This month, the European University Association, a representative of more than 800 European universities, issued a new report, “Public Funding Observatory 2020/2021: Part 1: Financial and economic impact of the COVID-19 crisis on universities in Europe.” The report is based on a survey conducted this summer of 29 national European university associations.

The report illustrates the impact of the COVID-19 pandemic on EU universities’ present status and possible ramification on their futures. It includes survey results regarding private and public funding as well as university operations.

Current Situation

A downturn in international student enrollment is one of the most significant economic fallouts of the COVID-19 lockdown on European universities. Fifteen of the 29 associations surveyed rated this impact as “high.” Similarly, 14 university associations rated the effect of student mobility costs as “high.” Other areas of impact were learning and teaching, research, infrastructure, equipment, staff mobility and international staff recruitment.

Changes in European universities’ commercial income has also had financial consequences. Twenty-two associations indicated that higher education systems in the region have been affected by lower income from commercial services, such as room rentals and student accommodations. Sixteen reported higher education systems have suffered a drop in contract research services.

 

“…universities are highly uncertain and concerned about their funding outlook for 2021–2023.”

 

In contrast, a brighter spot for European university income during the COVID-19 pandemic has been public funding. In this case, decreases have been more muted due to 2020 budgets that were already in place. Twenty-two of the 29 associations surveyed reported higher education systems have received new public funding during the pandemic. For 15, this included new calls or programs for coronavirus-related research. Additional examples of the types of public financial support that universities have received are investments in research and teaching capacity, student aid, student places, and infrastructure and digitalization.

In addition, during the COVID-19 outbreak, European universities have benefitted from resources provided by national university associations, according to the EUA survey. Coordination of dialog with policymakers about COVID-19 was cited by 22 as a benefit of the associations surveyed, while the exchange of good practices was a benefit identified by 20.

Outlook

Although the current COVID-19 situation has brought mostly negative results to European universities this year, but there have also been some positive outcomes, according to the EUA survey. Nonetheless, these universities are highly uncertain and concerned about their funding outlook for 2021–2023. Of the 29 university associations surveyed, 12 expect it to core national public funding for higher education systems to increase, 11 expect it to remain stable, 8 do not know and as many as 7 expect it to decline.

The outlook for European funding, currently the subject of EU budget negotiations, is an even bigger unknown. Twelve of the associations surveyed indicated they do not know, versus 8 that expect it to be stable and 5 that expect it to decline.

One area where the majority of respondents expect stability is the balance between public and private funding, as well as core and competitive funding. In fact, 8 of the national university organization surveyed expect an increase in public funding compared to private funding over the next three years.

But universities are much more divided about the future based on the type of funding mechanism. The outlook for core funding mechanisms is especially uncertain. Eight respondents expect them to be stable, 6 expect them to change and 6 do not know.

Targeted funding instruments’ future is also unknown, with 11 respondents stating they do not know and 7 labeling it as stable. In regard to university efficiency targets, most expect them to be stable but 7 do not know.

Turning to the expectations for private funding for European universities from 2021 to 2023, the highest number of the associations surveyed, 14, expect tuition fees from international students to be down for higher education systems. Eleven respondents each foresee contract services as well as other commercial services declining. However, reflecting the uncertainty, these 2 areas were cited by 10 respondents each as stable.

Income declines could come at a time when European universities are planning to make investments in response to the pandemic. Twenty-five respondents cited digital infrastructure as such an investment and 18 cited staff training. Digital investments, in particular, are tied to increased efficiency, as indicated by 14 respondents.

The survey also shows that European universities’ autonomy has not been impacted by the pandemic so far, but several respondents anticipate an eventual effect. Likewise, higher education systems’ governance has remained untouched for the most part. By categories of systems governance, the highest number of survey participants, 18, reported a neutral effect on system restructuring via mergers. Sixteen respondents reported a neutral effect on system restructuring via stronger differentiation. Even more positive, trust by policymakers increased for 12 respondents.

Recommendations

The report ends with a series of recommendations. Among the EUA’s advice: “Government must invest ambitiously at European and national levels in those areas that can build a sustainable future.” In addition, the EUA lists specific recommendations for universities, policymakers and European and national funders. Among the recommendations for universities is: “They should also make risk assessment and crisis management a part of institution operational planning.”

 

Instrument Business Outlook (IBO), a subscription-based publication covering and laboratory tools industry, regularly reports on the effects of university budgets and policy changes, providing insight into how they may affect lab instrument, equipment and aftermarket spending.