HE and HE funding models in Finland

HE and HE funding models in Finland 30.4.2014 Tomi Halonen Department for Higher Education and Science Strategy and Steering Group Ministry of Education, Science and Culture tomi.halonen@minedu.fi

HE in Finland

Duration FORMAL EDUCATION IN FINLAND ISCED - classification 6 Doctoral degrees Licentiate - degrees Universities 5 A Master's degrees Bachelor's degrees Universities Polytechnic master's degrees Polytechnics Work experience 3 years Polytechnic bachelor's degrees Polytechnics in years 1 9 1 3 4 5 4 3 Matriculation examination General upper secondary schools Special vocational qualifications * Vocational Further vocational qualifications * qualifications * Vocational institutions * Also available as apprenticeship training 2 & 1 Basic education, 7 16 - year - olds Comprehensive schools 0 Pre - primary education, 6 - year - olds ISCED - classification 1997 0 Pre - primary education 1 2 Primary education or lower secondary education 3 Upper secondary education 4 Post - secondary non - tertiary education 5 First stage of tertiary education 6 Second stage of tertiary education

The Finnish Higher Education System The Finnish higher education system comprises two parallel sectors University sector 14 research universities Student enrollment 168 000, (114 000 FTE) of which 18 000 doctoral students All institutions funded by the state Polytechnic sector [universities of applied sciences] (est. in the mid- 1990s) 24 institutions Student enrollment 148 000, (114 000 FTE) Institutions partly funded by the state, partly by municipalities Regional development tasks Bachelor degrees (vocational and professional degrees) (Professional) Master s degrees in selected fields

The Finnish Higher Education System - degrees by level

Steering and Funding of HEIs

Steering and funding of HEIs Legislation and norms Programme of the Finnish Government Education and research - Development Plan MoE steering Negotiations and performance agreements Written feedback University visits Information exchange State budget State funding for HEIs Universities 1,8 bn Polytechnics 0,9 bn + Public research funding allocated to universities (Academy of Finland & Tekes) 0,3 bn Tuition-free system

Universities funding formula

Universities' core funding formula reform 2013 Joint working group of the Ministry and Finnish universities proposal published November 2011, act passed by government April 2012 Vision 2020 for the Finnish universities Improved quality Deeper internationalisation Clearer profiles Greater efficiency Stronger impact New core funding formula from 2013 A step towards the vision Improved steering effect Limited number of indicators Enhanced transparency Funding allocated to universities in a lump sum

Universities core funding from 2013

Universities' core funding formula review 2015 (proposal) Review of the 2013 funding formula Joint working group of the Ministry, Finnish universities and Academy of Finland - essentially the same working group which made proposition for 2013 funding formula Working group gave its proposition to the ministry in February 2014 Data from the new quality-based Publication Forum will be included to the funding formula Federation of Finnish Learned Societies has completed the Publication Forum Project at the initiative of the Universities Finland (UNIFI) Data from new student feedback system will be included to the funding formula In January 2012, Universities Finland (UNIFI) set up a working group to prepare a national student feedback survey for universities Funding formula revision will come into effect 2015

Proposition of the working group for universities' core funding formula review 2015 Education Student feedback should be included to the universities core funding formula Proposed weight is 3% of the state funding Weight of the factor Number of students who have gained more than 55 study credits should be increased by 1 percentage point to 12% The corresponding increases in percentages should be deducted from financial items for Bachelor s and Master s degree resources, 6% of overall state funding for universities would be allocated on the basis of the number of Bachelor s degrees (previously 9%) and 14% on the basis of Master s degrees (previously 15%)

Proposition of the working group for universities' core funding formula review 2015 Research Publications rating system produced by the TVS should be adopted Computation of funding should be adopted so that the quality perspective would be strengthened over a transitional period of 2015-2016 and would be even more pronounced as of 2017. During the transitional period the rating of publications would be executed so that in Level 0 the coefficient for peer reviewed scientific articles and publications would be 1, in Level 1 it would be 1.5 and in Levels 2 and 3 it would be 3. To bolster the social impact of publications, other publications would be rated using a coefficient of 0.1 in the calculation of funding. Non-peer reviewed scientific papers, books and publications, publications designed for professional groups and publications intended for the general public

Universities core funding from 2015 (proposal)

Polytechnic reform and Polytechnics funding formula

POLYTECHNIC REFORM IN THE GOVERNMENT S PROGRAMME The legislation concerning funding and administration of polytechnics will be amended. The responsibility for the basic funding of polytechnics will be transferred to the state in its entirety, and they will be turned into independent legal organisations. The operating licenses of polytechnics will be renewed highlighting the quality.

AIMS OF THE POLYTECHNIC REFORM To give the polytechnics a stronger position to meet the changes and challenges of the working life, society and regions As independent legal persons polytechnics will have more independent status and more flexibility to better react and response to the needs of the surrounding society Stronger strategic competence, profiling, focus area choises, stronger leadership and ability to decision making To enhance the quality and effectiveness of teaching and RDI To strengthen their role within the system of innovation To ensure international competitiveness of the polytechnic system

FIRST PHASE OF THE REFORM In the first phase the operating licences and the educational responsibilities of polytechnics were revised. At the same time the Act on the Financing of Education and Culture was amended in regard polytechnics so that the grounds and criteria for financing will take into consideration the polytechnics statutory operations in their entirety, with emphasis on quality, impact and efficiency. the financing system to be made more performance-based the institution-specific funding will be primarily determined on the basis of degrees awarded, the quality and efficiency of study processes and R&D The first phase of the reform took effect on 1 January 2014 (amendments to legislation) concerning: new funding model new operating licences updated educational responsibilities

REVISING OPERATING LICENCES The present operating licences expired 31.12.2013. New operating licences came into effect 1.1.2014. The criteria for granting the licences demand for education economical and functional preconditions for organising the regulated tasks duly; taking into account quality, impacts and effectiveness Educational responsibilities consists of degrees and degree titles MoE will not decide on the degree programmes any more Aim of the reform of the educational responsibilities is to strengthen the autonomy of the polytechnics and to build larger educational entities.

Funding formula for polytechnics until 2013 70 % Calculated number of students by polytechnic s different fields of education Based on the number of study places and number of students set in the MoEpolytechnic agreement Government core funding (A unit price per student* x Number of students) 897 M (2011) 30 % Number of degrees awarded by the polytechnic Average of past two years Discretionary increase in unit price Discretionary government grant 22 M in Project funding 19 M Performance based funding 3 M *) unit prices are calculated every four years on the basis of actual costs

Polytechnics core funding from 2014

SECOND PHASE OF THE REFORM The polytechnics and the organisations running them to merge into one legal person, and juridically all the polytechnics become limited companies the governance model to be streamlined so that the polytechnics only have one, joint governing board The responsibility for core funding to be entirely transferred to the state according to the timetable of the government transfer reform The second phase of the reform is expected to take effect on 1 January 2015

R&D funding

Structure and resources of public STI system GOVERNMENT (R&D Financing 2012: 2,2 bn) state budget Research and Innovation Council Ministry of Education (1 billion ) Ministry of Employment and the Economy (746 m ) Other Ministries (372 m ) 258 m Academy of Finland (350 m ) Universities: 542m (of total university state budget of 1,8 bn) 134 m Finnish Funding Agency for T&I - TEKES (590 m ) 0,6 m Polytechnics R&D: total 108 m (of polytechnics budget 897 m ) 9,3 m VTT (87 m ) Other Gov. R&D institutes: 215 m SITRA, Finnish Innovation Fund

Government research expenditure 2013 Total 2 billion Source: Statistics Finland 2013

Developing HE

Other current development Renewal of higher education student selection Clearing the tertiary education application backlog temporary increase of study places (2014 and 2015) Shortening Higher Education graduation times Government support for universities to raise capital Comprehensive reform of state research institutes and research funding Reform of financial aid to students