NZ swells campus coffers by £140m

New Zealand's coalition government has frozen student fees for the third year but has found an additional NZ$400 million (£140 million) in funding over the next four financial years for university initiatives that support its goals of "relevance, excellence and accessibility".

Initiatives announced in last month's budget, including a boost in tuition subsidies, a shift to performance-based research funding and an overhaul of the funding system, have won cautious approval from universities.

Universities and other state tertiary education institutions have been promised an additional NZ$214 million in tuition subsidies over four years, including a 4.5 per cent increase in the per-student funding rates next year to institutions that agree to hold student fees at current levels. A new, more directive, integrated funding framework will be introduced progressively. It will comprise three main elements: a student component (the largest amount); a research component distributed through a performance-based research fund, and a targeted strategic development fund.

An additional NZ$58 million has been allocated to developing more centres of research excellence, an initiative started last year to encourage institutions, particularly universities, to work collaboratively on research that contributes to the government's national development goals.

Steve Maharey, associate minister for tertiary education, described the new system as shifting the focus "away from simply attracting students at the lowest possible cost to the government toward rewarding excellence and the contribution tertiary providers make to New Zealand's economic and social development".

Other initiatives include a review of funding categories, a cap on public funding for private training establishments, and a 9.5 per cent cut in rates to private providers for the share of funding that goes to capital expenditure.

James McWha, chair of the New Zealand Vice-Chancellors' Committee, welcomed the funding boost and research initiatives, but questioned whether the level of investment was sufficient. He also queried the restraints on tuition fees under the new system, saying regulation of fees by the government would inhibit the ability of universities to respond to demand. There would be further salary demands from staff later this year, and the improved funding still fell short of allowing universities negotiating internationally competitive settlements.

Students were less positive. The New Zealand University Students Association co-president Andrew Campbell said the average fee was about NZ$4,500 and the fee freeze policy did nothing to bring fees down."We can't be anything more than lukewarm about fees being frozen at the highest level they have ever been," he said.