Higher education institutions across Europe face today a demanding and complex financial context in which traditional modes of funding have been transformed and continue to evolve. Moreover, public sources are not as generous as they often were in the past and frequently become more demanding and competitive. The changes are particularly significant in Europe due to the traditional reliance on public funding. The current economic and financial crisis has exacerbated even further these problems, with growing pressures upon the sustainability of funding regimes of public higher education and the pressure mounting to explore new sources of income.
The efficiency of funding in terms of the capability to meet certain policy goals in a cost-effective way is becoming increasingly important.
The DEFINE project makes funding efficiency in higher education the main focus of research and activities, thereby providing data and recommendations which will support the development of strategies to increase the efficiency of funding. The project notably includes the setting up of international focus groups of university practitioners to determine good practice, challenges and pitfalls as well as the impact of funding efficiency measures such as performance-based mechanisms, institutional mergers and excellence schemes.
The project aims at contributing to the improved design and implementation of higher education funding policy and thereby to enhanced funding efficiency in the sector.
The project findings will feed into current and future higher education funding policy development at national and European level and support universities in responding to these changes. The project will therefore have a large impact on the European higher education area.
DEFINE is both a research project and a stock-taking exercise which will provide recommendations to policy-makers and universities in order to improve the design of funding efficiency measures in higher education.
In particular, DEFINE seeks to:
DEFINE notably explores the challenges related to performance-based funding mechanisms, merger processes and excellence schemes, and in particular their impact on university management.
The DEFINE project is run by EUA in collaboration with CIPES, the Centre for Research in Higher Education Policies (Portugal), and the Universities of Oxford (UK), Aalto (Finland) and Erlangen-Nuremberg (Germany), and the Copenhagen Business School (Denmark).
The Steering Committee includes:
The DEFINE project runs from October 2012 until Spring 2015. This webpage will be updated with the latest information regarding the project milestones.
DEFINE is co-funded by the European Commission under the Lifelong Learning Programme (2012). This project webpage reflects the views only of the project consortium, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
For queries on the DEFINE project, please contact: email@example.com
At this final event, the project team will present an overview of the findings and conclusions of the research carried out in the DEFINE project. Particular emphasis will be given to recommendations to policy makers and universities regarding the set-up of performance-based funding mechanisms, merger processes, and so-called excellence schemes.
The work carried out in the project has been summarised in a final publication which will be released on that occasion. The team will also present a pilot online tool which maps, for the first time at European scale, the different mergers involving universities in the past fifteen years.
The event will be hosted by the Representation of the Free State of Bavaria, Rue Wiertz 77, from 17.00 onwards. To register your interest please send an email to firstname.lastname@example.org.
On 9 and 10 October 2014, EUA organised the second edition of the Universities’ Funding Forum at the University of Bergamo, Italy. The Forum was set within the DEFINE project and addressed its main pillars: performance-based funding, mergers and concentration processes, funding for excellence and efficiency measures. For more information, please see the event page.
In the first half of 2014, three thematic focus groups will meet and discuss issues related to performance-based funding, merger processes and excellence schemes. Experts from higher education institutions across Europe, experienced in these areas, will be invited to discuss and identify good practice, challenges and pitfalls as well as the impact of the three measures on the management and the activities of higher education institutions.
The focus groups will give participants the opportunity to:
The results will feed into the final project publication and will also be discussed and presented at the second EUA Funding Forum in autumn 2014.
You can consult the call for interest here. Expressions of interest to participate in the groups can be submitted to EUA (email@example.com) via the application forms below:
Focus Group 1 on Performance-based Funding takes place on 19 and 20 February 2014 at the Copenhagen Business School in Denmark and registration for this group is closed. A thematic report on the topic will be published after the event.
EUA and HUMANE, the Heads of University Management and Administration Network in Europe, co-organised on 22-23 November an open seminar at the University of Aveiro (Portugal) dedicated to the challenging question “how to fund universities efficiently”.
Some 60 participants discussed the impact of a variety of measures aiming at enhancing funding efficiency in higher education on university management. Thomas Estermann presented the preliminary results of EUA’s analysis on the topic, covering 22 European countries while case studies from six different countries illustrated the challenges associated with changing funding models, mergers and concentration processes.
It appeared from the discussions that there is a general trend towards making funding allocation more transparent and more competitive through redistributive funding formulae at least partly based on performance. Common challenges highlighted during the seminar included the risk of “game playing” induced by the selection of indicators, the difficulty for universities to generate the requested data on which the indicators are based, and the cost for universities and authorities of the whole process.
A number of participants confirmed that beyond a greater focus on accountability, universities are also increasingly called on to demonstrate the impact that their activities (and notably the research they conduct) have on their environment, which can raise a number of issues.
Case studies also shed a new light on the various challenges for universities triggered by mergers and other concentration processes, including the necessity to comply with different regulations, for instance regarding staff, the difficulties in integrating real estate and infrastructure management, as well as fostering a new common organisational culture. A key message was the importance of having good communication among partners as well as sufficient financial support to carry out the process.
Finally, participants from about 18 countries explained how their institutions sought to foster efficiency measures internally or through collaboration mechanisms with other stakeholders. Discussions showed how regulatory frameworks and organisational structures had a strong influence on what type of activities the central university management could develop in this regard. In decentralised structures, one priority is to foster synergies among the different units to promote common approaches, for example by organising common procurement processes. In certain countries, sector-level approaches had already been developed.
The seminar generated a lot of qualitative input that will now be fed into the DEFINE project.
All the DEFINE project publications reflect the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
This third thematic report maps the use of performance elements in public funding for universities in 28 systems across Europe and focuses in particular on funding formulae with output indicators (such as numbers of graduates) and performance contracts. It combines system level data with case studies in a unique way and assesses the opportunities, risks and limits of performance-based funding. The analysis reveals that expectations towards performance-based funding are often too high. It further concludes that this funding mechanism should be used with caution and considered in the wider context. The report also outlines strategies for managing performance-based funding in order to reap its full benefits and mitigate the risks.
With this report EUA provides key recommendations to policy makers and public funders for the design and implementation of sustainable and efficient university funding systems. It also supports university leaders and managers in their strategic planning and internal funding allocation at institutional level and offers advice and good practice examples from across Europe. The complexity of funding systems and the diversity across Europe make comparisons challenging, but EUA hopes that the overview provided in the report will help structure the debate about funding reforms at European, national and institutional levels.
In this second thematic report, the focus is placed on university mergers and concentration processes. The report explores the rationale for universities to merge and reflects on the costs and gains associated with mergers. The analysis reveals a variety of different drivers but makes it also clear that cost-saving should not be the primary goal for mergers. The report includes a series of case studies which detail success factors and challenges of the different merging processes. The analysis shows that the success of any merger process is very much dependent on a solid pre-evaluation, good planning and implementation. The report also highlights the importance of inspired leadership fostering trust among, and the involvement of, the staff and wider community.
A common feature of the series, recommendations are included in the report with the view to support the strategic planning of a merger for university leaders and managers. Public authorities and policy makers will also find useful information, advice and transferable good practice as regards the question of system consolidation.
The first thematic report of the DEFINE project examines “excellence schemes", public funding schemes which have as their main objective the fostering of excellence in the university sector, and their impact on universities in Europe.The report includes a series of project recommendations for policy makers and higher education institutions which are based on data collection, case studies, site visits and focus groups which have been carried out/collected in the framework of the DEFINE project.
The report looks at the characteristics, rationale and objectives behind the development of the many schemes that have been introduced in Europe. Whilst the aims of excellence schemes may include for example enhancing international visibility or competitiveness, improving research and/or teaching quality, it notes that there is also often an ambition behind such schemes to enhance funding efficiency. The report highlights that excellence schemes should not be considered in isolation from the overall funding framework in a system, and should represent additional funding for universities, and not take away basic funding granted to universities.
The preliminary results of the project analysis, which are based on input from 24 European countries, are available in the DEFINE interim report published in December 2013. Some of the main observations highlighted in the report are:
• How public funding is delivered to universities: While this varies greatly between countries, the vast majority of higher education systems now use some type of performance-based elements in their funding. These include funding formulae (based on a series of indicators) and/or so-called performance contracts. For example, over 50% of the universities’ overall public funding comes from formula-based block grants in at least eight European HE systems. The report looks at the relative importance of the different indicators used, considering input- indicators such as numbers of students, and those focusing on outputs such as the number of graduates. Teaching and research activities are often funded differently. While input indicators such as the numbers of Bachelor and Master students are the most important criteria for funding teaching activities, research activities tend to be funded mainly on the basis of output indicators such as doctoral degrees or the amount of external funding (see figure 2 of report). Meanwhile, performance contracts, whereby certain goals are agreed between public authorities and universities, are a common feature found in 15 of the HE systems considered in the study.
• How the higher education landscape is being restructured: In almost all countries studied, authorities and universities are either considering or taking steps towards merger processes, with a view – along with other objectives – to rationalise funding allocation. The nature of these merger processes varies across Europe, with the deepest restructuring taking place in Denmark, Estonia, Finland or Latvia. However, mergers are only one of the many different concentration and collaboration phenomena occurring in higher education. Examples include the creation of university consortia and strategic partnerships. Public authorities encourage these processes via setting up specific funding schemes, often with a focus on excellence. Large-scale initiatives such as in Germany and France, where additional funding has been made available to universities, remain an exception but have an important impact on the system as a whole.
• How universities seek to optimise the use of resources: Universities are actively seeking to improve efficiency both internally and by creating synergies within the sector, but regulatory frameworks strongly determine the capacity to implement different measures.
The interim report concludes with a series of key messages which have been drawn from the project consultations, analysis, and discussions at a recent seminar on the topic which brought together university representatives from across Europe. The messages highlight that universities have an important role to play in the funding efficiency area, and should be proactive in addressing this challenge to contribute to shaping this agenda. EUA and its partners will take this work forward with three focus groups in the spring of 2014 that will gather small groups of HE experts from across Europe to analyse the institutional impact of the three groups of efficiency measures (performance-based funding; excellence schemes; and concentration measures) in more detail.
Public Funding Observatory: The EUA Public Funding Observatory interactive online tool gives the user the opportunity to look at annual public funding data since 2008 in a customised way. It provides necessary context for understanding developments in public funding to universities across Europe.
University Merger Tool: This pilot tool maps mergers in the university sector since 2000, showing the extent of the phenomenon and providing useful information to analyse restructuring dynamics in the field.
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