Speaker 1: From Schwartz Media. I'm Daniel James. This is seven AM.
Speaker 1: A quiet transformation is underway at Australian universities. Behind closed doors,
Speaker 1: powerful consulting firms are helping to reshape higher education, cutting courses,
Speaker 1: centralizing power and outsourcing staff. One firm in particular, Nouscroup,
Speaker 1: is now embedded in some of the country's most prestigious institutions.
Speaker 1: At the Australian National University, its role in a two
Speaker 1: hundred and fifty million dollars restructure has been concealed even
Speaker 1: from Parliament, raising concerns about transparency and accountability. Today, senior
Speaker 1: reporter for the Saturday Paper, Rick Morton on how consultants
Speaker 1: gain control of the university sector and what it could
Speaker 1: mean for the future of higher education. It's Monday, June sixteenth, Rick.
Speaker 1: Universities as a sector have been sounding the alarm for
Speaker 1: a long time. The government policy, including funding counts and
Speaker 1: student caps, has been having a big impact on their
Speaker 1: ability to function. So can you give me some examples
Speaker 1: of how consultants fit into that. How are universities using them?
Speaker 2: So consultants appear to be coming in and great example
Speaker 2: of that is one I covered recently at a University
Speaker 2: of Technology Sydney where KPMG were brought in. But we're
Speaker 2: essentially told go and look at individual research output from
Speaker 2: individual researchers and produce a master list of those who
Speaker 2: are not contributing enough profit to the university, which, as
Speaker 2: it was put to me, would probably contravene the enterprise
Speaker 2: bargaining agreement at that university because you can't you could
Speaker 2: performance manage someone for not meeting expectations. You can't make
Speaker 2: redundancies based on performance. That's not how this is meant
Speaker 2: to work. And so the consultants, of course took a
Speaker 2: particular corporate view across the board. They're looking at profit
Speaker 2: and loss, they're looking at ways to rationalize centralized services.
Speaker 2: But the actual structure of the university is incredibly special
Speaker 2: for a reason. It's meant to be a kind of
Speaker 2: a distributed network of knowledge centers, faculties, people who are
Speaker 2: learned in their field, who contribute to the life of
Speaker 2: the university and who are cooperative in the way that
Speaker 2: university is run. And increasingly, particularly with consultants like the
Speaker 2: NOUS group, which is one that will come to in
Speaker 2: quite a bit of detail, the advice is centralize all
Speaker 2: of your functions and to the degree possible handicap what
Speaker 2: it is the faculties and the academic staff are able
Speaker 2: to do and the say they have over the future
Speaker 2: of this institution, which would make it a lot more
Speaker 2: like a corporation and a lot less like a university.
Speaker 1: Now, there are a number of consultancy groups involved in
Speaker 1: all of this, but you did mention Nowscroup, which is
Speaker 1: a global consulting firm and they do a lot of
Speaker 1: work with the Australian National University. So what did you
Speaker 1: find out of the role they are playing there? Now?
Speaker 2: This is fascinating and I particularly there it in on
Speaker 2: them because I think they've had the most astounding growth
Speaker 2: off the back of their participation in higher education advisory services.
Speaker 2: And of course this story was first being told through
Speaker 2: the Austrained Financial Review of former colleague of mine, Julie
Speaker 2: Her who's a fantastic reporter, was looking at misgivings, I
Speaker 2: guess is one way of saying it. Early on within
Speaker 2: the tenure of the new vice chancellor there, Professor Genevieve
Speaker 2: Bell and her chancellor, Julie Bishop. Now Genevieve Bell had
Speaker 2: announces his kind of two hundred and fifty million dollar
Speaker 2: restructure at the A and U because they said that
Speaker 2: they were running out of money structurally and they were
Speaker 2: going to be six hundred to something job losses. But
Speaker 2: what they didn't do is tell anyone that they were
Speaker 2: using the Nouse Group's advice or paying them for that advice.
Speaker 2: In fact, they were incredibly tricky with how they disclosed
Speaker 2: any mention at all that they were using external consultants
Speaker 2: to advise on this enormous restructure.
Speaker 1: How wisepread is the use of consultants across the Australian
Speaker 1: university sector. I mean they're everywhere.
Speaker 2: They are literally everywhere. I mean KPMG was paid eight
Speaker 2: and a half million dollars for business advisory, which is
Speaker 2: consulting at the University of Melbourne. Deloitte was another one
Speaker 2: and a half grooth of the university has paid now
Speaker 2: I think it was almost two and a half million
Speaker 2: over the last sixteen months. And then lots of boutique
Speaker 2: ones that are even like a tier below now. So
Speaker 2: they're absolutely everywhere. And the irony is that universities themselves
Speaker 2: offered have their own consulting output, but they won't use
Speaker 2: them because they're worried to push back from staff and
Speaker 2: letting their plans kind of leak out into the public.
Speaker 2: The way the system has been built up, there's so
Speaker 2: much money sloshing around that to the extent that a
Speaker 2: firm wants to give you the tough advice, they're only
Speaker 2: prepared to do so if they think they can still
Speaker 2: keep getting work. I mean, that's just the sad reality
Speaker 2: is that you're not necessarily going to be told anything
Speaker 2: you don't want to hear.
Speaker 1: Coming up after the break, David Pocock takes on unibosses Rick.
Speaker 1: Late last year, the A and you were brought in
Speaker 1: front of Center Estimates to ask about the restructures you
Speaker 1: mentioned earlier, and David Pocock was trying to get to
Speaker 1: the bottom of how much the UNI had paid now
Speaker 1: Scroup for the very structure. Thank you, Thank you cha.
Speaker 3: Just finally, is it correct that you've engaged in our
Speaker 3: scroup and what what work are they doing? Is it
Speaker 3: related to finding savings or what's the scope of that work.
Speaker 2: There was one example where the chief Operating Office that
Speaker 2: Jonathan Churchill was asked how much is this contract worth? Yeah,
Speaker 2: thank you, senator, We have paid now sort of the
Speaker 2: fifty thousand dollars so far this year, okay.
Speaker 3: Seven fifteen, fifty fifty Okay, yeah, you're not.
Speaker 2: With now that's the question, very easy to understand. How
Speaker 2: much was this tract worth? And what he said was
Speaker 2: we have paid to date fifty thousand dollars to NAS.
Speaker 2: That wasn't the question, and there also wasn't correct as
Speaker 2: a standalone answer. And if he had been asked how
Speaker 2: much he'd been paid, because the invoices at that point
Speaker 2: were about four hundred and fifty thousand dollars to NUS.
Speaker 2: Now we now know when he asked this question on
Speaker 2: November seven last year, that a contract for NOUS had
Speaker 2: been signed and set in motion a month before, and
Speaker 2: that that contract was worth eight hundred and thirty seven
Speaker 2: thousand dollars. Genevieve Bell was also asked have you used
Speaker 2: NOUS to advise on the restructure, and the answer she
Speaker 2: gave was, I would argue deliberately obtuse.
Speaker 4: I initially engaged the NOWS group a number of months ago, Senator,
Speaker 4: to help think about how to look at the role
Speaker 4: and the changing role of universities in a global landscape.
Speaker 4: I was interested in what were the ways that universities
Speaker 4: thoughttrategically and what was a global survey really.
Speaker 2: And what she said was I brought them in early
Speaker 2: on in my tenure when I got the VC job
Speaker 2: to advise on the university's position in relation to other
Speaker 2: universities and how we're tracking. Now that makes it sound
Speaker 2: like that's not involved in the restructure.
Speaker 1: That's not true.
Speaker 2: And of course we now know subsequent to that fact
Speaker 2: that within seventeen days of the Vice Chancellor starting the job,
Speaker 2: she had authorized the pursuit of these consulting firms for
Speaker 2: enormous restructure at the A ANDU. When it was subsequently
Speaker 2: emerged that David Pocock had been misled, he was furious
Speaker 2: and he put out a statement in April this year
Speaker 2: essentially saying that he was appalling and that he takes
Speaker 2: this incredibly seriously. And the conclusion he reached was that
Speaker 2: he had been misled by these officials because they didn't
Speaker 2: want to answer the question. And of course after that
Speaker 2: there were also a bunch of questions on notice, which
Speaker 2: through the Parliamentary Estimate system, you can take a question
Speaker 2: on notice, you can take it away, you can use
Speaker 2: all your resources at your institution, your department, whatever it is,
Speaker 2: and answer the question properly and come back and tell
Speaker 2: the Senate the truth. And it is an offense to
Speaker 2: mislead the Senate. There were several questions on notice that
Speaker 2: printed outright mistruths about the use of Nouw's consulting and
Speaker 2: about the value of those contracts. They had to be
Speaker 2: recalled and corrected. The question that remains is how did
Speaker 2: that happen? Who's signed off on those questions on notice responses?
Speaker 2: The fact that there has been a pattern of behavior
Speaker 2: here now has led people to ask even more questions
Speaker 2: that they might have otherwise been happy to accept the
Speaker 2: answers to, which is, what are your motives behind this restructure?
Speaker 2: Why are you paying nows? And what are you doing
Speaker 2: with the advice that you're refusing to tell us about.
Speaker 1: A lot of secrecy and uncertainty around all this. But
Speaker 1: what we do know is that universities are spending a
Speaker 1: lot on consultants, which begs the question shouldn't university management,
Speaker 1: people like the vice chancellor and the people on the
Speaker 1: University council have a sense of how to make savings
Speaker 1: or where to spend money, or how to structure their business.
Speaker 1: I mean, isn't that their job?
Speaker 2: Yeah, that is their job and they should do it.
Speaker 2: We have a fundamental structural problem with universities and to
Speaker 2: some extent they won't be financially sustainable, while the government
Speaker 2: that funds and regulates them doesn't seem to care about
Speaker 2: their role in society. But vcs are paid, you know,
Speaker 2: somebody around a million dollars on average in Australia to
Speaker 2: do these jobs because we're told they demand an incredibly
Speaker 2: astute and sensitive skill set, which is to manage the
Speaker 2: academic output and the rankings and the quality of the
Speaker 2: institution with the business of running such a large organization.
Speaker 2: But university councils have even fewer oversight mechanisms than a
Speaker 2: corporate board. There are no shareholders to whom they're accountable.
Speaker 2: There is no publicly listed ASX meeting for these council members.
Speaker 2: The VC, particularly at university the Australian National University, the
Speaker 2: VC can only lose their job if they resign or
Speaker 2: if the council recinds it.
Speaker 1: So, Rick, what impact do you think all this will
Speaker 1: have on the university sector. The reliance on consultancy firms,
Speaker 1: the lack of funding from federal government to universities. What
Speaker 1: does the future of the university sector look like At
Speaker 1: the moment.
Speaker 2: It's pretty grim, and you know, staff are already overworked
Speaker 2: and overburdened, particularly academic and professional staff, trying to just
Speaker 2: keep the wheels turning on these places that have been gutted.
Speaker 2: And you know, they tend to get gutted every other
Speaker 2: four years. You know, there's always a restructure happening at
Speaker 2: a university at any given point in time. And of
Speaker 2: course university vcs didn't want to make these decisions on
Speaker 2: their own because they're so much political blowback within the organization,
Speaker 2: so they get these consultants in. But of course now
Speaker 2: over I'm very cranky that they're using these consultants. So
Speaker 2: you've got Griffith University now just hiring the consultants as
Speaker 2: full time employees. You know, someone told me to look
Speaker 2: at the Vice Chancellor's office at Griffith and there's two
Speaker 2: employees there who were hired directly from NAUS who are
Speaker 2: principal consultants who are now directing transformation within the Vice
Speaker 2: Chancellor's office. So it's pretty grim. I mean, what does
Speaker 2: it look like in the future we just keep cutting.
Speaker 2: And now somemselves are quite explicit in their report where
Speaker 2: they interviewed the chief operating officers. They literally said that
Speaker 2: the academy's up for grabs. That's how they phrased it's
Speaker 2: up for graps, which tells you everything you need to know.
Speaker 2: I think about the way that they.
Speaker 1: See this, Rick, thank you so much for your time.
Speaker 2: Thanks mate, I appreciate it.
Speaker 1: Also in the news today, Prime Minister Anthony Alberinezi has
Speaker 1: confirmed he'll meet face to face with Donald Trump this
Speaker 1: week in a high stakes diplomatic encounter on the sidelines
Speaker 1: of the g seventh Summit in Canada. The meeting comes
Speaker 1: amid escalating tensions in the Middle East and growing uncertainty
Speaker 1: over the Orcas submarine deal, which the Pentagon is now reviewing.
Speaker 1: Albanzi says he'll use the meeting to press Australia's case
Speaker 1: for a tariff exemption and to highlight the strategic benefits
Speaker 1: of Orcas for the US and Israel has launched a
Speaker 1: series of strikes on Iran's energy infrastructure, targeting a major
Speaker 1: oil refinery in Tehran and a gas facility in the
Speaker 1: country's largest production field. The attacks have sent crude oil
Speaker 1: prices sharply higher and raised fears of a sustained spike
Speaker 1: and fuel costs. Analysts warned that any further escalation, particularly
Speaker 1: in the Strait of Hamas, could destabilize global energy markets.
Speaker 1: This is being seven am. We'll be back tomorrow. Thanks
Speaker 1: for listening.