Far Eastern Economic Review
15 July 2004
A school is embroiled in a row between the board, parents and teachers which some say could cast a shadow over Singapore’s efforts to position itself as an international education hub
A heated battle between the board of one of Singapore’s premier international schools and teachers and parents could cast a shadow over the city state’s bid to become an international education hub.
The problems at United World College (UWC) of Southeast Asia, an exclusive private elementary and secondary school, began earlier this year when the board announced plans to cut housing benefits and a long-service bonus, or “service gratuity,” paid in lieu of a pension. The cuts, which teachers say will amount to a 20%-30% drop in overall compensation, come at a time when the school is splashing out on new on-site facilities in order to fulfil targets set by the Singapore government as part of the school’s property lease.
Some teachers allege the school was forced to grow too fast, and that its growing pains were compounded by fiduciary mismanagement on the part of the board. Dozens have threatened to resign, and parents and the board have squared off in a battle for control of the board. As the feud drags on, other international schools have been flooded with applications from parents anxious to transfer their children out of UWC after the summer holidays.
The furore could tarnish Singapore’s bid to become an international education hub, some of the protagonists say, because it portrays the government as putting pressure on the school to meet unrealistic targets. The government’s Economic Development Board, however, claims the row is simply a land-use issue and has nothing to do with its ambitions, which it says focus on tertiary institutions. To this end, Singapore has aggressively courted global education players in the last four or five years. Nine universities, including Insead, University of Chicago, Massachusetts Institute of Technology and Shanghai Jiaotong, have set up branch campuses in Singapore.
But Singapore has also offered international schools preferential terms on large plots of land, and has asked them to increase their size. When UWC, which has operated here as part of a British-based not-for-profit education organization since 1970, renewed its lease four years ago, the Singapore government required the college to expand its student enrolment to 2900 by the year 2010, according to the board. The move required a S$40 million ($24 million) building-expansion programme.
“In the last five years, the school has doubled in size, and we’ve had a very large building programme. The board has to constantly look at finances, and the service gratuity kind of stood out,” says Lachlan Hough, a board member.
In 1996, Singapore allowed companies with foreign employees to opt out of its Central Provident Fund (CPF) scheme, and the school offered foreign staff a service gratuity of 25% of their salary, per year of service, when they left–an amount that was then equivalent to the CPF. Singapore has since cut the amount employers must contribute to the CPF to 13%, and the board says it simply decided that it’s time to follow suit.
Hough denies there’s been any mismanagement, or that the school was forced to grow too quickly. “Fee income has also gone up,” he says. The school now has 2500 students, and is in the last phase of its building plan. “We have to be fiscally responsible. We looked at expenses, and 70% of those expenses are salaries,” says Hough.
The school’s total liability for the foreign-staff service gratuities is now at about S$27 million. The school had S$38 million in net assets, including property, as of July 31, 2003, according to financial documents obtained by the REVIEW. But borrowings, including a S$14.5 million provision for the service gratuities, stood at S$44.8 million; the school’s current assets were just S$7.7 million.In an April 12 memo, the board said cutting the gratuity was necessary “to contain an escalating liability and prevent it from affecting the future viability of the college.” But some teachers believe the board effectively borrowed from them to fund the growth mandated by Singapore, and is now cutting that bonus because the school’s debt to staff is piling up. The deferred bonus system, some staff argue, freed up the resources that allowed the school to undertake its new lease and all it entailed.
But the lease is just one issue; some parents and staff feel the problems were compounded by bad management. They cite, for example, construction of a S$4.9 million underground garage that was meant to include a bus drop-off point, but in the end could not accommodate large buses.
“There exists a deep mistrust of the board as currently composed. This mistrust is based on an extended record of inappropriate governance that has lacked transparency for many years,” the teachers wrote in a letter to the parents.
Tensions at the school are running high. The headmaster resigned on May 11, stating in a letter to parents that the crisis was about much more than wage negotiations. Many teachers have threatened to resign, or not renew their contracts when they expire. On June 28, teachers invited parents to the school to discuss its problems; the board deemed it an unauthorized meeting and refused to let it go ahead. But it has agreed to establish a special body to carry out a governance review.
Nobody connected with the school is talking, from the teachers to the parents, who fork out about S$22,000 a year per child in tuition fees. But the government asserts that the school set its own pace for growth, and that the issue over the lease is simply one of land use in a land-scarce city. A spokesman for Singapore’s Urban Redevelopment Authority (URA) says it wanted to scale down the school’s site to 9.86 hectares when its lease was renewed in 2000 because the original 17.3 hectare site was “deemed to be too excessive.”
The school asked for 11 hectares, and told the URA that it planned to increase its student population, according to the URA. These plans could hang in the balance. “It’s upsetting. This is a good school, but you’ve got to wonder,” said one parent, who’s planning to put children into another school next term.