Unis need Menzies and Gillard

GOVERNANCE is not a sexy topic, unless it involves cabinet ministers and whips. But, as any entrepreneur knows, it provides the settings for success.

Universities worry constantly about their internal governance. They host senates, councils and chancellors. Yet we rarely think about governance of the sector as a whole. We should. Higher education is a productivity multiplier. Get the settings right and the benefits flow to everyone. Good corporate governance balances entrepreneurship and risk.

Universities do ideas. They like diversity and innovation. The right settings create choice for students and industry. Get the rules wrong, however, and you have the academic equivalent of a parrot cage floor: chaos, crumble and excrement.

It is hard to discern intelligent design in the way university system rules have developed through the years. The sector is caught between states and territories, which own universities without funding them, and a commonwealth holding the purse strings.

With dollars come regulation, politics and dependence. Canberra wants value for money. Commonwealth regulations promote uniformity across the sector. If you have them by the wallet, hearts and minds surely follow. For decades, Australian governments have dictated higher education politics, brilliantly or badly.

Critically, universities have come to see the commonwealth not only as paymaster but master. When you are indigent and mendicant, it is hard to remember you are a vital component of civic society. This dependence on the commonwealth is complicated by an alphabet soup of supervising agencies - departments such as DIISRTE and DOHA, regulators such as TEQSA and AQFC, funders including ARC and NHMRC.

As agencies multiply, so policy coherence dilutes. It requires clever officials to hold together the centre, and continual bureaucratic cuts mean these are fewer in number, with their tasks overwhelming. Corporate amnesia threatens.

The result often is complexity, not co-ordination. This said, successive education ministers and the sector still achieve great things. The HECS system and the bipartisan expansion of university participation demonstrate underlying strength.

But these achievements can be despite the governance arrangements. And the rules of the game can make innovation a risk, not a virtue.

The question is, how do we adjust these settings? Perhaps surprisingly, the creation of a super-regulator, the Tertiary Education Quality and Standards Agency, provides an opportunity.

Some have criticised TEQSA, not always fairly, as intrusive.

In TEQSA, we have the kernel of a governance proposition. At present, it is a regulator. But it could be the primal ancestor of a more nuanced governance approach. The desired outcome is clear. We want quality, which requires regulation to ensure minimum standards. But regulation alone is cutlery without a meal.

We need a structure to drive diversity and innovation, with regulation as the means, not the end. We need, if possible, a single body uniting policy, funding, regulation and administration, with a career structure and continuity to build expertise across time. Above all, we must enshrine the basic governance value that universities are indispensable, independent intellectual components of civic society.

They are solutions, not problems to be managed.

History suggests there is a governance structure matching this vision.

When Robert Menzies launched his great expansion of Australian universities, he entrusted it to a universities commission. Government did not surrender overall control but it accepted expert guidance.

In the same way, a revived Australian Universities Commission would allow government - Labor or Liberal - to set basic directions for higher education but allow an expert body to build the policy details in a coherent way.

Higher education tends to be an area of bipartisan policy, with a shared commitment to diversity and innovation. A revived commission would provide space for the system to pursue these goals.

For the first time, like a good business, government could pursue a higher education strategic plan rather than a series of brilliant initiatives.

Government would not be hands-off but hands-off-throat. It would retain control of policy and finance. But it would be informed by advice beyond the bureaucracy and politics.

The commission could include business, community leaders and stakeholders as well as academics. It could unite the disparate satrapies of higher education, if not behind a single desk then behind one long counter.

To really rile Sir Humphrey Appleby, the commission's first reference from government could be an inquiry into eliminating bureaucracy, regulation and double reporting.

The functions of the commission would vary according to context. Its regulatory arm - the old TEQSA - would retain determinative powers constrained by the commission's settings.

The same would go for quality frameworks.

Other functions would be more recommendatory.

The commission could make non-binding recommendations to government on student, research and institutional funding. It could act as a price regulator if government conceded a degree of elasticity in student contributions. Its expertise would ground all manner of inquiries currently pursued on an ad-hoc basis.

The commission would move us forward in two crucial ways.

First, it would place political imperatives within a context of expertise and principle, without denying the ultimate responsibility of government.

Second, it would appeal to both sides of politics: a deregulatory diversity agenda pursued through a historic Liberal precedent built on Labor's regulatory reforms, themselves supported by the Coalition. It would give universities strong internal governance and a predictable external environment.

So Menzies and Julia Gillard could hold hands across the decades, reviving an old idea for a very contemporary purpose.

Greg Craven is vice-chancellor of Australian Catholic University. Glyn Davis is vice-chancellor of the University of Melbourne.