Higher Education Review Process

Varieties of Excellence: Diversity, Specialisation and Regional Engagement

8. facilitating diversity and specialisation

Although there appears to be a broad consensus that a mass system of higher education requires diversity, there is, however, less agreement about how best this diversity is to be achieved.
(Meek & Wood, 1998, p.189) 

376  How should further diversity and specialisation be facilitated in the Australian higher education sector? 

377  Internationally, a significant trend in public sector management has been to minimise the role of government in order to maximise competition and contestability in markets. Within such a framework, there are still policy changes that governments can make to promote change and facilitate particular behaviours in markets. Given that there is a strong legislative and historical foundation for institutional autonomy in Australia, what role should government play in facilitating greater diversity in the Australian higher education market? 

378 There are a number of possible options for the facilitation of further diversity and specialisation, each involving different levels of government intervention. The possibilities range from centralised planning and regulation of institutional missions to a deregulation of the higher education market to allow institutions to identify and secure their own position in the market. However, it is to be noted that the Commonwealth Minister, Dr Brendan Nelson, has already indicated that “the Government under no circumstances, nor I as a Minister, would ever accept an unfettered free market in relation to university funding” (The Australian, July 26, 2002).

379  Some submissions argued that the overall funding framework is the key to greater diversity and specialisation in the sector. The University of Western Australia proposed that:

Greater institutional specialisation would flow naturally and inevitably from reduced regulation and from a funding and policy framework in which institutions were encouraged to pursue fitness for purpose and comparative advantage.
(Submission 175, p.1)

380 There is some debate, however, about whether a deregulated market for higher education would produce greater diversity. Karmel has argued that: 

The establishment of a market for all the teaching services of universities seems likely to be conducive to greater diversity not only in meeting student needs but in responding to research opportunities and community needs.
(1998, p.62)

381  Meek and Wood, however, have questioned “the rather general assumption that market competition inevitably generates diversification” (1998, p.17). Marginson argued that a market has potential for homogenisation if “the elite universities that lead the system do not need to respond to demand” (1998, p.94). 

382 There was strong support for research to continue to be funded through a performance-based mechanism open to all institutions. Deakin University argued that “research thrives in the competitive environment of performance-based funding” (Submission 95, p.6). Swinburne University of Technology proposed that:

Whatever new funding models are introduced, if they involve redistribution of funding between institutions, an essential principle that the government must hold on to is that they should be competitive and open, and should not involve reserving funds for classes of institution regardless of actual performance.
(Submission 194, p. 1) 

383  A few institutions argued that certain institutional specialisations deserved greater financial support because of the additional costs inherent in the specialisation. Deakin University, for example, argued that: 

Universities experience different cost structures for their various areas of specialisation, which need to be reflected in government funding arrangements. Deakin’s distinctiveness in distance, corporate and continuing education, increasingly in an online environment, comes with a high cost for technology and new pedagogic skills to ensure effective communication and interactivity between students and their lecturers.
(Submission 95, p.14)

384  Many submissions supported ‘assisted evolution’, through the exercise of a ‘light hand’ by Government via directed incentives for differentiation and specialisation. Professor Millicent Poole supported incentives to reward diversification “provided the incentives follow the realisation that diversification and specialisation does not sit with a small number of universities but happens as a result of the performance of teams in diverse schools and departments” (2002, p.5). Kemmis et al rejected the imposition of a “hard view of diversity” through a regulatory system, preferring a “soft view of diversity”: 

…an evolutionary approach which creates genuine opportunities for different universities to choose and determine their own developmental paths, in ways appropriate to their own particular circumstances and opportunities.
(1999, p.66)

385 The University of Tasmania proposed that: 

The best decision, which could come from this review, is that universities should be assisted to evolve, and not constrained in a tightly engineered system. The process of evolution has some way to go before universities achieve their optimal differentiation, but there are clear signs of the path it is taking.
(Submission 153, p.1) 

386 The University of Western Australia argued for “multiple contestable funding mechanisms to facilitate and encourage diversity in the role and character of institutions, based on the principles of fitness for purpose and comparative advantage” (Submission 175, p. 19).

387  BHERT supported “strategic use of public funding” as a means of encouraging the development of diversity but believed that the ultimate decision-making should be left to the individual institution: 

Continue to devolve responsibility for decision making to the local level. Clearly, decisions made at the local level are more likely to generate different solutions between institutions through allowing local factors and interpretations to be taken into account.
(2001a, p.8)

388 The Higher Education Innovation Programme (HEIP) was created in 1995 to support innovation and collaboration, as a result of the merger of the Quality Assurance Programme and the National Priorities (Reserve) Fund (NPRF). Would an incentives fund that focused on partnerships and innovation facilitate even greater collaboration and coordination across the sector? The University of South Australia supported an extension to the current Innovation Programme: 

In addition, the Commonwealth should retain the capacity to stimulate experimentation in the sector. In the past this has been provided through Innovation Grant funding. Any future model should retain, and to the extent possible expand, this form of funding, to strengthen the capacity of the sector for innovation. The importance of being able to experiment with different arrangements for higher education, particularly in a time of rapid social and economic change, should not be underestimated as a means of increasing the responsiveness of the system.
(Submission 109, p.14)

389 The original higher education discretionary funding programme, the NPRF, was created in 1989 by top slicing one per cent from operating grants. As one source of comparison, the province of Saskatchewan in Canada, has created a “strategic initiatives envelope” which amounts to 5 per cent of total funding to address a range of specific public policy objectives, including greater institutional collaboration and rationalisation (Edward DesRosiers and Associates, 1998, p.5).

390 The question of the quantum of such a fund provoked caution from the University of Western Australia. It supported Commonwealth discretionary funding for special programmes but argued that it should only “account for a very small percentage of system funding and the greater percentage of funding [should flow] to institutions within minimum ties” (Submission 175, p.3).

391  In proposing a repositioning of Australian higher education there may be some place for a degree of planning and coordination, as opposed to regulation. This distinction was recognised by Kemmis et al in their proposition that “greater diversity in Australian higher education demands more sophisticated (and, yes, more complex forms of) regulation, not less (which is not the same as ‘government interference’)” (1999, p.25). Such an approach was supported by some submissions. The University of New South Wales argued that:

Planned differentiation and strategic connection of the higher education sector will facilitate a coherent development of educational and research activities and the efficient use of resources.
(Submission 143, p.1)

392  As suggested in an earlier section, there could be a role for a Commonwealth/State body or bodies, such as a council or committee, to promote and encourage the development of each regional section of the national network, particularly in terms of rationalisation of course provision. The importance of State involvement was acknowledged by the University of Adelaide:

In teaching, research and community service there are roles for State government in driving differentiation and rationalising the distribution of activities between the three universities, while ensuring that universities are appropriately recognised for regional programs that are often expensive to run, but that make significant contributions to rural economies.
(Submission 135, p.6)

393 There could be coordination of State-based approaches by a central body that had a broader ambit for higher education matters, as has been proposed by a number of submissions and will be further discussed in a later issues paper. Kemmis et al suggested the establishment of an independent commission for higher education: 

Such an independent body for higher education could formulate, coordinate and advise government (and the universities) on questions of mission, purposes and strategies for the system as a whole in relation to the missions, purposes and strategies of individual universities. On the one hand, it could advise government on the operation, development, regulation and funding of the system as a whole, through each autonomous university. On the other, it could advise each university about its operations and proposed developments in relation to strengthening its local, regional, national and international scholarly connections, communications and contributions as a distinctive member of the national network, and in relation to balanced development of the system as a whole.
(1999, p.55)

394 The establishment of the National Research Priorities exercise reflects the Commonwealth’s role in identifying and responding to national priorities. Some have argued for the identification of priority areas in other aspects of higher education, such as course provision, as proposed by the Australian Education Union in its identification of teacher supply, and the Australian Nursing Federation in its identification of supply of nurses, as areas of national priority: 

We believe that the Federal government, in collaboration with State and Territory governments, should construct National Priorities for the university sector which would lead to appropriate support, direction and encouragement from government.
(Australian Education Union, Submission 48, p.4)

…decisions about student numbers should be undertaken as part of an effective, regular and national workforce planning process.
(Australian Nursing Federation, Submission 316, p.3) 

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some possible responses

395  A number of possible options have been raised in relation to the issues in this section. While not an exhaustive list, questions include: 

• How can the Commonwealth best facilitate diversity and specialisation in the Australian higher education sector? 

• What role should the States and Territories have in facilitating diversity and specialisation in the Australian higher education sector?

• To what extent, and for what period, should the Commonwealth intervene in a competitive market to meet objectives of specialisation and diversity?

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