UNIVERSITY of Newcastle Vice Chancellor Alex Zelinsky has described the organisation as "running hard just to stand still", in a document sent to staff about its financial position and timelines for restructure, ahead of formal consultation.
As previously reported, UON will consolidate its five faculties into three colleges and has identified 500 of its more than 2200 courses for potential suspension, consolidation or discontinuation.
Professor Zelinsky sent staff a nine-page Organisational Restructure Discussion Paper on Wednesday, writing UON had been experiencing financial pressures created by funding reforms, other government policy changes and increased competition.
"Our university budget has been under pressure for several years, contending with an imbalance where the rate of growth in our expenses has outstripped revenue from our teaching and research operations," Professor Zelinsky wrote.
"The economic impact of the COVID-19 pandemic this year has compounded these existing pressures and sharpened our need to act.
"Significant operational change is required to improve our university services, enhance the student and staff experience, ease economic pressure, redress the balance, and achieve long-term financial sustainability."
He wrote the Looking Ahead Strategic Plan was also a driver for change.
Professor Zelinsky wrote both revenue and expenses were growing.
"Quite simply, in our core activities we are spending more than we earn."
Opinion on this issue: University of Newcastle needs more vision, not job cuts
He wrote contributions to reserves should be generated from core activities - teaching, research and engagement - but have come from student accommodation, the investment portfolio and accounting adjustments.
He wrote UON could not rely on investment returns to "meet the gap between our core income and day to day expenditure", because they were variable, needed to be put to infrastructure renewal and not cash inflow.
"We are all fatigued by these seemingly never-ending incremental cost reduction measures, running hard just to stand still. It's time to approach this problem in a different way."
Regarding course optimisation, he wrote "final determination of changes" would occur in late November.
UON will distribute in mid November a consultation paper about changes to its Pro-Vice Chancellor units and potential staffing impacts.
It will launch in February a paper about changes to schools.
Three college general managers will be appointed.
The National Tertiary Education Union Newcastle branch has been contacted for comment.
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