified a number of lower level problems, you know, in their sort of conversations, they've got some questions around things like governance and, do the kind of ways that our legislation requires university councils, government institutions, are the, are the councils the right size, the right shape, you know, are chancellors chosen the right way. But also in the funding side, they've absolutely, recognized that, funding is going to be a key challenge for them. They're going back to a bit of a first principle to try and understand the funding system. You know, with respect to the fact that this is a high powered group few of them have got modern experience in university management. And all the different sort of trade offs that are involved in that.
Then part of it is trying to, I think, walk them on the same journey that probably most senior university leaders are very familiar with, which is, every Western country puts 0. 8 to 1. 2 percent of GDP into its higher education system. And then it's just, you know, it is all about ambition around the extent to which you want access to universities social mobility, you want quality, you want value, you want you know, comprehensive universities versus specialist universities. There's a whole lot of different policy trade offs. Not a single one of them you can achieve by, you know, actually cutting cost. They are all just simply choices around how comprehensive you want your universities to be. How much quality you want and the extent to which you're wanting your research and your graduate profiles to, you know, be delivering genuine value for, you know, the wider communities that your universities are sitting in. So, um, we don't believe they're going to find major savings there. We know that every university for 30 years we've been living with the fact that funding's been rising by roughly consumer price index, but university costs of course don't link to our consumer price index, they're generally running at about 1.5 times that. So every university has been investing long term in making efficiencies and savings, introducing technology you know, reorganizing away from, say, things like academics and generalist management roles to specialists. A lot more use of, as I say, technology enabled and enriched learning. You know, these are the things that every university around the world's been going through because every university system is having to become more efficient and effective.
But a lot of it is taking our universities advisory group, you know, over a truncated 30 year journey to show them how we've, you know, how we've evolved in line with that.
Alex Usher: Right. Out of curiosity, I mean are mergers on the table? Is this something that's been discussed? You know, I guarantee you in, in, in Canada, if we had a jurisdiction with eight, you know, universities and four or five million people, that would be one of the first things people start talking about. Do we have too many institutions?
Chris Whelan: And, I'll, I'll give you two answers to that. The first one is the terms of reference explicitly says the number of institutions and their autonomy is off the table. So,
Alex Usher: Okay. That's simple. That's
Chris Whelan: Universities obviously don't have to go there, but this government has come in, the current government's been in for a year. One of the, one of the big election policies was to walk back the previous government's initiative, which was to merge all of New Zealand's 15 or so institutes of technology and polytechnics, the vocational education sector. So, uh, And that's it, Te Pūkenga, that's right. The storage is, large, expensive reducing regional autonomy and things like that. So I don't think, I don't think merges or amalgamations are really going to be a high priority for this government.
The other thing that we really want our university's advisory group to hear is just simply, of course you can do more collaborations. There are a lot of models around the world of university systems that work together, but every single one of them cost a lot of money to, you know, start. They take years to implement, the benefits are often uncertain, and the worst time to do it is during a period of financial austerity. You know, the right time to do it is when you've got the money and the, you know, the luxury of time.
Alex Usher: So, uh, you talked a little bit about research and research funding. New Zealand has a performance based research fund. What is that and what kinds of, modifications to it are being proposed now you know, to fix any problems that people may perceive with it.
Chris Whelan: So, it's a, I mean, by international standards, it's a relatively small amount of money Uh, 308 million New Zealand dollars annually. It's used as kind of core bulk funding. Really, I mean, primarily it's used for about four things. It's used to pay for things like doctoral scholarships. It's used to pay for postdocs and supporting early career research. And it's used just for general you know, research capability of universities. One of its key, I think it's defined as sort of one of its key definition, or one of its key objectives is always to help early career researchers and creating early career research, supporting early career researchers so they can become successful, mid career researchers able to get their own kind of funding and things like that.
Alex Usher: Let me stop you there for a second. If I understand correctly that's not something that the fund does directly. It pays money to institutions and institutions have their own schemes to do this.
Chris Whelan: Correct. So, it it's widely cross subsidized but it, does have a quality evaluation round, a QE round that has been run generally about every six years, and what it does is it effectively has every researcher, every research active academic submit a portfolio. It costs about 40 or 50 million dollars every, as I say, six or so years and the idea is to basically you know, assess the quality of researchers and research, and then it tweaks the how 310 million roughly is allocated across the eight universities. And I think the last quality evaluation round might have seen about 11 million dollars actually shift between institutions. So, you know, a lot of money for, yeah, pretty stable.
Alex Usher: And if I'm correct, this is the method you're describing is actually not that different from what they call the Research Excellence Framework in the UK, or Research Assessment Exercise it used to be called. So are there, is anyone upset with this? Do people just say, hey, that's a lot of money given that it's not changing very much from year to year? What's the critique of this program?
Chris Whelan: So, the PBRF fund itself is massively valuable. And you know, the university sector here would argue it could and should be doubled. And it would, you know, because basically it's the feeder for the entire research system. It's the thing that's used to support, you know, people into doctorates, through doctorates, into early career research. It supports a lot of quite impactful investigator led fundamental research. It's a good thing. The problem has been the quality evaluation round is expensive. It takes a moderate amount of work for every academic to prepare portfolios. It's not clear for the amount, for what is now quite a stable system, it's not clear that the effort justifies the time and money that goes into it. So in this day and age, you know, our argument is there's probably many simpler ways where you can assess impact and value of what you're getting from universities in their, you know, investment and research system.
Alex Usher: So looking ahead, I mean, this is always an issue with these, when you punt things to experts, sometimes the experts come back with recommendations the government doesn't like. And so, yes, there are examples of these kinds of, profile, mainly in the UK, so Deering and Brown where the government just said, yep, we're doing that and we're going to implement 90 percent of it and we'll do it very quickly, I think what we're seeing in Australia right now is the government's slow walking a fair bit of what was recommended because it wasn't really, you know, I don't know if it was outside their comfort zone or it's too difficult to implement or whatever it is, what's your, I mean, I, you know, you've talked about the delays in the UAG, which may, I don't know if that represents a separate source of difficulty or presages difficulty, but how likely is it that a group like this is going to come up with a set of recommendations that government's likely to accept? Like how, how confident are you that the results of this, good or bad will actually make it into policy?
Chris Whelan: Look how confident am I? Really not at all. I think, you know, when you look at the Australian Accord, and I'm not incredibly close to it, but it's, you know, it's a massively ambitious document. You could, with just a few minor tweaks pretty much go, well, that's been pretty much the vision for the New Zealand university system. I mean, it would look like the ambition for most, I think, university systems in developed economies. It's massively expensive. It requires investment at a time when, of course, the global economy is not, there isn't a lot of spare money around to invest in it.
So, slow walking, I think, you know, is possibly an outcome that, you know, we may see for our own science system and Universities Advisory Group reviews. You know, we are hopeful that they will be able to make, I mean, right at the beginning, they were saying, one of the best things they might be able to do is really help government understand where better investment might unlock a lot more value for the country. We still have hopes of that. And I think that's, again, the hopes that sit around the Accord. But a lot of that comes down to translating, you know, quite clear vision into a compelling economic case. And a kind of compelling economic case, and as you'll know, many university cases, there's a high degree of uncertainty around if you invest in research, we know across the board, it does produce good outcomes, but it's very hard to draw a hard, you know, line from investments to outcomes. It's a dotted line with a lot of uncertainty and you're never quite sure what's going to get a return. And, you know, people in our finance departments or treasury departments, you know, tend to go, well, there are more certain bits out there.
Alex Usher: A I guess on when this is going to actually all wrap up?
Chris Whelan: Well, look, we know it's heading into next year you know, at a minimum, before we see the reports. A lot of it's going to come down to, you know, because ultimately the advisory groups are producing advice for their policy agencies and the policy agencies will then provide advice to ministers. That's how it's supposed to work. In reality, of course, the draft papers have gone straight to ministers and ministers are talking to policy agencies and to the advisory groups. So I, you know, my guess is that, everyone's keen to see reports that are likely to be owned and implemented. So a lot of the work that's happening right now, that's causing delays, is probably exactly that conversation of, you know, what is it government could support so that this doesn't end up as just a talk fest.
Alex Usher: Chris, thank you so much for joining us today.
Alex Usher 2: And it just remains for me to thank our excellent producers, Tiffany McLennan and Sam Pufek, and of course, you, our viewers and listeners for tuning in. If you have any comments on today's podcast or suggestions for future episodes, please don't hesitate to get in touch at podcast@higheredstrategy.com. And of course, please go and subscribe to our podcast on YouTube. Never miss an episode. Join us next week when our guest will be Joseph Wycoff. He's the President of Historia Research and author of the fascinating book Outsourcing Student Success, the History of Institutional Research and the Future of Higher Education.