EUROPE: EUA warns over impact of economic crisis

The economic crisis has affected European higher education systems in different ways and at different stages of the crisis, but the ensuing cuts are likely to lead to sweeping changes to higher education systems around Europe, according to a report by the European University Association.

Those changes include the introduction of tuition fees, and the attachment of conditions or accountability requirements to funding in ways that will restrict university autonomy and hinder their ability to cope with the crisis, the report warns.

"This has given public authorities increasing power over universities, which can have counterproductive effects as it can significantly contribute to reducing universities' autonomy and their capacity to manage their own funds freely," the report says.

Some countries such as Norway and France have benefited from stimulus packages provided by their governments at the beginning of the crisis, the report says, but the economic crisis has left few higher education systems unaffected.

"While institutions in most countries expect further - and possibly deeper - cuts to come in the forthcoming months and years, some countries, such as the United Kingdom, prove that cuts are likely to have a significant restructuring effect on higher education systems around Europe," the report said.

The full effects may not be seen immediately since austerity measures tend to hit higher education budgets after a delay due to the use of budgeting periods. But, since 75% of European universities' financial structures are reliant on public funding, cuts in government spending can have a big impact, the report says.

Severe cuts in public spending on higher education were first seen in Latvia where a 48% cut at the start of 2009 was followed by an 18% cut at the start of 2010, forcing the government to consider structural reforms.

Italy's public spending on universities is expected to be slashed by 20% in 2013, but the cut will also reduce income from tuition fees, since universities are forbidden to allow fees income to rise above 20% of their public funding. The EUA said some 25 universities in Italy already face default in the near future and wide-ranging reforms have been passed, which will affect the way universities are funded.

Also on the critical list is Greece, where universities have been set a target of cutting academic and maintenance budgets by 30%.

The latest country to announce severe cuts is the United Kingdom, where 40% budget cuts in England will include up to 80% cuts in the teaching budget, a loss which the government expects to be covered by the raising of tuition fees for students, which will be allowed to triple to £9,000 (US$14,285).

A lower level of cuts, between 5% and 10%, has been set in Ireland, Estonia, Romania and Lithuania. In Eastern and Southeastern Europe, however, the trend has been for cuts of less than 5%, for example in Czech republic, Croatia, Serbia and the Former Yugoslav Republic of Macedonia.

By contrast the Nordic countries - Norway, Sweden, Finland and Denmark - and the Netherlands, Poland and Switzerland have either avoided cuts altogether or faced only minor cuts.

But in some cases the low level of cuts masks other financial pressures stemming from increased student numbers, particularly in Norway and the Netherlands.

Bucking the trend altogether is France, where the announcement of a national loan has seen higher education spending increase significantly, particularly in teaching and research, with up to EUR27 billion (US$36 billion) earmarked for investment in improvements in quality, developing research and creating or revamping university campuses of excellence in 2010. A budget increase of up to EUR4.7 billion is planned for 2011 to support career personnel, university reform, student social policy and research.

The German federal government has also pledged to increase investment by EUR2.7 billion through its German Excellence Initiative in 2010-15 and increase its funding for the Innovation and Research Pact by 5% per year until 2015. But these gains may be offset by cuts in funding by Länder (state governments).

According to the EUA analysis teaching has been affected by austerity measures more than research, particularly in the UK, Estonia, Latvia, Hungary and the Flemish community in Belgium.

Research has been proportionately more affected than teaching in the Netherlands, Spain and Austria. But in some countries it has been specifically protected or targeted at particular areas of national priority. For instance in the UK science, technology, engineering and mathematics has been ring-fenced while direct funding for the arts, humanities and social sciences has been removed.

The EUA warned that public funding is increasingly subject to conditions to its allocation or accountability requirements.

"Such developments are worrisome as they can hinder universities' capacity to overcome the crisis successfully."

It says the monitoring of the impact has clearly shown that universities' ability to respond effectively to the ongoing economic situation has largely depended on the level of their institutional and, especially, financial autonomy.

"In this sense autonomy is seen as the prerequisite to overcome the crisis successfully by allowing universities the freedom to allocate their funds strategically, and protect those areas that are crucial to the fulfilment of their institutional missions."

Universities are also facing pressures from growing demand for higher education, which is exacerbated in times of rising unemployment.

In many countries this has caused reduced spending per student, sometimes even when universities have not experienced direct cuts to their budgets, and presents higher education systems with a dilemma over how to maintain the quality of higher education, the report says.

The solution in some countries, such as the UK, has been to place a cap on student numbers in 2010-11. By contrast Ireland is fostering wider access by funding re-qualification schemes for the unemployed.

The financial pressures have brought an increased threat of course closures and departmental or institutional mergers in some countries and staff cuts or freezes and pay cuts. In Greece, Ireland, Spain, Portugal and Latvia university staff have been affected by salary reductions meted out across the entire public sector.

The chill wind of austerity has also broken resistance to tuition fees in some of the countries where exclusive public funding of universities has been most staunchly defended, including Sweden and Finland.

The full report is available here