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

1. Thomas Estermann
Director Funding, Governance and Public Policy Development
European University Association
Porto
6 October 2016
Latest trends in University Funding

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. 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. Focus
• Recent changes and outlook
• Challenges and Impact
• Long-term funding trends

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. 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. 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. 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. 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. 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. 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. 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. Please open the following link on your device
PollEv.com/fundingforum

14. Long-term funding trends
Key factor Inflation
Inflation rate between 2008 and 2015
(*) Data partly sourced from the World Bank

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. 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. 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. 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. 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. 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. Public funding
observatory report
online now
Contact:
Thomas.estermann@eua.be
www.eua.be
@ThomasEstermann /
@euatweets