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A differentiated funding model for South African higher education

September 4, 2010

The new funding framework only works to a limited extent

The new funding framework for public universities in South Africa, introduced in 2003 and phased in between 2004 and 2007 set out to use “institutional funding as a lever to move institutions towards the goals set out in the White Paper 3 and the National Plan for Higher Education” (CHE, 2009). The new funding framework rewards identified outputs with a view to influencing institutional behaviour toward increasing those outputs. The goal, broadly, was a “transformed higher education system, which is affordable, sustainable and contributes to the skills, human resource and knowledge needs of South Africa” (DoE, 2003).

The new funding approach has had some impact. For example journal publications, for which institutions receive direct rewards, have increased substantially. However, the envisaged “transformed higher education system” still eludes us. We have a system with a wide range of institutions from the elite research universities which enjoy international recognition to rural universities struggling for some sense of self-respect. And the divides are still along racial lines.

Part of this problem is that the funding formula applies equally to all institutions. Faced with the same goals and same rewards for all institutions, the ‘haves’ are already ahead of the race while the ‘have-nots’ face an impossible task to catch up.

The sector is self-differentiating

The higher education sector is already showing signs of self-differentiation. The universities of technology have formed the South African Technology Network (SATN) and have defined a set of performance indicators that they believe better reflect the goals of their institutions. A group of five rural universities are collaborating on defining their own particular strengths. And conversations are taking place between some of the comprehensive institutions as they try to figure out just what a comprehensive university might be. At the same time, the Higher Education Quality Committee’s quality audits encourage institutions to think more carefully about their institutional missions and visions and to ensure that these are realistic and directed towards national goals.

However, a hierarchy of institutions persists with frustration and a lack of respect for those at the bottom of the hierarchy. South African higher education consists of research universities, and universities that want to be research universities. But more research universities are not what the country needs. What is needed is better teaching and a wider range of knowledge generation and application activities.

The country needs more diversity in universities

To provide the kinds of skills and knowledge that are needed, there is a need for a range of strong universities, focused on different kinds of knowledge and knowledge generation. There is a need for scientists, for scholars in the humanities, for professionals, and for technical skills. There is a need for blue skies scientific research, for creative development of the arts, for improvement in professional practice, for disseminating research into communities, and for profitable partnerships with business and industry.

The single funding formula does not encourage all of these kinds of knowledge. Rather we have all institutions pursuing a single set of goals – journal publications and more PhD graduates – because that is where they can maximize their income.

What is needed is a funding approach that enables institutions to take advantage of their unique pasts, strengths, and locations to craft appropriate niches for themselves, including different kinds of teaching programmes and research.

A differentiated funding model

So here, in broad strokes, is what I propose. That the sector works together to envisage a number of ideal university types – the research university, the professional university, the creative arts university, the teaching university, the entrepreneurial university, the university of technology, the developmental university etc. – and what we imagine the goals of these ideal types of institutions might be.  It is important that the value of all of the ideal types of institutions be clear and that each has some particular contribution to make to national goals.

For example, a research university might have as its goals the production of research publications, graduating PhDs and having highly rated researchers among its staff.  A professional university might have as its goals undergraduate programmes aligned to the certification and registration requirements of professional bodies, having strong continuing professional development programmes and producing professional doctorates. A developmental university might target strong undergraduate programmes particularly suited to students from poorer educational backgrounds, effective community-based research and the contribution of its scholars to national and international development  discourses.

For each of these ideal types we define a set of measures and a related funding formula that rewards progress towards the identified goals of that type of institution. These funding models should focus quite radically on the goals of the particular type of institution.

For example a research university might not be funded at all for undergraduate enrolments or graduations, but rather for their research publications, enrolments and graduations from research degrees and for the number of staff who are rated researchers. The teaching university on the other hand might be funded for enrolled undergraduates, success rates and for the number of staff with both teaching qualifications and higher degrees in the area in which they teach.

Let institutions choose how they want to be funded

Having created a number of funding models, each of which rewards the goals of one of the ideal types of institutions, institutions should get to choose which model  (or possibly models) they would like to be applied to them. This will not only give institutions some sense of control of their own destiny, it will also force them to consider carefully what their strengths and weaknesses are. For an institution to choose a funding model for an ideal type which bears no relationship to their current strengths will result in severely reduced funding. But finding a match to current areas of strength might enable institutions to access greater funding and to be more successful against a set of measures better suited to their existing strengths.

Since existing institutions may have a mix of strengths, one might want to allow institutions to select up to two funding models for distinct part of the institution. Any greater dilution of the models would be more complex to support with performance measures and to administer. Thus a university might elect to be funded as both a research university (faculties of science and humanities) and a professional university (faculties of medicine, engineering, law).

Benefits of this model

While this proposal needs to be fleshed out, the model has the following potential benefits.

1)     It could encourage moves in the sector towards greater differentiation

2)     It could give institutions a choice in how they want to be funded

3)     It could facilitate a funding distribution that does not reward the strongest to the detriment of the weakest

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From → Higher Education

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