Financial Sustainability in Europe

I traveled to Bologna to address the European Universities Association Conference on Financial Sustainability. One-hundred and sixty delegates from all around Europe, all interested in what to do as government funding diminishes. Of course, in some countries, like Switzerland, that is (happily) not the case. But in most countries in Europe, even when governments say the opposite, universities are starting to feel the pain.

That means that income diversification becomes an imperative. But that is easier said than done, even in the best of universities at the best of times. In the middle of a recession, it is quite an ask. Some old chestnuts come up as potential saviours. One was philanthropy. But, although European universities are better at this activity than is often made out, it will take a generation to get anywhere near an American-style giving culture.

But most often mentioned in the EUDIS survey of European universities as a potential source of extra funding was the European Union. This did worry me. Even if European research budgets were to expand (and there is certainly no guarantee of that) it is impossible for everyone to make up their budgets from EU sources. Universities without existing European networks will struggle, in particular.

Yet I didn’t come away from the conference with a sense of total gloom. Most people seemed to think they would struggle through whatever faced them, with the usual resilience that universities have always shown.

But some questions were left unanswered. Surely not everyone can survive these conditions. At Warwick we have spent the last year making sure that our finances are in absolutely top shape in order to face the coming storm. However, a lot of European universities still seem to be acting as though they were in the world of the late 1990s and early 2000s – building vast new research edifices and programmes without any thought as to their future funding. But this is a strategy which will now have costs as well as benefits. In particular, the receding tide of research funding in some countries will leave many universities with underused infrastructure – and researchers – and subsequently costs that they can no longer finance. In particular, and most pressingly, what will happen to all those vast new medical sciences campuses built or planned as funding declines? Some of them could end up only half-full.

It may be that we, without really recognising it, have transited to what the OECD calls an ‘utterly changed world’ in which the priorities of the boom are about to be replaced – by more industrially relevant research, and by a greater emphasis on teaching. The first will mean a lot more than getting some more contracts from industry – the old research model with a new source of income – while the second produces some real dilemmas about how to teach large numbers of students well with limited resources.

So, some causes for hope but also some real concerns which, truth to tell, no one knows quite how to address at this point.

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