Latest Trends in University Funding

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  • Thomas Estermann

    Director Funding, Governance and Public Policy Development

    European University Association

    Porto

    6 October 2016

    Latest trends in University Funding

  • EUA Sources

    Annual monitoring of trends in public funding since 2008

    30 higher education systems

    Midterm review of European fundingprogramms

    Campaign on sufficent, sustainable andsimple funding

  • 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

  • Focus

    Recent changes and outlook

    Challenges and Impact

    Long-term funding trends

  • 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%)

  • 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

  • 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

  • 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

  • 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

  • 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.

  • 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.

  • 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.

    EUAs 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!

    http://www.eua.be/activities-services/projects/current-projects/governance-funding-public-policy/ustream

  • Please open the following link on your device

    PollEv.com/fundingforum

  • Long-term funding trends

    Key factor Inflation

    Inflation rate between 2008 and 2015

    (*) Data partly sourced from the World Bank

  • Long-term funding trends

    Key factor student numbers

    Growth in 10 systems

    Decline in 8 systems

    Decline in particularin Eastern Europe

    Growth in particular inNorth and West, and

    Turkey

    NB: Growth in Turkey +285%

  • 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

  • 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

  • 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

  • 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 Europes 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

  • 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

    https://www.polleverywhere.com/free_text_polls/q8fRofmYxYFVVke?preview=true

  • Public funding

    observatory report

    online now

    Contact:

    Thomas.estermann@eua.be

    www.eua.be

    @ThomasEstermann / @euatweets