No rollback of higher education institutions’ financial autonomy

CHE Consult, commissioned by the CHE Centre for Higher Education, has conducted a study on the financial autonomy of higher education institutions (HEIs) in North Rhine-Westphalia and Brandenburg. The study concludes that the policy of granting German HEIs financial room for manoeuvre is largely practiced. There is no evidence of a rollback to detailed state control. However, there is an inconsistent coexistence of different management tools and legal framework conditions in some cases.

Since the 1990s, German HEIs have been granted a significant degree of autonomy from the state. Most notably, they have gained greater financial autonomy. Clear indications of this greater freedom include their ability to build up reserves and introduce global budgets. The concept of financial autonomy has been fleshed out differently in the various federal states. In some cases, the options available for state intervention have expanded again in recent years. The question is whether the current framework conditions restrict the capacity of HEIs to act.

The extent to which HEIs enjoy financial autonomy in practice was the subject of an analysis conducted by CHE. The situation was analysed using North Rhine-Westphalia and Brandenburg as examples. The financial autonomy of HEIs is not severely restricted in either of these two federal states. However, the study clearly revealed the coexistence of old and new management tools. Principles of the management system considered “old” in this sense, subjecting HEIs to meticulous, detailed rules, include regulations concerning faculty teaching loads, capacity guidelines and establishment plans. Target agreements and global budgets are just some of the elements that represent the new regulatory mechanisms offering federal states greater autonomy.

“Our results show that both approaches remain juxtaposed in practice or have been insufficiently harmonised,” stated co-author Akiiki Babyesiza. “The German higher education system is obviously still at the transition stage in this respect. Ideally, what we need is a management model that places greater emphasis on the autonomy of HEIs, reducing discrepancies between the two approaches.” In some cases, the problem lies with the method of implementation, such as where management tools are used in such a way that obligations to document the procedure in great detail cancel out any new-found room for manoeuvre.

Another obstacle identified by the analysis are the many specifications or restrictions originating from the non-academic world, which increase red tape. It is often the case that insufficient consideration is taken of applications to scientific institutions in areas such as taxation law, procurement law and labour law. For example, the employment of student and graduate assistants involves a great deal of documentation, due to the Minimum Wage Act.

Besides the merger of small-scale programme funding lines, CHE calls for a reform of formal policies such as capacity guidelines and establishment plans, as well as the combination of detached issue-specific university contracts to avoid management diffusion. In addition, CHE has long considered it imperative to grant HEIs the freedom to decide whether they want to introduce tuition fees.

Interviews were conducted with budget experts at two universities of applied sciences and two universities in each of the federal states under review. Documents relating to higher education policy, legislation outside the area of higher education, volumes of programme funds, and the political perception of reserves were also analysed.



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