Medical schools blow their budgets

Otago University's Christchurch School of Medicine and Health Sciences is on course to blow its budget by $5 million - one-third of its annual Government funding.

The blowout could lead to cuts in staff and courses.

The deficit forecast mirrors similarly dire situations at other New Zealand medical schools.

Otago's other medical and health science schools, in Wellington and Dunedin, are also likely to be between $1 million and $2.5 million in the red.

The university receives $55.7 million a year from the Government for health programmes.

More than $14 million of this goes to its medical school at Christchurch Public Hospital, which trains about 900 students and conducts research programmes.

The University of Auckland says its medical programme is within budget, but is "extremely stressed" by Government-imposed caps on medical enrolments and fee freezes.

Otago University's acting assistant vice-chancellor of health sciences, Professor Peter Innes, said the university might have to lay off staff and cut courses if it did not get more Government money.

He said the university was concerned about the financial state of its programmes, which were struggling under a Government-imposed cap on annual student enrolments at 325, and a fee-freeze of $10,000 a student.

High recruitment and retention costs were also placing strain on the schools, as the university had to compete with higher-paying hospitals and health boards for sought-after health professionals.

A doctor shortage, worsened by New Zealand's junior doctors being lured to high-paying overseas jobs, was exacerbating the problem.

"We have to compete with the health boards," Professor Innes said. "Hospitals can afford to pay much more for staff. Recruitment has become a very serious problem.

"The real problem is the salaries - we just can't afford to keep them."

There were no easy answers as the university's three medical schools started work on cost reduction plans for already-tight budgets.

"It worries me that we can't reduce costs without reducing staff ... it's something that we're going to have to look at very seriously."

The dean of the University of Auckland's faculty of medicine and health sciences, Professor Peter Smith, said the school was stressed, but running on budget.

The high cost of staff recruitment and retention was a significant issue.

Auckland receives $33.7 million a year from the Government.

High student-to-staff ratios, the growing focus on research, and a looming shortage of health professionals also put pressure on medical schools.

Acting Tertiary Education Minister Margaret Wilson said the Government had given more money to tertiary institutions every year since it came to office.

It had also raised the cap on funded medical students last year by 40 - 20 each for Otago and Auckland universities.

Universities are bulk-funded, and Ms Wilson said it was up to each institution to decide how to allocate its money.

The deficits

Christchurch: $5 million.

Dunedin: $2.5 million.

Wellington: $1 million.

Auckland: On budget but "extremely stressed".

- NZPA