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.

---

The World of Higher Education Podcast
Episode 3.9 | The University Advisory Group: Reimagining New Zealand’s Higher Ed Future with Chris Whelan

Transcript

Alex Usher (AU): 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 to 2023? What was the state of New Zealand post-secondary education then? How well were institutions doing financially?

Chris Whelan (CW): 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. 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 saw a significant drop in international student numbers. Ironically, we saw 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 started quite a long process of serious cost-cutting and talking to government about what the long-term future looks like.

AU: But that didn’t end up as a feature of the election campaign in 2023, is my understanding. It wasn’t big enough of a deal to make the headlines or to make anybody make any promises. So when the new National Party-led government came in, what were their priorities around higher education? What commitments, if any, had they made to universities in their run-up to the election?

CW: Almost none. The previous Ardern government had actually recognized it could be an election issue and announced a fixed-term funding increase, around $120 to $140 million, to tide us through a planned higher education funding review after the election. The government changed, and higher education didn’t end up as a big election issue. The incoming coalition, made up of three parties, had almost nothing in their higher education policy. Big focus was on compulsory education, primary and secondary, with goals to lift achievement significantly at those levels. They also wanted to roll back reforms in vocational education. About the only higher education policy they included in the coalition agreement was requiring free speech policies at all universities. That was it.

AU: That was it. So, fast forward a year, and the government wants to create something called a University Advisory Group. And I take it 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. Is that what the government is expecting, something like the Universities Accord?

CW: Broadly, yes. As you say, the new government came in, the previous government had committed to a higher education funding review, and the new government turned that into a two-pronged process. They set up two advisory groups, one on the science system and one on the university system. Both are chaired by Sir Peter Gluckman, well known internationally and as New Zealand’s former Chief Science Advisor to the Prime Minister. Both reviews were expected to run in parallel. The science review was to report first to help shape the university review. Both reviews had ambitious timelines; the science review was to complete by October this year, with an interim report leading to a final report by now. However, we haven’t yet seen the interim report. The university’s advisory group was on a slightly longer timeline, expected to report around February or March next year, with two interim reports around July and October. We haven’t seen the first report yet. We have some rough sense of what is in them. The science review is looking at the architecture of New Zealand’s science system, which hasn’t been looked at in depth in about 30 years, it’s addressing some science and research policies that were the flavour of the day in the 1990s. The universities advisory group’s initial report is expected to define the problem, capturing input from consultations and feedback.

AU: It’s interesting that they’re consulting on what the problem is. Many of the briefs that we see out of governments, including Australia and the Universities Accord give a set of problems to go investigate. So the University Advisory Group’s brief, then, was really wide, just go look at universities? And who’s on this group? Is it a dozen, half a dozen, or just one main chief inquirer like you often see in the UK?

CW: It’s an advisory group of eight people, mostly very well-known, with long histories in the sector or high-profile public sector roles in New Zealand. As I mentioned, Sir Peter Gluckman is chair, and Alastair McCormick is deputy chair; he was Deputy Chair of our Tertiary Education Commission and a former dean at one of our larger universities. We have an ex-vice chancellor, a current university chancellor—it’s a high-powered group with extensive experience and hopefully able to bring some insights from their work. The brief is broad, covering funding policies, the effectiveness of governance, the quality and value of teaching, research, engagement with society, the shape of the university sector, collaborations including program delivery, technology use, and regulatory frameworks. There’s not a lot really missing from the list. In essence, they’re looking at whether universities can deliver more value, what’s in the way, and whether better funding or efficiencies could help, and of course, can you achieve more with less or existent funding.

AU: That was a long list of things, but I’m guessing that from the university’s side, funding is the top priority. From your perspective, what are the key aspects the government should focus on? Is it the size of the grants, the distribution between institutions, or perhaps more freedom to set tuition fees including tuition increases?

CW: Look, I can’t say for sure, but I can predict where they’re likely to end up. They’re focusing on a few things. They’ve identified lower-level issues like governance: the size and composition of councils, how chancellors are chosen. On funding, they’ve acknowledged it’s a major challenge. They’re going back to first principles to understand the funding system, but while it’s a high-powered group, it’s fair to say that few of the members have modern university management experience. Part of this process is about bringing them up to speed on issues most senior university leaders are familiar with, such as the fact that most Western countries spend 0.8 to 1.2 percent of GDP on higher education system. Then it’s all about ambitions around access, social mobility, quality, and comprehensiveness of universities all involve trade-offs. These are choices, that can’t be achieved through cost-cutting and savings. 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 be delivering genuine value for the wider communities that your universities are sitting in. Every university here has been managing funding that rises roughly with the consumer price index, while university costs tend to run about 1.5 times higher. Over 30 years, we’ve been making efficiencies and savings through technology, streamlined roles, and enriched learning, and reorganizing their structures. These are things that every university in the world has had to do over the last 30 years. So, a lot of this is catching the advisory group up on the journey universities have taken.

AU: Out of curiosity, are mergers on the table? I assume that with a country of eight universities and four or five million people, people must ask if there are too many institutions?

CW: The terms of reference explicitly state that the number of institutions and their autonomy are off the table. So, the University Advisory Group won’t go there. This government came in with a policy to roll back the previous government’s initiative to merge New Zealand’s 15 or so Institutes of Technology and Polytechnics, the vocational education sector. Mergers aren’t high on this government’s list.

Another message we want the group to understand is that while collaboration models exist, they’re costly, take years to implement, and their benefits are often uncertain. The worst time to do this is during financial austerity; the best time is when you have the luxury of funds and time.

AU: You mentioned research and research funding. New Zealand has a performance-based research fund. Can you tell us about it and what modifications are being proposed?

CW: By international standards, it’s a relatively small amount of money, $308 million New Zealand dollars annually, used primarily as core bulk funding for doctoral scholarships, postdocs, early career researchers, and general research capability of universities. The fund doesn’t pay directly for research positions but is used to support them, especially to try to help early career researchers to be successful. Every six years, there’s a Quality Evaluation (QE) round, where research-active academics submit portfolios, costing around $40-50 million each time the evaluation runs. This process assesses the quality of research and researchers, which then slightly adjusts the $310 million distributed across universities. In the last Quality Evaluation process, about $11 million shifted between institutions so overall it’s pretty stable.

AU: This sounds similar to the Research Excellence Framework in the UK. Is there any pushback on this?

CW: The fund itself is massively valuable, and universities would argue it could and should be doubled. It is the feeder of the entire research system. It supports doctoral and early career researchers and fundamental research. It’s a good thing. The problem has been that the QE round is expensive and time-consuming for what has become a stable system. So we argue there are simpler ways to assess impact and value from universities without such a resource-intensive process.

AU: So looking ahead, this is always an issue when you punt things to experts; sometimes they come back with recommendations the government doesn’t necessarily like. There are examples of these reviews, like the Dearing and Browne reviews in the UK, where the government took most of the recommendations on board and moved quickly to implement them. But in Australia right now, it seems like the government is slow-walking a fair bit of what was recommended in the Universities Accord, perhaps because some aspects are outside their comfort zone or too challenging to implement. Given the delays in the UAG process, how confident are you that this group’s recommendations will actually make it into policy?

CW: Look, how confident am I? Really, not at all. When you look at the Australian Accord—it’s a massively ambitious document, and with just a few minor tweaks, it could pretty much look like the ambition for New Zealand’s university system. And I think it would look like the ambition for most university systems in developed economies. But it’s massively expensive and requires investment at a time when there’s not a lot of spare money around. So, slow walking might very well be an outcome here, and that may also be the case with our science system and universities advisory group reviews. Right at the start, there was talk of this group helping government understand where better investment could unlock much more value for the country, and we still hold onto that hope. But so much comes down to translating that vision into a compelling economic case. And as you know, in university cases, there’s a high degree of uncertainty. Investing in research does produce good outcomes across the board, but drawing a hard line between investment and outcomes is very difficult. It’s more like a dotted line with a lot of uncertainty, which is never exactly what the finance or treasury departments want to hear—they tend to look for investments with more predictable returns.

AU: Any idea on when this will wrap up?

CW: We know it’s heading into next year, at minimum before we even see the report. Advisory groups produce advice for policy agencies, which then advise ministers. But draft papers are going directly to ministers, so we hope they’re working toward a report that the government will back, to avoid this being just a talkfest.

AU: Chris, thank you so much for joining us today. It just remains for me to thank our excellent producers, Tiffany MacLennan and Sam Pufek, and you, our listeners for tuning in. If you have any suggestions for future episodes or comments on today’s episode, please contact us at podcast@higheredstrategy.com.

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.

*This podcast transcript was generated using an AI transcription service with limited editing. Please forgive any errors made through this service.