Much of a recent rescue package for New Zealand¡¯s cash-strapped universities will be whisked away again, with half the sector facing imminent cuts because of ¡°significant¡± under-enrolments. ?

The Tertiary Education Commission (TEC) has unveiled a NZ$52 million (?24 million) reduction to this year¡¯s funding allocation to four universities and the national vocational training provider, Te P¨±kenga.

The four affected institutions ¨C Massey University, Otago University, Auckland University of Technology and Victoria University of Wellington (VUW) ¨C all registered deficits last year. Education minister Jan Tinetti was advised of the cut a month after she and finance minister Grant Robertson had?announced?a NZ$128 million lifeline to relieve the financial ¡°pressure¡± on the sector.

Government funding for New Zealand universities has been going backwards in real terms for well over a decade, and in recent years their finances have taken an additional battering from Covid-related border closures and an inflationary surge in costs. Plunging domestic demand is exacerbating the damage.

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The Tertiary Education Union said it was ¡°outraged¡± by the latest development. ¡°A month after the government announced¡­additional funding that was supposed to save courses and jobs, the TEC has seen fit to claw much of it back from the institutions that needed it most,¡± said VUW branch president Dougall McNeill.

¡°The TEC should be an advocate for¡­the tertiary education sector, but instead all they seem to do is force institutions to cut jobs and provision.¡±

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He said VUW union members would picket the TEC¡¯s Wellington headquarters on 1 September so that its staff could ¡°see the faces of the people impacted by their choices¡±.

Massey University said it had asked for the reduction to be deferred until next April, when the commission plans to reconcile this year¡¯s funding allocations, but the TEC had refused the request.

¡°Massey is disappointed at the response and notes the additional financial strain this decision will impose,¡± a spokeswoman said.

The University of Otago, which had also unsuccessfully requested a delay, said it had anticipated the cut. ¡°This adjustment between the forecast and actual happens every year, so was expected,¡± a spokeswoman said.

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The TEC declined to say how the funding reduction would be apportioned among the five institutions. In an ¡°¡± to Ms Tinetti, it said they were collectively expected to ¡°underdeliver¡± NZ$108 million of their funded places this year, and the commission only proposed to recover around half that amount.

Nevertheless, this ¡°standard operational¡± decision posed ¡°reputational and media risks¡± to the minister because it ¡°may be perceived as the TEC ¡®taking money away¡¯ from universities¡±.

¡°Whilst other sub-sectors have experienced this downward funding adjustment before, the university sector is not usually in this situation,¡± the memo notes.

It says that the TEC considered recovering a smaller proportion of the unexpended funds, but decided this ¡°would set an unwelcome precedent¡± by encouraging institutions to treat under-delivery as ¡°free cashflow¡±.

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¡°While it may assist their cash position in the short term, it is not conducive to the institutions effectively managing their organisation based on the true level of student enrolments,¡± the memo says. ¡°It is not the role of the TEC¡­to support [institutions¡¯] financial viability through deferring recovery of unutilised TEC funding.¡±

Times Higher Education?asked Ms Tinetti¡¯s office whether the minister would intervene, but received no response.

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john.ross@timeshighereducation.com