Universities forced to cut costs if additional funding not made available

University of Tartu's main building at night.
University of Tartu's main building at night. Source: Urmet Kook

Outstanding contracts under public law are not necessitating cuts just yet, while universities say that austerity cannot be avoided should higher education not see a 15-percent hike in funding this fall.

Kalle Hein, University of Tartu financial manager, explained that universities' decision not to sign new public-law contracts last autumn does not mean costs need to be cut right away.

"The university has a budget of €211 million this year of which €62 million in activity support is tied to its contract with the government. For as long as the new period's contract remains unsigned, the university will receive one-twelfth of last year's activity support volume.  Therefore, we are still receiving support every month.

Necessitating cuts in the future is the fact that higher education funding has fallen from 1.5 percent of GDP to 1.1 percent in the last ten years, with inflation punching holes in universities' budgets and forcing them to curb admissions or stop offering some fields of study.

"Even though the number of high school graduates is on the rise, the University of Tartu will not be boosting admissions. And if things stay the way they are, we will need to find other avenues for cost-cutting," Hein said.

The problem is deepening, especially for smaller universities offering arts education. Rector Ivari Ilja of the Estonian Academy of Music and Theater (EMTA) explained that the education his school provides is hugely expensive due to the need for individual instruction.

"We teach a lot of different subjects. All of them – whether we're talking about musical science, theater – are crucial for Estonian national culture.

Universities are hoping to see a higher education funding hike of 15 percent by fall. Provided it does not happen, EMTA will have to close some specialties, Ilja admitted.

Mart Kalm, head of the Estonian Academy of Arts, also said that cuts are in order if additional funding cannot be secured.

"I have nothing concrete yet. We are in the middle of relevant discussions but there are no agreements yet. A hike of 15 percent would keep the relative importance of higher education funding from falling further," Kalm said.

It is likely that no solution to hike higher education funding to 1.5 percent of GDP again can be found before Riigikogu elections in 2023.


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Editor: Marcus Turovski

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