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Back in the black, New Zealand scraps Lincoln University merger plan

SOURCE: Lincoln University
Lincoln University's financial future is looking brighter.

New Zealand has shelved a partnership proposal to save the ailing Lincoln University (LU), saying it would cost too much and was no longer necessary given the institution’s financial standing has improved.

In a letter explaining the decision, Education Minister Chris Hipkins told Lincoln Chancellor Bruce Gemmell that the cost proposed for the partnership with University of Canterbury (UC)–NZ$124-NZ$160 million–would outweigh the benefits.

“This is a very substantial amount of Crown funding given that traditionally mergers or other partnerships between tertiary education institutions do not receive Crown support,” he wrote, according to RNZ.

“In my view, the costs of the proposal significantly outweighs the proposed benefits.”

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The decision was also influenced by several other factors pertaining to Lincoln’s financial situation, including the school settling its NZ$45 million earthquake insurance claim and the decision to not proceed with the Lincoln/AgResearch Joint Facility contract.

“Both of these developments have reduced the financial risks to Lincoln in the short and medium-term,” Hipkins wrote.

But this doesn’t mean the university is entirely in the clear. The minister expects Lincoln University to explore more opportunities for collaborations with other institutions and research institutions across New Zealand.

The university should move away from being a standalone university to become the “academic heart of the Lincoln hub” and a partner to other learning and research bodies with shared goals, he said, citing the findings of the 2017 Transformation board.

Both LU and UC issued a joint statement later to say they welcomed the minister’s decision and that they intended to “continue achieving the benefits proposed through collaboration and cooperation”, Stuff reported.

LU’s acting Vice-Chancellor Professor Bruce McKenzie agreed with the minister’s reasons for scrapping the partnership, noting that the earthquake insurance settlement in early May had helped it back on its feet and removed the need to partner with UC.

However, the process putting together the proposal had brought the institutions closer, which he said would help encourage the more collaborations per the minister’s request.

“I think the minister believed that we can produce most of the benefits outlined in our proposal without a formal partnership,” he said.

university of canterbury
University of Canterbury in New Zealand. Source: University of Canterbury

The partnership proposal was first mooted in August last year as a way to help LU see through its financial troubles. The institution had been battling falling enrolments and over a decade of financial deficits in the 29 years since it formally separated from UC, prompting the government’s intervention on the matter.

According to reports then, Hipkins at first called for expressions of interest in LU, which generated interest among three universities. 

But the vice-chancellors of all New Zealand’s institutions later banded together to rally behind Lincoln University with a different idea in mind: the merger. This, they said, would allow LU to have control of its own future. 

Following that, a NZ$206 million plan for a joint research facility with AgResearch was scrapped after Hipkins rejected a request for NZ$85 million of Crown funding for it.

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AgResearch is now proceeding to build its own facility on LU’s campus, next to the institution’s new science facility, which will kick off next year.

“These buildings won’t be jointly owned, but they will be right next to each other with a shared cafe and a wide range of collaboration spaces so our staff are going to be together, essentially, all the time,” McKenzie was quoted saying in Stuff.

On top of these developments, LU is also working on different means of balancing its books, including selling off some of its assets. According to the portal, the institution sold half of a farm that was leased to Plant and Food Research and has leased three houses to staff.

“I feel extraordinarily positive for Lincoln University. We are in a place we haven’t been in for a while – we are financially very viable.

“We will exceed our targeted enrolments this year, our target next year is looking very strong, we will be building an extension of the recreation centre – which will start this year – and a new science building, which will almost certainly start this year,” McKenzie said.