Australian universities design their own performance funding test

Performance-related funding in Australia should be based around universities’ records on student retention, satisfaction, graduate employment and widening access, according to a group of institutions that have emphasised the importance of benchmarking in such a system.

The Australian government has said that it will introduce a performance-related funding system in 2020, when the current freeze in teaching grants ends, but the targets are yet to be specified, with ministers promising to release a discussion paper soon. Some universities are nervous that the new regime will unfairly penalise them by marking them down for high attrition rates without considering their student profiles.

As a result, the Regional Universities Network, which represents six institutions in Queensland, New South Wales and Victoria, has proposed a model for how the system should work. It says that providers should be judged on six “core” measures and up to four optional ones, in a system similar to the UK’s teaching excellence framework.

All universities would be judged on their completion and attrition rates, student and employer satisfaction, employment outcomes and share of students from disadvantaged backgrounds. Completion and attrition measures would be weighted according to the proportion of part-time, mature, off-campus and disadvantaged students.

Universities would also be judged against three additional measures selected from a pre-approved list, which could include things such as graduate starting salaries and student support resources. Each university would also be able to nominate a 10th metric reflecting its institutional mission.

In another mirror of the TEF, universities would present their data in written submissions that allowed them to provide context, with their success assessed by independent committees working at arm’s length from the government.

Regional universities have high proportions of mature, online and part-time students – groups who tend to take a long time to finish degrees and are prone to dropping out. RUN chairman Greg Hill warned that a “superficial” approach to performance funding could have unintended consequences, discouraging universities from taking a chance on these types of students.

“A narrow focus on attrition does not fully capture the expectations [on] higher education,” said Professor Hill, vice-chancellor of the University of the Sunshine Coast. “Unless performance is carefully defined, there is a risk of rewarding the wrong behaviours and constraining opportunity for students most in need.”

The proposals were drawn up by management consultants Nous Group, who said that they also borrowed from models in New Zealand and the US, including Pennsylvania’s approach of combining core and optional performance measures.

RUN executive director Caroline Perkins said that the framework would not allow universities to cherry-pick data to secure the extra funding. They would have to demonstrate how the metrics they had selected were relevant to their institutional missions.

Dr Perkins defended the scheme’s complexity, saying that it would be less arduous than research assessment exercises such as the Excellence in Research for Australia scheme. “If you go to significant effort to measure research, why underdo the measurement of other components of university contribution?

“There’s so much riding on this for regional universities. It’s tied to funding which will allow our campuses to grow. We need a complex set of indicators.”

Education minister Simon Birmingham said that the government would work closely with the sector in finalising its approach. “We welcome all constructive contributions,” he said.

john.ross@timeshighereducation.com