Ministry of Education and Research to reorganize funding of higher education institutions (2)

Graduates and alumni at the University of Tartu. (Andres Tennus/University of Tartu)
9/27/2016 1:40 PM
Category: News

The government is handing a bill to parliament that wants to introduce a base funding system to make the financing of the universities more stable.

As ERR’s radio news reported on Tuesday, the current system is based on two indicators. The higher education institutes of the country get 75% of their funding based on their own activities and resources, e.g. number of students and teaching staff. The remaining 25-30% are based on the institutions meeting government targets.

Director of the Education and Research Ministry’s higher education department Margus Haidak said that the current model couldn’t ensure the financial stability of schools. The situation could be improved by introducing a base funding system.

The base funding would amount to 80%, the indicator for which would be the previous three years’ average state contribution that the institutions received to keep up their basic function.

According to rector of the University of Tartu Volli Kalm, the public universities have supported the change, as for the income from such a model the purpose and destination of the funding was clearly specified. But at the same time, Kalm doesn’t believe that the financial stability of the universities would improve.

“The part where the new law says that 80% are stable all the time also says that the actual funding compared to the previous system can be only 80% of what you got on average over the previous three years,” Kalm remarked.

The other big change implied by the bill concerns finance based on meeting aims set. After the National Audit Office stated in 2012 that financial aims couldn’t be set with the necessary certainty, the plan now is to make them more precise and tie them to strategic aims.

Haidak said that the present proposal for financial aims considered indicators like the amount of students graduating within nominal study durations, as well as labor market indicators, namely how many graduates successfully entered it, and how many continued with their studies on the next higher level.

This means that while the new model would cover 80% according to the base funding scheme, the remaining 20% would depend on the competition between higher education institutions. This again increases inequality, as small and medium-size institutions would receive less, while large and well-known schools would receive more. Tartu rector Volli Kalm thinks that the step is justified, and that the state is moving in the right direction.

If part of the universities produced graduates with a very high probability of getting hired, and with a very high level of education, then these universities should receive more money, Kalm said. “The stress is on graduation effectiveness, not attracting the largest number of students,” he pointed out.

Editor: Dario Cavegn

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