2012 Performance

Universities

Universities are a vital part of modern society. They are important for teaching, research and the advancement of society as a whole. Universities engage with a range of stakeholders to promote learning and to disseminate and apply knowledge. With a focus on research excellence, universities play an important role in the economic transformation and development of New Zealand.

Universities are repositories of knowledge and expertise. They focus on advanced learning with the principal aim of developing intellectual independence and strengthening research outcomes. New Zealand universities’ teaching and research foster international connectedness and provide global learning opportunities for local and overseas students.

Eight universities across New Zealand deliver an extensive range of degree and post-graduate programmes, and some sub-degree programmes.

The Tertiary Education Strategy (TES) defines the core roles and expectations for universities as:

In 2012, universities received $1.4 billion – 53 percent of total government funding for tertiary education organisations

Core roles Government expectations
  • Undertake research that adds to the store of knowledge
  • Provide a wide range of research-led degree and post-graduate education that is of an international standard
  • Act as sources of critical thinking and intellectual talent
  • Enable a wide range of students to successfully complete degree and post-graduate qualifications
  • Undertake internationally recognised original research
  • ​Create and share new knowledge that contributes to New Zealand’s economic and social development and environmental management

Universities contribute to TES priorities by:

Universities’ Investment Plans aim to fulfil these roles and expectations with special emphasis on lifting course and qualification completions and other achievement rates, especially among the priority groups of Māori, Pasifika and those aged under 25 years.

University highlights

In 2012, university sector highlights included:

University performanceTop

Universities received the highest proportion of the Government’s total spending on tertiary education organisations: $1.4 billion or 53 percent in 2012. Overall, the university sector continued to strengthen its performance in 2012. Improved overall successful course completion and qualification completion rates translated to improvements across youth, Māori and Pasifika student groups. Research performance, as measured by the allocation of the Performance-Based Research Fund (PBRF), again exceeded other sectors, with 97 percent going to universities.

Operating environment

In 2012, universities generally delivered well against agreed 2012 Investment Plan commitments. Key factors affecting their operating environment included:

  • the continuing impact of the Canterbury earthquakes on infrastructure and enrolments at the University of Canterbury and Lincoln University, as well as at the University of Otago
  • participating in the PBRF quality evaluation in 2012, including the audit process
  • an overall decline in enrolments, driven by increased management of enrolments within agreed levels of delivery at some universities, reduced enrolments at the University of Canterbury and Lincoln University due to the Canterbury earthquakes, and lower demand across the sector compared with the 2008–10 Investment Plan period.

Participation

In 2012, universities provided tertiary education to 155,530 students or 118,490 EFTS. There were 14,322 full-fee-paying international EFTS (19,387 students) enrolled across the university sector,4 and 2,482 international PhD EFTS (3,027 international students) enrolled under the domestic fees policy (see figure 16).

Figure 16: University enrolments, 2009–12
Figure 16: University enrolments, 2009–12

In line with TES priorities, higher-level enrolments continued to increase across the university sector in 2012

Compared with 2011, there was an increase of 561 EFTS and a drop of 992 students in 2012. These enrolment changes are mainly attributable to a larger proportion of enrolments enrolling at higher levels of study (Levels 7–8 up 736 EFTS, Levels 9–10 up 125 EFTS) (see figure 17). Enrolments at Levels 1–2 also increased in 2012 by 293 EFTS, as a result of the merger between Lincoln University and Telford Rural Polytechnic, which delivers programmes at Levels 1–2 that have not traditionally been provided by universities. Over the same period, there were decreases in the volume of enrolments across Levels 3–4 (95 EFTS, down 6%) and Levels 5–6 (237 EFTS, down 10%). The enrolment movements are in line with TES priorities and reflect the university sector’s continued emphasis on increasing participation at higher levels, especially post-graduate study. As in the previous year, the university sector continued to contribute 80 percent of the programmes at degree-level and above across all tertiary sectors in 2012.

Figure 17: University enrolments by NZQF level, 2009–12
Figure 17: University enrolments by NZQF level, 2009–12

Māori enrolments increased by 361 EFTS compared with 2011 but remained as a 10 percent share of total enrolments across the university sector. Pasifika students remained at 6 percent of the university population, while the volume of Pasifika enrolments increased by 305 EFTS (see figure 18).

Figure 18: University enrolments by ethnicity, 2009–12
Figure 18: University enrolments by ethnicity, 2009–12 Note:
Total may exceed total EFTS or 100 percent as some students identify with more than one ethnicity.

The distribution of enrolments across the subject areas remained steady in 2012. Society and Culture (29%), Management and Commerce (15%) and Natural and Physical Sciences (14%) were the fields of study with the largest proportions of enrolments (see figure 19). The largest increases in fields of study were in Health (up by 399 EFTS) and Agriculture, Environmental and Related Studies (up by 355 EFTS), the latter primarily attributable to the 2011 merger of Telford Rural Polytechnic with Lincoln University.

Figure 19: University enrolments by subject, 2011 and 2012
Figure 19: University enrolments by subject, 2011 and 2012

Performance against TES priorities

Average educational performance by the universities improved in terms of qualification completion (up from 75% in 2011 to 80% in 2012), student retention (up from 79% in 2011 to 82% in 2012) and student progression within Levels 1–4 (up from 40% in 2011 to 62% in 2012). Course completion remained at the same level (86%) as in the previous year, which was the highest rate of any sector.

In 2012, average course and qualification completion rates increased across the university sector

Achievement by all students and the TES priority groups (Māori, Pasifika and students under the age of 25) strengthened across the university sector in 2012. In general, course completion rates remained at similar levels to the previous year but student retention and qualification completion rates increased across each group (see figure 20).

Figure 20: University participation and achievement, 2011 and 2012
Figure 20: University participation and achievement, 2011 and 2012

TES Priority: Increasing the number of young people (aged under 25) achieving qualifications at Level 4 and above, particularly degrees

In 2012, universities continued to attract the largest share of students under 25 years of age, with this group accounting for 73 percent of all university enrolments. Almost all youth enrolments were at degree level and above (96%) with relative proportions mainly unchanged over the past two years (see figure 21).

Overall, the number of youth enrolments increased in 2012 (by 1,053 EFTS or 1%), reflecting the overall trend to higher level enrolment trend for youth. Enrolment across degree and post-graduate level study increased in 2012 (Level 7 and above up by 1,281 EFTS or 2%), while the number of enrolments decreased at Levels 3–4 (down by 66 EFTS) and Levels 5–6 (down by 91 EFTS). However, a small increase occurred in participation at Levels 1–2 for the university sector due to provision at Lincoln University at this level following the university’s merger with Telford Rural Polytechnic.

Figure 21: University participation and achievement by students under 25 years, 2011 and 2012
Figure 21: University participation and achievement by students under 25 years, 2011 and 2012

Youth achievement continued to improve in 2012, with increases in qualification completion (up from 68% in 2011 to 72% in 2012), student retention (up from 84% in 2011 to 87% in 2012) and student progression Levels 1–4 (up from 58% in 2011 to 75% in 2012). Course completion (86%) remained at the same level as in the previous year. Youth achievement at Level 4 and above across the university sector improved across each of the educational performance indicators.

TES Priority: Increasing the number of Māori students enjoying success at higher levels

In 2012, Māori enrolments increased by 361 EFTS but remained proportionally at the same level of university enrolments (10%) as in the previous year. The distribution of Māori enrolments demonstrated a shift toward higher level qualifications with more enrolments at Level 7 and above and fewer at Levels 3–6 (see figure 22). The exception to this was an increase in the number of enrolments at Levels 1–2 due to the increases at Lincoln University outlined above.

Figure 22: University enrolments by NZQF level by Māori students, 2009–12
Figure 22: University enrolments by NZQF level by Māori students, 2009–12

Māori participation and achievement increased across the university sector

Educational achievement by Māori students continued to strengthen in 2012. Increases occurred in qualification completion rates (up from 62% in 2011 to 68% in 2012), student retention (up from 71% in 2011 to 75% in 2012) and student progression (up from 40% in 2011 to 61% in 2012), while course completion remained at the same level (80%) as in the previous year (see figure 23).

Figure 23: University participation and achievement by Māori students, 2011 and 2012
Figure 23: University participation and achievement by Māori students, 2011 and 2012

TES Priority: Increasing the number of Pasifika students achieving at higher levels

Pasifika student enrolments increased in 2012 (by 305 EFTS) while the proportion of students remained stable at 6 percent of total enrolments, the same as in the previous five years. The distribution of Pasifika students across the levels of study remained similar to 2011, with the majority of the increase evident at Levels 7–8, which accounted for 87 percent of all Pasifika enrolments.

Average Pasifika educational achievement improved from 2011 but remained below the overall student achievement rate. This was reflected in course completion and qualification completion rates (see figure 24), which saw the largest improvement in 2012 compared with other student groups. Successful course completion increased from 71 percent in 2011 to 72 percent in 2012, and qualification completion increased from 54 percent in 2011 to 60 percent in 2012. Pasifika student progression rose from 80 percent in 2011 to 83 percent in 2012 and student retention increased from 73 percent in 2011 to 76 percent in 2012.

Figure 24: University participation and achievement by Pasifika students, 2011 and 2012
Figure 24: University participation and achievement by Pasifika students, 2011 and 2012

TES Priority: Strengthening research outcomes

The university sector produced 3,678 research degree completions and generated $406.9 million in external research income

Funding for the PBRF is allocated according to three elements: quality evaluation, research degree completions and external research income. Universities received 97 percent of the indicative PBRF funding in 2012.

The university sector’s research degree completions rose from 3,452 (97%) of the national total in 2011 to 3,678 out of a total 3,825 (96%) in 2012. The sector generated $406.9 million in external research income in 2012, more than 99 percent of the total, but a slight decrease from 2011.

Financial performance

In 2012, the university sector achieved a modest increase in total income primarily driven by the increase in student tuition fees income (domestic and international) and total government funding. However, the university sector net surplus (after unusual items) decreased by $84.1 million since 2011. This was primarily due to significant unusual expense items incurred by the University of Canterbury and Lincoln University of $60.5 million. As a result, the university sector did not achieve the Tertiary Education Commission (TEC) recommended three percent surplus guideline in 2012.

Total operating expenses increased by $93.7 million (3.0%), reflecting both increased personnel and other operating costs. Across the sector, net assets increased by $17.5 million (0.3%) in 2012; this relatively modest increase was largely due to ongoing impacts of the Canterbury earthquakes. The university sector still maintained a net assets base of over $5.8 billion. University balance sheets remained strong but with declining liquidity (see table 4).

Table 4: Overview of university financial performance*
Key performance metrics 2010 2011 2012 TEC minimum
guidelines
Net surplus (after unusual and non-recurring items) 4.1% 4.1% 1.4% 3.0%
Net cashflow from operations 116.6% 115.9% 115.7% 111.0%
Liquid funds 22.4% 23.5% 18.2% 8.0%
3-Year average return on property, plant, equipment and intangibles 6.1% 6.5% 6.6% 4.5%
Summary financial statements
(NZ$000)
2010 2011 2012 % of 2012
​category
Revenue:        
Total government revenue $1,344,780 $1,403,568 $1,425,287 43%
Domestic student fees $559,708 $565,257 $591,567 18%
International student fees $277,951 $287,723 $306,700 9%
Other income
(including research)
$948,117 $969,873 $967,601 29%
Total revenue $3,130,556 $3,226,421 $3,291,155 100%
Assets:        
Property, plant, equipment and intangibles $6,112,711 $6,220,126 $6,269,650 88%
Other assets $888,379 $836,251 $888,747 12%
Total assets $7,001,090 $7,056,377 $7,158,397 100%
Equity (net assets) $5,886,263 $5,871,739 $5,888,795  

* This summary is based on data submitted to the TEC by individual universities as part of the TEC’s financial monitoring framework.

Universities received around half of total government funding for tertiary education organisations in 2012 ($1.4 billion or 53%). Of the Government funding allocated by the TEC, 79 percent ($1.1 billion) was for Teaching and Learning and 19 percent ($276.2 million) was for Research (see figure 25).

Figure 25: Total university government funding by type, 2012
Figure 25: Total university government funding by type, 2012

Future focus for universitiesTop

In 2013, universities expected to focus on the following key areas to support TES priorities:

  • continuing to strengthen post-graduate provision
  • strategically managing enrolments and provision and building on existing areas of strength to achieve a more clearly differentiated sector
  • meeting challenging ‘stretch’ commitments in Investment Plans to progress towards improved participation and parity of achievement for Māori and Pasifika students by 2015
  • strengthening research and economic outcomes through filling skill gaps in the economy, for example, by delivering additional priority engineering places
  • encouraging knowledge exchange and research commercialisation to help ensure research achieves wider economic and social outcomes.
4This is the number of international EFTS that were required to pay full fees and excludes PhD students or post-graduate students on scholarships who are not required to pay fees.