8-9 September 2011 Yerevan, Armenia Conference on Funding of Higher Education Linking Funding with Quality and Relevance

1. 8-9 September 2011 Yerevan, Armenia Conference on Funding of Higher Education Linking Funding with Quality and Relevance of Higher Education” Stefan Delplace, Secretary General, EURASHE EUROPEAN ASSOCIATION OF INSTITUTIONS IN HIGHER EDUCATION www.eurashe.eu

2.  Background Signals that funding of HE may be inappropriate: • EUA research : “Across Europe, 73 per cent of university financing on average still comes from national or regional governments. Student contributions are the second-largest source of revenue, accounting for just over 9 per cent of average income” • ESU on Financing: "The biggest problem is that education is being seen as a tradable good“ (Bert Vandenkendelaere, former Chairperson)

3. Background • EURASHE (Ten Commitments for the EHEA in 2020, Budapest Min. summit, March 2010): “Increased government funding is essential to maintain the current level of studies, but may not be enough to increase substantially the proportion of the youth that will complete a HE program”. • E.C. DG EAC website: “Extra funds for education, youth and creativity will boost jobs”, says the E.C.

4. Background • OECD on the share West-European universities have in ‘cross-border education’ : “public and private not-for profit institutions have been the main drivers of commercial programmes in the generation of export revenues”. • Deloitt, business advisory firm, latest HE report “Making the Grade 2011”: “The education sector was disproportionally hit during the financial crisis with funding from government, private sector and individuals drying up”. Deloitte’s report urges universities to “explore new revenue opportunities”.

5. The changing context • The context in which Europe is reaffirming its belief in the public role of HE, is not positive: stagnating public budgets, increasing provision of private HE and of transnational education with no link to the national public HE systems, debate on the role of the public authorities. Sjur Bergan, Council of Europe, “The public responsibility for HE & Research” (2005) • Growing economic & commercial interest in education, as an investment, and even a commodity • Growing self-awareness of higher education institutions & learners

6. Governance and funding of higher education, the link with quality In many countries, and in line with New Public Management concepts, external QA was introduced as part of the exchange between institutional autonomy and public accountability.

7. What are the official standpointson governance and funding of HE? • Prague Communiqué (Bologna Process 2001): “(Ministers) supported the idea that higher education should be considered a public good and is and will remain a public responsibility (…)”. • Further Communiqués strengthened this, but are aware of the changing context. • Leuven Communiqué (2009):“Within a framework of public responsibility we confirm that public funding remains the main priority to guarantee equitable access and further sustainable development of autonomous higher education institutions. Greater attention should be paid to seeking new and diversified funding sources and methods.”

8. Challenges • On the side of the institutions: competition public and private providers; less state funding because of crisis • On the side of the groups of learners: programmes meeting short time needs, personal development has to come second; lack of transparency of education systems and models • On the side of the economy/industry: lack of highly trained professionals, insufficient research funding, world-wide recession

9. Opportunities • International cooperation is growing • Increased importance of education in knowledge economy • new programs, new fields of study • new learning environments • mobility schemes increasingly funded • SH awareness growing • private investment growing (in some sectors however)

10. Present income diversification in higher education Example of co-financing, resulting from Education-Business Cooperation (UBC) in countries of the E.U. - third-party money income compared to overall HE budget • allocation of UBC income over the HEIs Source: DG Education Study on the cooperation between HEIs and Public and Private Organisations in Europe (HIPPO) Remarks:Only Latvia, Finland and Lithuania have a situation where both academic UBC and (non-university) HEI is rated highly. The majority of countries are in a low UBC situation, resulting in low income from UBC.

11. TOTAL UBC: Measurement / HEIs Q22. Third-party money as a percentage of the HEI budget The average amount of the HEIs budget coming from third-party money was 27%.(Third-party money is money earned from external sources additional to the regular fixed budget from the Federal State) Total HEI budget 27% Third party money Q23. UBC as a percentage of all third party money Amount of third party money from UBC 5% of HEIs receive more than 50% of third-party money from UBC 28% 100% of HEIs n=2060 of HEIs receive more than 10% to 50% of third-party money from UBC The average amount of third-party money coming from UBC was 17%. 67% of HEIs receive 10% or less of third-party money from UBC

12. Different actors: Role of the governments (or Public Responsibility factor) • provide an overall framework that can be described in a transparent way (Qualifications Frameworks) • provide an adequate QA system: QA via an independent body (again involving SH) and also accreditation are the control mechanisms for those who offer education outside the state-run education system, whether for profit or not-for profit. • do not have a monopoly on the provision of HE (weakens public responsibility factor, increases impact of SH, contributes to competition of means and quality)

13. Among the different actors: role of HE institutions • Quality of study programmes in the first place a responsibility of the HEIs • Institutional autonomy gives HEIs the option to choose for a level of dependency/impact of SH, in terms of governance, financing, according to their mission and profile. • Have to operate within the framework of a country’s education system • Also in the case of cross-border education (TNT): provision of franchised programs should be subject to evaluation and approval by the pertinent national authorities of the countyr in which they are offered, with the same criteria, standards and procedures that apply to its national institutions and programs.

14. Different actors: role of private providers • Education being a public good/responsibility, the legal framework should be the same for all education providers. (PawelZgaga, “Academic Freedom & Institutional autonomy” • In practice a different treatment of public/private HEIs, and consequences of this, in terms of governance, offer and quality of programmes. • As a rule private providers do not get any state funding, and almost all their revenues come from tuition fees and in a small part from applied research. Therefore the quality of their study programmes directly affects their recruitment potential, and the required revenues from tuition fees is therefore more crucial.

15. “Precisely because of limited resources for higher education, it would be unwise to overlook the private HEIs, and their potential of complementarity in providing part of the higher education, especially in those disciplines that require a high degree of responsiveness to the demands of the labour market.” S.Delplace, “Academic Freedom & Institutional autonomy, a viewpoint of professional higher education”

16. Different actors: role of stakeholders • Why they are important: - civic representation on a global scale - stakeholders’ involvement, a form of direct democracy • Recognition in the Bologna process (‘part of the European dimension’) • Variety of stakeholders with different responsibilities, depending on the mission & profile of the HEI

17. Linking funding with Relevance of Education • Relation with external stakeholders are an extra guarantee for the societal relevance of education • The Leuven Communiqué (2009) identifies higher education as a public responsibility, with HEIs having to “respond to the needs of society through the diversity of their missions”. • Relevance of education has its limits: a growing scarcity of resources to pay for quality mass education, but higher education has to remain accessible for all those who are qualified. Somewhere in between are the actual needs of the market for graduates.

18. Linking funding with quality of education • Quality assurance in the first place an institutional responsibility • Governmental role (not exclusive, but primordial): provide overall framework & adequate QA system, secure fair access to HE • Excellence and quality in relation with funding: • a need to redefine both concepts? • A public responsibility for overall quality of education

19. Quality and excellence in higher education Quality in a context • Since the growth of rankings and other world classification systems the insight that quality and QA are contextual has risen. • The quality at the input level clearly determines the quality of the output. This means that quality and QA should take into consideration the quality of the overall education system the HEI is embedded in. Source: EURASHE position paper on QA & TT (Sept. 2011)

20. Quality and excellence in higher education On the notion of excellence: • In the future the notion of degrees of quality up to excellence will give a better and more diverse picture of higher education than in the first phase of QA where the threshold was translated into only satisfactory or unsatisfactory. • Excellence will then mean what is internationally recognized, and benchmarked. Thus continually improving and innovative. Source: EURASHE position paper on QA & TT (Sept. 2011)

21. THANK YOU FOR YOUR ATTENTION! stefan.delplace@eurashe.eu Stefan Delplace, Secretary General, EURASHE www.eurashe.eu