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Governance and Funding

What is it?

The way higher education systems are organised and governed and the way they are funded have an important impact on their overall effectiveness. The EU's Europe 2020 strategy stresses that:

  • Higher education systems require adequate funding and, as a growth-enhancing area of spending, public investment in higher education should be protected;
  • It is important to diversify sources of funding to higher education and maximise the value gained from resources invested;
  • The challenges faced by higher education require more flexible governance and funding systems, which balance greater autonomy for education institutions with accountability to all stakeholders.
Why is it needed?

While spending levels on higher education vary substantially between EU countries, total investment in higher education in Europe is too low: 1.3% of GDP on average, compared with 2.7% in the US and 1.5% in Japan. The current pressure for fiscal consolidation has also placed additional pressure on public investments. So maximising the return on resources invested is crucial.

As noted, these challenges require greater flexibility, and autonomous institutions can specialise more easily, promoting better educational and research performance, while fostering excellence within higher education systems. But legal, financial, and administrative restrictions often limit institutional freedom to define strategies and structures and to differentiate themselves from their competitors.

What has been done so far?

Through its support for research and policy cooperation, the European Commission assists EU countries to develop effective models of governance and funding in higher education.

Country workshops, organised as part of the Open Method of Coordination in education and training, focus on such issues as institutional governance in higher education and performance-related funding.