Workshop Armenia. Setting the context: University Autonomy & Funding in Europe

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1 Workshop Armenia Setting the context: University Autonomy & Funding in Europe Thomas Estermann Director Governance, Funding & Public Policy Development European University Association Yerevan, Armenia 6 March 2014

2 Structure 1. Introduction to the project and EUA s work in the area 2. University autonomy concept, trends and challenges 3. University funding how universities are funded and how to foster their financial sustainability

3 Established in 2001 Brief Profile of EUA Non-governmental membership organisation 850 members (2 Armenian universities), including 34 National Rectors Conferences 47 countries Independent voice for the university sector Focus on EHEA and ERA

4 The ATHENA project Fostering Sustainable and Autonomous Higher Education Systems in Armenia, Moldova & Ukraine Duration: mid Oct mid Oct (36 months) Co-funder: (90%) EU: IV TEMPUS programme, 5 th call, structural measure Armenian partners: YEREVAN STATE UNIVERSITY (EUA member) GAVAR STATE UNIVERSITY STATE ENGINEERING UNIVERSITY OF ARMENIA (EUA member) NATIONAL RECTORS COUNCIL OF ARMENIA MINISTRY OF EDUCATION AND SCIENCE OF ARMENIA

5 The ATHENA project Aims: Foster the transfer of good practices in order to promote efficient and effective reforms; Promote inclusive approaches involving all relevant stakeholders; Build the capacities of HEIs to modernise the management of financial and human resources

6 Data collection Data analysis System level: Country workshops Moldova Ukraine Armenia Institutional level: Training seminars Autonomy & governance Financial management HR development Stocktacking & Benchmarking Regional event Final publication

7 EUA s work on autonomy & funding Policy activities Conference series EUA declarations (Glasgow, Lisbon, Prague) Input to EU policy processes (Modernisation agenda; Horizon 2020 etc.) Projects & publications Exploratory Study on university autonomy in Europe (2009) Autonomy Scorecard ( ) Case studies: TRENDS reports First study on full costing in 2008 Diversification of income streams (EUDIS ) EUIMA-Full Costing project + publication ( ) Funding efficiency in higher education (DEFINE ongoing) Services Institutional Evaluation Programme Public Funding Observatory (yearly since 2008) Consulting for public authorities in national reform processes

8 Why university autonomy? Correlations between autonomy and performance quality degrees of income diversification successful internationalisation Institutional autonomy enables universities to determine and pursue strategic priorities according to their strengths; does not automatically lead to better performance but is an important requisite.

9 Autonomy dimensions Organisational Financial Staffing Academic Selection procedure/ criteria for rector Dismissal/ term of office of rector Inclusion/ selection of external members in governing bodies Deciding on academic structures Creating legal entities Length/ type of public funding Keeping a surplus Borrowing money Owning buildings Charging tuition fees for national/ EU students Charging tuition fees for non-eu students Staff recruitment procedures Staff salaries Staff dismissals Staff promotions Deciding on overall student numbers Selecting students Introducing/ terminating programmes Choosing language of instruction Selecting QA mechanisms/ providers Designing content of programmes

10 Methodology of the Autonomy Scorecard The scoring system is based on deductions restrictions on institutional autonomy are assigned a deduction value based on how restrictive a particular regulation is seen to be; produces percentage scores for each indicator; calculates the score for one autonomy dimension as an average of the scores for all indicators making up that dimension. The weighting system is based on the responses by the European national rectors conferences to a survey on the relative importance of the autonomy indicators conducted in October 2011; translates these responses into a numerical system.

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12 Organisational autonomy - trends External members are now included in university governing bodies in a majority of systems, though external authorities often remain involved in their selection (East and South Europe) Still too large governing bodies in a number of countries to work efficiently Universities in nearly all systems are free to create legal entities and decide on academic structures. Rectors are always chosen by the universities, although external authorities often have to confirm the appointment.

13 Financial autonomy trends Universities generally receive their public funding as a block grant, although its allocation may be restricted. Funding periods mostly 1 year with some exceptions Surpluses can be kept and money borrowed in a majority of systems, but in practice, various limitations still apply. Universities in most systems are able to own their buildings, but often require external permission to sell them. The situation is complex, but universities tend to be more free to set tuition fees for MA and non-eu students. Avoid or minimise negative effects of the financial crisis Accountability requirements (e.g. Reporting) often too bureaucratic

14 Staffing autonomy - trends Recruitment procedures are less prescribed than before. In most systems, restrictions still apply to staff salaries, although these are less likely to be due to the civil servant status of university staff. Staff dismissals and promotions remain restricted in more than half of the systems studied. The financial crisis has strongly affected staffing policies.

15 Academic autonomy - trends Overall student numbers are limited in nearly all systems. Universities in Europe still have little freedom in choosing QA mechanisms. Accreditation is still compulsory for BA/MA programmes in a majority of systems. The language of instruction can be chosen freely in approx. 2/3 of all systems. Institutional audits should be promoted instead of programme accreditation

16 Autonomy as a holistic concept More financially autonomous institutions with inappropriate organisational structures will not reap the benefits Institutions less autonomous in financial and academic aspects will not be able to use greater freedom in organisational or staffing autonomy All areas and elements of autonomy are related Governance and autonomy reforms need to take a holistic approach But no one size fits all model - each system needs to find balance between accountability and responsibility related to its specific background.

17 How to ensure accountability? Appropriate quality assurance procedures Financial transparency through full costing Appropriate reporting Participation of external members in institutional decisionmaking

18 But is autonomy enough? Leadership development - Key success factor to: lead change in institution reinforce strategic approach implement successful income generation Human Resource development and professionalisation to develop: new skills management capacity new staff profiles Sufficient funding University autonomy and funding are mutually reinforcing factors

19 How are European universities funded? On average, almost ¾ of universities funding comes from public funding sources

20 Public funding trends and impacts Block grants, formula funding and contractual funding Growing importance of output criteria influences university s strategic choices Competitive funding Increasingly relevant for universities, in particular for research activities Requires universities to invest in their support capacities and professional development Targeted funding Targeted funding geared towards the achievement of specific objectives (e.g. Leadership development, improvement of infrastructure) Can restrict auonomy if used to extensivly, but can provide incentives

21 Financial Sustainability Identifying costs of all activities and projects Diversification of income streams Sufficient and sustainable public funding Universities Funders Public authorities

22 What can authorities do? Improve framework conditions coherent autonomy and governance reforms Improve funding modalities: Simplification of funding schemes and funding on a full cost basis Provide sufficient funding Implement smart funding incentives: Matched funding schemes Incentive programmes to develop capacity building and the development of full costing and financial management in universities Support leadership development and professionalisation of management

23 What can universities do? Invest in people, leadership and management Leadership development - Key success factor to: lead change in institution, reinforce strategic approach and implement successful income generation Human Resource development and professionalisation to develop: new skills, management capacity, new staff profiles Change structures and organisation Communicate (internally and externally) Provide internal incentives

24 THANK YOU! For more information on the ATHENA project please contact: More information on the European University Association: