Funding in higher education
Reflections onthe new Slovene HE funding
mechanism+
the Dutch HE funding system
HansHans VossensteynVossensteyn
Discussion seminar at the Slovene Ministry of Education hellipDiscussion seminar at the Slovene Ministry of Education hellip
LjubljanaLjubljana 6 D 6 D e e c c e e m m b b e e r r 2 2 0 0 1 1 1 1
InstitutionsInstitutions
TaxpayersTaxpayers
Framework to analyse the funding of higher education
Student Financial Aid System
- Loan schemes- Grant schemes
Allocation of Public Subsidies to Institutions
-Block grants funding formula-Targeted funds- Line-item budget
StateState
Private sectorPrivate sector
Students and families
Students and families
Funding Tertiary Education
Governing Tertiary Education
Decisions-Tuition fees-Institutional financial aid- Investments funds borrowing
Institutional efficiency- Time-to-degree- Completion rates- Student-staff ratios- Programme duplication underenrolment
Context- Expansion ofdemand for TE- Limits to public budget- Competing priorities for public budget- ldquoTechnologyrdquo Unit costs in TE
Goals of tertiary education- Access to and equity in TE
- Quality of provision- Relevance of programmes
- Internal efficiency of system
Constraints-Difficulties in determining lsquoneedrsquo- Ability to collect loan repayments- Private capital markets- Income distribution of population
QualityAssurance
RampD andinnovation
ldquoThird missionrdquoactivities
LabourMarket foracademics
Tertiary Education Outcomes- Size- Efficiency
- Equity- System responsiveness
- Quality- Innovation
Context EU Modernization Context EU Modernization Agenda on fundingAgenda on funding
1 States should ensure a sufficient level of funding for HE (reduce funding gap with US amp Japan)
2 States should examine their mix of student fees and support schemes in the light of their actual efficiency and equity
3 Financial autonomy Universities should be responsible and accountable for their resources
4 University funding should be focused on relevant outputs rather than on inputs
5 States should strike the right balance between core competitive and outcome-based funding
7 principles of economics7 principles of economics
1 People face trade-offs
2 The cost of something is what you give up to get it
3 Rational people think at the margin
4 People respond to incentives
5 Trade can make everyone better off
6 Markets are usually a good way to organise economic activity (lsquoinvisible handrsquo)
7 Governments can sometimes improve market outcomes
More market forces in More market forces in public sector (eg HE)public sector (eg HE)
Introduce connection between budget and performance
Introduce some degree of competition (freedom to choose)
The evolving role of the The evolving role of the statestate New modes of New modes of
coordination coordination
FFrom central planning to decentralised decision-making and facilitating self regulation and autonomy
Self regulation and autonomy
lsquoDonrsquot overdo itrsquo
Funding models for Funding models for HEHE
traditional state funding problemstraditional state funding problems
features problems
line-item budgetinginput control
inflexibility no linksbetween goals amp money
annual budgetbdquodecember feverldquo no
reserve planning
annual budgetinstability no reliable
calculation base
features problems
incrementalbudgeting
no incentives no per-formance orientation
central state allocationdecisions ex ante
low informationinflexibility
bottom-up aggregationof financial plans
no priorities
traditional state funding problemstraditional state funding problems
features problems
few financial sourceshigh risk high dependence
steering through regulation
uniform solutionsuniversity tactics
similar observations in different countries differenttiming and degree of change
traditional state funding problemstraditional state funding problems
criteria for good funding criteria for good funding modelsmodels
incentivesincentivescompetition demand-steeringcompetition demand-steering
goal and performance orientationgoal and performance orientation
promotion of profiles innovationpromotion of profiles innovation
stabilitystabilitycost orientationcost orientation
transparencytransparency
limited reactions long-term orientationlimited reactions long-term orientation
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
InstitutionsInstitutions
TaxpayersTaxpayers
Framework to analyse the funding of higher education
Student Financial Aid System
- Loan schemes- Grant schemes
Allocation of Public Subsidies to Institutions
-Block grants funding formula-Targeted funds- Line-item budget
StateState
Private sectorPrivate sector
Students and families
Students and families
Funding Tertiary Education
Governing Tertiary Education
Decisions-Tuition fees-Institutional financial aid- Investments funds borrowing
Institutional efficiency- Time-to-degree- Completion rates- Student-staff ratios- Programme duplication underenrolment
Context- Expansion ofdemand for TE- Limits to public budget- Competing priorities for public budget- ldquoTechnologyrdquo Unit costs in TE
Goals of tertiary education- Access to and equity in TE
- Quality of provision- Relevance of programmes
- Internal efficiency of system
Constraints-Difficulties in determining lsquoneedrsquo- Ability to collect loan repayments- Private capital markets- Income distribution of population
QualityAssurance
RampD andinnovation
ldquoThird missionrdquoactivities
LabourMarket foracademics
Tertiary Education Outcomes- Size- Efficiency
- Equity- System responsiveness
- Quality- Innovation
Context EU Modernization Context EU Modernization Agenda on fundingAgenda on funding
1 States should ensure a sufficient level of funding for HE (reduce funding gap with US amp Japan)
2 States should examine their mix of student fees and support schemes in the light of their actual efficiency and equity
3 Financial autonomy Universities should be responsible and accountable for their resources
4 University funding should be focused on relevant outputs rather than on inputs
5 States should strike the right balance between core competitive and outcome-based funding
7 principles of economics7 principles of economics
1 People face trade-offs
2 The cost of something is what you give up to get it
3 Rational people think at the margin
4 People respond to incentives
5 Trade can make everyone better off
6 Markets are usually a good way to organise economic activity (lsquoinvisible handrsquo)
7 Governments can sometimes improve market outcomes
More market forces in More market forces in public sector (eg HE)public sector (eg HE)
Introduce connection between budget and performance
Introduce some degree of competition (freedom to choose)
The evolving role of the The evolving role of the statestate New modes of New modes of
coordination coordination
FFrom central planning to decentralised decision-making and facilitating self regulation and autonomy
Self regulation and autonomy
lsquoDonrsquot overdo itrsquo
Funding models for Funding models for HEHE
traditional state funding problemstraditional state funding problems
features problems
line-item budgetinginput control
inflexibility no linksbetween goals amp money
annual budgetbdquodecember feverldquo no
reserve planning
annual budgetinstability no reliable
calculation base
features problems
incrementalbudgeting
no incentives no per-formance orientation
central state allocationdecisions ex ante
low informationinflexibility
bottom-up aggregationof financial plans
no priorities
traditional state funding problemstraditional state funding problems
features problems
few financial sourceshigh risk high dependence
steering through regulation
uniform solutionsuniversity tactics
similar observations in different countries differenttiming and degree of change
traditional state funding problemstraditional state funding problems
criteria for good funding criteria for good funding modelsmodels
incentivesincentivescompetition demand-steeringcompetition demand-steering
goal and performance orientationgoal and performance orientation
promotion of profiles innovationpromotion of profiles innovation
stabilitystabilitycost orientationcost orientation
transparencytransparency
limited reactions long-term orientationlimited reactions long-term orientation
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
Context EU Modernization Context EU Modernization Agenda on fundingAgenda on funding
1 States should ensure a sufficient level of funding for HE (reduce funding gap with US amp Japan)
2 States should examine their mix of student fees and support schemes in the light of their actual efficiency and equity
3 Financial autonomy Universities should be responsible and accountable for their resources
4 University funding should be focused on relevant outputs rather than on inputs
5 States should strike the right balance between core competitive and outcome-based funding
7 principles of economics7 principles of economics
1 People face trade-offs
2 The cost of something is what you give up to get it
3 Rational people think at the margin
4 People respond to incentives
5 Trade can make everyone better off
6 Markets are usually a good way to organise economic activity (lsquoinvisible handrsquo)
7 Governments can sometimes improve market outcomes
More market forces in More market forces in public sector (eg HE)public sector (eg HE)
Introduce connection between budget and performance
Introduce some degree of competition (freedom to choose)
The evolving role of the The evolving role of the statestate New modes of New modes of
coordination coordination
FFrom central planning to decentralised decision-making and facilitating self regulation and autonomy
Self regulation and autonomy
lsquoDonrsquot overdo itrsquo
Funding models for Funding models for HEHE
traditional state funding problemstraditional state funding problems
features problems
line-item budgetinginput control
inflexibility no linksbetween goals amp money
annual budgetbdquodecember feverldquo no
reserve planning
annual budgetinstability no reliable
calculation base
features problems
incrementalbudgeting
no incentives no per-formance orientation
central state allocationdecisions ex ante
low informationinflexibility
bottom-up aggregationof financial plans
no priorities
traditional state funding problemstraditional state funding problems
features problems
few financial sourceshigh risk high dependence
steering through regulation
uniform solutionsuniversity tactics
similar observations in different countries differenttiming and degree of change
traditional state funding problemstraditional state funding problems
criteria for good funding criteria for good funding modelsmodels
incentivesincentivescompetition demand-steeringcompetition demand-steering
goal and performance orientationgoal and performance orientation
promotion of profiles innovationpromotion of profiles innovation
stabilitystabilitycost orientationcost orientation
transparencytransparency
limited reactions long-term orientationlimited reactions long-term orientation
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
7 principles of economics7 principles of economics
1 People face trade-offs
2 The cost of something is what you give up to get it
3 Rational people think at the margin
4 People respond to incentives
5 Trade can make everyone better off
6 Markets are usually a good way to organise economic activity (lsquoinvisible handrsquo)
7 Governments can sometimes improve market outcomes
More market forces in More market forces in public sector (eg HE)public sector (eg HE)
Introduce connection between budget and performance
Introduce some degree of competition (freedom to choose)
The evolving role of the The evolving role of the statestate New modes of New modes of
coordination coordination
FFrom central planning to decentralised decision-making and facilitating self regulation and autonomy
Self regulation and autonomy
lsquoDonrsquot overdo itrsquo
Funding models for Funding models for HEHE
traditional state funding problemstraditional state funding problems
features problems
line-item budgetinginput control
inflexibility no linksbetween goals amp money
annual budgetbdquodecember feverldquo no
reserve planning
annual budgetinstability no reliable
calculation base
features problems
incrementalbudgeting
no incentives no per-formance orientation
central state allocationdecisions ex ante
low informationinflexibility
bottom-up aggregationof financial plans
no priorities
traditional state funding problemstraditional state funding problems
features problems
few financial sourceshigh risk high dependence
steering through regulation
uniform solutionsuniversity tactics
similar observations in different countries differenttiming and degree of change
traditional state funding problemstraditional state funding problems
criteria for good funding criteria for good funding modelsmodels
incentivesincentivescompetition demand-steeringcompetition demand-steering
goal and performance orientationgoal and performance orientation
promotion of profiles innovationpromotion of profiles innovation
stabilitystabilitycost orientationcost orientation
transparencytransparency
limited reactions long-term orientationlimited reactions long-term orientation
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
More market forces in More market forces in public sector (eg HE)public sector (eg HE)
Introduce connection between budget and performance
Introduce some degree of competition (freedom to choose)
The evolving role of the The evolving role of the statestate New modes of New modes of
coordination coordination
FFrom central planning to decentralised decision-making and facilitating self regulation and autonomy
Self regulation and autonomy
lsquoDonrsquot overdo itrsquo
Funding models for Funding models for HEHE
traditional state funding problemstraditional state funding problems
features problems
line-item budgetinginput control
inflexibility no linksbetween goals amp money
annual budgetbdquodecember feverldquo no
reserve planning
annual budgetinstability no reliable
calculation base
features problems
incrementalbudgeting
no incentives no per-formance orientation
central state allocationdecisions ex ante
low informationinflexibility
bottom-up aggregationof financial plans
no priorities
traditional state funding problemstraditional state funding problems
features problems
few financial sourceshigh risk high dependence
steering through regulation
uniform solutionsuniversity tactics
similar observations in different countries differenttiming and degree of change
traditional state funding problemstraditional state funding problems
criteria for good funding criteria for good funding modelsmodels
incentivesincentivescompetition demand-steeringcompetition demand-steering
goal and performance orientationgoal and performance orientation
promotion of profiles innovationpromotion of profiles innovation
stabilitystabilitycost orientationcost orientation
transparencytransparency
limited reactions long-term orientationlimited reactions long-term orientation
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
The evolving role of the The evolving role of the statestate New modes of New modes of
coordination coordination
FFrom central planning to decentralised decision-making and facilitating self regulation and autonomy
Self regulation and autonomy
lsquoDonrsquot overdo itrsquo
Funding models for Funding models for HEHE
traditional state funding problemstraditional state funding problems
features problems
line-item budgetinginput control
inflexibility no linksbetween goals amp money
annual budgetbdquodecember feverldquo no
reserve planning
annual budgetinstability no reliable
calculation base
features problems
incrementalbudgeting
no incentives no per-formance orientation
central state allocationdecisions ex ante
low informationinflexibility
bottom-up aggregationof financial plans
no priorities
traditional state funding problemstraditional state funding problems
features problems
few financial sourceshigh risk high dependence
steering through regulation
uniform solutionsuniversity tactics
similar observations in different countries differenttiming and degree of change
traditional state funding problemstraditional state funding problems
criteria for good funding criteria for good funding modelsmodels
incentivesincentivescompetition demand-steeringcompetition demand-steering
goal and performance orientationgoal and performance orientation
promotion of profiles innovationpromotion of profiles innovation
stabilitystabilitycost orientationcost orientation
transparencytransparency
limited reactions long-term orientationlimited reactions long-term orientation
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
Self regulation and autonomy
lsquoDonrsquot overdo itrsquo
Funding models for Funding models for HEHE
traditional state funding problemstraditional state funding problems
features problems
line-item budgetinginput control
inflexibility no linksbetween goals amp money
annual budgetbdquodecember feverldquo no
reserve planning
annual budgetinstability no reliable
calculation base
features problems
incrementalbudgeting
no incentives no per-formance orientation
central state allocationdecisions ex ante
low informationinflexibility
bottom-up aggregationof financial plans
no priorities
traditional state funding problemstraditional state funding problems
features problems
few financial sourceshigh risk high dependence
steering through regulation
uniform solutionsuniversity tactics
similar observations in different countries differenttiming and degree of change
traditional state funding problemstraditional state funding problems
criteria for good funding criteria for good funding modelsmodels
incentivesincentivescompetition demand-steeringcompetition demand-steering
goal and performance orientationgoal and performance orientation
promotion of profiles innovationpromotion of profiles innovation
stabilitystabilitycost orientationcost orientation
transparencytransparency
limited reactions long-term orientationlimited reactions long-term orientation
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
Funding models for Funding models for HEHE
traditional state funding problemstraditional state funding problems
features problems
line-item budgetinginput control
inflexibility no linksbetween goals amp money
annual budgetbdquodecember feverldquo no
reserve planning
annual budgetinstability no reliable
calculation base
features problems
incrementalbudgeting
no incentives no per-formance orientation
central state allocationdecisions ex ante
low informationinflexibility
bottom-up aggregationof financial plans
no priorities
traditional state funding problemstraditional state funding problems
features problems
few financial sourceshigh risk high dependence
steering through regulation
uniform solutionsuniversity tactics
similar observations in different countries differenttiming and degree of change
traditional state funding problemstraditional state funding problems
criteria for good funding criteria for good funding modelsmodels
incentivesincentivescompetition demand-steeringcompetition demand-steering
goal and performance orientationgoal and performance orientation
promotion of profiles innovationpromotion of profiles innovation
stabilitystabilitycost orientationcost orientation
transparencytransparency
limited reactions long-term orientationlimited reactions long-term orientation
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
traditional state funding problemstraditional state funding problems
features problems
line-item budgetinginput control
inflexibility no linksbetween goals amp money
annual budgetbdquodecember feverldquo no
reserve planning
annual budgetinstability no reliable
calculation base
features problems
incrementalbudgeting
no incentives no per-formance orientation
central state allocationdecisions ex ante
low informationinflexibility
bottom-up aggregationof financial plans
no priorities
traditional state funding problemstraditional state funding problems
features problems
few financial sourceshigh risk high dependence
steering through regulation
uniform solutionsuniversity tactics
similar observations in different countries differenttiming and degree of change
traditional state funding problemstraditional state funding problems
criteria for good funding criteria for good funding modelsmodels
incentivesincentivescompetition demand-steeringcompetition demand-steering
goal and performance orientationgoal and performance orientation
promotion of profiles innovationpromotion of profiles innovation
stabilitystabilitycost orientationcost orientation
transparencytransparency
limited reactions long-term orientationlimited reactions long-term orientation
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
features problems
incrementalbudgeting
no incentives no per-formance orientation
central state allocationdecisions ex ante
low informationinflexibility
bottom-up aggregationof financial plans
no priorities
traditional state funding problemstraditional state funding problems
features problems
few financial sourceshigh risk high dependence
steering through regulation
uniform solutionsuniversity tactics
similar observations in different countries differenttiming and degree of change
traditional state funding problemstraditional state funding problems
criteria for good funding criteria for good funding modelsmodels
incentivesincentivescompetition demand-steeringcompetition demand-steering
goal and performance orientationgoal and performance orientation
promotion of profiles innovationpromotion of profiles innovation
stabilitystabilitycost orientationcost orientation
transparencytransparency
limited reactions long-term orientationlimited reactions long-term orientation
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
features problems
few financial sourceshigh risk high dependence
steering through regulation
uniform solutionsuniversity tactics
similar observations in different countries differenttiming and degree of change
traditional state funding problemstraditional state funding problems
criteria for good funding criteria for good funding modelsmodels
incentivesincentivescompetition demand-steeringcompetition demand-steering
goal and performance orientationgoal and performance orientation
promotion of profiles innovationpromotion of profiles innovation
stabilitystabilitycost orientationcost orientation
transparencytransparency
limited reactions long-term orientationlimited reactions long-term orientation
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
criteria for good funding criteria for good funding modelsmodels
incentivesincentivescompetition demand-steeringcompetition demand-steering
goal and performance orientationgoal and performance orientation
promotion of profiles innovationpromotion of profiles innovation
stabilitystabilitycost orientationcost orientation
transparencytransparency
limited reactions long-term orientationlimited reactions long-term orientation
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
autonomy flexibility
autonomy flexibility
flexible internal decisions on expendituresflexible internal decisions on expenditures
university creates own internal mechanismsuniversity creates own internal mechanisms
discretionary state steering focused discretionary state steering focused
legitimizationlegitimizationtransparencytransparency
accountabilityaccountability
criteria for good funding criteria for good funding modelsmodels
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
hellip hellip and hellipand hellip
bull funding without strategy lacks orientation
bull strategy without funding (incentives) is useless
goals strategies are a necessary precondition for new funding systems
(and for performance orientation in HE)
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
general developments general developments bdquo3-pillars-modelldquo of state bdquo3-pillars-modelldquo of state
financefinance
basic task-oriented fundingbasic task-oriented funding
performance ndashoriented fundingperformance ndashoriented funding
innovation ndashoriented fundinginnovation ndashoriented funding
+ +
cost orientation ability to fulfill tasks
steering objectives influence behavior incentives for performance
finance innovation in advance control result of innovation
ratio-naleratio-nale
stability
incentives
legitimacylegitimacy
pillarspillars
different pillars to reconcile different goals
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
Options for the public Options for the public fundingfunding
of HE institutionsof HE institutions
bull Direct funding of HE institutionsndash Incremental (previous year + Δ )ndash Funding formulaendash Funding through projectsndash Funding through contracts
bull Funding through students (vouchers)ndash Hardly in use across the world
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
ContractsMission-based(negotiations with indiv HEI)
Project funding(competing proposals)
Public budget
DiscretionaryIncremental(previous yearrsquos budget)
Detailedagreements
Frameworkagreements
Cost based indicator driven
Performance oriented indicator driven
Formula funding
How to make funds available to How to make funds available to HEIsHEIs
Every country has its own MIX of funding components
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
SSpecific targeted funding - incentive funds for quality access and innovations (eg accreditation hellip)
MMove from negotiated line-item funding toformula funding - transparent rational simplified flexible - mainly enrolment driven but also outputs
MMove to lump sum budgeting - more responsibility accountability - efficiency
Almost everywhere lump Almost everywhere lump sum institutional sum institutional
strategystrategy
VVouchers learning entitlements - flexibility but administrative problems and do students want it
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
Allocation mechanismsAllocation mechanismsa balancing acta balancing act
The big question is
A proper balance between centralisation and decentralisation autonomy responsibility
(degree of autonomy balancing academic values with market forces maintaining equity between lsquorichrsquo and lsquopoorrsquo universities departments)
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
Advantages of Advantages of decentralization autonomydecentralization autonomy
Increased responsibility (vision profiling strategy)
Increases speed of decision-making
Accountability and the transparency it generates
Incentive for cost-effective use of resources
Empowers institutions (close to clients)
Motivates amp encourages innovation
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
Disadvantages of Disadvantages of decentralization autonomydecentralization autonomy
Shifting costs to other units (free riders)
Increased administrative burden of accountability
Lack of co-ordination (lsquonation of shopkeepersrsquo)
Can one handle responsibility
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
instrumental optionsinstrumental options
bull the instruments make the difference
bull rationale behind differences
priorities for objectives (eg incentives vsstability)
cultural differences (eg market simulationsvs negotiation)
bull major instruments for allocation formula ndash application ndash contract ndash lump-sum
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
bull Formula ensures transparency fairness accountability stabilitybull Funding rates usually in relation to costs in any
subjectHEI (ie method of delivery of subjects classroom-based vs laboratory-based) and degree levelbull Formula is not prescriptive (does not drive budgets at departmental level)bull Formula add-ons (premiums) to reflect additional costs special circumstances due to (eg)
Formula FundingFormula Funding
bull Student diversitybull Location age of HE providerbull Sustaining important subjectsbull High-cost facilities
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
Interesting example Interesting example funding of teachingfunding of teaching
NetherlandsNetherlands
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
Netherlands Netherlands performancesperformances
SSince 1983 substantial freedom of spending
TTeaching funds substantially based on performances - 50 for graduates (bachelormaster) - 13 for new entrants - 37 fixed amount
TTo increase the completion rate
NNow discussion about learning entitlements - empower students - flexibility (but do students want that limited budget)
RRisk creative book keeping
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
BaMa Model compartment(2008)
tariff base(in Euro)
share in lump sum (in )
teaching component
new entrants 2600 low 3900 high
13
diplomas 11500 BA-low 17300 BA-high (excl medicine) 20800 BA medicine 5800 MA-low 8700 MA-high (excl medicine) 31200 MA medicine
50
basic allocation Historical 37
total for teaching component 100
research component
basic allocation BaMa diplomas 2700 (BA-low)) 4000 (BA high) 8000 (BA-medical) 5400 (MA-low) 8000 (MA-high) 16000 (MA-medical)
15
PhDs PhD low 41700PhD high 83400
12
designer certificates 69500
research schools Historical 3
top research schools strategic choices 3
strategic considerations Historical 67
total for research component 100
National funding model (BaMa)
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
Education- part bull 85 Euro per student credit (ECTS) bull 2790 Euro per first year student in engineeringbull 1390 Euro per 1st yr student in social sciences
Research partbull 30 Euro per Bachelor-ECTS in social sciencesbull 40 Euro per Bachelor-ECTS in engineeringbull 80 Euro per Master-ECTS in social sciences bull 110 Euro per Master-ECTS in engineeringbull 44500 Euro for a researcher on Research council grant in engineering bull 31800 Euro for a researcher on Research council grant in social sciencesbull 22300 Euro for researcher on (some) industry sponsored contract (engineering)
15900 Euro for researcher on (some) industry sponsored contract (social sc)bull 75000 Euro for a PhD (all disciplines)bull 62500 Euro for a designer certificate
Funding rates in Twente Funding rates in Twente allocation model (formula allocation model (formula
part)part)
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
University of Twente allocation modelUniversity of Twente allocation model
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
To be replaced by contract
TU Delft allocation modelTU Delft allocation model
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
Interesting example Interesting example funding of teachingfunding of teaching
SloveniaSlovenia
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
2004 lump sum
OLS NLS2004
80 20
60 402010
no studentsno graduates
study fieldfactor
Introduction
HHow much flexibility in 2011 and onwards The Decree is very historically oriented few incentives Problem if student number is decreasing
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
fixed part (k+1)
=TSF (k)
+GDP
variable partplusmn 3 Variable part indicators
- efficiency (graduation rate) - plusmn1 - promotion of students from Year 1 to 2 - plusmn1 - international cooperation - plusmn1
Factor = fu+ fpr + fm
variable part of TSF-Zk = fixed part of TSF-Zk times Factor
RRemark variable part very limited and how likely it is that one institution would be good or bad at all 3 indicators Likely they will balance out
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
Budgetary financing of 1st and 2nd cycle
primary financing pillar (TSF) development financing pillar (RSF)
fixed part (k+1)
=TSF (k)
+GDP
Variable part
3public tenders
varietyinternationalisation
quality social dimension
HHow big is the RSF pillar Big enough to stimulate all 4 priority areas New or old money If new sustainable
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps
THANK YOU FOR YOUR ATTENTION
Contact information
Prof dr Hans (JJ) Vossensteyn
University of Twente
Center for Higher Education Policy Studies (CHEPS)
PO Box 217
7500 AE ENSCHEDE
The Netherlands
tel +31 - (0)53 489 3809
e- jjvossensteynutwentenl
inet wwwutwentenlcheps