Universities and Government dig in on funding cuts

INSIGHTS & RESOURCES

Universities and Government dig in on funding cuts

AUSTRALIAN FINANCIAL REVIEW
by Tim Dodd – Education editor
11 September 2017

Key Takeaways:

  1. Former ANU dean Keith Houghton presented university productivity data at a summit, showing variations in the cost of research paper production and student education.
  2. Some universities have improved productivity over time, while others show no progress.
  3. Dr. Houghton’s work gained attention from Education Minister Simon Birmingham and regulators, becoming a potential tool for analyzing university productivity in research and teaching.
  4. Universities’ productivity will face increased scrutiny, and they may need to address inefficiencies.

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Full Article:

“….Former Australian National University business and economics dean Keith Houghton attached much attention at the summit with his university productivity data that showed wide variations across the sector in the cost of producing each research paper and educating each student. It stated there is a lot of room in many universities to become more efficient.

Individual universities can argue that there have particular circumstances that might make their operations more costly. But Dr Houghton’s data also shows how their productivity have changed over years. Some universities improved, including UNSW which steadily grew its research productivity under former vice chancellor Fred Hilmer who brought in McKinsey style management to the university. And Gardner can take credit for the productivity improvement at RMIT which she led from 2005 to 2014. But other universities which have not yet been publicly identified by Dr Houghton have not improved. Their progress over time resembles the drunkard’s walk – random movements back and forth with no overall progress.

In the past fortnight, there has been a wave of interest in the work of Dr Houghton who is now retired for the ANU……He has been praised by Education Minister Simon Birmingham and he has attracted interest of those with regulatory and performance oversight over higher education. The stage now set for his work to be developed and refined to become an important tool to analyse university productivity in both research and teaching – at a deep level to help identify problems For universities, the scrutiny on their productivity will only increase. There will be nowhere to hide….”

 

There is growing anticipation that the federal government’s response to the Universities Accord review’s final report will come soon. Given this and the fact that the budget is less than a month away, it is timely to review one of the final report’s key insights.

Recently released analysis finds that one large Group of Eight university outperformed other public universities in its research and education productivity outcomes during the pandemic.

The joint and common cost problem arises where there are two or more outputs that arise from costs that are shared in the production of these outputs. In many situations, the ability to assign costs to these two or more outputs is not complex. But there are instances where it is highly complex. In these situations, there is a need to use advanced analytics to provide a valid and reliable estimate of costs.

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