Response from VC - 3 Sep 2008
------ Forwarded MessageFrom: University Messages <UniversityMessages@latrobe.edu.au>
Date: Wed, 3 Sep 2008 15:19:58 +1000
To: All Staff <AllStaff@ltu.edu.au>
Conversation: Message from the Vice-Chancellor - Administrative Change Program Update
Subject: Message from the Vice-Chancellor - Administrative Change Program Update
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Dear Colleagues
As many of you will be aware we are in the process of developing the 2009 budget. We are keen to avoid the confusion, extreme workloads and delays that occurred last year. So we are adopting a new budget framework which will be transparent to everyone, reduce unnecessary paper-shuffling, and help us to achieve our strategic goals.
At the same time the University has begun an administrative change program designed to reduce our expenditure on administrative work by 12%. Together with a longer term focus on increasing the University’s revenue, this program is necessary to move the University on to a sustainable footing.
A meeting was held last week with Senior Managers to commence the budget planning process for 2009, and to show how the planned savings from the administrative change program will be built into the 2009 budget. However, it is clear from feedback across the wider University and the NTEU that some of you would like more information and further clarification. If you are one of these, read on!
I think that the main elements requiring clarification relate to the following:
1. The way in which the 2009 budget will reflect the savings to be derived from the administrative change program;
2. the process through which we will identify the positions that are no longer needed;
3. the timeframe for identifying the positions that are no longer needed and
4. the process and timeframe for managing the related staff reductions.
1. The 2009 Budget
The overall budget objective for 2009 is to achieve an operating margin of 3% rising to a 5% margin by 2012 (the average operating margin across all Australian universities is currently just over 7%). It will take some time before projects designed to increase revenue come on stream. Therefore, in the short run (2008-09), as I have indicated in earlier communications, we need to focus on achieving the planned 12% improvement in the efficiency of our administrative systems. Given that the vast majority of our administrative costs are salary costs, it is likely that this will require a reduction of around 150 staff over this period.
In order to develop the budget for 2009 we need to show that we will meet the agreed operating target of a 3% surplus. However, until the functional reviews are completed we do not know where the necessary savings will be made. Since we must have a budget agreed before the end of the year, to enable units to plan their activities for next year in good time, we need to begin by making our best guess about where real savings can be made. As a result, the budget model will factor in savings to be made in 2008 and 2009 under the broad functional headings of Research Support, HR, Finance, ICT and so on – based on our most informed guess.
As the functional reviews are completed, the budget will then be adjusted to reflect where the positions have really become redundant, which may be in the central areas or in the faculties.
It is important to understand that the Budget process will not determine which positions are no longer needed, or where the savings will actually be made – this will be done by the functional reviews.
2. The process for identifying positions that are no longer needed.
The functional reviews that make up the administrative change program will determine how best to organise each particular type of service, which positions are necessary to support that service, and which positions are no longer necessary. The initial benchmarking against similar organisations helps us to identify possible areas where efficiencies can be achieved, but will not determine our staffing levels or structures.
3. The timeframe for identifying positions that are no longer needed.
The reviews of Research Support and HR are well advanced, but even once an agreed model has been developed, there is a lot of work that needs to occur – such as developing new position descriptions, consulting with all affected staff and their representatives, and ensuring that we have the proper principles and process for matching staff to the new structure. While I understand that staff are keen to know what the impact of any change may be on their particular job, we must follow good process.
The team managing the administrative change program is preparing a timetable for the reviews of Finance and ICT this week, and as timelines are agreed they will be posted on the change website (https://www.latrobe.edu.au/change/). Staff should use this website to keep themselves informed of progress.
4. The process and timeframe for managing staff reductions
Once the functional review teams have agreed on the best structure for each service it will be possible to identify the positions that will no longer be required. The process for reducing staff numbers to match the reduced number of positions will be handled in accordance with the EBA and involve a number of options. In the first instance, reductions will begin to occur through the normal processes of retirement and resignation. Where staff have appropriate skills, redeployment will be arranged into vacant positions across the University. I regret that there will also be some redundancies.
The work to be undertaken by the functional review teams is complex, and we need to ensure adequate time for data to be tested and staff to be consulted. As a result, it is unclear, as yet, exactly what savings can be achieved in 2008.
If you wish to know more about the budget process for 2009, or the administrative change program, please talk with your divisional manager or head of school in the first instance. In addition, the change website (https://www.latrobe.edu.au/change/) will be kept up-to-date with information on progress with the functional reviews, and it provides opportunities for you to give feedback.
I would like to take this opportunity to thank you all for your continued support as we build a strong and sustainable future for La Trobe University.
Paul Johnson
Vice Chancellor
3 September 2008