Government poised to bailout struggling universities facing hundreds of job losses, claims of underfunding

A noisy and passionate group of about 400 protesters marched through the University of Otago campus to demonstrate against cuts at the financially-troubled institution. Photo / Otago Daily Times

The Government is poised to step in with a rescue package for the country’s struggling universities facing hundreds of job cuts.

The Herald understands the Government will on Tuesday announce major new funding to help universities that are facing major deficits following drops in student numbers, particularly international students over the Covid years.

Over the past few months, reports have emerged of hundreds of jobs on the line, in particular at Victoria University of Wellington and the University of Otago, along with programmes being slashed.

These changes have seen protests and pushback from the universities themselves, which have laid some of the problem at the feet of successive governments for what they say has been years of underfunding.

A recent open letter, supported by Victoria University’s vice-chancellor Nic Smith and the acting vice-chancellor at the University of Otago, Helen Nicholson, called on the Tertiary Education Commission and the Minister of Education, Jan Tinetti, to provide short-term relief by lifting the debt ceiling and commit to sustainable and increased funding.

It said there had been “chronic underfunding” of universities below inflation that reflected an “unsustainable and fragmented funding model”.

“We implore the Labour Government to prioritise its belief in the essential role of education as a public good and take immediate action to prevent staff cuts and program losses,” the letter read.

The letter even quoted Prime Minister Chris Hipkins from his time as Victoria University of Wellington Students’ Association president in 2001, when he stated: “The days when University Councils were encouraged to act like businesses and return substantial surpluses are over.”

The Herald understands tomorrow’s announcement will include new funding over two years to help universities account for recent deficits.

The funding will be reallocated from within the existing Budget.