Australian universities spend hundreds of millions of dollars on corporate advisers who help an “overpaid executive class” perpetuate a “hiring and firing yo-yo”, according to the National Tertiary Education Union (NTEU).
Last year the 38 publicly funded universities collectively paid almost A$750 million (£385 million) to consultancies and professional services companies whose “bad advice” contributed to a “disturbing lack of workforce planning”, the NTEU says.
Six universities which each sacked hundreds of staff during the pandemic and recruited a hundred or more additional workers in the ensuing years are now making scores or hundreds of people redundant, according to the NTEU’s report, which is drawn from members’ testimonies, media articles and universities’ financial statements.
“This…unproductive restructuring and churning of staff is usually undertaken upon the advice of highly paid consultants who need to justify their fees by recommending more restructuring,” the report says.
Consultants also feature among the 143 corporate appointees to university governing bodies who determine executive pay. This “cosy relationship” has spawned a culture of “reckless largesse” where 306 university executives earn more than their respective state premiers or territory chief ministers, the report says.
Meanwhile class sizes are increasing, course choice is diminishing and the casually employed 49 per cent of university staff have collectively been underpaid aboutA$400 million, the report says.
The report says a federal parliamentary inquiry should be commissioned into public university governance and workforce planning. Its findings should feed into broader efforts to reform university employment and oversight and staff and student safety.
Some insiders suspect that university administrators engage consultants, ignoring their in-house academic expertise, so that they can wash their hands of responsibility for implementing the changes they want to make anyway.
But a university chancellor said consultants often undertook technical projects in areas such as IT, where academics lacked the time or expertise to do the work themselves.
The chancellor, who asked not to be named, said academic expertise did not necessarily yield the “practised” skills universities often needed. Their IT “geniuses” may never have worked with the specific platforms being installed, for example.
The NTEU report says universities tolerate “egregious conflicts of interest” that “would not be allowed in the public sector”. It singles out the University of Wollongong (UOW), where a A$35 million decline in international education revenue has forced a restructure expected to claim the net equivalent of 90 full-time jobs.
Consultancy company KordaMentha is reviewing the university’s operations and culture as part of a broader strategic project overseen by the UOW council. Interim vice-chancellor John Dewar is on leave from the company, where he is a partner.
UOW said Professor Dewar had played no role in engaging KordaMentha or supervising its work. He had declared his role with the company, in line with the university’s conflict of interest policy, and adhered to a plan to manage any conflict.
The NTEU report says UOW’s A$14 million spending on consulting and professional fees in 2023, up from A$9 million the previous year, contributed to the need for staff cuts. The university said the spending had preceded Professor Dewar’s appointment and had been for “services that can be delivered more cost-effectively by external providers” including “highly specialised and technical IT advice”.
The NTEU said all universities should separately disclose their consultancy spending, as is currently required in Victoria.
