PRESIDENT'S LOG:The recent Public Service Agreement will only divert money into bureaucracy and away from teaching, writes FERDINAND VON PRONDZYNSKI

I DON’T WANT to suggest that higher education is a business. But, if for the purpose of what I am about to argue you were to see it as a business, you would have to conclude that it isn’t an easy one to run.

Generally speaking, the key thing you need to get right in any business organisation is to maximise the income while controlling the costs. Taking the education of Irish undergraduate students, in the universities we cannot do either of these things.

The income is set by the Government, in the form of the recurrent grant and the fees that it pays on behalf of students in the “free fees” scheme. Once a year (and far too late in the financial year) we are told by the Government what this income is going to be. There are no negotiations or even discussions. We are simply told.

Costs are largely determined by staff salaries. So how good do you imagine we are at getting the salary levels just right? Sorry, that’s an irrelevant question. It’s irrelevant because we have no say whatsoever in determining the salaries of our staff, because the pay scales are pegged to public service grades, and their pay in turn is set through national bargaining. The universities, therefore, do not set the pay. Worse, we are not represented in the pay negotiations. We have no say whatsoever.

A few years ago I suggested to the then minister for education that undergraduate education was, financially, an impossible proposition for the Irish universities. We have no influence over either the income or the costs. And at that point costs were rising year-on-year, while the income per student was falling. If this were a business, I told the minister, the only sensible thing to do would be to get out of it quickly.

By now, in 2010, salary costs are no longer rising, but that hasn’t benefited us at all, as the savings have been immediately clawed back by the Government.

Of course, higher education is not a business, and we do what we do because we believe in it, and because we are committed to providing high-quality education for the national benefit. Furthermore, I don’t for a moment begrudge the university staff their pay. Most of them work very hard, and often impossibly long hours, and to get their jobs they need qualifications that would get them much higher pay if they chose to work elsewhere.

But that doesn’t get us over the fact that running a university has become a kind of financial puzzle for which there is no workable answer. The obvious solutions have all been ruled out of order by the Government. And the way forward that seems to be flavour of the month is what is described as more “accountability”, but which I believe means higher levels of bureaucracy, with an inevitable transfer of resources from education to administration.

Into all this comes the new Public Service Agreement (facilitated by Kieran Mulvey of the Labour Relations Commission, right), negotiated between the social partners and concluded a couple of weeks ago. As can be seen from media reports, this is being considered by the various parties, and votes are being conducted about its ratification or otherwise. Nobody has asked me, or any other university president, what we think about its terms. But I’m going to tell you anyway. My chief concern does not relate to the pay provisions on this occasion (though it would be nice if we were asked). Rather, my concern relates to the appended “sectoral agreement” on education, which has a subsection on universities and other higher education institutions. What good stuff do we find there? The first thing is the provision of an additional hour per week for teaching and learning. But what does that mean? Academic staff do not have set hours of work, so adding one is meaningless.

But if it means that the teaching hours are to be set contractually, with an additional one then added, I suspect the effect will be to reduce teaching hours dramatically, as staff will no longer perform the additional hours they now undertake voluntarily. It may not always be appreciated that many academics work in excess of 60 hours per week. I suspect if actual hours are set contractually, this goodwill will come to an abrupt end. In fact, the whole sectoral agreement seems fixated on contractual revision. Whoever thought of this has no idea how universities work.

I should emphasise that I am wholly in favour of reform of higher education, and I think we have much to do. But people must stop thinking that everything in the universities would be tickety-boo if only we introduced new regulations, guidelines and legal obligations with a new bureaucratic structure to police it all.

Universities thrive on creativity and innovation, and this needs to be encouraged and incentivised. Someone needs to talk to us, properly.

• Ferdinand von Prondzynski is president of Dublin City University