Gundars Berzins University of Latvia 2009.10.17. 1
Economic situation in Latvia State policy changes in education and University funding Student response to crises University response to decreased financing Strategic perspective and outlook for LU in financial downturn 2009.10.17. 2
Population 2,3 million Capital Riga, around 900 000 people HE institutions in Latvia - 34 6 Universities 13 state HE institutions 15 private HE institutions 2009.10.17. 3
GDP in Latvia 15,00% 10,00% 5,00% 0,00% -5,00% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009-10,00% -15,00% -20,00% -25,00% GDP in Latvia 2009.10.17. 4
Unemployment rate % 25,0% 20,0% 15,0% Unemployment rate %; 13,3% 10,0% 5,0% 0,0% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2009.10.17. 5
Reductions of state expanses Consolidated budget cut 7,9% Linear cut of state expenses for state institutions 15% Salaries 15% Other expanses 25% State policies To increase income VAT from 18% to 21% Attempts to introduce proportional income tax (now 25% equal) Attempts to introduse new property tax on flats, houses Structural changes State function audit Biggest restructuring in education, and healthcare State function reduction Reductions Restrictions on all employ benefits in state sector (health insurance, bonuses) 2009.10.17. 6
HE system in Latvia Bachelor Professional bachelor Master Professional master Doctoral State budget student places 2009, 19 793 students Self paying students State supported student loan program, participate around 30% Different self financing sources 2009.10.17. 7
State budget for HE in Ministry of HE, mil. euro. 88,6 99,0 67,9 74,3 51,4 38,6 40,9 24,4 27,0 27,9 2009.10.17. 8
Average financing per student, EURO 4463 5019 3413 3769 2666 2066 2133 1269 1406 1459 2009.10.17. 9
State HE budget dynamics /state average student financing dynamics Average per student State budget 60% 66% 42% 38% 31% 31% 0 0 11% 11% 4% 3% 3% 6% 12% 12% -25% -25% -29% -31% 2009.10.17. 10
Objective reduction of number of students Demographic situation Pupils finishing high school 7% Large amount of working people holding old former soviet stile education or no education have received received it during 18 years of independence; Potential students look for alternative education places outside Latvia 2009.10.17. 11
Reduction of students in universities due to a crises Tendencies Sharp reduction in master level student numbers Moderate reduction in bachelor students numbers Increase of PHD student applicants (EU incentive programs) 2009.10.17. 12
Cost saving as priority for education choice Choice of local (regional) university Saving costs of living outside home Cheaper Difficult to find part-time work in Riga Choice of relatively cheaper programs and universities Study only if program has state financing or other incentive shames Safe strategy Students tend to go to HE institutions with longer history or state owned institutions, considering them to be more secure then private sector in high uncertainty situations 2009.10.17. 13
Drop-out rate increase for second, third, and four year students; Increased amount of request to stop educations temporally due to financial situation Financial situation in family Personal financial situation Employer refused to continue financing for the student Demands for quality have increased, with the amount of effort to get financial resources for studies Decreased demand for student dormitories 2009.10.17. 14
Nr. HE institution Number of accepted students In comparison with previous year Number Percentage Universities -18% 1. Latvijas Universitāte 5155-1144 -18% 2. Rīgas Tehniskā universitāte 4616-1325 -22% 3. Latvijas Lauksaimniecības universitāte 1816-311 -15% 4. Daugavpils Universitāte 934 66 8% 5. Rīgas Stradiņa universitāte 969-379 -28% 6. Liepājas Universitāte 504-47 -8% 2009.10.17. 15
State HE institutions -32% 7. Latvijas Kultūras akadēmija 203 11 6% 8. Latvijas Mākslas akadēmija 210 8 4% 9. J.Vītola Latvijas Mūzikas akadēmija 183 29 19% 10. Latvijas Sporta pedagoģijas akadēmija 460 30 7% 11. Latvijas Jūras akadēmija 272 99 57% 12. Rīgas Pedagoģijas un izglītības 649-992 -60% vadības augstskola 13. Rēzeknes augstskola 657-235 -26% 14. Rīgas Ekonomikas augstskola 139 0 0% 15. Ventspils augstskola 323 17 6% 16. Vidzemes augstskola 284-2 0% 17. Banku augstskola 297-215 -42% 18. Latvijas Policijas akadēmija 37-528 -93% 19. Latvijas Nacionālā aizsardzības akadēmija 0-8 -100% 2009.10.17. 16
Private HE institutions -45% 20. Rīgas Starptautiskā ekonomikas un 679-735 -52% biznesa administrācijas augstskola 21. Biznesa augstskola Turība 1111-1271 -53% 22. Starptautiskā praktiskās psiholoģijas 53-100 -65% augstskola 23. SDSPA Attīstība 145 23 18% 24. Latvijas Kristīgā akadēmija 63 20 46% 25. Baltijas Starptautiskā akadēmija 664-657 -50% 26. Sociālo tehnoloģiju augstskola 119-103 -46% 27. Rīgas Aeronavigācijas institūts 155-112 -42% 28. Informācijas sistēmu menedžmenta 633-43 -6% augstskola 29. Ekonomikas un kultūras augstskola 303-155 -34% 30. Psiholoģijas augstskola 74-92 -55% 31. Transporta un sakaru institūts 552-553 -50% 32. RARZI 22-12 -35% 33. Rīgas Teoloģijas institūts 3-4 -57% 34. Rīgas Juridiskā augstskola 54 2009.10.17. 6 13% 17
Total drop of student enrollment by 28% Students tend to go to state institutions, with state financing and more stability, 18% drop in student enrolment Private education is hit the hardest, 45% drop in student enrolment Student enrolment for regional state HE institutions has drop 6% Graduate student enrolment have significant drop With good incentive program the student enrolment numbers increases. 2009.10.17. 18
University have 22000 students State financed students 5840 Self financed students16160 Founded in 1919 14 faculties Budgeting State financing Education Science grants scheme Research projects Applied research projects Other sources of income Self paying students EU research projects EU applied research projects Business activities (property management, events, software development, publishing house, dormitory management) 2009.10.17. 19
Budget distribution is based on fixed percentage calculated from all income generated by organizational units. Studies 37% from all student income is used for central administration, infrastructure, student services, other support functions of university. 63% is delegated to faculties. Faculties as organizational structures have to manage all there study programs, management, specific laboratories with money given. Science EU funds administration costs are usually 0-6% depending on program specifics 0% from scientific financing 9% for applied research projects Business 9% form income 2009.10.17. 20
70.000.000 60.000.000 50.000.000 2003 40.000.000 30.000.000 2004 2005 2006 2007 2008 20.000.000 2009 10.000.000 - LU State financing Other financing 2009.10.17. 21
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The structure of financial reduction First reduction 25% + 10% = 35% 01.01.09 Percentage as tool for fairness Equal reduction for all, layoffs, salary cuts (language faculties run into deficit) Second reduction 25% + 10% + 13,6%=48,6% 01.07.09 Equal reduction for all organizational structures Inside central administration projects, less reduction in wages more in other costs, decision left for heads of organizational units. Layoffs, salary cuts, restructuring of programs, reduction in all student support activities 2009.10.17. 24
Salary reduction in state financed programs (natural science, humanities, language faculties) Salary reduction from 10 to 50%, Teaching load increase up to 30% Unsatisfied personal Benefit cut, incentives, health insurances Restructuring programs Merging philology and modern language faculties Suspend duplicating programs Administrative and service reductions Salaries 10% Staff reduction 10% 95% cut in investments in infrastructure 50% cut in support materials, business trips Reductions on incentives and research support by university and state Budget of university without deficit 2009.10.17. 25
Expected budget cut of 31% 01.01.2010 Expected drop in other incomes by 15% Average reduction of budget by 20% LU strategy in situation of crises Noah Arch survival strategy To merge administration, planning processes in faculties with centralized structures in order to cut costs and increase efficiency To support activities that: Ensures functioning of main value chains Have ability to regenerate after renewal of financing 2009.10.17. 26
University context Keep all existing scientific fields presently active in university Reduce scientific sub fields with low demand (number of students), no prospects of grows Identification of excellence Excellence areas in science Quality and performance in education (student demand, potential of growth, good program brand, well known professors in the program as part of brand) Extra finances in the fields of excellence and performance Reduced financing for average performance Support service reduction or suspension Culture, sports, student services, Infrastructure Termination of all rent contracts Relocation of all student and research activities to university infrastructure Return of unused buildings to the Ministry of HE 2009.10.17. 27
Thank you! 2009.10.17. 28