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Auckland University of Technology is being saved from looming financial strife by a $50 million boost from the Government.
The university racked up debt through a $203 million building programme over the 10 years to 2005 to upgrade dilapidated facilities and cater for massive roll growth. Vice-Chancellor Derek McCormack said yesterday the institution had been under-funded for decades but coped by attracting students in big numbers.
It faced financial trouble under changes to the funding of tertiary education providers, which come into force next year. The new funding system focuses on "educational outcomes" set in complex investment plans and takes emphasis off student numbers.
"With changes to Government funding so that there's a cap on student growth, we were entering problems immediately," said Mr McCormack.
AUT's roll grew by more than 50 per cent in 10 years, with the number of fulltime-equivalent students rising from 9660 in 1996 to 15,750 last year.
Major building projects included $39 million on the business school in 2005, plus $7 million for land, $21 million on the Art & Design facility in 2004 and $32 million on Wellesley Library & Learning Centre in 2001.
AUT Chancellor Sir Paul Reeves said the institution was well run and returned a surplus each year. However, the surplus was needed to service its debt, which will stand at about $90 million at the end of this year, constraining some academic developments.
Sir Paul said: "If that had continued there would have been some real difficulty." He said the cash boost showed the AUT's contribution was understood and valued.
Minister for Tertiary Education Dr Michael Cullen said yesterday the funding would enable AUT to improve its research and teaching capability.
"AUT has developed a reputation for being responsive to stakeholder needs," said Dr Cullen.
"This investment will increase the university's capability to respond to the needs of students as well as industry and business groups, while at the same time increasing its international standing."
The funds were contingent on AUT meeting certain performance measures. Dr Cullen said the stringent requirements were in line with the Government's new approach to investing in tertiary education.
AUT was the lowest ranked of the eight universities in the Tertiary Education Commission's Performance Based Research Funding tally released in May. It also showed the biggest improvement of the universities in its research quality score - up 141.6 per cent since 2003.
