The current model of the Australian university is broken. The model crystallised in the late 1980s, and dominated the second, promethean stage of the growth of the mass university. In Australia in 1965, 1 per cent of the population, or 110,000 students, were at university. By 1991, that number had grown to over half a million, or 3 per cent of the population. Today it is 1.2 million and 5.3 per cent of the population. Not just in Australia, but across the OECD, governments created a huge demand for places in higher education which they part-funded. They offered the universities a devil’s bargain: systemic bureaucratisation of the university in exchange for public money for seemingly unlimited growth. Universities accepted the money with alacrity. They paid an enormous price.
Eventually a large proportion of every dollar that flowed to the universities was consumed in a miasma of policy, process and procedure. This has crippled them. Universities grew rapidly but the cost of this growth was deep dysfunction. Less and less time was spent on the core functions of the university: teaching and research. More and more time was spent on auditing, reporting, administering, regulating and codifying. The transaction costs of the university exploded. Nations are ranked according to the criterion of the ease of doing business. After the 1970s the university became a place where it was no longer easy to do business. Extraneous offices, functions, procedures, steps and documents proliferated as universities adopted methods of behaving that parodied the very parody of management.
Bureaucratisation accompanied expansion, and universities congratulated themselves on the growth of student places. Universities thought of themselves as providing a public good: access for all to higher education. Bureaucratic centralisation, everyone was told, was cheaper and more efficient than older, more minimal, more informal, and more decentralised methods of university administration. The management of knowledge, academic staff members were assured, would expand knowledge. The university was the icon of something called “the knowledge society”. This was one of the many clichés of the post-industrial and postmodern era. The period saw the frenetic and often splenetic rise of the bureaucratic university.
In every respect the university was kidding itself. Growth of universities proved to be as much a public pestilence as a public good. Bureaucratic centralism was more expensive and more time-consuming than administrative minimalism. Knowledge in the “knowledge society” declined rather than expanded.
Australia spent $23 billion on its universities in 2011. $13 billion of that came from the federal government, and most of the remainder from student fees. In 1995 Australia spent $10.8 billion in 2011 dollar terms, and the federal government kicked in $6.4 billion of that. Over the period 1995–2011, federal government spending reduced from 60 per cent of the total to 56 per cent. That is not a huge decline in real terms, but everyone knows the decline will accelerate in the future. This is one of the factors, though by no means the only one, causing a rethink about the model of the university.
Governments drove the expansion of the universities. They promoted the idea that more and more nineteen-year-olds should go to university. The university became an object of social engineering. All political parties promised that the university was the prime means of upward social mobility. But that was a fiction. Now more than 30 per cent of young Australians go to university. But there are not jobs for them all. Eight per cent of jobs are in the high professions like medicine and law. A further 8 per cent are in semi-professions like nursing or administration. That is a social ratio of long standing. It is persistent and unlikely to change. The most optimistic credible projection is that 20 per cent of future jobs will require a degree. That is the outside upper limit. What happens to the rest in higher education? Twenty-five per cent of incoming students drop out of university. Another 25 per cent of students who graduate will never work in a job that requires a degree.
Governments encourage universities, and universities encourage themselves, to lower entry requirements, be non-selective, and accept applicants with lower and lower scores. The consequence is discontented students who are unsuited to university study and who drop out. Thirty to 40 per cent of Australian undergraduates consistently reported over the decade between 1999 and 2009 that they were unhappy or ambivalent at university. Low academic achievement strongly correlates with such dissatisfaction. It is unsurprising, then, that a quarter or more of Australian undergraduates drop out of university. How could it be otherwise?
Students who drop out, or who get a degree they never use, exit with debts that many find difficult to pay off. Australian student debt totals $23 billion. The annual interest on the debt is $600 million. Some ex-students have become akin to debt slaves. What was meant to aid social mobility is a constraint that now holds them back. Student loans make sense for the 16 per cent or so who will end up in professional and semi-professional occupations. For them, it is a good investment—more expensive than a car but less expensive than a house. For others, rather than advantage, it disadvantages them.
Public funding of universities in real 2011 dollar terms doubled in Australia between 1995 and 2011. That kind of funding expansion happened across the OECD. It was unsustainable. Governments did it mainly by borrowing. The sovereign debt they accumulated ended by crippling them financially. In Australia the sovereign debt route was avoided. Instead governments under-funded domestic student places and partly cross-subsidised them with foreign student fees. The peak of the foreign student market was 2007. It has declined irreversibly since. The federal government spent more on education by spending less. In 2011 compared with 1995, it spent twice as much while funding a declining portion of university operating costs. Under-funding is a strategy that piggy-backs on legacy resources (like buildings). These are now exhausted. So Australian universities are thinking: What next? What other kind of model is possible?
Universities exist for teaching and research. Or do they? When I look at what they actually do, I wonder. It is no longer evidently so. Here is one statistic that suggests otherwise. American academics on average teach twice as much as they research. They teach for eleven hours a week. In colleges they research two hours a week and in research universities five hours a week. The rest of the time (twenty hours plus) is made up of committee meetings, e-mail correspondence and various professional obligations. Time disappears in this vortex—time that academics once would have spent interacting with students, and students with them. Bureaucratic time now continuously eats away at the vocation of the university—until one day it will disappear, unless a new model of the university is conceived.
Research as much as teaching has been eroded by the bureaucratic university. The last two decades saw the rise of research management in universities and the correlated decline of research output. In 1993, at the onset of the unified national system, Australian academics produced 1.5 publications per head. This metric tumbled as low as 0.6 in 1997. It has been an anaemic 1.0 per capita since 2004. The major American research universities produce two to five publications per head per annum. The best Australia can manage is the Australian National University’s 1.6 per capita. The University of Melbourne output fell from 2.0 per capita in 1992 to 1.1 per capita in 2011. This is a serious matter when we consider that high-quality research strongly correlates with high quantities of output. The best researchers produce great work and lots of work. Quality and quantity are mutually implicated in serious creative work. Australia has increased its external funding of research in the last decades. Total university research income in 2011 dollar terms rose from $744 million in 1992 to $3,172 million in 2010. Yet the number of research publications per $100,000 income has fallen from 3.6 in 1992 to 1.5 in 2010. This strongly suggests an investment of research income in process rather than in the production of output. The proliferation of research management bureaucracies in universities over the period is a parallel symptom of a system that values procedure rather than productivity.
There has been one exception to the elevation of process over production in the era of the bureaucratic university. Australian universities massively increased teaching productivity. It doubled between 1965 and 2011, rising from twelve “full time student units” per academic in 1965 to eighteen in 1991 to twenty-five in 2011. That meant a rise in the number of students an academic taught from 96 to 144 to 200. Few industries, especially labour-intensive ones, could boast that kind of rise. It was achieved in a number of ways, from larger classes to the extensive use of casual contract teachers. But given its scale it is unlikely to be repeated again. Some think that online classes will deliver further productivity gains. But these will occur likely only in the case of the relative handful of MOOC (massive open online course) superstars. Production and preparation costs of online delivery inhibit its productivity potential unless these can be offset by exceptionally large class sizes. In any case, teaching productivity does not make students happier, even if it does not necessarily make them any less happy.
Universities today are filled with unhappy students. This is not their salad days. Each year 18 per cent of commencing students drop out (some of them later return). The attrition rate varies between institutions, from 8 per cent in the best case to 33 per cent in the worst case. This is not surprising. Many nominal students at university have no aptitude for higher education. Yet governments and universities pressure them to enrol. Large numbers are disengaged from classes and study. In Australia, 61 per cent of full-time students work an average thirteen hours a week and put in a meagre ten hours a week studying for class and fifteen hours in class. De facto, governments subsidise students to stack shelves and game online. University of California Berkeley students spend twelve hours a week socialising with friends, eleven hours using computers for fun, six hours watching television, six hours exercising, five hours on hobbies, and thirteen hours a week studying. A convergence has occurred. Teachers have no time. Bureaucratic routines command their attention. Large numbers of students are disinterested in study. Entertainment, friends and social media absorb most of their time.
Bunking off lectures is not the issue. Peter Cook and Christopher Hitchens spent little time in class at university. In fact the most powerful predictor of high-level professional and creative success is not undergraduate grades but extracurricular productivity. It is equally true though that the extracurricular world of the inventive student is usually sparked by a strong connection with a decisive handful of academic tutors or mentors. The problem of the contemporary university is that extracurricular time is now mostly unproductive. It is spent idling. A tacit disengagement pact has grown up between students and teachers: they agree not to bother each other. Students engage in passive leisure activities. Teachers spend more and more time e-mailing their colleagues in attempts to satisfy bureaucratic demands. Administrative auditing of teaching provides little useful information. Student “feedback on teaching” surveys and surveys of “student experience” are simply indexes of student unhappiness. They do not measure whether or what students have learnt. They do not track extracurricular creation. They tell us what we already know: a third or more of students are unhappy at university.
What the surveys cannot tell us is that those students should not be at university. They should do a technical certificate or learn how to create their own small business. The older model of traineeship, apprenticeship and cadetship (TAC) entry to the workforce needs to return. University attempts at “work-integrated learning” are vain substitutes for this. Universities and governments have to accept that not everyone can go to university. Universities of the future can offer a potent mix of lectures online, inspiring tutors, and extracurricular integration of study, work and creation. But that is for 20 per cent of nineteen-year-olds, no more. Today’s university meanwhile lurches between bureaucratic fatigue and enervated entertainment. It is devitalised, exhausted and debilitated.
Signs of the debilitation of the university are everywhere. It has reached the point where bureaucracies think they can teach students better than academic staff can. We see this in some of the peculiar initiatives of Graduate Research Schools in Australia. These are bureaucratic offices that administer higher-degree research candidates. In the last decade these bureaucracies have tried to refashion PhD research degrees in their own image. As often is the case with bureaucracies, they expand their reach by offering solutions to non-problems. One of the non-problems of our time is non-completion by PhD students. Some people who start PhDs do not complete the degree. They discover that it is too difficult or it is not for them. Often the PhD student who stops has been unable to find the right supervisor or a good supervisor. As long as there have been statistics on PhD programs, going back in North America to the turn of the twentieth century, somewhere in the range of 50 to 55 per cent of PhD candidates fail to complete. In the last decade, centralised PhD administrations in Australia proliferated. To expand, they required a rationale. One such rationale was to save academics from non-completions, so graduate administrations came up with all kinds of worthless subjects and workshops for PhD candidates to do, not understanding that class learning and research undertakings have almost nothing in common.
There are two basic reasons PhDs do not perform well. One is that undergraduate scores are bad at predicting who will be a good researcher, because research and in-class competencies are very different. The second reason is the relation of student and supervisor fails. In neither case will getting a PhD candidate to do a bureaucratically-invented subject make an iota of difference. No amount of bureaucratic pedagogy can make the slightest difference to the natural fact of attrition. In Australia between 1991 and 2010 the median ratio of PhD completions to commencements three years prior expressed in percentage terms was 50 per cent in the 1990s and 55 per cent in the 2000s. This is much the same as the historic norm of PhD programs everywhere. This norm does not change. This did not stop a faux-solution to a fictional problem being promised. This is typical of administrative creep. In spite of obvious reasons to leave well alone, bureaucratic offices persist and prevail. They hoover up resources, they expand, they move into areas that are none of their business, and they reshape the university in their own image. The single greatest challenge in rethinking the model of the contemporary university is to conceive a functional model of a university that is not bureaucratic in nature.
The larger part of resources in a university today, both in Australia and across the OECD, is commanded by administration. The engorged scale of university administration is staggering. Of course, administration is a necessary component of any university. Finance, personnel, legal, facilities and technology services were there at the birth of the modern university. The question is not their necessity but their scale and ethos. Administration can be modest, lean and helpful. Contemporary university administration is the opposite. It is possessed by a bureaucratic spirit to expand and command. In Australian universities, there are 1.3 non-academic staff members to every academic staff member. That is the median figure across the sector. Any company or NGO would be drummed out of business operating on such a bloated ratio. Most non-academic staff members today are back-office central administration staff, not front-office school staff. Since the beginning of the 1980s, revenue has flowed away from academic departments and university schools to faculties and central administration at a rate of about 1 per cent per year. Today 50 to 60 per cent of university income is distributed to central administrations. Each year incrementally the figure grows. Universities repeatedly claim that centralising administration is more efficient, but it is not. Australian universities began the era of the unified national system in 1996 with 1.3 non-academic staff to each academic staff member. The ratio is the exactly same today. There has been no administrative efficiency gain in that whole time. The administrative productivity gain of centralised databases, the relocation of staff to central offices, and the amalgamation of departments into schools has been zero. In terms of efficiency, centralisation has been a complete failure.
While most Australian universities converge around the ratio of 1.3 non-academic staff members to each academic staff member, there are outliers. At the nightmare end, the ratio at Victoria University in Melbourne is 1.9:1. In contrast, the ratio at the University of New South Wales is 0.5:1 and at the University of Notre Dame 0.6:1. Lean administration is possible. But these are the exceptions, not the rule. To achieve a state of modest administration is not easy. Everything in a bureaucratic world is urgent, imperative, necessary, and must be done now. There is little evidence-based reason for bureaucratic expansion, but much huffing and puffing. The way to begin to reverse this is simple enough though. All Australian universities need to cap the ratio of non-academic to academic staff at 0.5:1. One front-office administrator in schools for every four academic staff is appropriate, along with one back-office central administrator for every four academic staff. That tallies to 0.5:1. No more is necessary to support the core business of teaching and research.
A second step then would be to remove extraneous functions and the processes and offices attached to those functions. Bureaucracies spread by inventing superfluous processes and dubbing them essential. Many of these are ideological. All of them should go. Universities do not need convoluted application processes for tiny dollops of incentive money and pointless awards, or teaching and learning development that develops nothing but regulation, or “low SES” support bureaucracies that have left the “low SES” entry percentage into universities unchanged for forty years, and on and on. An epidemic of “adminodemic” functions spread in universities during the last twenty-five years. Most assistant and associate dean and sub-vice-chancellor offices have no place in a lean university. Universities will have to shrink the scope of university service departments. These can in part be outsourced and in part devolved back to schools. Schools are close to those who use services. This avoids the massive transaction costs of centralised back-office administrators who constantly handball queries rather than perform functions. It has long been observed that bureaucracies lack information to make effective decisions. Today they spend their time on e-mail distracting other staff by asking for information they lack because of their central location.
The third step would be to reduce the prolix paperwork and multiplication of steps now attached to all functions in universities, even the necessary functions. “Ease of doing business” is the watchword for future universities. The five-page application document can be shrunk to one page, the five sign-offs authorising activity cut to one, the cumbersome five steps in the badly designed finance database reduced to one. “One step compared to five steps” is the difference between modest administration and bureaucratic administration. Approvals need to be given, expenditure needs to be checked, leave taken needs to be reported, and so on. By making each procedure short and quick, the pathologies of bureaucracy are reduced. Replacing the tortured, insincere and often demented language of bureaucratic administration with language that is plain and sincere is a start.
One argument against doing all of the above is that government places large regulatory burdens on universities. To an extent it does, though universities amplify these. The unified national system promised efficiency. In reality it delivered rules, codes, and an army of adminodemics. The temptation of government is to equate public good with the state with regulation and bureaucracy. That was the story of the past two decades. There are compelling reasons for government to move away from that idea now. The current federal funding of universities is not sustainable. It has dropped from 60 per cent to 56 per cent, and most seasoned observers expect it to drop to 40 per cent in the next decade or less. Students will pay more for their education, which will partly compensate. But that is not sufficient. Higher fees also have to compensate for the chronic underfunding of each domestic student place in Australia. Universities therefore will still need to do more with less income. The clear path to this is to reduce the central administration bloat.
In 2011 the federal government paid for $13 billion of the $23 billion operating cost of Australian universities. Students contributed around $6 billion. Academic salaries cost $6.7 billion. Non-academic salaries cost $5.9 billion. If non-academic costs reduced by 60 per cent, bringing them to the 0.5:1 ratio, a $3.54 billion productivity saving would follow. This is no different from the academic teaching productivity saving (the one efficiency of the unified national system, achieved painfully). A $3.54 billion productivity saving equates to around 27 per cent of federal spending on universities. Federal spending on universities will probably scale down over the medium term from $13 billion to $9 billion in 2011 dollar terms. A significant, though by means complete, portion of that can be achieved by reducing administrative super-sizing. Fee increases should be devoted to meeting the real costs of teaching and ensuring front-line teaching quality in universities, including allowing schools to develop high-quality online delivery of lecture courses. To do all of this requires the federal government to deregulate the universities.
None of this is easy. It will require not just institutional adaptation but a cultural re-think. Everyone in universities complains about bureaucracy and yet is hopelessly addicted to its narcoleptic allure. Could universities do without research management, graduate administrations, teaching and learning development? If they disappeared tomorrow, teaching and research would go on competently as they have for the last century. Could universities administer in one step rather than five steps? Countries have learnt to institute ease of doing business. Why not universities?
Bureaucracies are lobbies. They agitate to expand. They will agitate furiously against shrinkage. But we have come to the point where we have no choice. The unified national system is two decades old. It is in a state of entropy. It has conspicuously failed. Australia produces less academic research per capita as a result of it. Its external research income generates far fewer articles per dollar because of it. It enrols vast numbers of unhappy students who drop out or exit and never use their degrees. We can do better.
Peter Murphy is Professor of Creative Arts and Social Aesthetics at James Cook University. His most recent book is The Collective Imagination: The Creative Spirit of Free Societies (Ashgate, 2012).
 The figures on the Australian university in this paper are from the Australian Department of Industry, Innovation, Science, Research and Tertiary Education higher education statistics publications on Finance, Research Expenditure, Staff, and Students.
 D. Bradley, (Chair), Review of Australian Higher Education Report, 2008, p. 74; ACER Australian Council for Educational Research, Australasian Survey of Student Engagement, Camberwell, Vic, 2010, p. x; R. James, K.L. Krause, and C. Jennings, The First Year Experience in Australian Universities: Findings from 1994 to 2009, Parkville, Vic: CSHE, University of Melbourne, 2010, p. 60.
 ACER, op. cit., p. 43; James, Krause and Jennings, op. cit., p. 61
 R. Arum and J. Roksa, Academically Adrift. Chicago: University of Chicago Press, 2011, p. 11.
 Arum and Roksa, op. cit., p. 98,
 At the University of California Berkeley, the administrator to academic ratio grew from 0.2:1 in the 1960s to 0.4:1 in the 1980s. B. Gumport and B. Pusser, “A case of bureaucratic accretion’, Journal of Higher Education, September-October, 1993.
 Low SES (socio-economic status) data from Bradley, p. 28; DEST, A Fair Chance For All, 1990, p. 15.
 In 2011, 9 of 39 Australian universities had a net operating result expressed as a per cent of total income that was less than 5 percent.