FINLAND: When the going gets tough....

One rarely hears talk about redundancies in the Finnish university sector but the University of Oulu in the country's north-west is thinking along those lines. It finds itself in a financial bind largely because of cutbacks in government funding to the tune of nearly EUR9 million a year (about US$12.4 million). The university aims to get its budget back into the black by 2012.

The university has around 16,000 students and 3,000 staff and about two-thirds of its total costs are staff related. It is one of the few Finnish universities to be listed in the Shanghai Jiao Tong Ranking of World Universities. Last year, it ranked second among Finnish universities (in the 303-401 band), after the University of Helsinki (ranked 108th in the world).

Oulu will cut expenditure mostly by reducing the number of administrative and other support staff but a limited number of teaching positions will also be cut. A range of support activities will be centralised, reorganised and some might be out-sourced. Overlapping activities are to be reorganised and cuts will be effected at the main Oulu campus and at the regional university centre in Kajaani about 180 kilometres away.

Negotiations with staff are scheduled for later this month. A number of teaching posts in teacher education, IT and at the language centre will be dropped, as will support staff numbers across the board.

Staff numbers will have to be reduced by 180 in the first stage, which would generate savings of around EUR6 million a year. The university also intends to cut back on facilities.

Staff numbers will be reduced mainly by offering early retirement, through attrition by not replacing retiring staff and by not renewing short-term contracts. Some staff will face redundancy should these measures prove to be insufficient.

Part of the reason Oulu finds itself with a budgetary problem is that government funding has not increased to the extent intended by Finland's legislators. A new salary system introduced to allow staff to be rewarded for their personal efforts has led to a salary cost blow-out at most universities.

Supplementary funding was not provided to meet these increased salary costs. The government also failed to provide supplementary funding to match increases in rental charges for buildings which are paid to a government-owned company.

Universities have also been affected by the government's productivity programme, which has meant that annual funding of about EUR20 million intended for universities has been wiped out by compulsory cuts in accordance with the productivity programme.

Oulu will not be the only university to be forced down this path. The Lappeenranta Technical University made similar noises last year about its potential budgetary problems.

University World News readers will have read about the new Universities Act that came into force from the start of 2010 (click here). Even though Finland's universities are no longer formally part of the government sector, the productivity programme cuts still affected the size of their budgets for 2010 yet the new act was intended to free up the university sector, to allow more autonomous universities to seek private funds.

The government will continue to provide the bulk of funding but that funding is now provided as a monthly grant. In the past, each university was given access to government funds sufficient to cover that day's activities; they did not retain such funds in their own account. Despite the new 'autonomy', the government seems unready to relax the squirrel grip it has had on the universities for decades.

* Dr Ian Dobson is Helsinki correspondent for University World News. An Australian scholar often based in Finland, he is editor of the Australian Universities' Review.