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The University of Otago was yesterday shocked to be told "at the 11th-and-a-half hour" that it would not get all the government funding it expected next year.
The Government is introducing a new tertiary funding system from next year, which requires institutions to negotiate three-year course delivery and funding plans with the Tertiary Education Commission (TEC).
The university spent months negotiating its plan, which included an expectation of funding of almost $180 million for next year.
The plan was to be endorsed by the university council yesterday afternoon, but three hours before the meeting the university was told its funding level would be cut, Vice-chancellor Prof David Skegg said.
He would not reveal the new figure, saying it was "preliminary and confidential" but should be confirmed within a week.
"I don't want to exaggerate this as a calamity, but it is clear the money indicated previously won't be available. We will have to revise our budget to provide a course mix which is appropriate to the funding we do receive."
The dollar amount of the cut would be relatively small for a university which expected to spend about $500 million next year, he said.
The budget review would be "nothing maniacal or catastrophic" but Prof Skegg said the TEC's decision and its timing was "very disturbing".
The TEC had told him money would be diverted from Otago to three other universities that had predicted large increases in enrolments next year. He would not name the universities.
Staff in the office of tertiary education minister Dr Michael Cullen referred questions to the TEC yesterday.
The TEC did not respond to individual questions, including what the University of Otago's new funding figure would be.
Tertiary networks director David Nicholson said university funding for 2008 had not been finalised, however all universities would receive more in 2008 than this year.
The Government had introduced a controlled funding environment for universities and tertiary education organisations, and could increase that funding through the annual budget processes if it chose to.
Chancellor Lindsay Brown told yesterday's meeting universities had been assured the new system would move away from funding "bums on seats" to funding a set of agreed educational goals and priorities.
"It is an unfortunate start to a new system to have this happen at the 11th-and-a-half hour."
After the meeting, Prof Skegg said the university's plan predicted a "modest growth" in enrolments during the next three years. TEC-funded equivalent full-time student enrolments were expected to number 16,902 next year, 125 or 0.7 per cent more than this year. A further 1748 international students not funded by the TEC were expected to enrol next year.
No students would be turned away and the university would not limit entry to courses other than those which already had restrictions, such as medicine, dentistry and surveying.
However, the university would review all aspects of its budget, including whether to proceed with introducing 10 new degree qualifications in subject areas including teaching, dentistry, education and management areas.
Prof Skegg would not comment on whether the TEC's decision might impact on the university's $238-million building programme planned during the next five years, or might lead to fee increases for students.
He was concerned about what signals the TEC was sending universities about funding for 2009 and beyond.
"I have no doubt we can cope with a funding cut next year, but my concern is for future years. It seems the Government is robbing Peter to pay Paul. Our loss is another university's gain."
-OTAGO DAILY TIMES
