It is unfortunate that in the debate following the 2014 Budget, very few touched upon the proposals for further and higher education. This sector is critically important for the Maltese economy with the modernisation of higher education (and employability) being at the heart of the European Union’s higher education reform strategy.
The reform strategy is intended to increase the number of graduates across the EU and attract a broader cross-section of society into vocational and higher education. The EU (as in Malta) also has a problem with increasing numbers of students who drop out without completing their studies. There are several reasons for this including the non-relevance of teaching and the failure to prepare individuals with the required knowledge and core competencies they need to succeed in high-skill occupations.
Job creation is an ongoing challenge and the knowledge triangle, linking education, research and business is an absolute necessity for addressing labour market mismatches. Malta’s higher education institutions (both public and private) have largely responded effectively to the needs of industry but the updating of programmes and study units needs to be ongoing with emphasis being placed on enhancing quality and relevance.
All this will translate into increased expenditure by institutions and one would hope that the increased allocation to the state-funded institutions, as announced in the Budget, will also go towards improving the quality of programmes besides providing the facilities for accommodating ever-increasing numbers of students, especially at the University of Malta and the Malta College for Arts, Science and Technology.
Recent research on further and higher education provides an overview of where we stand today. Almost 28,000 students in Malta over the age of compulsory education were furthering their studies last year. The participation rate in further and higher education has actually been on the increase for a number of years both in the academic and in the vocational field.
At age 17, 83 per cent of students were attending one of the public and private institutions. This would indeed be encouraging if it were not for the fact that by age 19, participation rate goes down to 56 per cent. This explains, in part, why Malta’s early school-leaving rate, currently at 22.6 per cent remains one of the highest in the EU.
It also provides insights into the formidable challenge of achieving Malta’s target (agreed with the EU) of reaching the 33 per cent share of the population aged 30 to 34 years having completed tertiary education by 2020. Today’s rate is still at around 22 per cent.
Against this background, the 13 per cent increase in the budget for University and Junior College is not surprising. Malta has some way to go to reach the above-mentioned target for tertiary education. Approaching a figure anywhere close to 33 per cent would be a monumental achievement and it can only be achieved at a considerable cost including increased outlay on stipends (including the pro-rata increase based on COLA) and the provision of tax allowance for parents with children in tertiary education, now increased to 23 year of age.
The announcement in the Budget of what appears to be a performance-based funding for the University of Malta is an interesting development. If this is the case, then this approach would be in line with the funding strategies being adopted in a number of EU member states with the Netherlands being a useful reference. The idea is to establish a direct link between results or performance and the amount of funding allocated.
This is generally accompanied by granting more autonomy to institutions in managing financial resources but at the same time encouraging the diversification of funding sources as well as the creation of partnerships with business enterprise and other higher education institutions. A development such as performance-based funding would necessitate the University of Malta to build a strategic profile agreed with the Government to support its national targets including the target for early school-leavers.
Equally important is an updated strategy for further and higher education with emphasis being placed on the sustainability of public spending on further and higher education as well as avenues for alternative sources of funding for state institutions; the internationalisation of higher education together with the increasing provision of higher education by private and foreign owned institutions; and last by not least, assurance of quality provision across further and higher education.
The issue of further and higher education has multiple aspects: funding and allocation; reaching targets agreed with the EU; and access to further and higher education by a broader cross-section of Maltese society to name but a few.
Indeed, it would be impossible for a single Budget to address all these issues at one go. One would therefore hope that the Budget 2014 will serve as the first step towards a coherent and effective strategy in further and higher education.
Philip von Brockdorff is the head of the Department of Economics at the University of Malta.