Lincoln University Briefing to Incoming Minister

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1 Lincoln University Briefing to Incoming Minister Hon. Chris Hipkins, Minister of Education December 2017

2 Lincoln University Briefing to Incoming Minister Eke panuku, eke Takaroa Achieve greatness, overcome all obstacles and strive for excellence

3 Table of Contents Message from Chancellor, Steve Smith 2 Message from Vice-Chancellor, Professor Robin Pollard 3 Lincoln University is changing, playing to its strengths 5 Strengthening has occurred at a fundamental level, 5 and some change is well established Lincoln has a strong platform and we are 6 becoming stronger Lincoln delivers value to the entire primary sector 6 We are delivering the most employable students of any University 8 We have much work to do to redevelop the University s 8 physical environment Our organisational culture is strengthening 9 We are reframing Lincoln as a world-leading specialist university 9 in the land-based economy Collaboration is the key to Lincoln s future 10 We still have much work to do 12

4 2 December 2017 Lincoln University Briefing to Incoming Minister Message from Chancellor, Steve Smith Dear Minister On behalf of Lincoln University s Council, its staff and students I extend a warm welcome to you as the Minister for Education. You assume responsibility and leadership for education in New Zealand during an exciting time for the sector and for Lincoln University in particular. Over the past 18 months, the University Council and senior management have instituted significant organisational change, a process we are now accelerating following publication of the Transformation Board Report. The report is a ringing endorsement of Lincoln University s significant role, not just in the national economy but in the delivery of better outcomes in land, food and ecosystems in New Zealand. I note with interest the Government s ambitious goals for education, the agriculture sector, the environment and climate change impacts and I strongly believe Lincoln University will play a critical role in achieving the Government s objectives. With Government funding, and with AgResearch, we are establishing a joint research and teaching facility, the first stage of an innovation precinct on-campus dedicated to growing our primary sector economy. Early and enabling works began this year and the joint facility will be open for business in This facility will connect the agri-food and technology industry with science to enable industry-driven innovation. It will also provide Lincoln University students a world-class educational experience, with the opportunity to study and work alongside scientists to conduct ground-breaking research in landbased science. Since its establishment in 1878, Lincoln University has been dedicated to bringing a scientific and research-led approach to agriculture, with an overall objective of lifting productivity in the rural sector. Today and into the future, our remit is much broader. We are focussed on using our strengths in research and learning, and leveraging the scientific strengths of our partners, to address relevant challenges in sustainable food production, efficient land-use, restoring and protecting water sources and fortifying the resilience of our eco-systems to anthropogenic and other impacts. Our vision is to become a globally ranked top-five university in agriculture, and a top five New Zealand university, which we believe is achievable in the medium-to-long term. I look forward to working with you and your team as we advance the interests of Lincoln University and the broader interests of the education sector and public agenda. Yours sincerely, Steve Smith Chancellor

5 December 2017 Lincoln University Briefing to Incoming Minister 3 Message from Vice-Chancellor, Professor Robin Pollard Dear Minister I look forward to meeting with you and your team to discuss Lincoln University s strong progress since we started a programme 18 months ago to stabilise and strengthen the University for its future. The Refreshing Lincoln programme has two streams: A fitness workstream to improve organisational culture and financial performance; and a transformation workstream to explore and develop strategic options and opportunities through partnerships with public and private organisations in the education and land-based sectors. I am pleased to report the fitness workstream has restored financial health and Lincoln University has already surpassed its 2017 targets to achieve an operating surplus of $6.1m through to the end of October. The full year EBITDA is forecast at $12.9m, a 122% improvement on Early and enabling works have started on the joint facility, in which we are partnering with AgResearch. This is the first building in our collaborative precinct and it will be open for business in We have commenced a considerable reorganisation of our faculties and programmes to refocus our multidisciplinary strengths to initiatives of importance to the New Zealand economy. Course offerings are being tailored to ensure they better meet student and employer demands and next year s prospectus will reflect the future academic direction we are taking. New programmes in 2018 include additional majors in Water Management, Event Management, Tourism Management, Environmental Management, and Parks and Outdoor Recreation. The most recent milestone in our change programme was the release in November of the Transformation Board report. The Council engaged the Board in March this year to undertake an independent assessment of Lincoln University s current state and future direction, and re-define its value proposition. The Transformation Board s recommendations will greatly assist the University with the implementation of forthcoming priorities. We are clear about what we need to do to achieve our goals and we have started work on initiatives covering research, teaching and learning through which Lincoln University can be a globally significant thought leader in land, food and eco-systems. Yours sincerely, Professor Robin Pollard Vice-Chancellor Lincoln University

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7 December 2017 Lincoln University Briefing to Incoming Minister 5 Lincoln University is changing, playing to its strengths The world faces pressures from a growing global population, changing consumer demands and greater environmental consciousness. New Zealand s economy and future work force requires the skills to address these challenges. One in five New Zealanders are employed in the agri-food sector. Of total goods exported in the 2016 calendar year, more than $29 billion (60%) were agri-food, up from 57% in Lincoln is changing to meet these new challenges by adapting along its foundational axis of making a strong contribution to the growth of New Zealand and its international economy. We are using our specialist strengths in land, food and eco-systems, and leveraging the scientific strengths of our research partners to provide real-world solutions to the present and future challenges in this domain. Our land-based economy is as varied as the natural environment, from which it is formed, therefore it is not surprising that the change process required of Lincoln is equally complex. Strengthening has occurred at a fundamental level, and some change is well established Like the Refreshing Lincoln programme which has a focus on continuous improvement. Over the past 18-months this programme has achieved a great deal in stabilising and strengthening the University, and preparing it for its future success. The programme has already delivered a rejuvenated Lincoln University Academic Board ensuring that high-quality standards of learning, teaching and research are maintained across the University. Terms of Reference were reviewed in 2017 and new members have been announced. We re making our academic programmes more attractive and improving the way our disciplines and programmes are organised, with a view to focussing our multi-disciplinary strengths across initiatives of importance to New Zealand. Early and enabling works for the new joint facility with AgResearch are complete and main construction will commence early in the New Year. We are working hard to secure the sustainability of our improved financial performance. The University now has a clear financial strategy and sustained teamwork at every level of the organisation. This resulted in a modest financial surplus in 2016 (the first in 10 years), and improves Lincoln s financial position for the years ahead. As at end October 2017, we have achieved earnings before interest tax depreciation and amortisation (EBITDA) of $12.5 million (13.1%) and an operating profit of $6.1 million (6.4%). The full year EBITDA is forecast at $12.9m (10.7%), which presents a 55% improvement from the budgeted EBITDA. This also represents a $7.1m improvement on the $5.8m EBITDA achieved in The full year forecast operating surplus is $5.8m (4.7%) which reflects an improvement on the $1.3m (1.0%) 2017 budget surplus and the $0.5m surplus achieved last year.

8 6 December 2017 Lincoln University Briefing to Incoming Minister Our financial stability has returned and our key financial indicators for are: Total revenue is expected to grow from $121m in 2017 to $182m in 2026, which represents a 50.4% increase over 10 years at an average of 5.6% per year. EBITDA to total revenue is projected to reach 11.9% in The current forecast shows the net operating surplus increasing to $8.8m in 2026 at 4.8% of total revenue. Lincoln University/AgResearch Joint Facility depreciation ($4.7m) has a significant adverse impact between 2020 and Operating cash flow looks positive, increasing steadily from $8.0m (107%) in 2017 to $22.5 million in 2026 (115%). Cash balances are expected to reduce from $41.8m at end of 2016 to the low point of $14.7m at 31 December 2019, then increasing to $29.2m by There are insurance receipts in these forecast balances, with Crown funding of $65.0m included in 2018 and $15.0m for the Joint Facility capital project included in Lincoln has a strong platform and we are becoming stronger In QS world university rankings, Lincoln jumped 24 places from last year, placing in the top 1-2% of universities worldwide. Lincoln s staff continue to lead results-driven projects across a broad range of topics including: How Māori knowledge can improve New Zealand biosecurity Increased crop yield and better animal performance Helping farms adapt to climate change Helping China establish a national agency to manage its protected areas The effects of altitude training in athletes. Lincoln delivers value to the entire primary sector The many research projects we undertake on campus and beyond span our key disciplines, contributing thought-provoking insights and far-reaching benefits for our teaching programmes, industry, the environment, and the wider academic and research communities. Our demonstrated innovation adds value across many sectors, including agribusiness, land and water, food, beverage, and dairy. Delivering this type of research is possible because of the University s highly skilled, academic and professional staff who are able to find a healthy balance between discovery and application. Some of our most important new research projects and initiatives have been undertaken as strategic collaborations, highlighting our commitment to addressing some of New Zealand s most significant future challenges. Highlights include: The New Zealand China Water Research Centre: Facilitates collaborations between New Zealand and Chinese scientists from multiple organisations to mitigate water contamination, safeguard water quality and increase water use efficiency. One of three centres funded by the Ministry of Business, Innovation Employment (MBIE), it is hosted by Lincoln, in partnership with AgResearch, Landcare Research, Plant & Food Research, Lincoln Agritech, and the University of Otago.

9 December 2017 Lincoln University Briefing to Incoming Minister 7 Forages for Reduced Nitrate Leaching programme (FRNL): A DairyNZ-led collaborative research programme that combines the expertise and resources of DairyNZ, Lincoln, AgResearch, Plant & Food Research, the Foundation for Arable Research, and Landcare Research. The six-year programme aims to reduce nitrate leaching losses by 20 percent by delivering proven, adoptable and profitable pasture and forage crop options. Māori Biosecurity Network: Te Tira Whakamātaki (TTW): Evolved from Lincoln s Vision Matauranga MBIE programme and now exists as a network of Māori scientists (plant pathologists, soil chemists, biosecurity officers, indigenous sociologists), policy makers, politicians, kaitiaki, iwi leaders and whānau who are dedicated to ensuring Māori have a voice and are able to participate in New Zealand s biosecurity system. The network provides technical biosecurity support and advocacy to whānau, hapū and iwi. Unlocking Export Prosperity from the Agri-food Values of Aotearoa New Zealand: A fiveyear, $4m research programme aims to increase the value of New Zealand s agri-food exports. The research will test the conjecture that New Zealand agri-food production systems across the primary sector can deliver combinations of physical, credence and cultural attributes which are highly valued by consumers in major global markets. The research will also investigate which attributes are most valued in different markets and can produce the highest returns to New Zealand producers. Led by Lincoln University s Agricultural Economic Research Unit (AERU), the programme will be guided by a partnership with the Te Hono Movement and by an advisory board of both public and private sector industry leaders. Lincoln Agritech: A Lincoln University subsidiary, Lincoln Agritech, has released a ground-breaking new optical sensor solution, called HydroMetrics Nitrate GW50 for monitoring groundwater nitrates in real time. We are also involved with a number of National Science Challenges including Our Land and Water; New Zealand s Biological Heritage; Building Better Homes, Towns and Cities; Resilience to Nature s Challenges and Science for Technological Innovation. The virtual Lincoln Hub that was established back in 2012 has already begun sprouting innovative responses to challenges faced by the land-based sector. Developed between Lincoln University, DairyNZ and three Crown Research Institutes (AgResearch, Landcare Research and Plant & Food Research) the Lincoln Hub brings together the Southern Hemisphere s largest cluster of specialist land-based researchers and academics. Lincoln Hub partners are organising their research and teaching capabilities into themes: A. Increase sustainable production by accelerating productivity gains within environmental limits; B. Understand land, water and atmosphere by enabling land-use management in harmony with community expectations for environmental quality and customer expectations for product integrity; and C. Protect New Zealand s biological heritage by characterising and monitoring biota, ecology and ecosystem services, and managing pests, diseases and weeds. We will continue to nurture emerging researchers as they carry out their world-class projects, germinating innovation across the entire primary sector. This is achievable for Lincoln as we receive the highest amount of external research funding per staff member of all New Zealand universities: in total, $29.4 million externally funded and a further $10.1m PBRF per annum.

10 8 December 2017 Lincoln University Briefing to Incoming Minister We are delivering the most employable students of any University Lincoln enjoys the highest employment rates of all New Zealand universities and our own survey of graduates from the Lincoln class of 2016 showed the vast majority (93%) of those employed were in career-related positions. Real world learning is fundamental in delivering work-ready graduates, which is why practical work is an integral component of our programmes through formal internships across a range of industries. This is enabled through: 1. The formal industry accreditation that Lincoln has with New Zealand Institute of Valuers, New Zealand Green Building Council, New Zealand Planning Institute (NZPI), Pacific Rim Real Estate Society (PRRES), Property Council New Zealand, Royal Institution of Chartered Surveyors (RICS), Urban Allotment Gardens, the Valuers Registration Board (VRB), Chartered Accountants Australia & New Zealand (CA ANZ), CPA Australia, and the Association of Chartered Certified Accountants (ACCA). 2. Our nationwide portfolio of farmland owned by Lincoln for teaching/research and the sharing of best practise with the primary sector. Our major farms include: a. Lincoln University Dairy Farm a 180ha commercial demonstration farm managed by the South Island Dairying Development Centre. It operates as an irrigated, system 3 dairy farm. b. Lincoln University Research Dairy Farm a 55ha property that trials concepts for potential commercial use. c. Mt Grand a 2127ha high country station located in Central Otago. It currently runs fine wool merino sheep and could expand into tourism research and education. The station is held in trust, with the University as the sole administrator. Profits help to fund postgraduate scholarships. d. Ashley Dene Farm a 355ha property located about 15km west of the Lincoln campus. In 2016, a 190ha Research and Development campus was created on the farm to research improvements for the profitability, environmental and welfare performance of dairy and livestock farming systems. We have much work to do to redevelop the University s physical environment Our main campus was damaged extensively during the 2010 Canterbury earthquakes requiring temporary and renovated buildings to allow normal University activities to resume. However, the effects of the earthquakes on our campus created the opportunity to develop a world class campus responsive to blended learning and integrated programmes required by the modern world. $41m of claims were settled in 2016 with the insurer, and a further 12 buildings are still to be settled. After earthquake related costs, the University is left with a pool of $42.5m from the $65m received to date. The University filed a statement of claim in the High Court on 4 February 2017 for the remaining 12 buildings, historical paid expenses and outstanding business interruption insurance.

11 December 2017 Lincoln University Briefing to Incoming Minister 9 Our organisational culture is strengthening We re enhancing our organisational culture by establishing solid change management principles to ensure that transformation activity is underpinned with policy, process, tools, technology, infrastructure and commercial constructs to facilitate and champion new ways of working. This includes earmarking $1.1m for strategic appointments in Māori advancement fully imbues the process. Our Poutama Whenua aims to deliver a stronger Māori workforce including Māori leaders through collaborative internships and employment pathways with our strategic stakeholders. Whenua Arotake Akoranga (Academic programmes) is our plan to embed Māori content within all programmes, and has already been established in some programmes. We introduced the Whenua Strategy in 2013 to inform Māori education, research and relationships with tangata whenua and this strategy was reviewed this year. It includes six pou being implemented across the University and supplements initiatives that support Māori students at each stage of their university studies. The Motu Strategy seeks to achieve the same outcomes for our Pasifika students. We are reframing Lincoln as a world-leading specialist university in the land-based economy Technology is changing the way the land-based economy progresses and Lincoln is an important gateway to developing the value of New Zealand s primary sector exports with better environmental outcomes. The Transformation Board report affirms the important contribution the University makes to New Zealand s land based sector and sets out a clear direction for the future. Our ambition is to be a globally-ranked top-five university in agricultural areas and a top five university nationally, as well as ensuring New Zealand remains at the forefront of agri-food innovation worldwide. We are cultivating a range of initiatives to improve our attractiveness to students. These include: Improving our student experience. We are mapping the student journey to identify improvements and ensuring this is delivered through a Student Experience Board. This Board includes students, academic and support staff; Expanding partnerships with meaningful collaborations. Staff members and students liaise regularly with a range of employers and stakeholders from land-based industries, regulatory authorities and research institutes both public and private; Diversifying our recruitment channels. Our student recruitment campaign for the coming year confirms the viability and strength of Lincoln. This campaign utilises our alumni and strong relationships with organisations such as Young Farmers and the Primary Industry Capability Alliance; Growing international revenue. Almost 35% of our students are international, coming from 71 different countries. International EFTS have increased by 8.4% to date in 2017, compared to 2016; We re increasing partnerships with leading international Universities to boost Lincoln s global reputation and help us cater to a predicted 62% increase in international students over the coming decade;

12 10 December 2017 Lincoln University Briefing to Incoming Minister Enabling a supportive environment. We have a range of student support systems including weekly peer-assisted study sessions (PASS), which senior students run as part of our core first year courses. Other support mechanisms help transition first in family and those from disadvantaged backgrounds into university. To ensure that we continue to provide top-quality educational land-based programmes to both domestic and international students, we will make evidence-based decisions regarding the ongoing viability of programmes and courses, using the 5As matrix below. To date, all undergraduate programmes have been ranked using the 5As criteria. Acceptability Accessibility Accreditation Affordability Appropriateness 5As Definition Does the programme have an identified market appeal with prospective students? Will prospective students be able to access the teaching and learning opportunities presented by the programme? Is the programme formally accredited? Does the programme positively impact our international ranking and student barometers? How does the programme fare in the market in terms of cost, with respect to our current portfolio and similar offerings by other institutes? Does the programme fit in our portfolio as a specialist land based university? Will the programme lead to employment outcomes and at the right level? We have been addressing course offerings to ensure they better meet student and employer demands. Beginning in 2018, Lincoln students will have greater course flexibility enabling them to meet the innovation demands of the land-based sector. A range of new programmes will allow individual course choices, including the introduction of five transferable majors, to add further breadth and depth to students qualifications. The new majors include Water Management, Tourism Management, Environmental Management, Event Management, Parks and Outdoor Recreation. This means a student studying Commerce or Agricultural Science can add on a Major in Environmental or Water Management or Parks and Recreation. Lincoln is the only university in the country that has these combinations ensuring: The Department of Conservation will have work ready young people to manage its conservation and tourism estate and achieve Predator Free 2050; Lincoln graduates in commerce or science will have a deep understanding of the management of water and the environment to create opportunities for the future and to solve problems. The University has also built depth in its Commerce by strengthening its majors in supply chain management and global business. It is also introducing a Master of Professional Accounting (CPA) Lincoln is the first and only approved integrated course provider for CPA Australia in New Zealand. Collaboration is the key to Lincoln s future Our focus over the coming years is to strengthen connections with industry to support innovation and enhance our contribution to the land-based sectors. These relationships also provide Lincoln students the opportunity to form professional relationships during their tertiary education. The University enjoys established relationships with Dairy NZ, Beef+Lamb, the Foundation for Arable Research, PGG Wrightson, Pioneer, Ravensdown, AgResearch, Plant & Food Research, Landcare Research, regional authorities, and the Department of Conservation.

13 December 2017 Lincoln University Briefing to Incoming Minister 11 Facilities from ANZCO Foods and Yili Dairy are embedded in the Faculty of Agriculture and Life Sciences for research and development. Lincoln University and AgResearch have formed a limited partnership to build the jointly-owned Lincoln University/Ag Research Joint Facility on the Lincoln campus. This foundational building will be the first physical structure in our collaboration precinct, and is due to open in This facility will catalyse multi-disciplinary and multi-organisational collaboration on a significant scale, driving innovation and increasing responsiveness. Lincoln students will benefit from University-CRI collaboration in science clusters, in particular, CRIs operating through the Lincoln Hub will support more PhD fellowships in their externally-funded research programmes. The project requires capital investment of $206 million for a 27,000m 2 facility and is due for first occupancy in An implementation business case will be submitted for formal IQA in January, and then once building prices/contractual arrangements have been finalised, submitted to the Minister for approval in March 2018; Long-term (10-year) financial forecasts that demonstrate affordability have been developed as well as a comprehensive risk management plan; Lincoln University s planned investment includes capital funding from the Government of up to $85m (approved by Ministers in June 2017). AgResearch s planned investment is set out in its Future Footprint business case (2015); Detailed design is due for completion in December At each design stage, project costs have been reviewed, to ensure the project stays within the agreed budget envelope of $206m.

14 12 December 2017 Lincoln University Briefing to Incoming Minister We still have much work to do The recent Transformation Report clearly identifies a considered approach for Lincoln to implement extending the progress already made over recent years. This includes five strategic themes as well as further consultation and collaboration to shape our vision. The University Council has formally accepted the report, and an interim working group has been established with representation from Council and senior management to work through priorities for implementation. This group will report back in March There is still much to be done. Fortunately, our small size provides us the agility to respond to the changes we need to make. Collaboration, both within the University, and with current and future partners, and indeed all our stakeholders, will be the key to our future success. As we move forward we are committed to engaging closely with all our stakeholders, together with potential partners to help shape our success and achieve mutual advantage. We will be actively pursuing opportunities to forge new partnerships in future.

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