Latest Trends in University Funding

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

Key factor Inflation
Inflation rate between 2008 and 2015
(*) Data partly sourced from the World Bank

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%

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

Latest Trends in University Funding

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