The effectiveness of post-VSU government funding on Australian university campus services
Australian Government VSU Transition Funding
Overview of post-VSU government programmes to assist transition
To assist universities to make the transition to VSU the federal government committed to provide a range of programmes and other support. The programmes and other support universities were or will be able to access for these purposes are summarised in Table 12.1 below.
| Table 12.1 Government Programmes to Assist Transition to VSU over 2007-09 |
| Programme Name |
Solely for VSU Transition |
Funding Amount $ |
VSU Transition Fund (VSUTF)
Support for Small Businesses at Regionals
Regional University Sport Funding
National Talent Identification – Sport
|
YES
YES
YES
YES
|
80,000,000
10,000,000
10,000,000
800,000 |
| Sub Total |
YES |
100,800,000 |
Independent Assessment 18 months on
Workplace Productivity |
YES
NO |
unknown
120,000,000 |
Independently of VSU transition support, but over the same period during which grant applications could be made for VSU transition support, universities and campus services organisations were able to apply for grants under the federal government’s Community Water Grants programme. It is considered the campus services sector could potentially access up to $10 million in water grants in total nationally.
VSU Transition Fund programme
Background to and funding outcomes under the VSUTF programme
The VSUTF programme was announced240 by the former Minister for Education, Science and Training, the Hon Dr Brendan Nelson, on 12 December 2005.
On 18 April 2006 the former Minister for Education, Science and Training, the Hon Julie Bishop, announced241 the release of a discussion paper on the VSUTF for purposes of consultation with the higher education sector and related communities. In the discussion paper242 the proposed objectives and funding allocation mechanisms of the VSUTF were described as:
...to assist universities with the construction and maintenance of infrastructure for sporting and recreational facilities to support implementation of voluntary student unionism...
...The transition fund will assist the sector, particularly those parts of the sector with an historical and principal reliance on the compulsory student fees to support their operation, to adjust to the changed funding environment. It will help them to shift from reliance on compulsory fees to other mechanisms...
...The paper proposes that funding be allocated through a competitive selection round or rounds, with institutions submitting proposals which would address one or more of the funding priorities.
Universities that have previously relied primarily on compulsory student fees for constructing and maintaining sporting and recreational facilities will be a priority under the Fund but additional considerations, such as the needs of newer and regional universities where communities have limited access to alternative facilities, could also be taken into account.
After consultation with the sector and others the former Minister issued guidelines in the second half of 2006 for VSUTF Round 1 applications. The guidelines243 described the process for applying for VSUTF Round 1 grants and highlighted that grant monies could only be used for purposes of construction and maintenance of sporting and recreational facilities or repayment of loans used for such and could not be used to fund staff salaries, staff training, consultants or software. Applications for VSUTF Round 1 grants were subsequently lodged by the sector and assessed by DEST. A total of 40 higher education providers lodged applications for Round 1 grants. The applications presented 96 separate projects for consideration and sought $177.5 million in funding.
Further details on the VSUTF grants and the processes followed leading up to the former Minister’s announcement of the successful Round 1 applicants, are available from the DEST website244.
On 26 February 2007 the former Minister announced245 the successful VSUTF Round 1 grant recipients. There was a total of $55.6 million allocated in VSUTF Round 1, with 25 separate campuses across 17 universities receiving grants and with nearly all of the grant recipient projects being for regional sporting infrastructure246. On 17 May 2007 the former Minister invited247 applications for Round 2 VSUTF grants of $24 million – this was in addition to the $55.6 million in grants made available under VSUTF Round 1. Applications for VSUTF Round 2 grants were subsequently lodged by the sector and assessed by DEST with the former Minister announcing248 the successful VSUTF Round 2 grant recipients on 16 October 2007.
There was a total of $29.65 million allocated in VSUTF Round 2 grants, with 22 separate campuses across 18 universities receiving grants and with most of the grant recipient projects being for regional sporting infrastructure249. Several campuses which received grants under Round 1 also received grants under Round 2. The grants issued under Rounds 1 and 2 of the VSUTF came to $85.25 million in total. It is understood from discussion with DEST that the reason the total of the Round 2 grants was in excess of the $24 million referred to in the former Minister’s 17 May 2007 media release was that unallocated grant monies from the Support for Small Businesses on Regional University Campuses programme were transferred in to the VSUTF programme.
In terms of the numbers of students as measured by EFTSL who benefited or did not benefit from these grants, in VSUTF:
- Round 1 there were 109,355 (17.9 per cent of sector) who benefited;
- Round 2 there were 73,471 (12.1 per cent of sector) who benefited;
- Rounds 1 & 2 combined and after taking account of those campuses which received grants in both Rounds there were:
- 155,485 (25.5 per cent of sector) who benefited, &
- 454,100 (74.5 per cent of sector) with no benefit.
Campus services sector frustrations with the VSUTF application process
Many parts of the campus services sector not operating at regional campuses (the bulk of the sector) reported they found the process of applying for VSUTF grants to be a frustrating and demoralising experience. Only a small proportion of the many applications lodged for other than regional campuses, met with success. Notwithstanding this, only 12 of the 38 UA member universities failed to receive any VSUTF grant monies at any of their campuses.
Sector wide adequacy of the VSUTF funding
It is worth commenting at the outset upon the adequacy of the VSUTF in terms of its stated objective of assisting the sector to adjust to the changed funding environment which exists in a post-VSU setting.
As noted at Table 5.9 in Chapter 5 earlier in this report, the net present value to the campus services sector of the loss of amenities and services fees over the next 25 years for all campus services areas is estimated to be in excess $2.6 billion.
The $85.25 million in capital grants made available via the VSUTF, whilst welcome, has in practice provided little assistance to the campus services sector overall for the task of preparing for such a massive loss in revenue.
For the three quarters of the sector on an EFTSL basis that received nothing in either of Rounds 1 or 2 the VSUTF has obviously provided no assistance to campus services organisations as they struggle to adjust to this massive change in their funding environment. Adequacy of the VSUTF for regional university sport
The outcomes under the VSUTF for regional university sport are different than those for the sector overall. Of the $85.25 million in grants issued under VSUTF Rounds 1 and 2, a total of approximately $64 million of these grants went to capital projects for regional university sport.
As noted earlier in Chapter 5 of this report it is estimated the net present value of the reduction in income from amenities and service fees at the 84 recognised regional campuses operated by UA member universities over the next 25 years is of the order of $95 million.
It is estimated the written down replacement cost of sporting infrastructure at the 84 recognised regional campuses operated by UA member universities is very roughly about 16 per cent of the total national estimated written down replacement cost of university sporting infrastructure of roughly $500 million – that is about $80 million.
In summary on the regional sporting issue, the VSUTF has provided approximately $64 million in capital grants to assist regional university sport to adjust to loss of future revenues with a net present value of about $95 million and where existing regional sporting infrastructure has a written down replacement cost of about $80 million.
Given the VSUTF was only ever designed to provide assistance on capital projects and that VSUTF grant monies could not be used for operating expenses such as staff salaries, it is considered the VSUTF provisions for regional university sport were generous in terms of servicing the sector’s requirements for new capital infrastructure.
From the above very rough numbers it would appear the VSUTF grants will increase the written down replacement cost of regional university sporting infrastructure from about $80 million to about $144 million – an increase of very roughly 80 per cent over the space of just three or four years.
There have been other VSUTF benefits for regional university sport (and in some cases also for suburban university sport) to do with the VSUTF acting as a form of “seed capital” to bring additional capital into university sport and from sources other than federal government.
In a number of cases VSUTF grants have been provided on a matched funding or co-funding basis – that is where for example the university or state or local government may have agreed to match dollar for dollar the VSUTF funding for a new capital project.
An example of this matched funding activity is the VSUTF Round 1 grant of $4.05 million to build a new sports precinct at the UWS Penrith campus which under the terms of that particular VSUTF grant was matched by funding of $4.05 million provided directly from UWS for the same project. An example of co-funding activity is the VSUTF Round 1 grant of $5 million to the University of the Sunshine Coast (USC) to build a new air-conditioned 3,705 square metre indoor sports stadium at the USC Sippy Downs campus which under the terms of that particular VSUTF grant was matched by funding of250:
- $2.0 million from the Queensland Government Department of Education, Training and the Arts;
- $0.9 million from the Queensland Government Department of Sport and Recreation; and
- $2.1 million from USC.
After taking account of those cases where the VSUTF grants have acted as a form of “seed capital” it would be no surprise to see an outcome where the written down replacement cost of regional university sporting infrastructure doubles (compared to the pre-VSU position) over the course of the next three or four years.
To put the scale of the impact of the VSUTF on the level of investment in capital infrastructure into perspective note that before the introduction of VSU the bulk of the funding for new sporting infrastructure projects at regional university campuses was being funded out of the (roughly) $6.4 million in compulsory amenities and services fees that went to regional university sport.
Under the capital funding model that applied before VSU was introduced the rate at which new sporting infrastructure was going into regional university campuses is estimated to have been less than $5 million per annum.
The doubling of investment in regional university sporting infrastructure which is likely to result from the VSUTF grants and other sources over the course of the next three or four years would likely have taken of the order of one to two decades to achieve under the pre-VSU funding model which was previously being used by the sector.
In terms of assisting regional university sport to deal with operating costs (as distinct from capital costs) going forward, the VSUTF has provided some limited benefits as follows.
New regional sporting infrastructure built with VSUTF grants will in many cases be constructed using modern, low maintenance building materials to replace ageing infrastructure that is costly to maintain and keep in service. This will reduce building maintenance expense.
Against this, the expected doubling of the written down replacement cost of regional university sporting infrastructure over the next three or four years will undoubtedly increase overall building maintenance expense in those cases where completely new buildings are going up and are not replacing old buildings.
The construction of new regional sporting infrastructure provides an opportunity for regional university sport administrators to put in place infrastructure which more readily lends itself to income generation whether from students or from the wider community. It has been reported by many university sport administrators over the course of this study that students will generally pay more to use new, well equipped facilities compared to aged facilities with a “tired” presentation.
Other programmes, such as Regional University Sport Funding for example, were provided to assist regional university sport to deal with on-going operating costs (in certain areas) in a post-VSU setting.
Extent of coverage of the regional campuses by the VSUTF grants
It is worth also commenting on the extent of coverage of the regional campuses by the VSUTF Round 1 and 2 grants. The coverage was very broad in that only 4 regional university campuses nationally and where the campus had EFTSL of over 1,000 missed out on receipt of any grant monies under either Round 1 or Round 2. These four campuses were:
- CSU Albury Wodonga campus (EFTSL of 1,876);
- CSU Wagga Wagga campus (EFTSL of 6,039);
- Deakin Geelong Warne Ponds campus (EFTSL 6,139); and
- Deakin Geelong Waterfront campus (EFTSL 1,141).
Note that both CSU and Deakin received VSUTF grants for one or more other regional campuses they each operate and which are not on the above list (refer to Tables 12.2 and 12.3 below).
Fairness and transparency of the VSUTF programme
In overview it is considered in most areas there were acceptable levels of transparency in the way in which the former Minister administered the VSUTF.
Programme guidelines were published after consultation with the sector. The processes by which the programme was administered, that there would be two rounds of grant applications and approvals, the reporting and accounting obligations of grant recipients and so on, were all well documented and available to the public on the DEST website.
However in the case of the VSUTF grants there was Ministerial discretion over which grant applications were approved, notwithstanding the former Minister was required to consider Departmental recommendations before making her decision. The VSUTF guidelines251 stated in relevant part:
...the Minister for Education, Science and Training will make the final decision on the allocation of grants under the VSU Transition Fund and the conditions under which they are made.
Given the level of discretion the former Minister had in this case there were those who suggested, well before the VSUTF Round 1 grants were even announced, that the grants were not likely to be allocated on a fair basis.
The Council of Australian Postgraduate Associations Incorporated (CAPA) was an early entrant into the debate about the direct role of the former Minister in the decision making process as to which universities in which federal electorates were to receive VSUTF grants. On 16 May 2006 CAPA issued a media release concerning the VSUTF which stated (in part)252:
'...When it comes time for the funding grants to be allocated, CAPA does not wish to see opportunities for electoral pork-barrelling as was the case under the former Minister for Environment, Sport & Territories, Ros Kelly in the sports rorts affair’, said Mr Hart...
CAPA therefore has called on Minister Julie Bishop to remove herself from the process of grants allocation'
The former Shadow Minister for Education, Science and Training, the Hon Jenny Macklin (ALP), subsequently entered the debate about the former Minister’s role in deciding who was to receive VSUTF grants. On 19 September 2006 the former Shadow Minister issued a media release253 in which she described the VSUTF as an “$80 million pork barrel”. Table 12.2
VSUTF Round 1 Grants by Campus and Electorate
The standards of conduct expected of Australian government agencies in administering grant programmes have previously been documented by the Australian National Audit Office (ANAO) in the context of audits of specific grant programmes. See, for example, the Auditor General’s Audit Report No. 39 2006-07254 on the distribution of funding for community grant programmes.
In the case of ANAO Audit Report No. 39 2006-07 the ANAO conducted statistical analysis to determine whether the political party holding an electorate had a statistically significant independent impact on average grant size in electorates255.
In August 2007 the standards of conduct expected when administering government grant programmes were referred to in the media256 by a spokesman for the former Minister for Finance and Administration, the Hon Nick Minchin where the spokesman stated:
"The Government doesn't discriminate based on whether an electorate is coalition or opposition-held..."
To examine whether students enrolled at campuses in electorates held by the coalition received more per student in VSUTF grant monies than students enrolled in campuses in electorates held by the opposition the study team looked into how much in grant monies went to which federal electorates.
The distribution of grants by electorate for each of VSUTF Rounds 1 and 2 is shown in Table 12.2 above and Table 12.3 below.
The distribution of grants by electorate for VSUTF Rounds 1 and 2 combined and also showing the grant monies per EFTSL for each campus in each electorate, is shown in Table 12.4 below.
Counting the 41 separate UA member university campuses that received grants in either VSUTF Rounds 1 or 2 and the Notre Dame Broome campus that received a grant in Round 2 (note that Notre Dame is not a UA member university) the electoral distribution was as follows:
- 29 campuses were in coalition held seats;
- 11 campuses were in opposition held seats; and
- 2 campuses were in seats held by independents.
This distribution of campuses receiving grants to seats is not considered unusual. The coalition holds more seats than the opposition in regional Australia.
Table 12.3
VSUTF Round 2 Grants by Campus and Electorate
The average amount of grant per campus by party covering both VSUTF Rounds 1 and 2 (including the Notre Dame case) was as follows:
- $1,914,363 per campus in the coalition held seats (computed as 55,516,514 / 29);
- $2,147,449 per campus in the opposition held seats (computed as 23,621,941 / 11); and
- $3,287,000 per campus in the independent held seats (computed as 6,574,000 / 2).
This distribution of grant amount per campus by party holding the seat is not considered unusual.
The average amount of grant per EFTSL per campus by party covering both VSUTF Rounds 1 and 2 (including the Notre Dame case) was as follows:
- $1,798.77 per EFTSL per campus for the grants to coalition held seats (computed as 52,164.45 / 29);
- $2,861.72 per EFTSL per campus for the grants to opposition held seats (computed as 31,478.97 / 11); and
- $1,832.48 per EFTSL per campus for the grants to independent held seats (computed as 3,664.96 / 2).
The materially higher average amount of grant per EFTSL per campus for the grants to opposition held seats is considered unusual but can be explained by the extraordinarily high grant amount per EFTSL of $25,757.58 for the grant to the Melbourne University Creswick campus in the Labor held seat of Ballarat (see Table 12.3 above). Perhaps use of medians rather than averages is more appropriate here.
The total amount of grant per EFTSL for all campuses by party covering both VSUTF Rounds 1 and 2 (including the Notre Dame case) was as follows:
- $713.77 per EFTSL for campuses receiving grants in coalition held seats (computed as 55,516,514 / 77,779);
- $343.94 per EFTSL for campuses receiving grants in opposition held seats (computed as 23,621,941 / 68,681); and
- $728.42 per EFTSL for campuses receiving grants in independent held seats (computed as 6,574,000 / 9,025).
As can be seen from the figures in Table 12.4 below the total funding per EFTSL for the coalition held seats was more than double the total funding per EFTSL for the opposition held seats. Table 12.4
Combined VSUTF Round 1 & 2 Grants by Campus and Electorate
Expressed another way, the 77,779 EFTSL enrolled at campuses located in the 29 coalition held seats received the benefit of a total of $55,516,514 in VSUTF grants whereas the 68,681 EFTSL enrolled at campuses located in the 11 opposition held seats received the benefit of a total of only $23,621,941 in VSUTF grants. These figures are of some concern.
Although there are concerns on this front, the above analysis does not necessarily mean the former Minister was unfair in administering the VSUTF or that the former Minister discriminated in making grant decisions based upon whether an electorate was coalition or opposition held.
It would be difficult if not impossible to form a conclusion as to whether or not the appropriate standard of conduct was upheld by the former Minister, without examining the DEST advice on the grant applications, as well as the grant applications themselves, that were before the former Minister at the time the VSUTF grant decisions were made.
During the sector consultation stage for the VSUTF both ACUMA and AUS proposed that 50 per cent of the total transition funds to be distributed on an EFTSL basis and that 50 per cent be distributed by application.
Had the above ACUMA and AUS proposal been agreed to by government at the time there would likely have been less cause for the types of concerns which have been expressed above.
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