Universities delay funding deals to try to derail fee capping

New Zealand universities are using the government's fee stabilisation deal as a bargaining card to delay legislation that would allow the government to set maximum limits on tuition fees.

The government has offered institutions a 4.5 per cent funding rise next year provided institutions do not raise fees. It is the third consecutive year that rises have been conditional on institutions keeping fees at 2000 levels.

None of the country's eight universities has so far accepted the deal. Vice-chancellors have recommended that their councils defer any decision until they have details of a new funding system to be introduced in 2004. In response, the government extended the deadline for accepting the deal by six weeks, to mid-October.

Vice-chancellors said the offer was in effect a 3 per cent increase when considered in the context of government funding and income from tuition fees, and that was not enough to cover inflation, other costs such as rising insurance premiums and union demands for 8 per cent pay rises.

At Victoria University of Wellington, earthquake insurance premiums have shot up from NZ$400,000 (£119,000) a year to NZ$2.1 million a year. At Otago University, staff held a half-day strike this week to protest against the management's offer of a 1.5 per cent pay increase.

The vice-chancellors' tactics are also designed to press the government to drop or delay legislation introducing "fees maxima", which would allow the government to cap tuition fees. The vice-chancellors believe the policy could disadvantage some institutions financially and infringe their autonomy.