‘Uniquely Australian’ scheme rewards high performers but also helps those that fall short, education minister says

This article is more than 1 year old

This article is more than 1 year old

Universities will be paid to improve outcomes even when they fail performance metrics in the areas of attrition rates, graduate employment, student satisfaction and participation of equity groups under a scheme endorsed by the Morrison government.

On Wednesday the education minister, Dan Tehan, released a review of performance funding, which recommended that a pool of $80m of at-risk funding in 2020 increase over time in line with national population increases.

Despite Tehan trumpeting the scheme’s ability to deliver “incentives for performance and transparency”, the review shows that an “incremental” approach will mean even the worst-performing university will receive 75% of their at-risk funding.

And even when universities fail to achieve their performance metrics, the panel said the unallocated funding “should be provided to universities under conditions negotiated between the Department of Education and the university”.

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Tehan told reporters in Wollongong the model was “not a carrot and stick” because universities would be rewarded for performing well and would receive “a financial payment to help improve” performance in other areas.

Tehan denied that churning at-risk funding back to failing universities defeated the purpose of a performance funding system. He said the “uniquely Australian” system would mean the universities which fell short would “give up a tiny bit of autonomy where they’re not performing as well as they otherwise would be”.

The review, conducted by a panel of vice-chancellors led by chair Paul Wellings of the University of Wollongong, called for a cumulative approach so that the pool of at-risk funding grows from 2021 to 7.5% of universities’ total funding.

The panel called for four performance metrics:

Student success, as measured by first-year attrition rates but accounting for shifts into vocational education;

Participation by Indigenous, low socio-economic status, and regional and remote students;

Graduate outcomes, as measured by longer-term graduate employment rates for domestic bachelor students; and

Student experience, as measured by student surveys of teaching quality.

Graduate outcomes would be measured based on an individual university’s improvement on the previous year, while student success would control for other factors such as demographics and courses.

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The panel said a portion of at-risk funding should be allocated for each metric, to prevent a “severe” and “unfair” all-or-nothing approach. It left open the possibility that universities could be allowed to set a greater weight for each metric.

“Each of the four measures should allocate funding based on an incremental approach,” it said, meaning that falling short of identified targets in each area would only result in partial loss of funding.

The panel modelled the impact of the new funding model with “indicative” data, finding that in 2020: 16 universities would receive more than 90% of their at-risk funding; 31 universities would receive more than 80%; and the worst-performing university would still receive 75%.

Tehan said the framework was “an excellent one” and he had agreed “a way forward on performance based funding” with the sector, although he hoped to finalise sign-off by the end of the month.

Andrew Norton, the higher education program director at Grattan Institute, said he opposed performance funding and the decision to grow the at-risk pool.

“As a consequence, universities will be even more cautious about expanding their bases because the funding is not guaranteed – it increases the risk that student places will fall,” he told Guardian Australia.

Norton questioned the wisdom of basing the system on indicators out of universities’ control, such as employment results.

“Ratcheting up the improvement requirements will be the hard part … There will often be quite limited levers to pull, the question is what universities can do in practical terms.”

The shadow education minister, Tanya Plibersek, said Labor would consider the proposal and was not against “linking some funding to performance” in principle.

“But it does nothing to change the fact the Liberals have restricted access to uni, locking out thousands of Australians, especially in the suburbs and the regions.”

The Greens education spokeswoman, Mehreen Faruqi, said the performance measures were “misguided”, citing graduate employment “as a measure of success [which] betrays the purpose of our public universities”.

“We cannot allow their collegial, public-focused mission to be displaced by the Liberals’ vision of unis as just factories for the workforce.”