Posted tagged ‘planning’

Securing sustainable higher education

May 18, 2009

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.