Universities to lead Europe out of

the crisis – Challenges and

responses

Helena Nazaré, EUA President

and

Thomas Estermann, Head of Unit

Governance, Autonomy and Funding EUA

Structure

I. A Reminder. Challenges/Why university autonomy?

II. The state of university autonomy in Europe/Greece: data – trends – scorecards

III. Funding: Trends and the impact of the crises

IV. Reform processes

…2…

Educate citizens, train researchers / professionals /

innovators / entrepreneurs, supply the high qualified HR

that Europe needs to boost competitiveness.

Diverse missions in basic and collaborative research

Capacity to foster interdisciplinary research skills and

expertise

Embeddedness in cities and regions as components of

social and economic development

Focal points for dialogue and knowledge exchange with

society

International cooperation building upon institutional

historical and cultural links – strengths and capacities

A Reminder(1)

“The overall level of education… of European citizens

constitute a key determinant for european

competitiveness”

“ What matters for good performance is money and good

governance” (Bruegel policy brief – 200.. ,Aghion et All

2008)

Adequate Funding and appropriate governing

instruments (autonomy) are preconditions.

A Reminder(2)

Elements of autonomy

Institutional autonomy is contingent on the diverse cultural, political, legal and historical backgrounds of Europe’s HE systems

All areas and elements of autonomy are related;

Organisation (Governing Bodies and Selection of Leadership), Financial, Staff (Recruitment, dismissals, salaries) and Academic

The Autonomy Scorecard allows to compare different sytems, (Greece does not score high!)

Organisational autonomy - trends

External members are now included in university governing bodies in a majority of systems, though external authorities often remain involved in their selection.

Universities in nearly all systems are free to create legal entities and decide on academic structures.

Rectors are always chosen by the universities, although external authorities often have to confirm the appointment.

Discussion for GR

External candidates for leadership should be possible

Only internal members in governing bodies – other countries have more flexibility. Lobby.

More flexibility to decide on academic structures

…6…

Organisational autonomy – the scorecard

…7…

Financial autonomy – trends

Universities generally have block grant funding

Surpluses can be kept and money borrowed in a majority of systems, but in practice, various limitations still apply.

Universities in most systems are able to own their buildings, but often require external permission to sell them.

The situation is complex, but universities tend to be more free to set tuition fees for MA and non-EU students.

Discussion for GR

Move from line item budget to block grant

Capacity to keep surplus

Balancing effects of financial crisis

Financial autonomy – the scorecard

…9…

Staffing autonomy - trends

Recruitment procedures are less prescribed than before.

In most systems, restrictions still apply to staff salaries, although these are less likely to be due to the civil servant status of university staff.

Staff dismissals and promotions remain restricted in more than half of the systems studied.

The financial crisis has strongly affected staffing policies.

Discussion for GR

More flexibility to recruit academic and administrative staff

More flexibility to decide on staff salaries

Fade out civil servant status

…10…

Staffing autonomy – the scorecard

…11…

Overall student numbers are limited in nearly all systems.

Universities in Europe still have little freedom in choosing QA mechanisms.

Accreditation is still compulsory for BA/MA programmes in a majority of systems.

The language of instruction can be chosen freely in approx. 2/3 of all systems.

Discussion for GR

More freedom to select students

Language of instruction

Academic autonomy - trends

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Academic autonomy – the scorecard

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…14…

…15…

How to balance accountability and autonomy?

Appropriate quality assurance procedures

Participation of external members in institutional decision-making

Financial transparency through full costing

Appropriate reporting (only what is used to make decisions)

FUNDING MODELS AND TRENDS

16

Funding Trends: state of play

On average almost 30% of universities’ funding comes from

additional funding sources

73%

9%

6% 3%

5% 4%

Public funding (national and regional)

Student contributions

Funding coming from contracts with business sector

International public funding

Philanthropic funding

Service-related income17

Great diversity of funding models in Europe

18

30%

35%

14%

19%

2%

UK universities

Public funding

student fees

contracts

services &philanthropy

EU research funding

76%

5%

9%

10%

Austrian universities

Public funding

student fees

contracts

other(EU+philanthropy)

Balance between public and private?

No single model, but dependent on economic situation,

socio-economic environment, culture, etc.

Greatest diversity through fees (varies between 35% (UK)

and 0% (Norway) of total university budget. Often

differentiated fees according to cohort, degree level and

course.

Potential of contracts, services, and philantropy

Efficiency is another aspect of a sustainable funding system

19

Shift from public to

additional sources

possible?

Unequal starting

points also due to

economic crisis!

20

www.eua.be/publicfundingobservatory

10 Figures corrected for inflation Raw figures

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Public funding in 2012 compared with 2008, corrected for inflation

Greek funding situation in comparison

From 2008-2013 : -43 % (Only Latvia cut more)

From 2012/2013 highest cuts in Europe

High inflation in 2008, 2010 and 2011

Outlook?

22

How do other countries deal with it?

Institutions apply cuts themselves

Precondition staffing autonomy and financial autonomy

Impact on cicil servant status

Salary reductions, less holiday, longer working hours, etc.

Incentives to attract other funding sources

Development of differentiated tuiton fees

Efficency measures

Public private partnerships, shared services, etc.

23

Challenges and opportunities

Challenge:

Keep or improve quality

devlop long term vision and reform

investment in future when ressources are scarce

staff development

Opportunities

Restructuring of system

Pressure for reform

Develop benchmark with other countries

Reform processes need to take long term view even if financial pressures are current

24

What can authorities do?

Incentives in public funding to increase private funding

Funding formula

Targeted funding

Performance contracts

Support the development of full costing and financial management in universities

Universities need to have a professional financial management to raise cost awareness

Implement smart funding incentives:

Matched funding schemes including capacity building

Tax incentives for philantropic funding

Other tax incentives for universities

25

What can authorities do - II

Support Leadership development - Key success factor to:

lead change in institution

reinforce strategic approach

implement successful income generation

Human Resource development and professionalisation to develop:

new skills

management capacity

new staff profiles

Support for development of young generation to leadership

26

What can authorities do - III

Support efficiency measures:

Through targeted funding (like Innovation funds UK, IE)

Cooperation through sharing services, equipment, facilities,

ICT

Process improvement (improvement through ICT)

Public private partnerships

Outsourcing and shared services

Public procurement

Data and benchmarking (to drive improvements in efficiency)

27

What can universities do?

1. Integrate income diversification in the overall strategy

2. Identify the strengths & specificities of the university to develop a branding strategy

3. Analyse perspectives for income generation of activities

4. Invest in people, leadership and management

5. Communicate (internally and externally)

6. Change structures and organisation

7. Provide internal incentives

28

Key aspects of implementation

Dialogue among stakeholders

Universities

Relevant public

authorities

Funding bodies/ governl

Other stakeholders

(employers, students, society

at large)

Leadership commitment Coordinated approach

Continuous communication

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Further Information: www.eua.be

Contact: thomas.estermann@eua.be 30

AUTUMN 2014

DEFINE project (2012-2015)

Designing strategies for efficient funding of

higher education in Europe

2013: European mapping study

2014: University managers focus groups

Financially

Sustainable Universities series

Current EUA’s activities on funding