Cash crunch for varsities

Students look on at the Pietermaritzburg William OBrien exam hall at the University of KwaZulu-Natal that was set alight in the early hours of yesterday morning.Photo.Ian CarbuttPhoto.Ian Carbutt
Students look on at the Pietermaritzburg William OBrien exam hall at the University of KwaZulu-Natal that was set alight in the early hours of yesterday morning.Photo.Ian CarbuttPhoto.Ian Carbutt

The South African government has withdrawn all subsidy funding to universities for the next three months — June, July and August — as they have no cash in the fiscus, University of KwaZulu-Natal (UKZN) Vice Chancellor Nana Poku told academic staff on Friday.

UKZN will consequently have to find an extra R370 million for these three months, and although government is set to review the situation in September, Poku said it is “highly unlikely” that the withheld subsidies would be returned, with what happens in the future being “driven by forces outside our institution”.

There were concerns that the government would not return subsidies for the next two years. The university is now considering a number of measures to address future financial risks.

UKZN had made substantial revisions to the 2020 budget as there were numerous threats to long-term sustainability, staff were told.

Student debt had increased since the FeesMustFall campaign from R600 million in 2010 to R1,7 billion in 2019.

Because of the Covid-19 pandemic, South African universities have largely resorted to online teaching.

However, unlike other major universities such as the University of Cape Town, Wits and Stellenbosch, the majority of UKZN students are from quintile one to three schools and consequently the institution depends substantially on government funding.

Poku said UKZN was committed to inclusivity where students were concerned, but a decade of management agreeing to financial concessions after violent protests had led to cumulative damage.

“Third stream” or private funding had also decreased, with part of the reason being the loss of senior academic staff who were not replaced at that level, Poku said.

About 65% of UKZN academic staff are early career scholars at lecturer level. In addition, during the period 2007 to 2018, the number of academic staff decreased by 12%, while the number of administrative staff rose by 28%.

For online teaching, the institution has provided data for both staff and students, with only around 16% of students without connectivity. However, Poku said the data costs were unsustainable.

With regard to the return of students to UKZN’s five campuses, senior management were adhering closely to government guidelines.

Only 33% of students were allowed to return, and those needing laboratories and about to graduate were being prioritised.

Measures to address financial risks included the suspension of contracts (including student accommodation lease agreements), the suspension of capital and maintenance projects, the deferral of payments to suppliers, a request to the Department of Higher Education for a financial stimulus package, the renegotiation of contracts which could not be suspended, and the suspension of discretionary expenditure.

There was a likelihood of a hiring freeze, and salary cuts would be a last resort.

Sessional dates for the university were still being discussed, with the first semester likely to end in mid-September, and the second semester in February 2021.

UKZN had not responded to an enquiry about the matter by late Monday evening.

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