European universities need to come to terms with the fact that they can no longer expect generous government financing, an irreversible trend exacerbated by the global financial crisis. That was the message delivered at a conference here this week that drew university leaders, European and national policy makers, private investors, and higher-education experts from around Europe.
Organized by the European University Association, the meeting was focused specifically on shifts in university financing, and how to adapt to the changing economic climate. The association’s unit for governance, autonomy, and finance has been monitoring the impact of the crisis on university systems since 2008 and the data it has gathered are now revealing distinct trends, says Thomas Estermann, head of the unit. “Before what we were seeing was very diverse, but now we can see that there are a couple countries that are still investing and keeping up funding and a large group that have cut quite drastically, so extreme points are coming out.”
European universities remain overwhelmingly reliant on public money for most of their financing, and cuts in public spending have meant that higher-education budgets have been slashed in many countries. Twelve countries—including Greece, Ireland, Italy, Latvia, Lithuania, the Netherlands, Portugal, and Spain—have suffered spending cuts to higher education of more than 10 percent.
Michael Murphy, president of University College Cork, in Ireland, said public financing for institutions there has fallen by 25 percent during the past five years. His take-home pay has decreased by a third, his university has eliminated 12 percent of its staff even as student numbers have increased by 6 percent, and the management team has been trimmed. The crisis has proven to be a “transformative experience” for Irish universities, Dr. Murphy said, forcing them to face more quickly harsh changes they “would have had to undergo anyway to be internationally competitive.”
In Spain too, “the crisis has accelerated what was going to happen,” says Daniel Peña, rector of Carlos III University in Madrid. He now spends a third of his time meeting with companies, seeking external financing, and he has overseen new alliances with other institutions, for example in a partnership of five universities that are working together to try to attract more international students. Changes in the law have allowed increases in tuition for Spanish students, which now covers 25 percent of the university’s total cost, and the only new programs that now receive approval, he says, are those that can be offered at market prices.
In the Czech Republic, said Mikulá Bek, rector of Masaryk University in Brno, recent changes in how universities are financed include a shift from a formula based on the number of students to a more complex one involving performance indicators such as staff qualifications and employability rates among graduates. Seven universities in the region have begun sharing facilities, in a move that Mr. Bek says will help prepare them for the more limited financing that will be in place from next year.
The trend toward shared facilities and consolidation was a common topic of discussion. Farid Ouabdesselam, president of PRES University of Grenoble, described how the institution he heads is a new kind of organization in France.
Although France is one of the few countries in Europe that have increased public financing for higher education, it has changed how the money is distributed. In 2006 a new law allowed the creation of “centers of research and higher education” (a phrase abbreviated as “PRES” in French) as a tool for increasing cooperation among higher-education institutions in a region and reducing traditional divisions in higher education and research. Under President Nicolas Sarkozy, who was in office from 2007 until last month, more than 20 have since been created.
The new institution Mr. Ouabdesselam heads was created out of six existing institutions and since 2010 has been able to deliver degrees. These consolidated universities were also encouraged to take the lead on bidding for projects that were part of major new government investment programs in higher education.
According to Mr. Estermann, of the European University Association, almost all European countries are discussing the use of performance indicators in their financing formulas, but there is confusion about the implications of this approach. “The intention, of course, is to create more competition and to make universities more efficient, but we don’t know what the unintended effects are,” he said.
One participant, for example, asked whether having staff with higher research backgrounds really means they are good in teaching and whether high mobility rates really benefit students, illustrating the skepticism that many feel about the growing reliance on such measures.
Although the worst of the financial crisis may be ebbing, the realization that what Europe universities are experiencing is more than a passing phase permeated much of the discussion. “Times will never be the same again,” said Liviu Matei, senior vice president at the Central European University, in Budapest, who acted as the conference rapporteur.
What is required of universities is “not just marginal adjustments in the way universities operate, but serious transformation,” he said, and to meet the challenge, institutions will need strong institutional leadership.
The demands of the university president’s job are increasing. University College Cork’s Dr. Murphy, who spent nearly a decade at the University of Chicago, described it as a process of “Americanization.” His final word of advice was for new university presidents to choose wisely in selecting a deputy “who can do the other half of the job.” That, he said, would be their most critical appointment.
Correction, 6/17/2012, 5:35 p.m.: This article has been updated to correct the timing of the changes made in France and of Nicolas Sarkozy’s term in office.