Education left behind in the corporatisation of our universities

Dec 9, 2021
university of sydney quadrangle
University of Sydney (Image: Wikimedia Commons)

The rise of middle management and the non-democratic nature of university governance are undermining Australia’s higher education system.

Australian universities continue to be subjected to authoritarian forms of governance that make a mockery of the word “consultation” and display open contempt for the expertise and interests of the majority of academic and professional staff.

In April 2020 Universities Australia (UA) reported that 21,000 jobs were at risk from the COVID-19 pandemic and projected a sector-wide revenue decline of $3 billion to $4.6 billion in 2020. Actual results demonstrate the situation is much worse with respect to employment and much better with respect to revenue.

A recent report by the Australia Institute revealed that over 40,000 academic and professional staff lost their jobs in the 12 months to May this year. These losses, which equated to 20 per cent of the total pre-Covid workforce, are four times higher than the national unemployment rate in October 2021. They are also far in excess of the roughly 30,000 jobs that would be lost if all thermal coal mining activities in Australia had been phased out in 2019.

With regard to the actual impact of Covid on university revenues, federal government data reveals that sector-wide revenue declined by $1.9 billion or 5 per cent in 2020 compared with 2019, significantly less than the figures projected by UA in 2020.

According to the Mitchell Institute, 15 out of 38 public universities had operating deficits in 2020. These figures are misleading. Professors James Guthrie and John Howard have pointed out that such analyses are an artefact of the use of accrual accounting techniques that do not provide an accurate representation of the financial health of universities. As Guthrie has repeatedly pointed out, in university finances “cash is king”, because the vast majority of university revenue is from student tuition fees and state and federal grants, mostly derived from cash paid to universities for teaching and research.

Drawing on the same federal data, Howard and Guthrie have argued that at the end of 2020 the majority of Australia’s public universities had cash surpluses and collectively held more than $61 billion in net assets. Given the value of these assets, all of which have been accumulated from surplus student fees and government grants, we contend that the current crisis has more to do with the distorted priorities of corporatised university governance structures than any kind of crisis in their financial positions.

Case in point: several universities that had significant cash surpluses at the end of 2020 have savagely cut course and subject offerings and sacked hundreds of staff, including UWA, UTas, Sydney, Flinders, Macquarie and Monash.

Australian universities already have the highest teacher-student ratios in the OECD. The mass sacking of academics over the past 18 months will ensure the decline of this metric continues. All this while direct contact time with lecturers and tutors decreases further through the creation of “self-directed” online modules. This is despite the very clear student dissatisfaction with online learning reported by the Tertiary Education Quality and Standards Agency. What is more, under the so-called Tehan reforms of October 2021, students now have to pay significantly more for many degrees.

While the number of equivalent full-time positions for academic staff has not kept pace with student numbers, there has been enormous growth in the numbers of senior managers. Over the past 20 years the number of staff employed in academic support roles has decreased by 70 per cent, while the number of staff employed in “regular” professional roles has increased by 37 per cent. Over the same period, there has been 144 per cent growth in middle management roles and 110 per cent growth in senior management. Many senior managers are now paid significantly more than the state premiers or the prime minister.

The claim that Australia’s vice-chancellors and senior executives need to be paid high wages to attract the necessary “talent” conveniently overlooks the fact that they are among the highest paid in the world, and receive twice as much on average as their equivalents in the UK, for example.

Using Covid as a justification for slashing jobs, disciplines, courses and subjects looks anything but convincing when these facts are taken into account. Such actions are, to the contrary, primarily attributable to the increased marketisation and corporatisation of academia in the Anglosphere over the past few decades.

The shift towards a commercial corporate model of university governance has been occurring for more than 30 years despite the fact that the vast majority of Australia’s public universities are registered charities. Radical legislative changes imposed on the higher education system by then federal education ministers John Dawkins and Brendan Nelson require all university governing bodies to be comprised of a majority of external appointees who are neither enrolled as students nor employed by the university. All these members are appointed by the governing bodies themselves or recommended by them to state education ministers.

Academics for Public Universities recently conducted a review of the backgrounds of all individuals currently occupying university governance positions based on their public profiles on university websites. Out of a total of 564 members, only 33 per cent are elected from within the institutions they govern and have any academic experience. Even fewer (31.5 per cent) have any expertise working in the tertiary sector. By way of contrast, 61 per cent have professional expertise in fields other than the tertiary sector. The majority come from the commercial corporate sector.

A brief comparison with the board composition of large registered companies in Australia demonstrates just how anomalous are such structures in the corporate world. Seventy-three per cent of Rio Tinto board members, 72 per cent of the Telstra board and 78 per cent of the CSL board have prior experience in the sectors in which they operate. It would therefore appear that when Dawkins, Nelson and their ministerial successors argued that “universities should be run like businesses”, they conveniently overlooked the fact that the “business” of universities is primarily teaching and research.

Despite the trappings of corporate culture imposed on Australia’s universities over the past few decades, universities do not have shareholders and are not commercial corporations. As we have seen with the recent ruling by the Fair Work Commission on UWA, university governing bodies do not even have to provide accurate data to staff or the broader communities they serve in order to justify cutting jobs and whole programs. They are not accountable to their own members, and their levels of external accountability are largely restricted to annual audits by state auditors-general. They are not even required to accurately or uniformly report their employment figures.

Inasmuch as universities have managed to accumulate vast property and investment portfolios over the past two decades, Dawkins’ and Nelson’s aspirations for universities to be run in a “business-like fashion” have been realised. However, those successes disguise the utter failure of their governing bodies to prevent the wage theft of tens of millions of dollars from their workers, or to preserve the thousands of years of knowledge and expertise that has been accumulated by the 40,000 staff members they have sacked. Nor have they prevented the increasing casualisation of university workforces, which is now above 70 per cent at some universities.

Neoliberals and their supporters in higher education argue that universities are large, complex organisations with multimillion-dollar investment and property portfolios and so academics and professional staff are ill-equipped to run them. This conveniently overlooks the fact that many of us are international experts in management, accounting, finance, education and the processes and policies that drive innovation. It is disingenuous in the extreme to argue that we lack the internal expertise to run our own institutions well.

Most European universities are governed by academics who are elected by staff and students and are required to articulate their vision of what their institutions should be to their peers in competitive electoral processes. At Oxford University, for example, 77 per cent of governance positions are filled by individuals with prior experience in higher education, with 73 per cent explicitly possessing academic backgrounds.

Without sufficient academic expertise to lead the sector’s governing bodies and a return to the academic values that have traditionally informed tertiary education, we fear that efforts to further reduce staff and student representation on governing bodies will continue. But if we as Australians are serious about maintaining a “world-class” higher education system, democratic governance should be at its core. State and federal governments need to acknowledge their responsibilities to adequately and appropriately fund higher education, ensure the institutions are appropriately governed, and require that public universities redirect the $61 billion they have accumulated in net assets to their core missions of teaching, research, and building a better future for our children, the nation and the world.

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