Cut state apron strings, European academy told

Universities must diversify income streams in an era of austerity, EUA warns. Hannah Fearn reports

September 16, 2010

Europe's universities must reduce their financial reliance on the state, a conference in Italy has heard.

A study of 140 institutions across the continent, carried out by the European University Association, has found that the average university in Europe still receives 72 per cent of its funding from the public purse.

More than a third of higher education institutions receive less than 10 per cent of their income from non-state sources, according to the research, which was presented at the EUA's Towards Financially Sustainable Universities II: Diversifying Income Streams conference in Bologna this week.

The EUA also explored the wide range of funders working with universities across Europe. The average institution receives 7 per cent of its income from contracts with business, and a further 3-4 per cent from international public-funding streams such as European Union structural funds. It also picks up between 3 and 4 per cent from philanthropic gifts, and up to 5 per cent from service-related income.

While France, Germany, Sweden and Switzerland are increasing academy spending, governments across the rest of Europe are reining in public funding for universities, forcing them to look elsewhere.

However, the research identifies barriers preventing European universities from diversifying their income streams. Thomas Estermann, head of the Governance, Autonomy and Funding Unit at the EUA, said universities' close ties to the state were holding back attempts to raise money from new sources.

"In a number of countries, universities don't have sufficient autonomy to act independently and find alternative income streams," he said, adding that academic culture could also be a factor.

"[Academics] believe that there is a danger of being too market-driven, particularly in countries where there has been a high percentage of public funding," he said.

A lack of trained staff, such as charitable fundraisers and intellectual-property experts, could also stymie attempts to diversify.

"There is a whole set of new skills necessary that is not always present in institutions, particularly when they're just starting to explore those routes," Mr Estermann said.

Nigel Thrift, vice-chancellor of the University of Warwick, told delegates at the conference to instigate cultural change across Europe.

"It's not an embarrassment to be commercially minded," he said.

Warwick owns 17 free-standing businesses, which are run to generate profit for the institution.

"These help academic enterprise, not hinder it. It's terribly important to understand that there are ways in which we can generate substantial income through this kind of business," Professor Thrift said.

But he said universities must not expect too much from philanthropy at this stage. "There is not an accepted and established culture of giving in most of Europe, and that takes a generation to build up."

Conference chair Ian Creagh, head of administration at King's College London, said the rest of Europe would be looking to the UK for guidance on attracting funding from a wider range of sources.

"In many respects, UK universities are significantly down this path already. Other Europeans will be looking to learn what they can take from the British model," he said.

The full EUA report is expected to be published in January.

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