Funding overhaul in Hungary

February 18, 2000

Three years after Hungarian politicians created an uproar in academia by sacking thousands and introducing performance-linked pay, plans are being drafted to change the way universities are funded.

Drawing on the experience of other countries that have grasped the nettle of university reform, Hungary's ministry of education wants to tie finance budgets to either research or teaching-based programmes.

Wary of growing pressures for more sophisticated roles from the higher schools - the equivalent of the United Kingdom's former polytechnics - and keen to contain costs, Hungary's ministers are pushing through changes in funding regulations that will have a profound impact on a stubbornly conservative university system.

"Our goal is to give more freedom to the universities to change their strategies, whether they want to be research-based and financed or teaching-based," said Joszef Palinkas, political state secretary at the education ministry.

A physics professor from Debrecen University, Dr Palinkas is a political appointee from Hungary's ruling Fidesz party.

"At the moment, universities have to both teach and do research to get enough financing. If a university is not able to build up a good enough research capacity it would probably be better off not trying to carry on with a weak service," he said.

Next year, new funding regulations should be introduced that give weightings to research capacity and output and tie cash to the performance of doctoral schools.

The funding change will be phased in over two years, and universities are being asked to draw up "institutional development plans" to indicate which path - research or teaching - they wish to follow under the new funding regime.

Each of Hungary's state universities will have to define its mission and its research capacities, present plans for its future function and student enrolments and state how it will fund its budget, through both state and private sources.

Capital grants worth 55 billion forints (Pounds 137 million) will be made available over four years to help ease the transition from dual-role to single-role institutions. The money represents a 20 per cent increase in university funding over the period: the annual higher education spend in Hungary is 85 billion forints.

The plans represent another shock to Hungarian academia, which has been one of the least adaptable sectors of the economy since the collapse of communism more than ten years ago.

Performance-related pay, mass sackings and the introduction of student fees have all shaken the system, but the latest upheaval has yet to impinge upon most academics.

A head of department at Eotvos Lorand University, the leading humanities university, said when told of the planned funding changes: "This is somewhere up in the air. It has not yet come out into the open so it is not really part of our lives yet."

Dr Palinkas is expecting an outcry from those who perceive themselves as losers when the precise funding formulas become clearer later this year.

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