Securing sustainable higher education

The global recession has, amongst others, one common element: cuts in state funding or support for higher education. In most countries over recent months governments have announced reductions in allocations to universities and colleges. There are very few exceptions to this – in fact the only one I have been able to find of any significance is Bavaria in Germany, where the centre-right state administration has told the higher education institutions that, notwithstanding problems with public finances, funding will be maintained.

In some public universities in the United States, funding cuts imposed by local administrations have been so severe that large-scale redundancies are now anticipated, with so far unpredictable results for the quality of teaching and for research. In France, as you would expect, there is a lecturers’ strike about this and other things, but in most countries the worsening financial setting is creating a general atmosphere of gloom and fears about the sustainability of the sector.

It is possible to make some quite contradictory observations about the current situation. The most obvious one is that public money as the sole source of funding for higher education is unsustainable; government decisions on funding, while perfectly rational in terms of the decisions they must take to balance the books for the exchequer, are often unpredictable for the universities, and sudden dramatic cuts can create crises that the institutions, without other available means, simply cannot manage. Public universities also have notoriously little flexibility in relation to the management of costs, which overwhelmingly consist of salaries and pay.

On the other hand, as governments cut budget allocations during a recession, they may also be reluctant to impose additional burdens on the population in the form of tuition fees, so that there is no alternative source of income for the cash-strapped institutions. In Ireland we we know, the Minister for Education and Science has been looking at the possibility of a return of fees, but there have been significant ongoing delays in coming to any final decision.

There are, I think, three important conclusions that need to be taken into account in this debate. First, higher education cannot be delivered with any kind of quality unless the resources for it are reasonably sustainable. In most countries universities operate on very tight margins, so that even in good times they will make extremely small surpluses, if any. Where they are resourced by public funding this is inevitable, as the taxpayer will not readily fund a service to a level higher than the apparent actual cost. A consequence of this is that institutions are almost totally unable, at short notice, to reduce their expenditure. Therefore a system of allocation of public money based on the possibility that funding will fluctuate significantly from one year to another destabilises the sector alarmingly.

Secondly, no organisation can succeed in the long term if it is unable to plan its financial performance. Where a university  draws its income from really only one source, and where it has no control over that source and cannot even influence it by, say, effective marketing; and where in any case it only gets advance notice of income for a single financial year (in our case in Ireland, when that ear is already well under way) – where all this is the case the university cannot undertake anything that could be described as medium to long term planning. It is living hand to mouth, and often it seems that its only mechanism for planning its medium term financial performance is prayer.

In these circumstances, and notwithstanding any ideals one might have about public education, it is impossible not to conclude, thirdly, that in order to secure higher education it cannot be built solely on public funding. There has to be a sensible diversification of sources of income, accompanied by a high degree of operational and planning autonomy.

In Ireland as in other countries, we are facing some very important decisions right now which will determine whether we can maintain a quality system of higher education.

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10 Comments on “Securing sustainable higher education”

  1. Tonya Waters Says:

    even if the world is now in recession, it would always be nice that each and every country considers education as a necessity to all.

    • Tonya, I agree with you about that. There is, I guess, an additional step. We *do* actually constantly state that education is a priority for us, but we don’t follow up and resource it. I don’t just mean higher education; in fact, I don’t particularly mean it at all. Our failure to fund pre-school education, for example, is very serious failure to take education seriously, even in good times.

      My fear is that no matter how much we protest that higher education is important, as a society we are not willing to fund it; in the end governments do what they expect taxpayers to tolerate, and they have concluded that taxpayers won’t stand for an increase in taxation to fund third level. They are probably right.

  2. More budget should be allocated to education and health so as to make a healthy and educated population.

    • Thanks, Katherine – however I fear that will never happen. It didn’t happen in good times, and it isn’t happening in the bad ones.

      Despite what I write, I would actually favour a higher education system free at the point of entry. But I have concluded that any such system will always be under-resourced.

  3. Vincent Says:

    Your funding can hardly be said to fluctuate when all funding has gone up for years. And to use fluctuate when you mean accelerate, -some years lesser but still acceleration- is somewhat disingenuous of you when the entire world economy has been made sit on its rump. Imagine the heartache of the comptroller at Yale et al.
    Costs; Virtually all costs beyond utilities are within your control. While to the statements on undergraduates, you might not be getting as much cream on them that you were used to getting. They are still vastly more profitable kilo for kilo to anyone else.
    The return of fees will be a good thing also, for you will quit looking at u-grads as a cost and return to viewing them as your most profitable resource.
    On to buildings, Atlantic Resources have done you very well. And while you don’t have a LHC in a loop running between UCD, TCD, your place, NUI,M and back to UCD, you are not all that short.
    There is only one very real difference between here and the rest of the West is the spend on the Defense Vote and the percentage the Universities have of it to work.
    Independence; I have never come across such a thing as an independent university. Not one, ever. The nearest I’ve seen was the pre-1845 Maynooth. Where £15000 was handed over for them to do what ever the dickens they liked with it. But even there, there is the 20ft statue of George III decked out as Imp’ Hadrian. Nor did it last all that long. Still and all 50 years was a goodish innings.

    • Vincent, you wrote: “Your funding can hardly be said to fluctuate when all funding has gone up for years.”

      That’s not really the case. The reason why third level funding went up over the past decade is only because the actual student numbers went up dramatically. On a per student basis, set against the inflation rate, funding went down consistently throughout that period. To that extent you are right, it didn’t fluctuate: it just went down. Even before the cuts occasioned by the current recession, funding per student had decreased in real terms by nearly 40 per cent during my term as university President. It’s a completely unsustainable position.

      I agree with you about the hugely important role played by Atlantic Philanthropies in building up the capital infrastructure of the sector. But that’s over, and we need to ensure that the period in question was not just a kind of ‘golden blip’.

      • Vincent Says:

        It was the overall cash I was on about, and that has gone up. Once that money hit your bank a/c you can in the main do with as you will.
        A friend of mine who went to Madison told me that in some areas two and three theaters were tele-linked and Prof Ficus could lodge to the minds in a very time effective way. This is far from the ideal of one to one but where the study requires little more than guidance with three/four hours of contact and where the library has more than three copies for 200, and where being a self starter is equally important. It can work and very well indeed and it costs almost nothing.
        It is where the Method being imparted requires props that things start to bite from your point of view.
        However, in reality, the Profit from each undergrad is down and this hits other areas. Never the less there are thing you can do about it. Astronomy and all the other small areas need to join up and create a hum. And you could charge the post-grads far more than you do. Forget about the for merit fellowships with cash, and use the cash to cover shortfall for those who need it.
        Anyhoos, we would all like the sustainable, but given the pattern of economics we practice this is a forlorn hope.

      • Aoife Citizen Says:

        I am just back from giving a talk in the UK. The UK funding councils now pay “full economic costing”; they attempt to fund university research at its cost to the university. Apparently that means they have an effective overhead of 200%, the overhead is the amount the funding exceeds the direct cost, pay cost of a post-doctoral researcher or whatever; the SFI overhead is 30%.

        Vincent may be right in saying the total income of the sector has risen, but only against a large amount of additional activity: in the case of research, activity which, on the evidence above, is being hugely underfunded.

  4. seamus Says:

    I’m not sure if I agree with the conclusions you’ve made here. Mainly i disagree with the logic that since public funding can be reduced at short notice “public money as the sole source of funding for higher education is unsustainable”. The same could be said of secondary or primary education, or any number of other publicly funded sectors that are also feeling the effects of the recession. Is public funding, as the sole source of funding for anything, therefore unsustainable? fees for primary schools then?

    Private funding can also be subject to booms and busts, as many a private enterprise in this country would agree. Does that make private funding unsustainable too?

    I think what’s important, is not whether funding is public or private, but rather whether it is managed in a sustainable way. The public finances, of late, haven’t been. It might be reasonable to assume that if the universities themselves managed their sources of income, they’d do a better job….but who knows? Besides, for many of the 3rd level funding models being proposed the government will still manage things, and cut your allocation if they manage things badly!

    • Thank you, Seamus. I think my point is that where you have some diversification of income you are a little less vulnerable to sudden changes affecting one of them. Of course there may be times when all of them are affected.

      There is, however, a significant difference between primary and secondary education on the one hand, and third level on the other. Schools provide an education that is indeed most appropriately funded by taxation and which, except for those who voluntarily choose otherwise, should be free at the point of use. Higher education is much more complex, not least because some of what is involved is not education in that sense at all, and also because it is hugely expensive when done to a high class quality.

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