'Minister Dijkgraaf gave a poisoned gift to universities'

Universities have been complaining about structural underfunding for years. You immediately break down that thought in an op-ed on ScienceGuide...
“That point of view was recently reiterated by Caspar van den Berg, President of the association of Dutch universities (UNL), fuelled by the 2021 PwC report, among other things. Neat analyses were made at the time for the MBO (vocational education) and HBO (universities of applied sciences) levels at the time. As for universities, they relied on what people said. So, if people say universities are one billion euros short of their needs, there must be a one billion shortage. I don't think that's convincing. 

Universities' revenues grew from four billion euros in 2014 to 6.85 billion euros in 2023, largely thanks to higher lump sum funding from the Ministry of Education. Is that underfunding? At the same time, universities are overflowing with ideas and good things. So you can always claim that universities never get enough money, but that's not very convincing either.”

You point out two developments that played a decisive role in the current financial problems, starting with the influx of international students. Why?
“I refer to the call from the University of Amsterdam in 2018. From that year on, the growth in the influx of international students was no longer fully covered by rising income. UvA started shouting that they were getting too big and couldn't do anything about it, and then asked the minister for instruments. The Internationalisation in Balance Act, which universities now fear, was lobbied for by some universities. That's not an idea stemming from PVV or Pieter Omtzigt, it comes from the universities themselves.

It is completely unbelievable that universities can't do anything to curb that influx themselves. If you launch a bunch of English-taught programmes and get too many international students as a result, surely you could just discontinue those English-taught programmes? That is a logical conclusion for anyone outside this sector. There has never been a reason to launch so many international Bachelor's programmes in Amsterdam, except for money. Big universities asked for a brake, which they are now going to get with that legislation. But all universities will suffer the consequences."

The second development you mention is the increase in staff
“This is often overlooked. In part, it goes with the growth in the number of international students. It makes sense they would need more staff. There were also funds from the Wet Studievoorschot (also known as the student loan system, Ed.), which universities were obliged to spend on education. Those funds were often spent on additional academic staff. But the previous Minister of Education, Robbert Dijkgraaf, is probably responsible for the biggest push."

How so?
“Dijkgraaf was allowed to spend an additional one billion euros per year. Once he distributed it, he concluded that he did not know why he had spent the money that way. Universities received half of that sum, which they had to use for sector plans, additional staff, and the so-called rolling grants. So, that was earmarked money. I consider it a poisoned gift from Dijkgraaf to the universities.”

So, more money is not always a blessing for universities?
“Certainly not. Implementing the sector plans and hiring more staff increased salary costs. In addition, operational costs rose due to inflation. Earmarking the funds in this way resulted in a few ridiculous situations. I know a case where someone who had only been employed for a month was not allowed to count as a new investment. While that person could be perfectly linked to the sector plans, a new Assistant Professor still had to be appointed. In a broad sense, those sector plans were an investment that universities could not afford.”

You recommend giving universities more responsibilities and leeway, so less earmarked money. Should that provide them with the necessary space?
“It is striking that universities wanted to maintain the sector plan funds when the budget cuts were announced. They were in financial trouble, yet they asked the minister to maintain one of the causes of their problems. I was astonished. It is in the interest of both the minister and the universities to give the latter more flexibility and responsibility and make considerations as locally as possible, i.e. getting rid of earmarked budgets.

In principle, the minister could say tomorrow: 'We're quitting, this was a bad idea. Universities will then receive the money for the sector plans and the rolling grants and the space to do more sensible things with them. That would also mean less bureaucracy. The cabinet could record this on Budget Day and set it as of January 1. It is not going to solve all problems, of course. The people who were hired on that money are permanent employees."

What should the minister do?
“Offer perspective, because that is completely lacking right now. That is what employees at the university can expect, a clear long-term perspective. The minister is not only responsible for the upcoming Internationalisation in Balance Act. He has a systemic responsibility for the future of the higher education system in the Netherlands. So, if he cuts the budget – as he plans to do – he must also consider what that means for the development of the sector.”

What about university administrators? 
“As a university, you can't do anything about inflation. But I do not agree with the suggestion that it is impossible to respond to these developments. The brake on the influx of international students was announced years ago. They could also forecast that the number of Dutch students would level off years ago. At that time, universities already struggled with increased salary costs. They could already say: 'We are going to get in trouble'. That still leaves the university’s implicit business operations out of the equation. Things could be more effective and efficient.'

It's up to university administrators to tell an honest story. The assumption that the effects of the Internationalisation in Balance Act will not be too bad and the number of international students does not have to be reduced is a nice scenario. But it is not a realistic scenario. One way or another, growth comes to an end and then universities are under stress. You must manage that stress. The minister has several rough parameters to distribute the money. Executive boards must make their own choices about what to maintain. You can't just look at where the costs are, you must also think about your profile and your public responsibility.”

In the meantime, universities have announced a relay strike to protest the budget cuts. Does that have any chance of success?
“The people who ultimately suffer from this are the ones who have chosen an academic career; those who have been told there is nothing better than working at a university, and that one could become a professor if they did their best. You can't blame someone who took such a job because of such promises. I can well imagine the anger of the trade unions and representative organisations, but we must also admit that the room to stand up for those interests is minimal. In the longer term, structural problems will arise if the growth in costs due to inflation is not covered by additional income. If the minister does not want to correct that, the drama will be much greater.”

About Barend van der Meulen
Barend van der Meulen has been a Professor of Institutional Aspects of Higher Education at the University of Twente since 2019. He works in the Knowledge, Transformation & Society section of the BMS faculty and is the director of the Centre for Higher Education Policy Studies.