Australian universities could reduce or even eliminate the need for savage job cuts by curtailing their spending on consultants, marketing and travel, with some executives lavishing the equivalent of a lecturer¡¯s salary on a year¡¯s business class flights, a new paper argues.

The Australia Institute says job losses could?mostly have been averted at three institutions ¨C the Australian Catholic 51¹ú²úÊÓƵ (ACU), Australian National 51¹ú²úÊÓƵ (ANU) and the 51¹ú²úÊÓƵ of Wollongong ¨C if administrators had reined in their elective spending.

¡°These three examples are useful not because they are extraordinary, but because they are typical,¡± the report says. ¡°None of the three are the sector¡¯s biggest spenders.¡±

It says ACU¡¯s A$59 million (?28 million) outlay on advertising and consultants between 2021 and 2023 easily eclipsed the 2023 deficit that precipitated scores of retrenchments. Wollongong¡¯s spending on consultants and travel in 2023 amounted to 40 per cent of a A$51 million savings target that is expected to cost about 280 jobs.

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ANU¡¯s 2022 and 2023 expenditure on consultants, advertising and travel totalled A$190 million, almost double the scale of the university¡¯s A$100 million job-cutting proposal that the academic union has warned will claim 638 positions.

Public universities collectively spent A$363 million on advertising and marketing in 2023, the report says. The 27 universities with ¡°the most directly comparable annual reports¡± disbursed almost A$410 million on consultants, and the travel outlays at the 10 highest-spending universities totalled A$370 million.

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¡°Individual figures can look small on a university¡¯s annual financial statement, but they can¡­make the difference between operating surplus or deficit,¡± the report says. ¡°Staff and students¡­bear the brunt of budget cuts when the reports show large deficits.¡±

Author Joshua Black said universities had engaged in ¡°quite a bit of belt-tightening¡± in 2020 and 2021, but become less parsimonious as the pandemic passed. ¡°Sharper strategic decisions needed to be made in in 2022,¡± he said. ¡°If you¡¯re paying millions of dollars to get good strategic advice, there is a kind of irony here.¡±

Black said ¡°no one would quibble¡± with universities¡¯ need to engage specialist legal, auditing or information technology consultants at times, but a lack of granularity and consistency in their annual reports generally made it impossible to distinguish such spending from more amorphous strategic consulting contracts.

He said universities that had been caught out underpaying their staff had spent millions of dollars hiring consultants to oversee wage remediation processes, and then hired more consultants when the initial work was found wanting. ¡°We see consultants benefiting in the good times and¡­the bad times as well.¡±

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His recommendations include ¡°nationally consistent annual reporting categories¡± for all public universities, with itemised disclosure requirements for consultancy spending, and really ¡°clear-eyed cost-benefit analyses¡± of the effectiveness of advertising spending.

¡°In Canberra, you can barely walk past a bus stop that doesn¡¯t have a university¡¯s logo and marketing splashed across the side of it. We¡¯re increasingly seeing university branding on sports players¡¯ jerseys. We need much clearer analysis and reporting of this stuff.¡±

ANU said it was ¡°open to standardisation in disclosure where this adds value¡±. Chief financial officer Michael Lonergan said the university¡¯s consultancy spending included research support and commissions paid to international agents ¨C which was far cheaper than running overseas offices ¨C while travel was ¡°crucial¡± for research and field work.

¡°Marketing and advertising generate income,¡± he added. ¡°If we do less of that, we get fewer students through the door, which is bad not just for our bottom line but for those students who then miss out on educational opportunities.¡±

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ACU, like ANU and Wollongong, said it had been reducing its elective spending. But ¡°short-term, targeted expenses¡± in areas?such as information technology and regulatory matters often proved far less expensive than keeping specialised skills ¡°on the bench¡±, it said.

Chief operating officer Patrick Woods said marketing at ACU encompassed ¡°everything from open days and school engagement to printing and student expos, replicated in seven different campuses. This can¡¯t be compared to any other university in Australia. The discussion paper by the Australia Institute lacks the necessary financial rigour and a nuanced understanding of the higher education sector.¡±

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Wollongong said that with eight campuses in New South Wales and four overseas, travel was a ¡°normal and necessary part¡± of its operations, while technical computing advice constituted the ¡°largest single component¡± of its consulting and professional fees. It said the spending referred to in the report predated the government changes to international education that had necessitated job cuts.

john.ross@timeshighereducation.com