EUROPE: Less government money but more regulation

Universities across Europe face a future of reduced state funding with a greater degree of government regulation, a European Universities Association conference on its European Universities Diversifying Income Stream (EUDIS) project, heard.

The conference was held at Italy's University of Bologna from 13-14 September.

Universities are successfully tapping other sources of revenue but were also warned about the potential pitfalls of cosying up too close to the private sector.

The balance between public and private funding of universities is changing in most countries and this may be a good development if it helps defend the autonomy of the institutions, Nigel Thrift, Vice-chancellor of the University of Warwick argued.

"Governments are surrounding universities with thickets of regulations and are often intervening to a greater extent than ever before," Thrift told the conference.

He believes there will be inadequate public funding in the UK over the next 10 to 15 years. This change was forcing universities to look elsewhere, Thrift said, but diversification of income sources should not been seen as a bad thing.

"At a time when governments want to tell universities what to do, it is a defence against that tendency. In the UK it is the only way we can retain values which universities hold dear and not simply become glorified schools which, frankly, I suspect some politicians would not be too bothered about."

Warwick had no choice but to seek alternate funding. It suffered severely during the Thatcher government cuts in the early 1980s but became enormously successful in diversifying income. At present it has an income of EUR490million (US$650 million) a year and gets only 23% of its funding in a core grant from the government - this compares with an average of 35% for UK universities as a whole. Warwick also gets other state funds from research councils and through competitive tendering.

Warwick is part of the Russell group of top universities in the UK. It receives the same proportion of core grant funding from the government as Oxford. Cambridge gets less again and the London School of Economics gets only 14%.

"Quite frankly the LSE could go private tomorrow and it would not make any difference," he suggested.

His advice to other universities seeking to diversify income was not to copy anybody else and to be very specific about their strengths and weaknesses. They had to be relevant to society, be entrepreneurial and outward looking, and get momentum going which would attract good people.

The Warwick manufacturing group was a good example. It had been set up in the 1980s as a way to boost the local manufacturing industry, specifically the car industry which was very strong at the time.

But there were other sources of income. Tuition fees, particularly from overseas students were very important. Sources included a science park, an arts centre, a conference park, print and design services, an advertising agency for the education sector, an on-campus supermarket, one of the largest independent bookshops in the UK, a temporary staffing service for university departments and commercial clients.

Tight control over finances was essential, he said. "Getting anything past my financial director is very hard work indeed. We know our costs, down to the last penny. We also have a flat management structure. If a crisis comes along we need to be able to do things very rapidly. This is in contrast to many universities in the UK which have large amounts of hierarchy - we set our face firmly against that".

"We are very entrepreneurial and make no apology for that. It's very good for the university in all sorts of ways," he added.