HUMANE
SEMINAR
Technical
University of Berlin
13-14 October 2000
Wolfgang Bröker, the Kanzler, welcomed participants on behalf of the
Technical University of Berlin, and opened the seminar by briefly describing
the university’s size and budget – there were some 30,000 students, 6,000 staff
and a budget of about 250 million euros.
As one of three universities in Berlin the TU was in competition with
others for a share of the State budget, and there was (therefore) an increasing
reliance on contracts and performance measurement. At least budgets were broadly announced three years in advance,
and it was possible to carry forward savings into a future year. The TU had now started distributing funds to
departments in a similar manner – also including contracts and performance
measurement – and had reduced the size of central administration by
distributing some staff to Faculties.
Higher education
and other policies in government thinking
The presentation
centred on the role of government in directing HE. Governments are making and implementing policies on education,
research, finance, regional development and labour market issues, all of which
are influencing higher education institutions. Universities have, or more
precisely, are given important roles in many of these policies. But policies on (un)employment or regional
development which universities may consider to be secondary may conflict with
their primary policies on teaching and research; all this under financial
restrictions imposed by the Ministry. Policies are made and implemented based
on political lines of thought, often taking into account factors that from a
university point of view may appear irrelevant, while governments will hold
universities accountable for actions which are not directly related to teaching
or research.
Governments
use direct as well as indirect methods of governance. One example of a direct
method would be regulations. Accountability broadly may also be used as a
strategic indirect approach in Governance, i.e. by requiring reports and
evaluations the behaviour of the institutions can be changed without any
explicit decisions
John drew on his own
experience as a civil servant to note that – just to make things more
interesting for administrators! - ministers in different countries talk to each
other to a larger extent than normally perceived in universities. Therefore,
expectations on higher education and new methods for governance tend to drift
around internationally. Against this background he would try to point out how
governments think and work, and how they viewed universities’ accountability.
In discussion, questions
raised the issues of the various “buffer” bodies which intervened between
universities and the State. In Sweden
an earlier body had dwindled in importance through the 1980s before disappearing
in 1993, partly because universities had developed the habit of approaching the
Ministry direct. In other countries the
buffer had taken on stronger powers in order to be more than a mere
intermediary. It was observed that a
buffer body was useful in reducing the various extremes of political swings of
government. Whatever the precise
system, and whatever the degree of autonomy, it was recognised that the State
had a legitimate interest in assessment of performance and accountability.
'University and
State: Autonomy by Continuous Negotiation'?
The inter-relationship between
knowledge and power has long been recognised: many historians have attempted to
evaluate the history of European universities around this theme. Such evaluations could focus on university
struggles to be free of the control of Pope or Prince, Bishop or Baron, Magnate
or Merchant - as patronage or support has moved from the local to the national
to the international scene. In this
first quarter of the twenty-first century the State is the patron with whom negotiation is necessary.
Care must be taken in regard
to the different university/State relationships pertaining through the
different European countries.
Notwithstanding statements regarding university autonomy, it is arguable
that govenments still seek major influence through the funding process. Private sector funding - in the context of
'public/private partnerships' - is also a factor which we must consider.
'Accountability' and
'Autonomy' must not be confused.
Universities have an obligation to be accountable for their use of State
(i.e., taxpayers') money, for quality,
and for integrity of our systems.
However, if the balance
between accountability, autonomy and freedom is not adequately achieved, there
is a danger that the ethos which imbues all good universities will change
drastically for the worse.
The movement from 'élitism' in
higher education to 'massification' has created circumstances which apparently give
further legitimacy to the State oversight of universities. Support for individual programmes - relating
perhaps to social access, to specific labour needs, to economic advantage - is
often provided on the basis of 'conditional contracting' - i.e., funds are
provided for a specific contract.
In this context, is 'autonomy'
a myth, and must freedom in universities be, in the future, by way of
continuous negotiation with State governments?
Michael Gleeson placed his
analysis in the context of three main models which had determined the evolution
of universities over previous centuries, namely, those associated with Newman,
Humboldt and Napoleon. All had evolved
in different ways, but the end result was still that (according to a recent CRE
analysis) 69% of university income came from public authorities. This had justified government intervention
in the public sector, although the application of some legislation (eg,
planning issues or health and safety) disregarded the rather special position
of universities. Like other speakers
Michael acknowledged the need for accountability, but saw a contradiction
whereby autonomy was the public position whereas the reality involved more and
more governmental control.
In response to questions he
noted that – in Ireland, at least – the shift towards seeing universities as
public institutions (rather than private institutions using public funds) had
come about very suddenly in the mid-1990s.
The new vision had been prompted by several factors which accompanied
major political change:
·
The large amount of money collected in tuition fees
·
An extension of the HE system, with the inclusion of new HEIs revealing
the inadequacies of the old funding mechanisms
·
Government awareness (in the new, larger system) that one part of the
sector had been subject to less control than the other
Other participants observed
that over the previous three or four decades most change in university
management and structures had been imposed or impelled by external factors or
bodies. Universities thus needed to
act, rather than to re-act – and exactly the same point was made in
relation to press coverage of all university activities or events. In this context Wolfgang Bröker illustrated
the very well-developed network of press contacts used by TU – and it was
perhaps symbolic that this was the only HUMANE seminar where a university PR
department took group photos for later use by the press!
Jean-Pascal Bonhotal:
The keyword of this
presentation was autonomy (indeed, this turned out to be the major theme of the
whole seminar). His illustration of the
French HE system showed the trend towards more and more autonomy – although
there was much interesting debate among colleagues as to what this word might
mean, exactly, in various systems. For example,
French Faculties were not allowed to create posts; however, French participants
argued that the President was even more powerful than the British
Vice-Chancellor. This in turn raised
the issue of the relationship between the President and the Recteur (the
head of each of the 25 regional educational groupings known as Académies),
with a number of questions about the logical and/or practical resolution of
differences of opinion. The
relationship was portrayed as not being a hierarchical one, and – despite
doubts from several participants – the French members were entirely satisfied
that the system worked well.
Jean-Pascal certainly accepted that there was very little financial
autonomy in France, since the State controlled not only the finances (85% of
funding) but also staffing issues – staff were civil servants, paid directly by
the State.
Historically
German universities have been characterised by their dual nature. In research
and teaching they enjoy a great independence from State influence, but their
economic activities are another matter altogether. Here the State plays a pronounced role, which can be traced back
to how universities are basically funded, with a greater degree of public
funding than in foreign universities. Until recently, universities have not
enjoyed much autonomy in this area..
In the early nineties a discussion began about
how dependency on the State framework could be reduced. This could well be the
first time that the chance has existed of combining the traditional
unrestricted intellectual autonomy with an economic autonomy which weakens the
ability of government and especially parliament to intervene and to exert
influence. Operating decisions are delegated to the university level. This led to a discussion about the need for
government and parliament to obtain a
clearer overview of expenditure, and to a demand for a new accounting
system which would provide greater cost transparency not only for the university itself, but also for the
State.
Traditionally univerrsities
have used the cameralistic system of accounting which typifies the
public service sector in Germany. This
system aims to assure the observance of budget estimates as laid down by
parliament and thus to balance income and expenditure. Accuracy and
verification of transactions thus become more important than economy.
There are no evaluation criteria and also no meaningful indices for planning,
control and management of the institution; meanwhile strategic considerations
are insufficiently considered. While
there is broad consensus on the weaknesses of the camaralistic system there is
no consensus on the remedies. As a result there are currently a great number of
reform efforts in existence, which has led to university accounting systems
diverging in individual Länder, indeed among individual universities.
Three basic tendencies can be seen:
1. Retention of the
previous cameralistic system with the addition of flexible budgets;
2. Retention of the system
with cost to performance accounting procedures
3. Adoption
of the commercial accounting methods via integrated standard software.
A fundamental goal and
principle in the preparation of university accounts is cost transparency, as
well as the ability to make comparisons
with other universities, for example, by comparing the costs arising from a
specific course of study. Such transparency and comparability help to reveal
cost saving potential, to counter misdirected resources and to recognise gaps
in financing in good time. This also involves steering away from the previous
concept of money consumption and heading towards a concept of resource
consumption, which represents a considerable change both in the actual
organisational structure and the mentality. A stronger link must
be established between the ability to enact and responsibility, which means
greater financial autonomy must exist at the decentralised level. And if the
quantitative evaluation of the product is difficult enough, the qualitative is
even more so.
The presentation will describe
the (five) fundamental elements of a new university accounting system, and look
at the ways in which the resource consumption concept is rather alien to the
cameralistic system. It will also consider the advantages of commercial
accounting systems, while admitting that
any such system has only limited application to the university goals. HEIs
are service providers which manufacture different products in the field of
research and teaching. We therefore argue for a university accounting system
situated somewhere between the cameralistic system and a highly-differentiated
cost accounting system. The final
decision can sway one way or another - what is far more important is that the
following methods are incorporated:
1. Cost types accounts
2. Cost centre accounts
3. Cost objective accounts
Apart from the
university-specific cost accounting using the methods just described, it is
necessary – extending beyond the status quo – to introduce a controlling
function for the purposes of coordinating and controlling. This involves an
inter-functional control instrument that supports a targeted information
gathering and information processing system. Beyond this, a balanced
relationship must be assured between State responsibility and academic
autonomy. This can be best achieved by
concluding specific service agreements of fixed duration that could be subject
to periodic monitoring without allowing the academic freedom to be infringed
upon.
The presentation will conclude
with the view that the aim of a new system should be to change this
historically based input-control into output-control based on
economic factors. (“if a certain agreed task is fulfilled I am prepared to pay
the agreed sum for this”). For us in Germany this represents a fundamental
change to our previous budget system and the chances of its realisation can
still not be completely foreseen.
Hans Seidler,
Hans outlined the ways in
which new conditions of governmental control led to demands for greater
transparency which might benefit both universities and the State. Any new system of accounting which replaced
the former cameralistic system should have several main aims, defined as in the
abstract.
Discussion included several
aspects of the talk, which had itself reviewed not only the features of accounting
systems but also the accountability to government. Hans noted that the differences between Länder
meant that benchmarking comparisons were sometimes difficult. A number of
participants noted the problems of cost and comparability associated with
commercial products. It was also
observed that whereas private companies could distinguish between public documents
(annual accounts, etc) and confidential papers, universities became less and
less able to withhold information as they developed institution- or system-wide
systems – and with the possibility of permanent inspection from outside came
the possibility of external control.
HS insisted on transparency as
an aim, and thought comparative costs analysis was vital. He accepted, in theory, the view that
academic quality might be driven down by a concern about costs, but did not
feel that it was a reality. He agreed
with the view put forward that the price of providing answers and details to
outside bodies was worth paying, since better information led to better
management. Where he did see a problem
was in the replacement of State bureaucracy by a university bureaucracy, and a
mad duplication whereby there would ultimately be accreditation of accrediting
bodies.
Panel Session: “The role of
Lay Members[1] on Governing
Bodies”
Four presentations were made
of contrasting systems including the Netherlands, “old” and “new” universities
in the United Kingdom, and Spain.
These all analysed in different ways the effects of appointment as
opposed to election of members of governing bodies, and the power of those
bodies. There was considerable interest
in the structure employed in Spain, and the different levels of Government
(both State and Regional), the Social council, and the University, which itself
had different responsibilities for
government bodies and Faculties/departments.
They also focused on the role
of lay members, and the proportion and influence of such people. There was a
clear belief among panel members that lay members took that role extremely
seriously, and they agreed with the observation that this was important to
ensure that lay members had a proper job to do. They also recognised the danger that lay members with business
backgrounds tended sometimes to lose their commercial instincts when faced with
the different structures of the university world. UK members in particular stressed the importance of providing
good induction (training) for new members.
Effective Governance of Universities
Steve Cannon, University of Aberdeen
Steve Cannon opened
his presentation by quoting from two contributors to an International Seminar
on University Governance and Management in Barcelona earlier in the year,[2]
to say that “governance within higher education is a most complicated and
challenging issue. Of all issues
currently under discussion in the world of higher education, few are more
controversial than those pertaining to institutions of governance. Who should govern a university, how, and to
what ends, have been recurring questions in the history of universities”.
In recent years
higher education institutions (HEIs) had experienced major changes in their
governance and leadership. The former
autonomy of institutions within national systems was tempered by the realities
of funding mechanisms and quality assessment procedures. There had been reductions in funding from
the public purse and, in many countries, tertiary institutions are being given
greater responsibility for the management of their financial affairs. Steve
drew together various points made earlier in the seminar in order to underline
his main argument that governments across Europe actually know that
universities are very good at what they do, and that - since governmental
interest in accountability was entirely justifiable - universities could very
reasonably point to the ways in which they followed good practice.
The Chief Executive of the
Scottish Higher Education Funding Council (SHEFC) had commented that whilst
reliance on the State for funding means that notions of freedom from the State
are little more than illusions, institutions enjoy (within a broadly based
framework of accountability) considerable freedom to manage their own
affairs. That framework, however,
places clear and specific duties, responsibilities and obligations on
institutions, funding councils and the State.
In
the United Kingdom as long ago as 1985 the State established a new framework of
governance appropriate for institutions that it considered were "first and
foremost corporate enterprises” and urged universities to examine their
structures and develop plans to meet certain key requirements. Governing bodies were encouraged to assert
their responsibilities in governing their institutions, notably in respect of
strategic plans, which should underpin academic decisions and structures to
bring planning, resource allocation and accountability together in one
corporate process linking academic, financial and physical aspects. It is this view of HEIs as “first and
foremost corporate enterprises” that encouraged SHEFC to look to corporate
governance arrangements in the private sector to provide a lead. Thus as in the private sector, where
shareholders look to corporate boards to safeguard, regulate and add value to
their investment, State authorities are increasingly looking to institutions of
governance to do the same for public funds.
However,
unlike company boards, the Governing bodies of HEIs have on the whole not been
designed for strategic management but rather as representative bodies of a wide
constituency of interests. Governing
bodies, particularly in the older universities, derive from an age when their
roles and responsibilities were more symbolic than real, when the
"dignified" as opposed to the "efficient" elements of
governance were emphasised. A
university is primarily defined by its business of teaching and research, and,
while it must remain solvent, looks principally not to profits but to the value
of its outputs. In addition, and
uniquely, in many of the older universities the core business - academic
matters – lies beyond the the governing body.
He outlined various statements
by the Scottish Funding Council to stress the importance of proper (that is,
not just legal, but effective and efficient) use of resources, and illustrated
ways in which his own university had set about training and improving the
members of its governing body (Court). In this context he agreed with the point
which was made that members of governing bodies tend not to understand the
actual core business of a university (teaching and research); he also warned
that universities needed to ensure that they made members aware of precise (and
changing) demands. It was clear from
comments made concerning “away days” or questionnaires and interviews with
members of governing bodies that other members were determined to raise
consciousness.
At the closure of the seminar
in the late afternoon participants enjoyed a guided walking tour of
Berlin. The site of the former Wall was
in itself a symbol of the European dimension of the network, and for a party of
university staff no monument could have been more powerful than that created in
the Bebelplatz to commemorate the mass burning of books by Nazi sympathisers in
1933.
[1] In university terms, a lay person is someone from
outside the organisation – the parallel with religious organisation is clear,
in that for churches one has members of religious bodies (priests, etc) and lay
people.
[2] Harry de Beure and Leo Goedegebuure,
in a discussion on Dutch University governance in transition,