Universities face a "perfect storm" with, or without, fee deregulation

Tuesday, 30 September 2014

Australian universities face a "perfect storm" of financial, demographic, and technological forces that threaten to undermine the sector regardless of the Senate's decision on fee deregulation, warns the University of Adelaide's Vice-Chancellor and President.

"Thanks to 20 years of eroding government support, many universities face financial positions significantly weaker than they had a decade ago, some are in fragile fiscal health," said Professor Warren Bebbington in his opening address to the Deregulation in Higher Education Conference in Melbourne today. "The level of Commonwealth support, already low amongst developed countries, seems likely to be cut further.

"Passing deregulation will add control of price to the vice-chancellors' present levers of volume and cost, and considerably help to plan a sustainable future. But defeating deregulation will not make it any easier to solve our problems on the cost side instead."

Professor Bebbington said the combination of the uncapped system and changing student habits, a flat student market, increasing competition from Asian universities and a volatile return on investment in technology has led universities to a "point of no return" irrespective of the higher education reform package currently under debate.

"All in all, we're facing an unpredictable maelstrom--one which would be greatly abated by fee deregulation passing the Senate, while a defeat would do little to calm."

He said individual universities must realign to their core purpose to thrive in the long-term and be cognisant of their position in the community in which they operate.

"In a growing number of cities, including Adelaide, we have universities slowly replacing dead or dying manufacturers, or other businesses, as amongst the major institutions and largest employers in the region.

"Higher education is increasingly the linchpin of the economy in some places. But being the modern equivalent of the town's steel mill or auto plant is not without costs.

"Where a university is central to the regional economy, external pressures grow: it becomes held to account for the local job market, a player in the local housing developments, civic service recreation provision, even the entertainment business," says Professor Bebbington.

"The danger is both the university and the community, lose focus on what should be its primary mission--teaching students and pursuing research," he says.

Universities will need to define and promote their differentiation more than ever before, says Professor Bebbington.

"The importance of setting an individual mission, of understanding what value is offered is vital," he says. "It reminds us of the underlying strengths of higher education's long-term landscape, which are there for all of us to exploit--at a time when interest and participation in universities has never been so high.

"If our universities have a clear sense of identity and of value, they will be prepared for whatever our political representatives in their wisdom decide," he says.

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