Price tag puts govt off university merger

James Hight building at the University of Canterbury. - Photo: Wikimedia Commons

A multi-million price tag has killed government support for a proposed partnership between Lincoln and Canterbury universities.

A letter from Education Minister Chris Hipkins to Lincoln chancellor Bruce Gemmell said the institutions wanted $124-160 million for the plan, which was submitted to the government in December last year.

Mr Hipkins said in the letter the cost of the proposal outweighed 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 said.

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

Mr Hipkins said there had also been several developments since the proposal was submitted, including cancelation of a join facility with AgResearch and settlement of a $45m insurance claim.

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

Mr Hipkins said he expected Lincoln to actively explore opportunities to increase collaboration and partnerships with other tertiary institutions, Crown research institutes, industry, iwi and research organisations.

"As per the findings of the 2017 Transformation Board, Lincoln needs to "move away from being a standalone university to being the academic heart of the Lincoln Hub and a valued partner to institutions with shared goals"," he said.

Mr Hipkins said a key consideration in coming months would be Lincoln's business case for $85 million to rebuild its science facilities.

In a statement, the universities said they would continue working together and had established a joint working group.

Lincoln had 2511 full-time equivalent students last year, about one quarter as many as the next largest university, Waikato.

The university had been dogged by financial problems during much of the 29 years since it formally separated from the University of Canterbury.

A 2016 report advised that its best option was to "integrate" with another university, and in 2017 an advisory board recommended Lincoln "move away from being a stand-alone university".