Fri | Dec 2, 2022

Editorial | Facing UWI’s funding crisis

Published:Tuesday | October 4, 2022 | 12:06 AM
UWI regional headquarters at Mona, St Andrew.
UWI regional headquarters at Mona, St Andrew.

Assuming they have been paying attention, Jamaica’s legislators would have already known what they were recently told by The University of the West Indies (UWI) officials about the difficult financial circumstances of the institution, of which Jamaica is one of the owners.

The discussion, however, was important in the face of what we hope will be a robust debate on the reform, including of its funding, of Jamaica’s underperforming education system. How the UWI, as a regional institution fits within the education framework, must be part of the discourse. Further, it is an opportunity to question – which the members of Parliament’s Human and Social Development Committee did not do sufficiently – how the university has adjusted to the new realities and the success of its self-imposed mandate to cut costs and increase revenue.

For instance, it would have been useful if the bursar, Andrea McNish, and the pro-vice-chancellor for planning, Professor Densil Williams, were asked about the status of what the university vice-chancellor, Sir Hilary Beckles, had promoted with the catchphrase, “10 in two”. That was Sir Hilary’s plan to cut the institution’s expenditure by 10 per cent in each of two fiscal years, to June 2022, while at the same time increasing revenue by an equivalent amount.

What Ms McNish essentially explained was that over the past dozen years, the three big funders of the university, Jamaica, Trinidad and Tobago, and Barbados (they host the major campuses), have not met their funding obligations in accordance with the originally agreed principle – where regional governments would cover 80 per cent of the cost running the institution – or at rates that merely kept pace with inflation..

In other words, at least in Jamaica’s case, the Government, each fiscal year, allocates to the UWI a dollar amount that does not necessarily equate to a specific funding formula. It is what the administration believes it can afford. In 2021-2022, Jamaica committed to pay the university J$8.2 billion, but based on the UWI’s current assessment, Ms McNish reported, the allocation should have been J$12.8 billion.

WAS NOT CLEAR

It was not clear, however, if that assessment was based on Sir Hilary’s projected formula of two years ago, of shareholder governments meeting 50 per cent of the university’s costs. In any event, the Jamaican allocation was less than two-thirds (64 per cent) of the assessment. And in a situation where Jamaica’s contribution is nearly 90 per cent of the amount, the subsidy from regional governments for 2020-2021 represented only 37 per cent of the income of the university’s Mona, Jamaica, campus and could cover only 35 per cent of its total expenses, helping to fuel a campus deficit of over J$1.3 billion.

“There is a shortfall,” Ms NcNish told the parliamentary committee of the university-wide impact of governments paying less. “When we tabulate what that amount is on an annual basis, it is in the region of about BDS$56 million each year. That is written off the university’s accounts.”

More recent accounts are not as yet publicly available, but the cut in allocations by governments, as noted by Ms McNish, lent to an overall deficit of BDS$68.3 million in 2019-2020. While this was an improvement on the deficit of BDS$83.5 million of the previous year, it is clearly an untenable fiscal situation. This raises several important questions, not least of which is the commitment of Caribbean governments to the university and the maintenance of the UWI’s regional character. Domestic ‘nationalisation’ of campuses has assaulted the university’s West Indian identity and, perhaps, contributed to governments treating it as they tend to do their regional institutions – seemingly without deep obligation.

ACCEPTANCE

That notwithstanding, there has to be acceptance, too, of the profound fiscal crisis facing most Caribbean governments and the competing demands for limited resources not only from other sectors of regional economies, but within the education systems themselves. The Orlando Patterson Commission’s call for a new focus on Jamaica’s early- childhood sector, for instance, is a case in point.

The situation might require asking students to pay more for their university education, which may demand more creative loan-financing arrangements. The university, too, will have to become far more efficient in how it runs the business, more entrepreneurial in its operation, and more robust in fundraising.

Sir Hilary and his team should perhaps take a cold, hard look at whether it makes sense to continue many of the courses they offer in the context of the fiscal environment and the social and economic value they add to Jamaica’s and the region’s economies. The university also needs to be more aggressive in partnering with the private sector to link research to R&D programmes of firms while tapping high net worth individuals for endowments.

These ideas, of course, are neither unique nor new. They have been talked about by the UWI’s management. The question is whether they have been as robustly pursued as they ought to be. Indeed, meeting income ratios may seem good. It is, however, infinitely better if earnings cover costs and leave healthy surpluses.