Why does no-one seem to like compacts?

Opposition Leader Bill Shorten has given some sense of where the ALP might go with higher education policy. He has suggested that a future Labor government should attempt to ensure that universities deliver strong retention rates and good graduate outcomes.

Many commentators have expressed concern that the demand-driven system of funding, where the government agrees to pay for any student a university will enrol, has been an irresistible means for universities to grow revenue.

As The Australian reported, this has been described as “harvesting” enrolments “particularly from low socioeconomic backgrounds”. This all sounds a bit like something you do for the black market, but it is a legitimate concern.

Concerns over the quality of the education and how universities see their mission are not new to the ALP. When it was last in government, it used mission-based compacts to attempt to guide what universities did. The spectre of reintroduced compacts has been met with quick opposition by some, but it is worth looking at their history before either championing or decrying the idea.

What are ‘compacts’?

Originally compacts were designed as a written agreement between the Commonwealth and universities. They were intended to cover the range of university activity – mission, goals and plans for teaching, research, research training and innovation activity.

Agreement was to be in exchange for funding – to act as the stick alongside the carrot of shared vision between universities and government which the whole process of compact negotiation was supposed to generate, such as equity enrolment targets or areas of focus.

Although a one-year interim agreement covering university mission and research was signed in 2010, it was not until 2011 that the first full compacts were established. The current government has continued the compacts through their second iteration for 2014-16 but without saying much about them, other than its intention to not continue using them in the future.

Compacts were never legal agreements stipulating key government support for university activities (although they were attached to some limited performance funding). More important were the funding agreements universities must sign with the Commonwealth to receive support for teaching. These were included with the compact documents but not dependent on it.

For some, this is where the trouble started with compacts. The conversation between government and universities which had real and potentially significant consequences – that is, the funding agreement – was never properly integrated.

While there have been different requirements for universities in the past, these had been clearly understood as separate from the funding discussion. The compacts were originally supposed to include funding and agreed mission goals in a jointly signed document.

Most compacts didn’t live up to their promise

For universities and government alike this might have been an attractive proposition. Once the compact was agreed, universities would enjoy greater autonomy in how they spent their funds and be free to pursue the goals and mission they had set. The government could devote less time and resourcing to oversight, having made its wishes known during the three-yearly discussions.

But few turned out that way. The compacts were seen by many as just extra administrative burden where universities at times would reproduce information from their public documents, such as mission statements and annual reports.

The goals some universities set were accused of being tailored to meet research and teaching objectives in line with government funding priorities, rather than a genuine expression of a university’s unique aspirations. Without significant consequences – good or bad – compacts have not been as potent as originally claimed.

If a future government – presumably an ALP one as the Coalition has not shown much enthusiasm – does decide to resurrect compact-like agreements, it should learn from the first two goes with them.

Compacts need to be in the interest of students, government and universities alike, be tied to real outcomes and support, and not just add paperwork to the system with no purpose.

After all, as the government still largely holds the purse strings for Australian universities, it already has a big stick.