Call to avoid European HE funding cuts by ‘learning lessons of crash’

European countries and universities can mitigate some of the coronavirus-related funding challenges by rejecting the short-term thinking that was prevalent in response to the 2008 financial crisis, according to a policy expert.

A briefing published by the European University Association this week warned that all sources of university income will be affected by Covid-19 in the short to medium term and said the pandemic was likely to increase the investment gap between different higher education systems in the continent.

But Thomas Estermann, director of governance, funding and public policy development at the EUA and co-author of the briefing, said universities and countries could “mitigate the effect by understanding and learning from the lessons from 2008” and making decisions based on “more of a long-term perspective”.

“There will certainly be a possibility to make better decisions this time by thinking very carefully about what kinds of decisions are absolutely necessary,” he said.

“Of course there will be difficult choices to be made, but in the end I think what is different this time is it is better understood that universities’ activities of research and innovation and educating people are absolutely crucial to helping us get out of the crisis and preventing a crisis in the future. The argument that this is a very important sector to invest in can be heard a bit better this time than in comparison with 2008.”

Previous analysis by the EUA of public funding for higher education across Europe found that many university systems were still plagued by austerity in 2018, with some countries failing to offset funding cuts made 10 years earlier despite economic growth. Economic challenges also led to declines in university autonomy across the continent, with governments increasing their control of institutional finances, it found.

As examples of the short-term thinking in 2008 that should be avoided this time, Mr Estermann cited government-mandated staff recruitment freezes at universities in the Republic of Ireland and significant cuts to infrastructure in several countries.

“It should be up to the institution to be able to make those decisions, rather than saying there is a general hiring freeze or something like that. That is something where you can see very clearly a better choice with greater flexibility for institutions would potentially prevent long-term effects,” he said.

He added that nations should consider placing time limits on coronavirus-related policy changes so they do not continue after economic recovery.

The new EUA briefing, “The impact of the Covid-19 crisis on university funding in Europe: lessons learnt from the 2008 global financial crisis”, also warns that university mergers, which increased across Europe after the 2008 crisis, “cannot be considered as a way to reduce costs or serve as a quick fix to economic difficulties”.

“Merging is one of the [topics] that has come up in response to the upcoming financial difficulties, but from our findings in the past 10 years, it is very clear that merging only for financial reasons basically doesn’t work out,” Mr Estermann said.

ellie.bothwell@timeshighereducation.com