Sun | Feb 16, 2020

Sir Hilary Beckles | Outlining The UWI’s new business model

Published:Sunday | January 26, 2020 | 12:44 AM
Sir Hilary Beckles

The University of the West Indies welcomes opportunities to participate in this meaningful discourse on higher education funding within the Caribbean context. It is arguably one of the main development challenges facing our regional community. We therefore see this conversation as a critical part of the search for a solution-oriented financial paradigm.

In this regard, it is important to note, however, that there are overlapping issues that must be untangled for the purpose of analytical clarity and thematic differentiation.  There is the institutional matter of how The UWI singularly, as the number one ranked university in the Caribbean, is seeking to improve upon its financial health in order to assure its sustainability as a regional centre of academic and development excellence. Then, there is the broader system issue of what strategy and model should be adopted by stakeholders to fund higher education with its diversity of institutions and mandates across the region. There is obviously an inter-connection at all levels of thinking between the two, but the content of current comments have dealt specifically with the former, hence the focus of my intervention.  

The UWI, like dozens of universities in the region, is not a ‘for profit’ business institution, though it is expected by stakeholders to run its operations in a ‘business-like fashion’. We have the flexibility to be market-driven, but there is always the matter of catering for the ‘public good’ that sometimes requires a more complex decision-making process. The expectation of demonstrated financial efficiency in the use of public funds lies at the heart of our governance model, hence the selection of distinguished corporate minds to chair and manage our financial and audit committees, campus councils, and who play a critical role in discussing the responses to the university’s external audit reports.

The business model on which the university operates was regionally approved for campuses to implement. Simply put, all programmes are costed, and the cost sharing splits out into an 80 per cent support from governments (mostly the campus governments) and 20% from students. The university bills governments for the 80 per cent in respect of national students, and bills the students for their 20 per cent. In the case of Barbados and Trinidad and Tobago, the governments pay both the 80 per cent and 20 per cent for its nationals. When governments do not meet the billing, it goes into arrears and should be accounted for as a receivable in audited accounts. This shortfall, the media have correctly stated, started to balloon out of control 20 years ago, and constitutes the principal driver of bad news on the balance sheet.

The challenge the university is faced with, then, is how best to grow its expansion of new and innovative programmes, promote relevance, transform research, and be a source of public advocacy, with public funding shrinking at a significant rate, while maintaining its standing as a university ranked in the top four per cent of the best 28,000 universities globally. At the moment, the governments’ contributions cover about 50 per cent of the university’s overall operational cost. Student fees’ input hover about 15 per cent, leaving the university to find 35 per cent from its entrepreneurial activities. 

The first point to make in this regard is that the governments, in the grind of their fiscal challenges derived from shrinking economies, must be celebrated and not in any way criticised for this circumstance. While their relative contribution to operational budgets has fallen from 90 per cent to 50 per cent over 30 years, their absolute contributions in hard cash has risen dramatically over the same period. Governments have carried this UWI on their shoulders for 71 years. In 2018, we took the opportunity of the CARICOM meeting in Montego Bay, under Prime Minister Holness’ chairmanship, to thank them for a phenomenally well done job, taking us from depending on the colonial scaffold in 1948 to a global elite brand we celebrate today.

How, then, do we move forward as we drive our operations to the centenary in 2048? We will be asking our governments to maintain their funding levels to about 50 per cent. This is enough to stabilise day-to-day operations, leaving us to be more aggressively entrepreneurial in search of development funds. We will be proposing, in this regard, to begin with a new business model in which the governments will be requested to market about 20 per cent of their 100 per cent equity in The UWI to private investors. We hope, therefore, that this will take care of 70 per cent of operations. Given the growth of working-class poverty in recent decades, and the need for more equitable access from historically marginalised communities, we are inclined to keep student fees stable for the near future, contributing the 15 per cent it currently represents.  

The new funding model, then, could possibly settle at 50 per cent governments; 20 per cent private sector; 15 per cent students; and 15 per cent international engagements.  Already, discussions are advancing nicely to enable this new model. Governments, for example, are considering adopting the US model of allocating campus lands to the university freehold as opposed to leasehold. The UWI can therefore become a land-grant university. This has enormous entrepreneurial implications, as well as potential for balance sheet improvement, and the financial marketability of the institution.  Furthermore, The UWI is engaged in advanced conversation with the private sector in terms of how best to present it with an investment instrument to enable private/public partnership.

It should be stated, however, that the University Grants Committee approved, last year, the establishment of a ‘New Funding Model Committee’ which has made very innovative recommendations that are being assessed. The University Council Meeting this April, will be receiving the package of ideas that have been approved. In addition, we have created an “Office of Global Partnerships and Sustainable Futures” to significantly upgrade the revenue stream for research funding and project development.  

In summary, then, The UWI has radically transformed its thinking and actions on this matter; 2021-2022, will see the roll out of an approved new financial model that will seek to erase the US$75-million funding gap that currently exists. Pressure to implement the new approach is driven by the fact that we carry about 10,000 students beyond our budgetary provision. Mona, for example, carries about 3,000 Jamaican students beyond budgeting who are funded by its entrepreneurial efforts. These decisions are taken because The UWI is not here to serve itself. It is not a profit-driven corporation. It is here to serve our communities. Service, then, not sales, is our eternal episteme.

With respect to a funding model for the wider Caribbean, we have created a regional body comprising more than 50 regional institutions called ‘Universities Caribbean’. I have been asked to be the inaugural chairman for three years. This gives The UWI an opportunity to provide guidance and leadership to the regional university system.  

Internationally, the question is often asked, how does The UWI maintain its elite ranking located as it is in an economy that has not seen sustained economic growth in 30 years? The answer is obvious - deep stakeholder commitment, focused leadership, and the power of dedicated, unwavering colleagues. 

The new funding model, then, is unfolding before our very eyes, and will be ready for discussion and approval within our management organs in 2020. With the continued blessings of our governments, the requested investment support of our private wealth holders and the loyalty of international agencies, the plans on the table to drive the internal entrepreneurial business culture for greater financial self-reliance will be sprung into action. 

 

- Professor Sir Hilary Beckles is vice-chancellor of The University of the West Indies