Research reveals a billion euro deficit in higher education

Demonstration in The Hague, December 2018. Photo: DUB

Outgoing Minister Van Engelshoven (D66) sent three reports to the House of Representatives on Friday. The most important report focuses on whether or not there is adequate funding for education.

PriceWaterhouseCoopers’ consulting branch Strategy& writes that academic education and research should get an additional 800 million euros a year. On top of that, universities have some catching up to do, for which a one-off boost of 300 million euros is necessary.

Of this 800 million euros, 400 million is budgeted for academic research and 200 million is intended to get investments that are lagging behind “back on track”. With another 200 million euros universities would be able to offer educational activities on a smaller scale.

But all of this comes on top of the extra funding needed as a result of the expensive coronavirus crisis. The above-mentioned report does not look beyond the year 2018. Even the hundreds of millions saved by the introduction of the new student loan system and the scrapped basic student grant have nothing to do with it.

Universities of Applied Sciences
The universities of applied sciences should also get a bigger budget. The report writers conclude that they do have enough money for education, but not for applied research. They are currently using 65 million euros from the remaining part of their budgets for this research.

But universities of applied sciences should aim to do more research, which would require an additional 120 to 270 million euros per year depending on the number of lecturers needed.

The total amount needed by universities and universities of applied sciences adds up to approximately 1 billion euros per year. Coincidentally, or perhaps not, the amount is the same as mentioned by Minister Van Engelshoven a year ago.

The universities and university hospitals are pleased with this recommendation to the incoming government. In their opinion, however, even more funding is needed because they say Strategy& failed to take into account both higher student numbers since 2018 and various new ambitions in research and innovation.

Universities of applied sciences are also pleased, although in a statement issued in response to the report they indicate a higher amount than the Strategy& advisors. In the report, universities of applied sciences read that up to 130 million euros in additional funding will be needed to prevent drop-outs. But that is not entirely correct, because the report only states that a lower drop-out rate among students would mean that same amount would be spent more efficiently.

National student organisations LSVb and ISO are also optimistic. The basic student grant was scrapped in 2015 and the country was promised that the money saved would go towards improving education; a promise they believe the government has so far failed to deliver on. The hundreds of millions made available by scrapping the basic student grant are currently mainly used to close financial gaps, which is why additional funding is a very good idea.

More money seems simple enough, but how do you distribute it? That is another question entirely, and one that consultancy firm Berenschot was asked to consider. Their report was also sent to the House of Representatives.

Government funding currently largely follows the students, which has its disadvantages. Degree programmes that attract few students, such as Dutch Language and Culture, struggle to stay afloat. And what can a university of applied sciences in a contracting rural region do to prevent going under? Should these institutes offer fewer educational programmes?

Higher education institutions would prefer to see a more ‘stable’ funding that is less reliant on student enrolment and will make it easier to look to the future. Berenschot understands, but the firm does not draw any hard conclusions.

Significant differences
According to the recommendation, the educational institutions are very different, making it harder to solve everyone’s problems with a simple funding adjustment. This makes sense because a smaller, independent teacher training school can hardly be compared to a major university. Stable funding comes with a range of other problems. Such as, what do you do with a sudden growth in the number of students? The popularity of degree programmes cannot always be predicted.

This puts decisions in the hands of the government, because what do you do with universities of applied sciences in contracting regions? How do you keep small but important fields alive when student enrolment is lacking?

According to Berenschot, it is best to look at the ‘fixed base’, or the amount that educational institutes will be able to get regardless. For historical reasons, one institution receives more fixed funding than another but you can make changes if you want to support that one Dutch language programme or university of applied sciences in a contracting region.

Tricky puzzle
But this puzzle will be tricky to solve, because how much funding do they need exactly? Universities and universities of applied sciences do not always have an overview of the costs associated with a degree programme. Teaching hours, overhead, facilities... some expenditures are difficult to track in detail. It would be good if this problem was tackled by the institutions, writes the Minister in an accompanying letter to the House of Representatives.

Other interests are also at play which are largely left out of the reports. Some political parties are hoping that ‘stable’ funding will ensure that degree programmes stop the hunt for foreign and Dutch students, and instead focus their efforts on helping students find the most suitable degree programme even if the institution does not offer the programme in question.

So what will happen to these reports? The elections on March 17 will have a great impact on the course of future decisions. In an interview with HOP, Minister Van Engelshoven (D66) expressed surprise at the fact that the largest party in the polls, the VVD, plans to cut the lump sum for universities and universities of applied sciences by 200 million.