How to Cut Costs

by Jane S. Shaw

A report from the National Research Council proposes a grand scheme for sending more state and federal funds to major research universities in return for more efficiencies on the part of the schools. The scheme strikes me more as self-serving whimsy than a viable plan.

On the day the report came out, I was sitting at a University of North Carolina Board of Governors meeting, and the topic was greater efficiencies at UNC campuses. Chancellors described the steps they were taking to cut operations costs. They reported such changes as:

— North Carolina Central University will consolidate its arts and science disciplines into one school, and the human resources department has been cut by nearly half.

— UNC–Chapel Hill has saved millions by streamlining its human resources departments and information technology following a study by Bain & Co.

— UNC-Wilmington has stopped renting space around the city of Wilmington, consolidating all its functions on campus.

— Other schools have contracted out services and shifted functions such as internal auditing to the UNC general administration.

(These changes are separate from reviews of academic departments, which are also going on at some campuses.)

The cutbacks appear to be significant. They didn’t come about because of crony-like cooperation between government and academe. They came about because the North Carolina legislature, for the first time, really cut the university’s budget — to the tune of $400 million.

That is a cost-saving technique that works.

Phi Beta Cons

The Right take on higher education.