New year ushers in new higher education funding formula

Namibian higher education funding will be based on a new formula from the 2016-17 academic year. The country now calculates operational funds based on the number of courses, which translate into credit units, for which a student is registered. This does not mean more money for institutions – it’s all about bringing transparency and equity to funding, said a top official.

In 2013 cabinet approved a new policy for calculating the government subsidy for operational higher education funds such as investing in additional facilities, enrolment and programmes expansion, and for governing tuition fees.

Dr David Namwandi, former minister of higher education, training and innovation, directed the roll-out of the a new three-year funding framework last year.

Namibia lacked clear criteria on how funds were allocated to public higher education institutions and there were no agreed performance indicators, Mocks Shivute, executive director of the National Council for Higher Education, or NCHE, told University World News.

The 10-year-old council is charged with advising the education minister on matters such as the structure of the higher education system and its coordination, quality assurance, access and accreditation.

“In the absence of an appropriate tool for assessing not only the needs versus the mandates of public higher education institutions, but also the level of effectiveness of public funds utilisation, it was not possible to determine whether or not government financing was sufficient,” said Shivute.

The new formula

Namibia has two public higher education institutions, the University of Namibia and the Namibia University of Science and Technology, formerly known as Polytechnic of Namibia. There are also numerous public and private colleges.

Unlike systems that base funding on the number of students enrolled, in Namibia funding is calculated according to the volume of courses taught by an institution.

The workload for each student is measured by the number of courses – and the number of associated credit units – for which the student is registered, said Shivute.

Each public higher education institution is awarded a specific amount of funding for each credit unit. Thus, the unit cost for each credit unit needs to be estimated.

Shivute said the basic cost per credit unit was different, reflecting the different academic burden of each programme stemming from the field of learning and the type of offering – contact tuition, distance teaching and learning, or research and supervision.

“A government subsidy is intended to complement a public higher education institution’s own income. Such subsidies are determined by calculating the difference between an institution’s own resources and its operational costs calculated using the cost per credit unit as the basis,” he told University World News.

So as not to discourage institutions from generating resources, Shivute said the subsidy calculation ignored all own income other than tuition fees, provided that the income was indeed generated by the institution from sources such as research and consulting services provided to industry.

The main objectives

The main objectives of the funding framework were to be an important planning tool for the entire higher education system, to impact positively on predictability, equity and efficiency in the higher education funding process, to subject institutional budget submissions to systematic assessment, and to monitor the utilisation of resources by public institutions.

“The purpose of the funding framework is not to give more money to institutions but rather to ensure transparency and equitability in the allocation of funds. In this process, institutions could receive more or less funding compared to the Medium Term Expenditure Framework estimates.”

Shivute said models made for 2016-18 show that estimations of the government subsidy for operations using the funding framework are slightly lower than what had been planned in the Medium Term Expenditure Framework, but the difference is contracted at the end of the period.

“Estimates provided by the funding framework are not fixed as they basically serve as a guide and an objective basis for discussions with higher education institutions. Any adjustments that can be justified can be taken into account,” he said.

Shivute explained that the framework and use of funds would be monitored on an annual basis through the assessment of the Medium Term Plan and Budget, or MTPB.

An MTPB is developed once a year and covers a three-year period, in line with the government’s medium-term plans. The MTPB drafting process is aimed at linking institutional strategic planning to annual budgeting.

Benefits of the new system

As a planning tool, the funding framework encourages institutions to improve. Institutions will become aware of the factors driving the formula and will know, within parameters, the magnitude of resources they will be allocated over a certain period.

“All public higher education institutions will be treated in the same way and in a transparent manner.

"The funding framework should encourage institutions to improve their performance and achieve national development goals in terms of equity and efficiency,” said Shivute.

The NCHE has also designed a Higher Education Management Information System that will be used to collect data from public and private institutions, based on which subsidies will be calculated and the first-ever Namibia Higher Education Yearbook will be produced.