Is there ‘huge growth’ in the cost of university administration?

In responding to a Group of Eight whinge about university funding, Julie Bishop alleged:

“There has been huge growth in the cost of university administration and, given their strong financial position, the challenge for university management is to ensure their institutions are operating more efficiently and to invest more in teaching and research.”

I agree that universities could be more efficient. But I am not sure that we are witnessing ‘huge growth’ in the cost of university administration. I don’t know of any public data that directly measures administration costs, but DEST finance statistics divide employee costs into academic and non-academic. Staff are the major expense for universities. Over the period 2002 to 2006, total enrolments increased by 9.8% and total university expenses rose by 38%. Academic staff costs increased by 48% and non-academic staff costs by 46%. This suggests that staff costs are heading up at a faster rate than other costs, but not that administration costs are blowing out relative to teaching and research costs, unless there has been a growth in central administration staff at the expense of other non-academic staff.

DEST’s staff statistics get us closer to central administrators, but without counting just them. Their numbers are mixed in with the delivery of non-administrative services, such as maintenance and security. But their total share of university employment is stable on around 19% since 2000, slightly lower than it was in the 1990s.

I doubt central administration is growing quickly. There are pressures to growth but also areas of greater efficiency. The increased micromanagement and data demands of the government certainly add significantly to administrative work at universities. If the Coalition gets back, these will continue to escalate with the Research Quality Framework. Universities spend more on marketing and media staff than they used to, an inevitable consequence of having to recruit full-fee students. On the other hand, as in other sectors there are efficiency gains through IT. Finance, HR and enrolment services have all benefited from improved efficiency as the result of IT investment.

These trends would see clerical staff replaced with more expensive employees with higher levels of skills, such as those needed to maintain IT systems and understand complex bureaucratic requirements. So average staff salaries are likely to have increased.

For some reason – perhaps to create the impression of change and therefore news – people make incorrect claims about trends to make plausible points about a problem. I think that could be the case here. University administrations could be more efficient, but there is no clear evidence of huge growth in costs relative to the tasks they have to perform.

8 thoughts on “Is there ‘huge growth’ in the cost of university administration?

  1. One would expect that the cost of academic staff would rise in parallel with the number of students but the cost (or at least the number) of administrative staff should not rise in parallel because there should be economies of scale and other efficiences to be gained in admin that cannot be gained so easily in teaching.

    No doubt there has been a blowout since the Dawkins reforms but it is most unlikely that the administrative octupus is growing at the same rate nowadays (call me an optimist!).

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  2. “No doubt there has been a blowout since the Dawkins reforms but it is most unlikely that the administrative octupus is growing at the same rate nowadays (call me an optimist!).”

    Rafe – Centrally employed staff were 21.3% of all staff in 1990, early on in the Dawkins period, and 18.9% in 2006. One of the aims of Dawkins was to drive economies of scale, and perhaps that was achieved.

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  3. This year I attended the budget speach of our Vice Chancellor. Apparently there is a freeze on overall $$$ for admin areas for 3 years, which in reality means reduction in staff numbers.
    RQF is one of those things that make me reluctant to vote Libs this time round.

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  4. Andrew, the reduction from 21 to 19% in numbers is interesting but it does not take account of (a) the inflation of admin pre 1990 as a result of centralization under Whitlam (b) the economies that should have been obtained from improved systems (c) the higher unit cost of personnel as you noted (d) highly paid “Mickey Mouse” admin positions that don’t add value and (e) the devolution of admin to teaching staff, a factor that drove one of my friends, a highly talented scholar and research scientist, into early retirement.

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  5. Rafe – I don’t have 1970s data so I am not sure what the history of the academic/non-academic divide is. At least in principle, moving from three client groups (state, commonwealth, student) to one should have reduced administration after 1974, but I don’t have evidence either way.

    You can’t win with academics – take responsibility away from them and they complain about ‘managerialism’ and give it to them and they complain about overwork. I don’t think there has been any devolution of work from the centre to individual academics, but certainly the data and compliance demands have increased across the institutions.

    Overall, I think universities have become more efficient – they are producing more with less with no loss, and indeed an increase, in student satisfaction. The major inefficiencies are structural, such as the short teaching year and the difficulties in shifting resources to where they are best used.

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  6. “You can’t win with academics – take responsibility away from them and they complain about ‘managerialism’ and give it to them and they complain about overwork. ”

    Well yes. I give you an example. We have a job opening and want to advertise. But we must go through our HR department. They will design the ad in consultation with us. Oh, no. They won’t actually do it themselves. They outsource it to an agency. Which designs the ad in consultation with them. And they consult with us. And it is going on for so long, all the dates need to be changed. We call them and request that the closing date needs to be changed. Fine. They changed the closing date on the web,… but not in the ad.

    Of course we also advise them on where to put the ads, the costs, formats etc. Then after all this of course we are asked to pay for all this.

    Of course I am angry. I think if we are to cover the costs, we should also be able to choose how to do it, who to contract etc. Because if it is done the way it is, it is both managerilism AND overwork.
    Or: we employ an IT person. Brilliant. We pay him from our research grants. Now as part of the centralisation of the university IT they want to take him away. It seems there is no logic behind this other than to make our life miserable.

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  7. I can add that the type of thing Boris descibes also seems to happen at every level, so it isn’t just an anecdote.
    It occured to me last time I watched Hitchhikers GTTG, that Douglas Adams’ worst nightmare about beauracracy (the Vogons and how they get things done) wasn’t as bad as what we have put up with in terms of number of times some things have to get signed etc.

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