1. TATIONpRÆSEN February 2011 AARHUS UNIVERSITY DANISH UNIVERSITY FUNDING MODEL AARHUS UNIVERSITY – AN EXAMPLE AARHUS UNIVERSITY Au

2. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen 2 WHAT IS FULL COSTING?  Are expenditures at universities that run budget surpluses fully financed?  Or is economic autonomy being eroded?

3. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen 3 UNIVERSITY REFORMS IN DENMARK  Globalization Council under the leadership of the prime minister recommended reforms of:  University Governance – higher thrust by introducing external boards and appointed rectors (Accountability)  Institutional Structure – fewer institutions by mergers and a new university landscape (Efficiency)  University Financing – increased investments in higher education and research for competitiveness (Effectiveness)

4. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen 4 FINANCING REFORM  Committed to the Lisbon and Barcelona targets and raise public investments in research to 1 percent of GDP in 2010  University core-funding is based on performance indicators (45% graduation, 10% Ph.D.program efficiency, “% bibliometry, 20% external funding)  Study programs are taximeter funded (automatic and follows accumulated completed ECTS)  50-60% of research funding through competitive mechanisms e.g. research councils (includes a flat overhead of 44%) Mill. € (2008 prices)

5. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen COMPETITIVE FUNDING at DANISH UNIVERSITIES

6. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen AARHUS UNIVERSITY – INCOME STRUCTURE Budget 2011 (800 million EUR, about 70% state funded)

7. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen FINANCING DEGREE PROGRAMMES A 2009 report by McKinsey showed that: Degree programme expenditures exceeds taximeter income:  Substantial variation on number of student-teacher hours between and within taximeter groups – humanities and social science tend to have fewer lessons, tutorials and lab. hours 7

8. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen AARHUS UNIVERSITY and AURF Aarhus University: › Turnover: EUR 800 million › Liquidity: EUR 180 million › Grant funds: EUR 500 million › Equity: EUR 100 million Aarhus University Research Foundation: › Balance EUR1100 million › Equity: EUR 400 million › Grant budget 2010: EUR 10 million Board Rector’s Office Administration Aarhus University Research Foundation Aarhus University Board Research Foundation Administration Research Foundation’s Real Estate Ltd. Auriga Industries Ltd. Østjysk Innovation Ltd., INCUBA Ltd., etc. INCUBA Science Park Ltd. Aarhus Faculty of Arts Aarhus School of Business and Social Sciences Aarhus Faculty of Science and Technology Aarhus Faculty of Health Sciences

9. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen UNIVERSITIES IN TRANSITION The Humboltian UniversityTriple-helix University Quadruple helix - the Modern University Education Research EducationResearch Knowledge Exchange Education Research Talent Development Knowledge Exchange

10. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen AU ORGANISATION

11. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen AARHUS UNIVERSITY – EXPENDITURES AU Budget 2011 (EUR 800 million) Education Research Talent Development Knowledge Exchange The Modern University Research Program- mes Ph.d.s Study program- mes Post docs Students LifeLong Learning Research projects Contracts Profes sors

12. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen Infrastructure Prerequisites – from a governments point of view : Acquisition of buildings must be government cost neutral Large equipment acquired through competitive mechanisms Effective financial management (by the university) Competent building administration Possibilities – from a university point of view: Greater autonomy Faster, simpler administrative procedures Potentially greater solvency (depending on terms of acquisition) Borrowing capability (depending on realization of solvency potential) Strategic, longterm university decisions require a 15% equity (PwC) 12

13. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen Is a full costing scheme implemented yet? McKinsey (2009): Degree programme expenditures exceeds taximeter income and are not full cost financed Result at AU internal cross-subsidy of education from research budget at about 3-6% 13

14. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen What is next for AU? Change of academic culture Autonomy and accountability (once again) Reorganisation and reduction of internal structures. Fewer and larger academic entities (faculties and departments) Financial and strategic management system, (decentralised budgets, income generations drives activities, all cost will be “project” based, time allocation and/or time registering) 4 year rolling budgets (semi independent of budget law), and strategic economic room 3.5 per year 14

15. February, 2011 AARHUS UNIVERSITY Rector Lauritz B. Holm-Nielsen LAURITZ B. HOLM-NIELSEN RECTOR, AARHUS UNIVERSITY RECTOR@AU.DK Au