The government urgently needs to clarify how the huge costs of tertiary mergers will be met, say the heads of the country’s universities and technikons. And they remain sceptical that mergers will achieve government education policy goals.
If mergers currently on the table are implemented over a five-year period, they will cost R3,6-billion – close to half the country’s annual education budget. This estimate is at the heart of a study, released this week, by the finance committees of the South African Universities Vice-Chancellors Association (Sauvca) and the Committee of Technikon Principals (CTP).
But the total cost could be much higher: insufficient information about the implications of equalising staff salaries and student fees between merged institutions mean that these costs are not included in the estimate.
Other factors the study says it had to omit, and that could push the costs even higher, include obligations concerning post-retirement pension and medical aid costs and accrued leave pay.
How much of the tab the government will pick up, and how much universities and technikons will have to fund themselves, is a central anxiety. ‘Institutions have expressed concern at the absence of a formal indication from the Department of Education regarding the source and amount of funds which will be made available,” Sauvca said this week. The need for this is pressing, ‘especially in the absence of due diligence studies prior to the final decisions”.
Sauvca says the ‘experience of the merger of Natal Technikon and ML Sultan (where the funds for restructuring are alleged not to have yet been made available) does not inspire confidence. Without a firm commitment in terms of funding, it will be impossible for the restructuring to proceed.”
Mergers are the chief instrument whereby the government plans to reduce the country’s 36 tertiary institutions to 21, and to achieve policy goals including increased access to and equity in higher education.
‘We have been doing ongoing work on a funding framework for mergers,” says Ahmed Essop, chief director of higher education planning and management in the national Department of Education. ‘But we won’t release any details about funding and costs until the final Cabinet decision on mergers later this year.
‘The Ministry of Education has accepted that mergers will be costly … We’re in discussion with the Treasury about mechanisms for funding: that will be finalised in the run-up to the Cabinet discussion – probably late in November.”
Sauvca also says that of ‘pressing concern is whether the expenditure of these funds (on mergers) will indeed result in the achievement of the objectives outlined in the NPHE (the government’s National Plan for Higher Education).”
How institutional debt will be handled needs to be settled before mergers can be implemented, the Sauvca/CTP report says. ‘Although accumulated debt is, strictly speaking, not a cost caused by merging, leaving it unresolved will have negative consequences. Some institutions have already announced that they are unwilling to accept partners whose debt is likely to destabilise their own financial positions.”
Satisfactory answers are still needed to valid questions, Sauvca said. ‘Not the least of these is whether this money [to fund mergers] could be spent more usefully given the many demands on the limited pool of funds.”