Performance-based financing and its impact on HEIs. address: ul. Hoża 20 \ ul. Wspólna 1/3 \ Warszawa \ phone: +48 (22) \ fax: +48 (22) Data: 25 \ 11 \ 11 Can the new financing mechanisms and incentives improve higher education financing?

Contents: 01 \ 02 \ Funding mechanims – typology. 03 \ Funding mechanisms distribution. 04 \ Potential impact of performance-based financing 05 \ The funding system in Poland 06 \ Components in formula for funds distribution 07 \ Polish system’s advantages and drawbacks 08 \ Conclusions. 00 \ Performance-based financing and its impact on HEIs.

01 \ Funding mechanims - typology. 01 \ Performance-based financing and its impact on HEIs. -Input-based mechanisms – a formula based on inputs e.g. the number of students enrolled (Belgium, Ireland, Italy, Cyprus, Hungary) -Negotiated allocations – non-automatic allocation mechanisms – negotiated between governments and higher education institutions (previous years’ allocations, the number of students or students taking exam in a particular year - Austria, Romania, UK)

02 \ Funding mechanims – typology. 02 \ Performance-based financing and its impact on HEIs. -Purpose specific funding (targeted funding) – expenditure is directly linked to certain tasks, functions and objectives (distribution through competitive processes – Poland) -Performance-based mechanisms – actual or intended results attained/to be attained by HEIs over a period of time (based on outputs: the number of graduates or inputs: the number of students/staff with certain characteristics; failure of result attainment is penalised (Denmark, Greece and Latvia)

03 \ Funding mechanisms distribution. 03 \ Performance-based financing and its impact on HEIs. Negotiated allocation Purpose-specific funding Performance-based mechanisms Input-based mechanism Other Source: Eurydice. UK ( 1 ) = UK-ENG/WLS/NIR Explanatory note Most important funding mechanisms contribute an accumulated 70 percent or more to the public funding of higher education institutions.

04 \ Potential impact of performance-based financing -Allow direct link between public policy objectives and higher education funding -Potentally a good tool to foster government objectives by means of selected criteria used to set targets and intended results, e.g. social dimension, equity in higher education, wider participation -Performance based mechanism are good instruments to reward HEIs for achieving particular goals as they are focused on outcomes Technically, countries use : prospective performance targets, past performance and measures of quality and employability in their formulas used to distribute funds to HEIs. 04 \ Performance-based financing and its impact on HEIs.

05 \ The funding system in Poland. 05 \ Performance-based financing and its impact on HEIs. -Poland takes advantage of a mixture of funding mechanisms (state-budget subsidies only for public HEIs) -The Eurydice study ascribed Poland solely to the purpose-specific funding, with some elements of input based mechanisms. -The Polish system allocates funds for specific purposes – -the tasks related to the teaching of full-time students and full-time doctoral students, and the training of research staff, as well as to the maintenance of the higher education institution, including renovation work; -the tasks related to non-reimbursable financial support for students -the co-funding or funding of investments, including investment projects supported by public Community funds under regional development contracts

06 / Components in formula for funds distribution 06 \ Performance-based financing and its impact on HEIs. -Input based mechanism elements - Polish system uses a mathematical formula with componets that have impact on the total amount a HEI receives : -the amount received in the previous year -number of students and doctoral students -number of academic staff -Performance-based mechanism elements – -sustainable development component -research component -the number of certifications for granting scientific titles, e.g. Phd, professor -International exchange component

07 / Polish system’s advantages and drawbacks 07 \ Performance-based financing and its impact on HEIs. -Polish system uses a variety of mechanisms. Their impact is positive as it promotes important objectives supported by the government. It is not decisive when quality and overall performance is to be taken into account. -Performance-based mechanism elements – could be supplemented by components promoting: -employability of graduates -student, doctoral students and researchers mobility -selected specialities important for labour market - interdisciplinary study programmes

08 / Conclusions 08 \ Performance-based financing and its impact on HEIs. -Effectiveness of performance-based mechanism requires further analysis and evidence, but it is more and more popular in European countries. -It cannot however constitute the only tool to influence the structure and performance of HEIs. -It may shift the focus of HEIs activity towards achieving particular results and disregarding their other fundumental goals and missions.

address: ul. Hoża 20 \ ul. Wspólna 1/3 \ Warszawa \ phone: +48 (22) \ fax: +48 (22) Data: 25 \ 11 \ 11 THANK YOU.