{"id":107628,"date":"2019-12-19T16:17:42","date_gmt":"2019-12-19T15:17:42","guid":{"rendered":"https:\/\/www.erasmusmagazine.nl\/en\/?p=107628"},"modified":"2025-12-19T11:24:38","modified_gmt":"2025-12-19T10:24:38","slug":"universities-richer-than-budgeted-due-to-optimism","status":"publish","type":"post","link":"https:\/\/www.erasmusmagazine.nl\/en\/2019\/12\/19\/universities-richer-than-budgeted-due-to-optimism\/","title":{"rendered":"Universities richer than budgeted due to \u2018optimism\u2019"},"content":{"rendered":"

For all sorts of reasons, Dutch universities\u2019 budgets have tended to end in the black at year-end for several years now. In other words, the universities are getting richer and richer. Dutch universities of applied sciences were in the red for two years, but this year, they have reported a collective surplus of \u20ac112 million. And the same trends can be observed at primary and secondary schools, as well.<\/p>\n

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Every year the Cabinet forwards an overview of the education sector\u2019s financial condition to the Dutch Lower House. A document called De Financi\u00eble Staat van het Onderwijs<\/a> (The Financial Condition of the Education Sector) lists the reserves held and expenditures made by all Dutch education institutions, ranging from primary schools to universities.<\/p>\n

Kept in reserve<\/h2>

\u201cWe are having a hard time explaining increased levels of reserves in the education sector at a time when society is calling for more permanent funding to be awarded to education institutions,\u201d Arie Slob and Ingrid van Engelshoven (the Ministers for Primary\/Secondary Education and Tertiary Education, respectively) wrote<\/a> in their response to the document. \u201cWe are concerned about the fact that funds designated to be spent on degree programmes are being kept in reserve.\u201d<\/p>\n

They commissioned the Oberon research agency to investigate<\/a> how these things happen. Some causes were already known. For instance, politicians sometimes allocate a great deal of money to a particular cause right before the end of a year, which money can then not be spent in the same calendar year, and ends up staying in the universities\u2019 coffers for a bit.<\/p>\n

Furthermore, the government is unpredictable. For example, education institutions are sometimes awarded additional funding to counteract inflation, but sometimes they aren\u2019t, so can they count on these payments or not? Also, try telling faculties specialising in the humanities and social science that they must spend the money they are sitting on when they know they are about to see their budgets slashed. After all, the Ministry of Education has announced that it will award an additional \u20ac100 million to STEM programmes in the next few years, at the expense of the humanities and social sciences.<\/p>\n

Optimism<\/h2>

However, Oberon has identified another reason why the universities are sitting on so much money: optimism. You might not expect that answer, because you\u2019d think that optimists are likely to spend a lot of money and thus end up in the red, but that is not how things work.<\/p>\n

Sometimes universities and departments will include expensive plans in their budgets, only to overestimate the speed with which they will be able to implement those plans. For instance, they may not be able to get a project off the ground as soon as they expect, or they may have difficulty finding the right people to implement the project. As a result, the implementation of the project is delayed, and the money allocated to it is added to the next year\u2019s budget.<\/p>\n

\u201cThe education institutions believe that such optimistic scheduling is undesirable, and are therefore increasingly raising awareness of it during the budgeting process,\u201d Oberon\u2019s researchers stated in their report.<\/p>\n

Objections<\/h2>

Another practical problem identified by Oberon is the fact that the people in charge of the universities\u2019 financial condition (in particular, their supervisory boards and faculty directors) tend not to be in favour of budget deficits. \u201cFaculties are very concerned about the fact that all the projects they are going to invest in may be halted in just a few years,\u201d one of the interviewees told Oberon. Because obviously, education institutions won\u2019t be allowed to have budget deficits for ever.<\/p>\n

In recent years, a lot of money has remained on the shelf at Erasmus University. A deficit of 27 million was therefore deliberately budgeted in the 2020 budget.<\/p>\n\n\t

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De redactie<\/h2>\n\t\t\n\t\t
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