Presentation at OECD webinar on 15 November 2021 providing an overview of performance agreements in Finland

1. International Knowledge
Exchange Webinar on
Institutional Performance
Agreements in Higher Education
Maarit Palonen
15.11.2021

2. 1200 km
25 % of population
13 Universities
BA
MA
Doctoral training
Scientific research
156 000 students
22 Universities of Applied
Sciences
BA
MA
RTI
149 000 students
12 research institutes

3. Public funding for higher education institutions
2017
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1.51
0.05
0.00
0.50
1.00
1.50
2.00
2.50
3.00
%
of
GDP
Public Private

4. Public funding for higher education and research
2021 (million euros)
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In addition, private foundations (~ €200m) and EU funding (~ €150m) are important sources.
The Academy of Finland – Finnish Research Council also funds, e.g, research done at university hospital and international research infrastructures.

5. Core funding for HEIs
• The Finnish Parliament yearly decides the overall amount of the core funding allocated to
the Finnish Universities (for the whole sector) and to the Finnish UAS (for the whole sector)
• Approximately 1,7 billion € (2021) allocated between universities using the Ministry of
Education and Culture’s funding model
• Core funding from the Ministry comprises about two thirds of the total funding of the
Finnish universities (on average)
• Approximately 830 million € (2021) allocated to UAS using the Ministry of Education and
Culture’s funding model
• Core funding from the ministry comprises more than 80 % of the total funding of the
Finnish UAS (on average)
• Other funding sources for example Academy of Finland, Business Finland, foundations,
companies, international funding (EU etc.)
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6. Core funding models of the HEIs’
• HEIs are mainly funded based on their achieved outputs
• Future oriented strategic funding
• All indicators calculated using 3-year averages
• When allocating funding for the year 2021, most of the indicators are averages
from the years 2017-2019
• Three-year averages and slowly changing indicators like degrees results in
moderate and predictable changes in funding. This acts in practice as ”core”
element of the funding model.
• Funding allocated to HEIs in a lump sum
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7. Universities Core Funding From 2021
24% Other
education and
science policy
consideration
s
34% Research
42% Education
Bachelor’s degrees and Master’s degrees
• Master’s degrees 19%, Bachelor’s degrees 11%
• Coefficients: graduation times, multiple similar degrees, fields of education
• Funding up to the agreed target (Master’s degrees)
30%
Continuous learning
• ECTS based on cooperation 1%
5%
Student feedback
3%
Number of employed graduates and quality of employment
• Number of employed graduates 2%, graduate tracking 2%
4%
PhD degrees
8%
Scientific publications
• Refereed scientific publications: Rating of publications Level 0 (coefficient 0.1), Level 1 (1), Level 2 (3) and
Level 3 (4)
• Other publications: 0.1 • Coefficient for open publications: 1.2
14%
Competitive research funding
• International competitive research funding
• National competitive research funding and corporate funding
12%
Strategic development
• Part A. Strategecy of the University, implementation of the strategy, profiling, internationalisation
• Part B. National education and science policy aims
• Emphasis on part A
15%
National duties
• Special national duties, teacher training schools, National Library of Finland, University of Arts
9%

8. Universities of Applied Sciences Core Funding From 2021
5%
Other education and R&D
policy considerations
19% Research and Development
76% Education
Strategic funding
• Part A. Strategy of the UAS, implementation of the strategy, profiling, internationalisation
• Part B. National education and R&D aims
• Emphasis on part A
5%
Bachelor’s Degrees
• Coefficients: graduation times, multiple similar degrees, fields of education
• Funding up to the agreed target
56
%
9%
Number of employed graduates and quality of employment
• Number of employed graduates 3 %, graduate tracking 3 %
6%
Student feedback
3%
Degrees in vocational teacher training
2%
External R&D funding
11% Publications, public artistic and
design activities, audiovisual
material and ICT software
• Coefficient for open publications 1,2
Master’s Degrees
6%
2%
Continuous learning
• ECTS based on cooperation 1 %

9. Performance agreements are a tool for steering
the system – among others
• Legislation (universities, UAS, Academy of Finland)
• Performance agreements negotiated and agreed between the HEIs
and the Ministry (covering 4-year periods – now 2021-2024)
• Steering by funding (core funding model, targeted funding of mergers
and strategic cooperation) – integrated into performance agreements
• Steering by information: Joint events and regular informal contact
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10. What goes in the performance agreements?
• The institution’s overall strategic objectives, choices and profile –
situated within Finland’s national strategy
• Areas of strength and emerging fields
• Specific development objectives with related monitoring indicators
• “Degree objectives” = objectives for numbers of graduates by broad
field and level
• Indicative core funding for 4 years and specific allocations for
strategy-based funding
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11. How is performance monitored and what happens
if goals are not met?
• The HEIs are expected to present correct information on their
performance and finances in a way that enables their progress be
evaluated against the set goals.
• Development is annually monitored through indicators which gauge effectiveness
and quality
• No explicit financial consequences: results achieved in each 4-year period
can influence future negotiations
• In the event of a problem, the Ministry decides to have a specifying
discussion with the HEI with a view to revising the level of strategic
funding previously decided.
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12. What have we learned?
• Higher education institutions must have a real opportunity to attain the
objectives.
• More radical, quicker and more effective measures are needed than before.
Steering must recognize this development and be flexible in this sense.
• A key element in the steering is mutual trust and open interaction between
different actors. Higher education institutions emphasize the importance of
interaction and openness.
• Efforts have been made to develop steering and agreements in a direction that
enables higher education institutions to diversify and profile. HEIs wish for more
elements emphasizing cooperation and quality in the agreements. They would
also like to see more attention be paid to the longer-term trends.
• In the future, it will be important to continue with the reform, including
diversification of the funding base and the promotion of digitalization.
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