Not hiring may save university nearly $4m

The University of Otago hopes to make nearly $4 million in savings by not filling vacant positions.

The figure was mentioned in the financial report, which was discussed at the university council meeting last week.

It comes at a time when the university is in a difficult financial position and is looking to make savings through a variety of approaches.

The financial report said "while achieving the full $25m in savings [for 2023] will be challenging, $21.4m of these savings have now been identified and locked in".

Brian Trott. PHOTO: SUPPLIED
Brian Trott. PHOTO: SUPPLIED
The Otago Daily Times has asked for a breakdown in those savings, but the financial report said "salary savings due to vacant staffing positions" was calculated to be $3.9m, while there were "$3.6m in financial improvement initiatives still to be identified".

Otago University chief financial officer Brian Trott said it was "standard practice for organisations to review vacant staff positions and with the need to identify potential savings, this has been a particular focus this year".

"A substantial part of the savings is made up of staffing changes and paper and programme reviews.

"The balance is a mixture of service provision changes, efficiency gains and revenue growth."

The university was tracking confidently towards the savings target for the year of $25.8m, and since the report was published, a further $2.7m needed to be identified over the next four months, Mr Trott said.

"All areas of the university are under review in an attempt to make savings."

Protect Otago Action Group spokesman Dr Olivier Jutel said he understood that some of the savings had been forced on the university by the funding model, but there were dangers to running "lean".

"It poses a threat to the institution in the longer term because it limits the natural progression of pathways for many new academic staff, and then impacts our ability to recruit doctorate students, for instance.

"It limits the blue-sky approach to thinking.

"We need that critical engagement at the university."

He was not totally convinced that the savings could be made without damaging part of the university’s reputation.

"When the university builds itself up again after a lean period, it can become difficult to fill those vacant positions again, because our brand and standing would have been affected."

Earlier this year, the university accepted 107 voluntary redundancies.

Of the 107 accepted, 36 came from health science, 14 from science, eight from commerce, 10 from humanities, 22 from operations and 17 from academic, external engagement, financial services and research divisions.

The financial report said there were additional known voluntary redundancy costs of $6.5m for the year, but the university has previously said these redundancies would save $9m a year from 2025 onwards.

matthew.littlewood@odt.co.nz

 

 

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