Funding for Europe’s universities rising, but not enough

Governments have increased funding for European higher education over the past decade but this recovery is not happening fast enough to produce a catch-up effect, according to the European University Association (EUA). This was one of the main trends in university funding presented at the EUA’s Fourth Funding Forum, held in Barcelona, Spain on 18-19 October.

There is also significant variation between countries in the rate of increase. Between 2008 and 2017, countries including Norway, Sweden, Denmark, Germany and Poland saw their funding increase by over 20%, while others, such as Greece, Spain, the Baltic nations, Serbia, the UK and Ireland, experienced cuts of 20% or more.

This was one of the main findings of the EUA’s 2018 Public Funding Observatory, due to be published in report form in January 2019 and previewed at the forum. The figures do not describe a clear regional trend, but “in Southern and Eastern Europe, you have more systems which have cut funding, although there are always exceptions – in Poland they are investing whereas Ireland has cut”, said Thomas Estermann, the EUA’s director for governance, funding and public policy development.

In order to get a more accurate picture of what this means for university budgets, you need to tally investment trends with trends in student numbers.

Doing so has enabled the EUA to classify countries’ higher education systems as “front runners” – countries such as Sweden, Norway and Portugal where levels of investment are higher than the growth in enrolments; “growing systems under pressure”, the largest group, including Austria, Denmark, France, Germany, Iceland and Turkey, where investment has increased but student numbers more so; or “systems in danger”, namely Ireland and Serbia, where student numbers are growing and levels of investment decreasing.

But these categories also need qualifying, according to Estermann. For instance, labelling Portugal a front runner does not mean the Portuguese university system is now as well-funded as those of Norway and Sweden. “We are measuring the trends, not the amounts,” he said, “Portugal experienced substantial cuts before 2008 so its starting point was quite low.”

For Pedro Nuno, professor of economics at the University of Porto, the main benefit of national funding trends has been the prospect of financial stability. In 2016 the Portuguese government signed an agreement with universities to maintain public funding at 2015 levels and to stop the practice of withholding public funds in the event of a budget freeze. “To have a medium-term perspective for the level of public funding has been very helpful,” he said.

Another trend in funding is that efficiency, effectiveness and value for money have become the new mantra for higher education and research and this often dominates the debate on university funding.

“The funding situation has been an important driver for institutions looking for efficiency and effectiveness,” said Estermann. “In countries such as Spain there have been cuts to salaries and the freezing of hiring, but in the long term this can have a very negative effect.” He added that the EUA is doing its best to shift the debate from solely focusing on the question of resources to also include quality.

This second trend is linked to a third one – the huge expectations being placed on funding reforms, in particular performance-based schemes, to enable universities to deliver more for less money. For Estermann, such schemes need designing with care and with a clear idea of the final aim. “Using indicators has it limits,” he said. “You can say how many students you want, but what does that say about quality?”

With the EU’s new Framework Programme for Research and Innovation due to begin in 2020, many are keen to know what this will mean for research funding. The EUA’s fourth finding on funding trends predicts that “EU funding will not meet demand, nor will it get simpler.”

Simplifying the allocation of funding between so many different national systems is difficult to do, according to Estermann, but there is also tension between trust and control, which is at the heart of the current debate.

“We need to show the EU that universities have robust financial management systems and can be trusted,” he said, adding that greater EU acceptance of national and university accounting practices would be a major step forward for achieving simplification.

According to EUA figures, only 10% to 15% of project proposals win EU research funding. “Even if you use a modest figure, almost 30% of funds allocated are used to prepare the proposals,” said Estermann. “This is a huge waste of resources.”