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Latest Trends in University Funding

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Thomas Estermann, Director for Governance, Funding and Public Policy Development at the European University Association tackles the issue of universities’ efficiency and their value for society in a broader European context. The presentation shows the most recent trends in public funding of universities across Europe, including the release of the 2016 Public Funding Observatory, and explore the links between public budgets for universities, efficiency measures and funding modalities.
The full report is available here: http://eua.be/Libraries/governance-autonomy-funding/public-funding-observatory-2016.pdf?sfvrsn=0
and more information about our work in Higher Education and Research Funding can be found here: http://eua.be/activities-services/projects/eua-online-tools/public-funding-observatory-tool.aspx

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Latest Trends in University Funding

  1. 1. Thomas Estermann Director Funding, Governance and Public Policy Development European University Association Porto 6 October 2016 Latest trends in University Funding
  2. 2. EUA Sources » Annual monitoring of trends in public funding since 2008 » 30 higher education systems » Midterm review of European funding programms » Campaign on sufficent, sustainable and simple funding
  3. 3. Latest trends in public funding Cuts on all fronts Higher costs for students Stronger competition for EU money More efficiency Less money for teaching & infrastructure More performance- based funding Stress test for the frontrunners Growing differences between the systems
  4. 4. Focus • Recent changes and outlook • Challenges and Impact • Long-term funding trends
  5. 5. 2015/2016 changes Growth TR (27%), AT (9%), IS (7%), HR (6%), NO (6%), ES (3%), BE-fr (2%), PT (2%), DE (2%) (+1%) HU, LV, NL, SE, SK (-1%) BL-fl, IT, PL, RS Decline UK (2%), IE (3%), CZ (5%), SL (9%), GR (16%)
  6. 6. Mixed Outlook for the ‘Nordic model’ • Some of the ‘frontrunners’ in the North show a slowdown of investment or a negative outlook:  FI has been reducing funding since 2014 and inflationary increases are frozen through to 2019  DK shows negative outlook through approved cuts through 2019  Iceland has still not closed the gap accumulated in the early phase of the financial crisis  In SE the annual growth rate slipped under 1% in 2016  Norway increases 5.6% in 2016, following a temporary slowdown in 2015 year
  7. 7. Challenges • Year on year fluctuations make rational strategic planning for universities very difficult • Discrepancies are growing between the systems in the EHEA and ERA • Reduction in infrastructure investment reduces competitiveness • Growing expectations from European Funding which is under pressure
  8. 8. Impacted areas Teaching ▪ DK reduction 2%/year till 2019 ▪ NL efficency cuts ▪ Decline in funding per student in UK and IE ▪ NO and SE increase in funding per student Research ▪ DK reduction of funding 1.09 % to 1.01% of GDP as of 2016 ▪ IE Programme for Research in 3rd Level Institution has declined by approx. 80% ▪ CZ, PL, SI, SE and UK safeguard or even increase their research budgets
  9. 9. Impacted areas Infrastructure ▪ Several countries reduce investment and expect institutions to fund from other sources, even countries like SE Staff ▪ Layoffs, lower replacement rates and reduced benefits (e.g., DK, FI, IE, IT,..) ▪ Pay rises in LV and SK and staff replacement ratio stabilisation in ES
  10. 10. Shifting costs to students • In 2016, several countries introduced or discussed higher tuition fees for non-EU/EEA students:  FI will charge tuition fees for non-EU/EEA students enrolled in English-taught BA and MA programmes from 2017/2018  Tuition fees for non-EU/EEA students might go up to EUR 12,525 per year in BE-fr (current max. of EUR 4175)  New provisions in CH will allow Swiss universities to charge foreign students significantly higher tuition fees  Discussions on introduction of tuition fees for undergraduate students in IE. • Support for domestic students is reduced in some systems  England expansion of loans and abolition of student support for living costs • Only ES has reported minor increase in funding for students through scholarships in 2016.
  11. 11. Growing competition for limited European funds • Pressure on universities to increase funding from EU sources • The amount of EU funding attracted by a university is one of the elements of performance-based funding in many systems. • Universities find it increasingly hard to obtain EU grants given the oversubscription of EU programmes and record low success rate (e.g., ca. 14% in first 100 calls of H2020). • Reduced public funding for universities affects their ability to keep up the investment in top research staff, support services and infrastructure and thus compete successfully for European funding. • Universities might gradually lose their attractiveness as partners for consortia and collaboration networks, which grow in importance.
  12. 12. Performance-based funding and efficiency • Governments pay closer attention to performance-based funding, efficiency measures and a more active use of output indicators:  Graduate employability is gaining importance in DK and SI  Additional funds were allocated for PBF in Latvia  Efficiency cuts are implemented in NL to reduce indirect cost coverage and optimise academic offer. • EUA’s project USTREAM aims to explore measures pursued by universities across Europe in order to enhance efficiency.  A key success factor for efficiency of higher education institutions is … Please complete this sentence now online!
  13. 13. Please open the following link on your device PollEv.com/fundingforum
  14. 14. Long-term funding trends Key factor Inflation Inflation rate between 2008 and 2015 (*) Data partly sourced from the World Bank
  15. 15. Long-term funding trends Key factor student numbers • Growth in 10 systems • Decline in 8 systems • Decline in particular in Eastern Europe • Growth in particular in North and West, and Turkey NB: Growth in Turkey +285%
  16. 16. Long-term funding trends Key factor economic growth Evolution in public funding to higher education institutions as a percentage of GDP between 2008 and 2015
  17. 17. Long-term public funding trends (2008-2015) I • Public funding to universities was growing in 11 systems. • In 7 systems student numbers were growing faster than public funding. • Frontrunners NO and SE • PT and PL cuts before 2008 and lower funding base • Rest are systems under pressurewww.eua.be/activities-services/projects/eua-online- tools/public-funding-observatory-tool.aspx
  18. 18. Long-term public funding trends (2008-2015) • Public funding to universities declined in 13 systems in Europe • On top of the funding cuts, in 7 systems the student numbers were growing • In 6 systems the decline in funding was faster than the decline in the student body • England special case through tuition fee increase
  19. 19. What is needed • Universities, national and European policy makers need to work closer together and openly discuss and address problems • Funding needs to be aligned with expectations • More focus on communicating that universities help addressing Europe’s challenges like integration, social and economic crises, youth unemployment and unprecedented migration flows • Show universities’ direct economic impact and contributions to society • Reduce growing funding gap between the systems
  20. 20. Exchange and Input Sufficient, sustainable and simple funding for efficient universities POLL RESULTS https://www.polleverywhere.com/free_text_polls/q8fRofmYxYFVVke?preview=true University Efficiency Focus Group Session: TODAY At 17.45 – 18.30 Room: Sala -2 Level -2
  21. 21. Public funding observatory report online now Contact: Thomas.estermann@eua.be www.eua.be @ThomasEstermann / @euatweets

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