UCT could increase revenues by maximizing its facilities, assets and expertise, in order to generate a healthy operating surplus, suggests Professor Martin Hall, Deputy Vice-Chancellor in charge of planning. He spoke to Monday Paper about the thinking behind the 2004 budget plan, currently under construction.

MP: What is the process for drawing up the University's plan and budget for 2004?

Hall: We started working with the faculties, CHED, the GSB and the Library in February. Now that we have an overall framework that we believe is viable, I will present this to Senate and Council in early June. Working with their guidance, we will submit final proposals to the University Finance Committee, and then to Council at its October meeting. The final authority rests with Council.

MP: How consultative is this process?

Hall: We're trying to make it as consultative as possible. Drawing up the proposals is very much a team effort, drawing in Finance, Planning, Research and Innovation, Properties and Services and staff in fundraising and development. We've consulted with all the Deans, the Library and with the University Strategy Committee, which includes student representation. I'll be meeting less formally with a range of focus groups between now and the Senate meeting. But, ultimately, any plan and budget is about choices, and some will inevitably be disappointed.

MP: This is the first time that you've been responsible for co-ordinating the University's plan and budget. What has been your starting point?

Hall: I started by trying to get my mind around an enigma. UCT has a full complement of students who pay fees that are comparable with those of other institutions. Our staff are paid modestly, and the University has no debt. So why do we suffer from recurrent budget crises?

The answer to this puzzle is, I believe, that we cross-subsidise too many activities from student fee and subsidy income. For example, over the past ten years the volume of contract research has increased dramatically, and is now a third of the size of the University's operating budget. This has not been matched by any significant cost recovery. In addition, we give back more than R30-m in student financial aid from our operating budget. Many other higher education institutions in South Africa provide little financial aid from their own budgets.

MP: Does this mean that you will be proposing taxing researchers, or cutting back on student financial aid?

Hall: No. We are not proposing a US-style system of research levies in which all research income is taxed at 50% or more. We are rather proposing a realistic system of cost recovery for research and other activities, one that is fair and equitable. These proposals are in the system at the moment. And we don't believe in reducing UCT's level of student financial aid, although I do think that financial support should be more closely linked with academic performance. Social exclusion from higher education will be a problem in South Africa for as long as there is a wide gap between a wealthy minority and a poor majority, and we must counter this to the best of our ability.

MP: Will cost recovery be sufficient to balance the budget?

Hall: No, it won't. UCT needs to continue to grow in several areas if we are to meet the policy objectives set by the Vice-Chancellor. We need to continue to develop those areas where we are traditionally strong in research, and we need to explore new areas of research and innovation. We need to improve our teaching and our teaching facilities, and we need to make our curriculum more responsive to the needs of our local and regional communities. We need to revamp our IT systems. Cutting across all of this is the urgency of transformation. All these objectives will cost money.

The answer lies in putting revenue first. Most people run their households by first taking account of their income, and then calculating what they can afford to spend, and what they want to save. We need to plan in the same way. Our consultations with the Deans has shown that, when we think collectively of what we want UCT to be in 2004, we think of an institution that is between 10% and 30% bigger than our projected income base. So we must earn at least 10% more in revenues if we are to meet our aspirations.

We believe that this target can be achieved, and we've challenged the Deans and the Director of the GSB to develop a plan that will generate R25-m per annum in increased revenues in 2004 and beyond. As an institution, we have additional capacity in a number of areas. We underutilise our facilities in the vacations, and over the summer. We have the expertise to offer more short courses, and programmes in continuing professional education. We can take greater advantage of the flexible learning opportunities that information technology brings. And a wide range of our academic activities interface with commerce and industry. Our calculations show that, were we to have additional revenue in the order of R50-m per annum, which is about 4% of our current budget, we would be able to generate a healthy operating surplus each year.

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