Transcript Dia 1 - Laija

Funding models considered
and the proposal for a new model
Prof. Dr. Frank Ziegele, World Bank Team
September 24, 2014
Riga, Latvia
Funding models considered
How did we come to the proposed
instruments?
use experiences with
existing models
develop the existing
system further
suggest new ideas/
components
but you can‘t transfer a model 1:1 to
another country, always special
contexts. specific combinations,
Adopt and adapt elements!
Models we learned from
• Study place allocation models: UK, Estonia, Sweden
• formula funding: Finland, Germany, Netherlands, Sweden,
Norway
• target agreements: Germany, Netherlands, Croatia
• cost-sharing approaches: Netherlands, Australia, New Zealand
• student grants and loans: Estonia, Germany, Netherlands
• excellence-oriented funding: Germany, France, Denmark
• sector consolidation program: Denmark, Scotland
• innovation vouchers: Netherlands
(plus comprehensive overview on trends in European systems)
Models we learned from: example Finnish state
funding
Proposal for a new model
The new model also addresses the 4 elements
1) State funding
2) Diversification of financial sources
3) Financial autonomy
4) Student funding and support
The proposal includes two ”packages” to
overcome political blockades
the reform should be a package of
more public funding + strategy/ performance-orientation
• no additional public funds without changing the system – changes as
good reason for more investment (additional funds make changes
possible)
• orientation for change: strategic fit, performance-orientation
the reform should be a package of
public/private cost-sharing + access promotion
two
packages!
• mixed funding of the mixed good higher education (instead of
polarized debate)
• turn down major access obstacles
A major principle for the reform is: balance!
an important feature of the funding model is „balance“. One-sided models
are dangerous, the model has to deal with trade-offs. The current model is
not sufficiently balanced.
stability, input-orientation
incentives, output-orientation
ex ante funding
ex post rewards
national objectives
institutional profiles
teaching criteria
research criteria
broad research funding
focused research funding
public sources
private sources
needs-based student funding
merit-based student funding
autonomy
accountability
Proposed model for state funding in brief
• increase public funding
• keep and optimize the study place system
• introduce basic funding for research (again) – only
universities
• introduce rewards for good performance
• introduce rewards for good plans to develop HEIs
profiles and performance
• support (few) centers of excellence in research – only
universities
State funding: 3-pillar-model instead of
1 pillar
pillar 1:
basic funding
teaching
• numbers of study
pillar 2:
performance –
oriented funding
pillar 3:
innovation –
oriented funding
• number of graduates
places (per field)
• cost oriented weight
• number of incoming
and outgoing
students
+ institutional indicators
research
• numbers of
professors or
academic staff
(per field)
• cost-oriented
weight
implications of the 3-pillar-model
• bibliometric
profile-oriented
target agreements
teaching + research +
third mission
indicator
• third party funds
• number of PhDs
+ institutional indicators
funding of
centers of
excellence
Important implication: available funds differ
according to performance
from pillar 2/3
funding high
performance
funding low
performance
from pillar 1
funding per
study place
funding per
study place
available funds
per study place
The process of planning study places is
gradually changed
• stakeholder consultations (labor market needs, development of
demand), interministerial committee
• MoES/line ministries: overall target numbers for fields (incremental
with planned +/-), target numbers for innovative programs
• universities: proposals how to contribute to +/- and for innovative
programs (the latter: open for private universities)
• panel to review proposals, MoES to decide (last period’s demand
relevant if more than e.g. 5% deviation from plans)
• part-time study places allowed
Strengths of current study place system are
preserved
• planning process according to labour market needs
•
stability
• differentiation according to cost of fields
• but now: allowing reallocations (innovative programs), less
micro-management
Research funding balances 3 elements
funding of
non-university institutes
current model
funding of
centers of excellence (pillar3)
university
pool to
support
individ.
researchers
funding of institutes
(university + non-university)
per capita-funding (pillar1)
individual researchers
incentives for
research
performance
incentives (pillar 2)
The 2nd pillar is a major new element of
performance orientation
• around 10% of budget would create substantial incentives
• calculation: X € of total budget for indicator, university with Y% of
indicator value gets Y% of the indicator budget
• final decision about indicators and weights: political, strategic fit
• up to 3 institution-specific indicators
(calculation options: premium for targets reached, reward
according to rate of increase of indicators)
The 3rd pillar promotes profile differentiation
• clarify priorities for next 3 years in promoting institutional profile
(within framework of national goals)
• define institution-specific performance indicators for pillar 2
• pre-funding of innovative activities (e.g. establish joint Dr. schools
with non-university research, post doc programs, international
accreditation...), but also reward goal attainment
• funding of research centers of excellence
Diversification: requirements for the EU
structural funds
• parallel process going on, we recommend to include goals that are
not covered by 3-pillar-model (and which have short-term
character)
• incentives to stimulate other income streams (e.g. knowledge
vouchers for SME)
• sector consolidation incentive program (reference to Denmark,
Scotland)
Autonomy: a strength of the Latvian system
• formal rules of autonomy are a European best practice
• but the other side of the coin is transparency/accountability
(financial statement, report on target agreement)
• plus financial management training, peer learning
Student funding: based on cost-sharing +
promoting access
• enlarge number of state-subsidized study places (full need of the
country)
• private contribution from all students
• differentiated system (cost, labor-market perspectives, political
preferences such as STEM) – or advantages of flat fee?
• needs-based scholarship to refinance private cost-share
(continuation based on merit)
• student loans with state guarantee (and merit-based debt
remission)
Funding model is not isolated, needs favorable
framework conditions
• strategic planning on both sides
• informed study choices (U-Multirank participation)
• quality assurance
• inter-ministerial coordination (MoES, line ministries, MoF)
• alignment of mechanisms for universities, colleges, research
institutions
Funding models considered
and the proposal for a new model
Prof. Dr. Frank Ziegele, World Bank Team
September 24, 2014
Riga, Latvia