‘Extraordinary’: No govt risk assessment of $444m SA uni merger

The state government’s higher education policy unit has not done any risk assessment on the agreed merger of the University of Adelaide and UniSA or asked the universities for their business case, an inquiry has been told.

Aug 09, 2023, updated Aug 09, 2023
Photo: Thomas Kelsall/InDaily

Photo: Thomas Kelsall/InDaily

The parliamentary inquiry into the establishment of Adelaide University held its first hearing on Tuesday to scrutinise the Malinauskas Government’s push to merge the University of Adelaide and University of South Australia with $444.5m in taxpayer support.

The government and universities say the merged institution will add $500m to the state’s economy per year, educate more than 70,000 students and create an additional 1200 jobs.

But the proposal has faced questions over transparency, with the universities refusing to release the merger’s business case in full or name the consultants who helped compile it.

Premier Peter Malinauskas and Deputy Premier Susan Close also both admitted to not seeing the full business case from the universities before the government’s $444.5m funding package was approved.

Senior public servants from the Department for Industry, Innovation and Science (DIIS) were asked on Tuesday about what advice had been provided to ministers about the merits and risks of the merger.

Karen Hunt, director, higher and international education – a standalone policy unit established within DIIS in July 2022 – faced questions from Opposition education spokesperson John Gardner.

Gardner asked: “Has anyone in either your office, the department or government more broadly to your awareness undertaken any policy work to consider the risks of the proposal in addition to its benefits, and what mitigation measures… have been put in place to meet those potential risks of the proposal?”

Hunt replied: “Not at this point in time, no.”

The question came up later in the hearing when Labor Member for Adelaide Lucy Hood asked Andrew Dunbar, DIIS’ executive director of research and innovation, to outline the benefits of being a larger-scale institution to attract research funding.

Dunbar and Hunt said a larger university will benefit from increased research intensity, more transdisciplinary research and a greater ability to attract “highly talented researchers” that can in turn bring in more federal funding.

Gardner jumped in to ask: “Are there any instances where your unit or your department has provided, in writing, advice to a minister of the merits, or is that actually the first time you’ve been asked?”

Dunbar replied: “Not specifically in terms of the ways it relates to research income, but we have lots of conversations with the Deputy Premier and we often talk about the importance of scale.”

Gardner then asked: “From a policy point of view, do you have a view on what risks may also sit alongside those potential benefits and what mitigation measures need to be in place to guard us against those risks?”

Dunbar responded: “We haven’t done a detailed risk assessment and risk analysis at this point in time.”

“I assume the feasibility study, business case undertaken by the two universities looked at all of the risks as well as the benefits,” Dunbar added.

Gardner followed up: “Has that information that you’ve just described being done by the universities been provided to your department in any format?”

Dunbar replied: “No.”

Asked whether “anyone in government” had asked for copies of the universities’ business cases, Dunbar said: “We haven’t asked for those business cases, and I can’t comment for other agencies.”

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The committee also heard that the Department of Treasury and Finance prepared the $444.5m government funding package for the merger, with the higher education policy unit not providing advice or input on the package.

InDaily asked Deputy Premier Susan Close’s office whether any government department or agency has completed a risk assessment on the merger of the University of Adelaide and UniSA.

In response, a government spokesperson said the two universities “have done extensive work on the merger”.

“Potential key risks and opportunities were considered by the government in informing the support package, focused on achieving the objectives of the merged university,” the spokesperson said.

“The investment was carefully considered to not only benefit the university but to provide benefits to taxpayers, with the bulk of the funds retained by the state.

“The package includes $300 million for two separate funds, enshrined in legislation and held on the government’s balance sheet, to support the enrolment of students from low socio-economic groups and support research initiatives.”

Gardner told InDaily the testimony provided by Dunbar and Hunt was “extraordinary”.

“I thought it was surprising to say the least that the department agency responsible for university policy in South Australia’s government had had absolutely no input into the government’s package,” he said.

“It was deeply disappointing to learn that nobody in the government had asked their own department for advice on either the risks and benefits of the merger nor for policy advice on the funding package that was announced by the Premier.

“And I was particularly concerned to hear that the government department responsible for university policy advice for government, when asked whether they had considered risks associated with the merger and whether mitigations were in place, the testimony given was that they assumed the universities had done that in their business cases.

“Those being business cases that the Department had neither been given or asked for.”

A 19-page extract of the universities’ transition plan for the merger, released in June, does mention “sizable risks” associated with the amalgamation but states that these risks “can, with effective planning, be mitigated successfully”.

The transition plan also states that a risk management framework “has been advanced” for identifying and managing risks associated with both the merger and the operation of the two universities in the interim.

“A transition of this scale constitutes one of the largest higher education amalgamations undertaken anywhere in the world,” the transition plan states.

“In parallel with the large opportunities it will create for the future, the transition in the short term carries with it sizeable risks and effort, in core activities – cultural change, curriculum and research transformation, systems integration – and critically, in being able to manage such major changes at the whole of system level.

“The feasibility assessment evidenced throughout this Plan, indicates that the volume and complexity of work can be managed, and that risks have been identified and can, with effective planning, be mitigated successfully.”

The merger inquiry continues.

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