1. Fourth ECA Education Conference October 24-26, 2007, Tirana, Albania, “Issues and Choices in Financing TVE” Combination of Per Capita and Performance-based Funding of Initial VET in Finland, Kari Pitkänen, October 26, 2007

2. Finland in the North Geographical data:   338 000 km 2 (10% water, 69% forests)   188 000 lakes   1269 km border with Russia People:   5,3 million   67% in urban and 33% in rural areas Languages:   Finnish, Swedish, Sami Society and economy:  Member of EU since 1995  Free public services and high taxation Economic competitiveness Technological advancement Low corruption

3. Main Features of Education System 1.Voluntary participation in pre-school education (6 year olds, 98 % participate) 1.9 year basic education in comprehensive school 2.96 % continue immediately after basic education in in 3 year upper secondary education divided to:  General Education (53 % out of 60 000)  Vocational education and training (43 % out of 60 000) 3.Higher education divided to:  University education  Polytechnic education 4.Wide supply of different forms of adult education and training

4. Steering of VET Providers  New government (every 4th year) decides on Education Development Plan – high rate of consensus and sustainability  MoE decides on licence for provider of VET. Licence is relatively permanent:  The municipalities in which VET is organized;  The language of teaching;  The broad branches of VET;  The maximum number of students (eligible of state funding);  Special educational assignments; and  The form of organization of VET (apprenticeship training).  MoE decides on National Qualifications (52) and National Board of Education on Core Curricula for VET (113 study programs)  Regional provider of education has high autonomy in those frames to direct VET

5. Structure of Funding VET Providers FINANCING OF VET STATUTORY GOVERNMENT TRANSFER STATUTORY GOVERNMENT TRANSFER UNIT PRICE/STUDENT/YEAR including performance-based funding UNIT PRICE/STUDENT/YEAR including performance-based funding BASED ON QUALITY ASSESMENT (EFQM) - SPECIAL THEMES (Qualitative) BASED ON QUALITY ASSESMENT (EFQM) - SPECIAL THEMES (Qualitative) QUALITY AWARD BASED ON OPERATIONAL OUTCOME - effectiveness - processes - staff BASED ON OPERATIONAL OUTCOME - effectiveness - processes - staff

6. Per Capita Funding  Numbers of students on January 1. and on September 20.  Real average expenditure from year t – 2 as basis for the Government’s Unit Price Decision  Average for all VET in 2006 was 8 300 €/student.  Unit price varies according to the branch of VET  Total funding = Number of Students x Unit Prices  Depreciation of school buildings is added to unit prices – no grants for capital investments.  MoE pays monthly 1/12 of the annual grant  Providers/owners (ca. 200) of VET institutions have autonomy to distribute budget inside institution  Rector has normally high degree of decision-making power.

7. Unit Prices in 2006 TOTAL AND BY BRANCH €/STUDENT IN 2006 VET, total8 300 Natural resources12 500 Technology and transport8 600 Business and administration5 800 Humanities and education8 100 Tourism, catering and home economics8 300 Health care and social services7 200 Culture9 300 Leisure and physical education8 100

8. Performance-Based Funding Index Performance-Based Funding  Calculation of the final Index is based on the measures described above.  In calculating the Performance-Based Funding Index, different measures are given different weights: Effectiveness 1.Placement in employment 40 % 2.Placement in further education measure 15 % Process 1.Drop-out measure 15 % 2.Graduation measure 13 % Human resources 1.Teacher Qualification measure 11 % 2.Staff-Development measure 6 %

9. Quality Awards in Performance- based Financing of VET  Based on EFQM and modified for VET  Yearly changing special themes  2004 Vocational education developing regional working life  2005 Different learners in VET  2006 Management and developing teachers know-how  2007 Skills tests in vocational education  Awarded to providers of vocational education  Max 4 awards/year: 200 000 – 300 000 €

10. Even if the Share of Performance Funding is only 5 %, it fixes Focus on Real Results and Quality Per capita funding (95 %):  promotes reaching the quantitative objectives  promotes efficiency and autonomy of VET schools Performance-based funding (5 %):  focuses on real results of VET – employability and progress in education  includes both quantitative and qualitative approach  process indicators focus on care-taking of students  stress the importance of human (teacher) resources According to recent study:  95 % of providers monitor performance indicators  93 % gained benefit of performance-based system

11. Finnish Life Style

12. Reforms of Education in Finland

13. Hvala Vam Puno, Drage Dame i Gospodo