Issued by: Ministry of Education
3 October 2000
Madam Speaker
Honourable Members of the National Assembly
This is the second amendment Bill to be introduced since the promulgation, in December 1997, of the Higher Education Act. The implementation of this Act has proven to be a challenge. The transformation of education systems is complex at the best of times, but more so for a system which needs to address the inequalities of the past while positioning itself to meet the demands of the 21st Century. This Bill seeks to address some of the shortcomings that have become apparent with the implementation of the Higher Education Act of 1997.
Government's programme for the transformation of the South African higher education system requires individual higher education institutions to change the ways in which they operate, and especially to take account of broad system-wide interests. Unfortunately, it has become clear that certain higher education institutions, both public and private, have extended the scope and range of their operations in ways, which may not be in the best interests of the system as a whole.
Let me give you an example of the type of developments that we are witnessing. The past few years have seen the proliferation of satellite campuses of public higher education institutions throughout the country, often without due regard to the effect these campuses might have on sister institutions or to the quality of the educational and infrastructural provision.
Section 3 of the Higher Education Act (1997) places an obligation on the Minister to determine higher education policy after consultation with the Council on Higher Education (CHE). The proposed amendment (3) gives the Minister the discretion, under specified conditions, to determine policy for public as well as private higher education institutions. The conditions are those embodied in the co-operative governance model to which government is committed, as spelled out in Education White Paper 3. The amendment is entirely consistent with this model.
There are objections to the proposed amendment. One objection is that the amendment gives the Minister extensive rights, which are contrary to the principle of institutional autonomy, which is upheld in the preamble to the principal Act. It is alleged, that the Minister will be given draconian powers to override, by executive decree, the private acts of universities.
The key claim of this objection is that the principle of autonomy, which is upheld by the preamble to the 1997 Act, is contravened by the proposed new subsection. This is misleading because no principle, in the sense of a statement having universal or unconditional application, is in fact built into this preamble. The principle to which the government is committed is that of academic freedom, which cannot be equated to autonomy. The 1997 White Paper on Higher Education Transformation lists academic freedom as one of the fundamental principles that must guide the process of higher education transformation in South Africa.
Academic freedom, a fundamental right protected by the Constitution, has to do with the pursuit and practice of academic work, without interference. The concept of autonomy is concerned with the relationship, which holds between the state and higher education institutions; and in particular with the ways in which the state manages or steers the public higher education system. The concepts of academic freedom and of autonomy are thus not identical.
Our choice has been to entrench the principle of academic freedom for all higher education institutions and to place limits or conditions on their autonomy. The preamble to the 1997 Act refers explicitly to higher education institutions in South Africa having conditional autonomy.
It is clear from this preamble that no appeal to a so-called 'principle of autonomy' can exempt either an individual higher education institution or the system as a whole from meeting these transformation goals or conditions.
The first annual report of the Council on Higher Education (CHE), which I received at the end of 1999, clearly indicated that the higher education system is moving only slowly towards meeting the transformation conditions contained in the White Paper and the Higher Education Act. The information contained in the CHE's annual report is supported by the Department of Education's analyses of the first two years of rolling plans submitted to it by public higher education institutions. The higher education system in South Africa is not meeting national transformation conditions concerned with responsiveness to societal needs and equity.
The amendment gives the Minister of Education the discretion to address the laissez-faire development of higher education. It does so, while respecting fully the principles of academic freedom and of co-operative governance.
Now to move to the second key area addressed in the Amendment Bill.
Certain higher education institutions are facing serious financial problems and have, as a consequence, raised large overdrafts with commercial banks. Steps have to be taken to protect the substantial investment, which the government has made in South Africa's public higher education system. The proposed amendments to section 40 of the 1997 Higher Education Act are designed to do precisely that. Public investment in higher education is considerable. Nearly all the land and buildings, and much of the teaching and research equipment, of the 36 public universities and technikons in South Africa have been purchased with the assistance of substantial government funding.
The amendment recognises that public universities and technikons are able to enter legally binding contracts. However, it lays down a set of requirements which institutions must meet before entering into a loan or overdraft agreement; the construction of a permanent building of any other immovable development; the purchase of immovable property; a long-term lease of immovable property.
These requirements are (a) that the council of the institution must approve the agreement, and (b) that the Minister's approval must be obtained if certain limits would be exceeded by the raising of the loan or overdraft or the construction or purchase or leasing of immovable property. The limits proposed are reasonable ones. In the case of loans or overdrafts, Ministerial approval is required if the sum raised in any financial year is higher either than an amount predetermined by Minister or (if no such determination has been made) than 5% of the institution's average income for the previous two years. In the case of the construction or purchase or leasing of immovable property, the approval of the Minister must be obtained if the value of the construction or purchase or lease is higher than 5% of the institution's average income for the previous two years.
Objections have been raised to the effect that these new requirements will limit significantly their rights to enter into legally binding contracts, and will, as a consequence, have a potentially severe impact on the functioning of higher education institutions. The response to the first part of this objection is straightforward: the Minister clearly has an obligation to ensure that public funds are employed properly and responsibly.
The response to the second part of the objection is equally straightforward: many other countries have requirements of this kind without the operations of higher education institutions being affected in any serious way. For example, the Higher Education Funding Council of England, which operates as an agent for the UK government, lays down a detailed set of conditions, which must be met before universities can borrow funds on a long-term or short-term basis. The Funding Council specifies that higher education institutions must, under certain circumstances, obtain its prior written consent before entering any borrowing agreement. Institutions require the Council's consent before undertaking "such level of borrowing that the annualised servicing costs of all long-term borrowing exceed a threshold of 4 per cent of total income as reported in the latest audited financial statements".
The conditions laid down by the Higher Education Funding Council of England are more stringent than those contained in our amendments. It is therefore difficult to accept that the amendment could have a serious impact on the operations of South Africa's higher education institutions!
Lastly, the Amendment Bill strengthens the regulatory framework for the operation of private higher education institutions. In particular, it allows for differentiation between local and foreign private higher education institutions. No country can afford to sit back and watch as the future sustainability of its higher education system is threatened by foreign universities looking for new markets.
I thank you.
Contact: Bheki Khumalo at 021 465 7350 or 082 781 2660