A better way
Universities face yet another government review. Frank Jackson argues that funding and policy should be determined by independent experts.
On 26 April, the Minister for Education, Science and Training, Brendan Nelson, announced a wide-ranging review of higher education. Just about everything will be on the table, but the issue that will dominate the review will be the perennial one of how to determine the funding an individual university gets from the government. It is vital for the future of higher education in this country that we change the current system.
From the 1960s to the late 1980s Australia had a very simple way of determining the funding. We divided the tertiary institutions into two groups, one called universities and the other called advanced colleges. Each group was funded on a per-student basis, taking some account of cost differences between subjects, but at a markedly higher rate for the institutions called universities than for those called advanced colleges. The arrangement was justified by giving the two groups different missions. Universities were expected to carry out research and graduate supervision as well as undergraduate teaching, whereas advanced colleges were primarily charged with undergraduate teaching and professional training.
With the decision in 1987 by John Dawkins to abolish this division (known as the binary divide), a new method had to be found. The method that developed has four elements. First, there remains a large funding-per-student component that takes some account of cost differences between subjects; you get more for a medical student than for a fine arts one, for example. Second, there is the funding allocated by government-funded research agencies, of which the Australian Research Council (ARC) and the National Health and Medical Research Council (NHMRC) are the most significant. Third, there are allocations driven by formulae devised by DETYA - now DEST (Department of Education, Science and Training) - with a small input from the Australian Vice-Chancellors' Committee. Finally, there are ad hoc government allocations. The allocations from the various programs in the prime minister's $2.9 billion 'Backing Australia's Ability' initiative are good examples of the last.
A new set of DEST formulae came into operation this year, for funding starting in 2002. Three formulae in particular require closer scrutiny. All up, they control the allocation of over half a billion dollars each year, so the incentives they generate are substantial:
• The Institutional Grants Scheme (IGS) allocates funds on the basis of publications (ten per cent); research income (60 per cent); and research student load (30 per cent).
• The Research Training Scheme (RTS) allocates funds on the basis of publications (ten per cent); research income (40 per cent); and research degree completions (50 per cent).
• The Research Infrastructure Block Grants (RIBG) allocate funds on the basis of success in obtaining grants from the ARC, NHMRC and similar bodies.
These formulae cover each and every one of our 38 universities. In a country as large and diverse as Australia, we should be developing a diverse system. You don't get a diverse system when major incentives are uniform across the system.
Further, the major role given to research training in the RTS and IGS means that every university in Australia is under substantial pressure to boost its postgraduate research enrolments. In the US, a number of highly regarded colleges pride themselves on being very good places to take a first degree - examples are Oberlin, Vassar and Smith. There is no chance of our getting an Oberlin in Australia under the present funding arrangements.
The pressure to boost postgraduate numbers is having some harmful effects. One is that some universities are entering into arrangements that border on buying postgraduate students. They are moving substantial funds into additional scholarships, top-ups on existing scholarships, and other financial incentives like housing subsidies and relocation expenses, to attract research postgraduates. Arrangements of this kind have been around for some time and are perfectly acceptable within limits. However, we are in danger of moving outside these limits and entering into a bidding war. This is nice for the postgraduates concerned but not so nice for the parts of the universities that are cross-subsidising the contest. It is widely recognised that the bidding wars between states seeking to attract large companies are a net loss to Australia. I fear we may be facing a similar situation in universities.
Another consequence of the push for postgraduates is that departments are being pressured to take on students who should not be doing a research degree in the first place. Sometimes the right thing to say to someone thinking of doing a research postgraduate degree is - don't. The right degree for them may be a professional doctorate or a diploma or a coursework Masters, or perhaps they should get a job and maybe - or maybe not - think about doing a research degree after a period in the workforce. In this context, it is worth emphasising that the monetary value of a research degree to a university under the formulae is independent of its quality, provided that it is completed successfully. A PhD that is praised by external examiners and that secures a research position at Imperial College London is worth the same as one passed without enthusiasm and never read by anyone except the student, the examiners and the supervisor.
Departments are also under great pressure to hold on to their best undergraduates. Often - not always - it is good for a student to move to a new university to do their PhD or Masters degree. In the US this is standard practice. The current system punishes a department that advises a student to move on and cut the apron strings.
In case you are wondering about the size of the incentive to enrol a research postgraduate student, the return over time to a university for each student is calculated at between $40,000 and $100,000. And perhaps more importantly, the return is on a 'share of a fixed total' basis. This means that money going to one university comes from another university. If your university is not competing well, the result will not merely be that it misses out on some extra dollars; it will have money taken away from it. The situation is quite different from that with so-called over-enrolled undergraduates. The dollars for enrolling above one's undergraduate target are an extra in the system. True, it is an extra that comes at no net cost to the government because the extra dollars match the projected HECS return through the tax system, but they are an extra all the same. By contrast, the dollars for additional research postgraduates come from inside the system.
There are also serious problems with the publication element in the DEST formulae. (Incidentally, it was the Australian Vice-Chancellors' Committee (AVCC) and not DEST that pushed to have publications included.) Publications are weighted at only ten per cent in the RTS and IGS, but because they appear in both formulae, they move a lot of money. A paper is worth about $3000 and a book about $15,000. And, as with postgraduate performance, the funding is on a 'share of a fixed total' basis. If the number of publications from your university drops as a percentage of the system total, funding moves from your university to other universities. In consequence, there is a significant financial incentive to publish a lot. However, it is much easier to publish in what are known as low-impact journals - journals whose papers on average are not cited often - than it is to get a paper into one of the very best journals. So the pressure to publish encourages the publication of run-of-the-mill papers, and recent surveys of publication practices show a clear trend towards publishing in lower-impact journals.
The contrast with practice overseas is marked. In the Research Assessment Exercise in the UK, academics nominate a small selection, four or five, of their best publications over a four-year period.
Similarly, in the best US universities the focus is very much on quality.
So with the DEST formulae we have a one-size-fits-all system when we should have one that promotes diversity. We have a system that encourages departments to give bad advice to intending research postgraduates about where they should study, and whether they should undertake a research degree in the first place. It is a system that encourages universities to bid against each other for research postgraduates with dollars taken from, for example, undergraduate education and libraries; a system that encourages the publishing of minor papers and books. The obvious question to ask at this point is, how did this happen?
There is much that could be said on this subject. But I am sure that a major factor is the process by which higher education policy is developed in this country.
Higher education policies, including the formulae we have just been discussing, are developed through a complex interaction between public servants (especially in DEST), politicians (especially and obviously the Minister for Education) and universities (especially through the AVCC). All three groups are far from ideal sources of policy input.
Many of the public servants involved in formulating research-funding policy are very able, and care for the sector, but their knowledge is typically very much second-hand. They have little experience of working and researching in universities. Also, some public servants are too wary of what is sometimes called 'interest-group capture'. Instead of taking advice from people who work in universities and making adjustments for the inevitable self-interest factor, they tend to work largely independently of advice from the practitioners. Also, as has been widely noted, recent and not-so-recent changes to the Australian public service mean it no longer provides the independent, fearless advice to government that citizens would like it to provide. Public servants are under pressure to say what their minister wants to hear.
Many politicians are not well-disposed towards universities. It is said that a senior minister told Nobel Prize-winning scientist Peter Doherty that 'if we gave universities more money, they would only increase the wages of the gardeners'. This may be apocryphal. But I am sure that many senior members of the government regard universities as places that protect mediocrity and resist change in order to look after their own interests rather than the interests of their students and the taxpayer. I think we in universities are partly to blame for this situation. Many senior members of the government, and the opposition if it comes to that, attended universities in the '60s and '70s. Mostly they will have been taught by able, dedicated staff, but the odds are that they will also have had some teachers who were chronically late and disorganised (sometimes proudly so), who had serious personal problems that interfered with their teaching, or who had published nothing of note for ten years and yet had the same teaching load as staff who were writing ground-breaking books. They will also likely recall that the university did nothing about these staff. The situation in universities today is very different and some politicians know this, but many, perhaps most, do not. These bad memories can be very damaging when universities seek extra funding from government.
However, the main problem with politicians is that they are politicians, and I mean this in a nice way. The first question they tend to ask about any funding proposal is whether it is good for the university in their electorate or state or territory. And if they forget to ask this question, a call from the Vice-Chancellor of the university in question will remind them. A major program in 'Backing Australia's Ability' is substantial new funding for Major National Research Facilities. Each and every state and territory received some funding in this program's first round. No-one thinks this was an accident. Also, politicians being politicians, they like media opportunities. This means that they are resistant to increasing the basic operating grants for universities, which is what we who work in universities know is most needed. They much prefer to announce a complex set of new programs, each of which provides a number of media opportunities: when the program is first mooted, when bids for funding under the program are called for, and when the results are announced.
Finally, I should say something about the AVCC. The AVCC is composed of highly intelligent women and men who care a lot about universities - whatever their staff and students may think from time to time. But they care most about their own university. This makes it very hard for them to speak with a unified voice on major policy proposals. For obvious reasons, in a system as diverse as ours, many major policy proposals move dollars around, and when dollars move around, there are losers as well as winners. Vice-chancellors of the universities that lose under a proposed policy will oppose it more or less automatically. I would like to see more vice-chancellors taking a whole-of-system approach to policy questions, but this is no easy thing to do when your university is in competition with the rest of the system.
Of course, the AVCC does sometimes speak with a unified voice, usually in support of more money for the system as a whole, and often produces compelling figures to back up their claims. But they are so obviously a lobby group, and funding comparisons between Australia and the rest of the world are sufficiently complex to allow government to respond with their own figures in ways that leave the average punter in a state of confusion about whom to believe.
What should be done? We need a body charged with providing funding and policy advice on universities whose members have the following characteristics: they are people of undoubted standing; they know a lot about universities; a good number have worked in a university here or overseas; and they are genuinely independent of both the government and the universities.
If we set up such a body, we would return to the system we had when the Universities Commission (1957-77) and later the Commonwealth Tertiary Education Commission (1977-87) operated, and we would fall into line with the UK with its Higher Education Funding Council (HEFC).
What are the chances? I am pessimistic. An HEFC involves a transfer of power away from government. True, it would assist the government in making unpopular but necessary reforms by allowing an HEFC to take some of the flak. But governments these days seem to prefer power, and the correlative patronage possibilities, to flak protection. Also, I suspect that some universities would oppose an HEFC. They believe that they do better by lobbying government than by having their funding determined by a genuinely independent body.
Frank Jackson was Director of the Institute of Advanced Studies at the Australian National University from 1998 to 2001. He is currently Professor of Philosophy in the Research School of Social Sciences.
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