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Spending cuts loom as Egerton rolls out restructuring strategy

Egerton University Vice-Chancellor Prof Isaac Kibwage. [Kipsang Joseph, Standard]

Egerton University has embarked on a restructuring programme aimed at cutting costs an making it financially stable.

Vice Chancellor Isaac Kibwage on Thursday held a session with the media to explain steps the institution was taking to change the way university activities are organised.

First on his priority list, Prof Kibwage issued a notice of intention to declare some positions redundant to cut the wage bill.

He said they are targeting to scrap courses that have failed to attract enough students despite having hired lecturers for them.

“We have so far identified five- degree programmes which we intend to scrap. Lecturers in those departments will have to exit and those qualified for other departments retained,” he said.

“The intention is still there. When we were charged for contempt, we were told if we don’t have money we lay off people. The train has left the station but there are steps to be followed. Our current workforce is at 1,457 people,” he added.

University Academic Staff Union (UASU) has, however, pointed fingers at the management over the looming redundancies.

“It is true we are hiring new staff. Some lecturers have exited like any other institution. Where there are no replacements in the current system, we have to hire new people,” said Kibwage.

The management has also been accused of unfairly targeting union leaders with disciplinary proceedings for leading industrial action among the workers.

“There are rules that govern every institution. The fact that you are a unionist does not allow you to break the rules. They are first employees of the university before they become union leaders,” said Kibwage.

The VC said the restructuring was aimed at making the institution more competitive in the future.

Kibwage noted that the restructuring was necessary even if it would put more strain on the leadership. He exuded confidence that the university will get back on track since the government had expressed its willingness to support the higher education sector.

“Egerton is a government university. No government has ever been defeated. As management we know the government is doing something and a new dawn for all public universities is coming soon,” said Kibwage.

He blamed financial woes of the institution on a deal it had entered with the Kenya Revenue Authority (KRA).

Kibwage said the university pays millions of shillings per month to the taxman to service an accumulated Pay as You Earn (PAYE) debt.

“After the former VC was arrested in 2019 for not remitting PAYE, the management signed an agreement with KRA on how the debt will be paid and this is straining us,” said Kibwage.

Before the agreement, KRA froze the university’s bank accounts as they sought settlement of a cumulative Sh670 million tax debt.

“We are paying the debt at the rate of Sh12.5 million per month in addition to what becomes due to them every month. This is despite under-funding and drying revenue streams,” he said.

Kibwage said that in a month, Egerton receives Sh185 million funding from the national government and raises Sh26 million from other sources including tuition fees paid by students.

“This is against a payroll of Sh240 million per month and other operational costs. We end up with a deficit every month. This is why we are unable to fully fund our payroll,” said Kibwage.

According to him, the 2016 change in policy on students’ sponsorship dealt the university a blow even as government funding continued to dip.

“Self-sponsored students have been a major source of revenue. This revenue stream has been drying up over time. No additional funding has been pumped in to cover the shortfall,” he said.

Kibwage added that despite engaging the university staff and laying bare the financial status of the institution before them, they have continued to pressure the management to pay them full salaries.

“The crisis at Egerton boils down to the union leaders. Instead of engaging the management, they are prosecuting their grievances in court which is their right. They are creating more turbulence,” he added.

The lecturers issued a 21 days strike notice last week demanding full pay from their employer just a day after the students returned from the long December holiday.

“Egerton’s current debt is at Sh9.925 billion. We have tried to manage it. Since I took over, the debt has grown by Sh1.4 billion arising from the deferred pay,” said Kibwage.