Getting the beast on a diet

Hey there, time traveller!
This article was published 31/05/2016 (3450 days ago), so information in it may no longer be current.

May 16, the swearing-in day for Manitoba’s new government, was the best day Premier Brian Pallister will likely have in his four-year mandate. In the throne speech, he promised — as he did during the election campaign — to reduce waste and duplication and to “slow the growth of government spending while maintaining frontline services.”

This sounds simple, but it isn’t.

In response to the growth in U.S. government spending, former Federal Reserve chairman Alan Greenspan was a proponent of the “starving the beast” strategy. It appears Pallister has no intention of starving the beast; he simply wants to put it on a diet.

No doubt, the beast will resist, and the premier and his ministers will have difficulty finding, let alone eliminating, waste and duplication.

In the reorganized ministries, three departments stand out because they account for 75 per cent of provincial expenditures. Specifically, Health, Seniors and Active Living accounts for about 45 per cent; Families accounts for about 10 per cent; Education and Training for about 20 per cent.

In order to find waste and duplication, these ministers, specifically, will need to pore over complex financial and performance records late into the night.

Here is a little help for the education minister in finding waste at universities.

At present, the funding process pays universities to get the bums of first-year students into lecture hall seats, rather than degrees into their hands. Thus, the minister needs to change the incentive system so more students graduate.

Statistics from the University of Manitoba show the incoming student cohort (first-time, full-time students) increased to 4,014 in 2010-11 from 3,423 in 2002-03. However, the percentage of students graduating within four years decreased to 13 per cent from 19 per cent. In other words, more students graduated from the 2002-03 cohort when fewer were admitted than from the 2010-11 cohort when more were admitted.

Similar trends are evident for those graduating within five, six, seven and eight years.

During the last 15 years, the provincial government has given the U of M and the other universities, substantial increases in their operational funds. In fact, as reported by the Free Press, Education Minister Ian Wishart recently said the budget for universities would increase by “what has been the usual 2.5 per cent, along with an additional 1.5 per cent, primarily for indigenous and newcomer education.” The consumer price index increased by only 1.27 per cent from March 2015. Thus, the universities will receive increases that are more than three times the increase in the cost of living.

With so much money, can’t universities do better?

Yes, they can.

First, the minister must require all universities to publish institutional statistics showing attrition and graduation rates by faculty.

Second, the minister needs to devise a funding scheme that aligns incentives to graduation rates.

How would a scheme such as this work?

Assume the cost of educating a student in a particular faculty is $10,000 a year. Assume also the province pays half and the student pays half in tuition fees.

Now assume the province pays only $4,000 for a student’s first year and restricts tuition fees to $4,000. Thus, the faculty receives $8,000 to educate each first-year student. Because the education costs $10,000 per student, the faculty invests $2,000 in each of them.

If a student progresses to the second year, the provincial grant and the tuition increase to $5,000 each. The same amount is paid for students’ third year and each subsequent year. If a student drops out, the faculty gets no more money and forfeits the $2,000 already invested.

Finally, when a student graduates, the province reimburses the faculty the $2,000 it invested and pays a bonus of $5,000 directly to the faculty.

This scheme aligns the payment from both the student and the province with the objective of getting more students graduating with degrees.

As a result, faculties would probably do the following: begin using entrance exams to ensure students have the necessary skills, knowledge and psychological dispositions; assign the best teachers to first-year courses; and ensure required courses are taught so students can graduate on time.

Of course, this is just an outline of the changes required. But without changing the incentives, faculties will continue to enroll more and more ill-prepared first-year students, with fewer and fewer graduating.

If Wishart implemented such a funding scheme, in four years, when the government’s mandate is up, a higher percentage of students will have graduated. The beast will have been put on a diet, and there will be less waste and duplication in Manitoba’s universities.

Pallister will then have his second-best day as he prepares for the next election having found and eliminated considerable waste and duplication and helped more Manitoba students obtain university degrees.

Rodney A. Clifton is an emeritus professor of sociology of education at the University of Manitoba.