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The funding of fachhochschulen in Austria

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The funding of fachhochschulen in Austria
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  This article was downloaded by: [The University of British Columbia]On: 19 June 2013, At: 15:22Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House,37-41 Mortimer Street, London W1T 3JH, UK Tertiary Education and Management Publication details, including instructions for authors and subscription information:http://www.tandfonline.com/loi/rtem20 The funding of fachhochschulen in Austria Hans Pechar a   b   c   da  Institute for Interdisciplinary Research and Continuing Education, University of Innsbruck,Organisation und Didaktik von Wissenschaft b  Institute for Interdisciplinary Research and Continuing Education, University of Klagenfurt,Organisation und Didaktik von Wissenschaft c  Institute for Interdisciplinary Research and Continuing Education, University of Vienna,Organisation und Didaktik von Wissenschaft, Westbahnstrasse 40/6, Wien, A ‐ 1070 Phone: 0043 1 526 96 88 Fax: 00 43 1 526 96 88 E-mail: d  Institute for Interdisciplinary Research and Continuing Education, University of AbteilungTheorie, Organisation und Didaktik von WissenschaftPublished online: 20 Jan 2010. To cite this article:  Hans Pechar (1997): The funding of fachhochschulen in Austria, Tertiary Education and Management, 3:2,165-172 To link to this article: http://dx.doi.org/10.1080/13583883.1997.9966919 PLEASE SCROLL DOWN FOR ARTICLEFull terms and conditions of use: http://www.tandfonline.com/page/terms-and-conditionsThis article may be used for research, teaching, and private study purposes. Any substantial or systematicreproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form toanyone is expressly forbidden.The publisher does not give any warranty express or implied or make any representation that the contentswill be complete or accurate or up to date. The accuracy of any instructions, formulae, and drug doses shouldbe independently verified with primary sources. The publisher shall not be liable for any loss, actions, claims,proceedings, demand, or costs or damages whatsoever or howsoever caused arising directly or indirectly inconnection with or arising out of the use of this material.  Tertiary Education and  Management Vol.3 No.2 1997 165-172 The Funding of Fachhochschulenin Austria Hans  Pechar Policy  backgroundMost OECD countries established a non-univer-sity sector during the 1960s and 1970s. Austriadid not follow this trend (Lassnigg and Pechar1988). Until recently in this country higher edu-cation was a universities monopoly. There hadbeen attempts to create an alternative to univer-sities in the early 1970s. Ironically they wererejected by a coalition of conservative and left-wing arguments. Conservatives argued that Aus-tria would need no diversification of highereducation, because they thought they could pre-vent an expansion of universities. From theirpoint of view a more diversified system wouldease access and would encourage more young-sters to enrol than the economy would need.From a left-wing perspective, diversificationwould create a two-class system of higher educa-tion; it would deprive students of lower socio-economic status of the full reward ofparticipating in higher education.Eventually, in the late 1980s, there was a changeof opinion. In 1990 the government decided toestablish a Fachhochschul sector. In 1993 the legalbasis for this new sector (FHStG) was passed byparliament. In 1994 the first students enrolled onFachhochschul courses. The sector is small andwill only grow slowly. In quantitative terms onecould easily neglect the Fachhochschulen. How-ever, in qualitative terms they are quite remarkableand receive a lot of attention from policy makersand the general publicThe most obvious difference to universities is thecurriculum. The whole Fachhochschul sector wasdeliberately founded in order to provide short andvocationally-oriented study courses. But further-more the Fachhochschul sector differs fundamen-tally from the traditional universities in terms oforganization and funding. It is a major step towardsderegulation of Austrian higher education.There can be no doubt that if Austria hadestablished Fachhochschulen in the late 1960s orearly 1970s, this sector would basically havebeen a copy of the university sector in terms oforganization and funding. However, in the early1990s, when the new sector was planned andorganized, the policy context had changed. Atthat time, the heavy state regulation of Austrianhigher education came increasingly under attack.A reform of university organization, starting in 1991,  attempted to strengthen the manageriallevel at the universities and to shift decision-mak-ing power from the state to the institutions(BMWF 1991). However, this reform processproved to be very difficult and controversial. Anew organizational act for universities waspassed in 1993, but this was a compromise be-tween the proponents and the opponents of thereform and only a cautious step towards moreinstitutional autonomy. The new organizationalact is still in the early stages of implementationand it remains to be seen whether it will be - atleast partly - a success (Pechar 1996b). Dr  Hans Pechar  is at  the  nstitute  or Interdisciplinary Research and ontinuing Education  of  the Universities  of  Innsbruck Klagenfurt Vienna Abteilung  Theorie Organisation und Didaktik  von  Wissenschaft Westbahnstrasse  40/6 A-1070 Wien.  Tel:  00 43 1 52696 88.  Fax:  00 43 1 526 968 818.  Email:  hans.pechar@univie.ac.at 165    D  o  w  n   l  o  a   d  e   d   b  y   [   T   h  e   U  n   i  v  e  r  s   i   t  y  o   f   B  r   i   t   i  s   h   C  o   l  u  m   b   i  a   ]  a   t   1   5  :   2   2   1   9   J  u  n  e   2   0   1   3  166HANS PECHARThis change in the policy context exercised anenormous influence on the establishment of theFachhochschul sector. It was clear from the verybeginning that the new sector must not duplicatethe structures of the old universities. The organ-izational concept for Fachhochschulen was evenmore radical than the reform proposals for uni-versities (BMWF/BMUK 1992). Of course, it iseasier to build up new structures than to changeexisting ones. Nevertheless, the new organiza-tional concept for Fachhochschulen was verycontroversial. There was a lot of resistance againstsuch a fundamental change in the relations be-tween the state and the educational institutions(e.g. Mrkvicka and Kaizar 1994). An examina-tion of the Austrian higher education system bythe OECD with the focus on the new Fach-hochschul concept proved very helpful. In spring1993 the OECD presented its review whichexpressed strong support for this concept 1 (OECD 1995). Only a few weeks later theFHStG was passed by parliament.One way to establish a non-university sectorwould have been to upgrade existing institutionseither at the secondary or at the postsecondarylevel. For several reasons this approach was notchosen. Parts of the business community wantedto sustain the technical schools, which wouldhave been candidates for upgrading into Fach-hochschulen. Other candidates would have beenthe academies for teacher training at non-univer-sity level, and the schools for medical assistants.However, policy makers feared that such an up-grading would result in higher salaries for thegraduates of the respective schools and be aburden on the public budget. For those reasons,the Fachhochschul sector was built up with com-pletely new institutions. This has the importantimplication that the new sector can only growslowly and that it will be —in short-term and evenmedium-term perspective - much smaller thanthe university sector.Another important preliminary decision wasnot to follow a top-down, but a bottom-upapproach. The starting point should not be a master-plan by the government which decideson a few locations and subjects. Rather the proc-ess should advance by decentralized initiatives.This leads to the implication that students are notconcentrated in a few Fachhochschulen butspread over many institutions. On the other handthose institutions are, at least in the first years,very small, enrolling only a few hundred stu-dents. The first Fachhochschul courses started in1994. After two years, a total of less than 2000students have enrolled on 20 courses, which arespread over 11 institutions.Differences Between Universities andFachhochschulenThe emphasis of this paper is on funding, but tounderstand the new funding mechanism oneneeds the perspective of the whole organiza-tional concept. A good way to give a general viewis to contrast the Fachhochschul sector with theuniversities. In this context this can only be donevery briefly and rather schematically:• Both sectors are regulated by federal law.However, the function of this legal basis andthe range of the respective acts differ funda-mentally from each other. For the universitysector there is a large number of acts, manyof them voluminous; their function is a tightregulation in terms of organisation, person-nel and study courses. For the Fach-hochschul sector one act exists only, consist-ing of a few paragraphs, which provides afairly open legal framework for the activitiesof the single institutions.• A fundamental issue is the maintainance andgovernance of the institution. All universitiesare owned by the federal state and governedby the ministry. For the Fachhochschul sec-tor there are no legal ownership restrictions. 1 The OECD also recommended that the government should commission a series of studies to monitor theimplementation of the new law. This paper is based on the monitoring of funding Pechar 1996a).    D  o  w  n   l  o  a   d  e   d   b  y   [   T   h  e   U  n   i  v  e  r  s   i   t  y  o   f   B  r   i   t   i  s   h   C  o   l  u  m   b   i  a   ]  a   t   1   5  :   2   2   1   9   J  u  n  e   2   0   1   3  THE FUNDING OF FACHHOCHSCHULEN IN AUSTRIA167All institutions are owned by quasi-private 2 associations or corporations and are gov-erned by a professional management.The university academic staff are employedby the federal state; faculty members are civilservants; professors are appointed by theminister. The staff of Fachhochschulen areemployed and appointed by the institution.An important criterion for the scope of insti-tutional autonomy is the admission of stu- dents.  For the university sector, admission isregulated by federal law. Graduates of thesecondary elite track are entitled to enrol atany Austrian university. There is open accessregardless of means. In the Fachhochschulsector students are admitted by the institu-tion in accordance with available studyplaces.Who decides on the curriculum? At the uni-versities there is a hierachical regulation ofstudy courses by four stages: two federal laws,  a ministerial decree and finally a fine-tuning by the university  itself At the Fach-hochschulen decisions on the curriculum aremade by the responsible academics in coop-eration with the institutional management.An important difference between the twosectors refers to the philosophy of qualitymanagement. In both sectors professionalself-control by academics is crucial. In addi-tion, at the university sector an  x  nte  controlby federal law is exercised. Universities aresupposed to have equal status and standardsof quality. The final responsibility for qualityin the Fachhochschul sector is in the hand ofan external professional body, the Fach-hochschulrat. The Fachhochschulrat guar-antees minimal standards of quality. Further-more, Fachhochschulen are expected to varywidely in terms of profile and quality of theireducation. The Funding of Fachhochschulen andUniversities Before dealing with the details of funding theFachhochschulen, I shall give a general overview,which contrasts the principles of funding in thetwo sectors:• Universities and Fachhochschulen differ inthe funding background philosophy: in bothsectors the federal government plays andominant role. However, for the universities,the federal government has accepted respon-sibility for covering all costs, whereas for theFachhochschulen it has accepted only a lim-ited responsibility. One could say that thestate has a rather paternalistic relationship tothe universities and a more distant one to theFachhochschulen. The government is com-mitted to meet all the financial requirementsof  th universities. To make that possible, thegovernment insists on defining those re-quirements. The universities can only makeapplications and proposals; it is always theministry which has the last word in decidingwhether or not these claims are legitimate.This requires the government to interfereconstantly in the internal affairs of universi- ties,  in order to make proper judgementsabout whether or not universities need moreresources. Once the government has agreedon certain requirements, it is legally obligedto provide all necessary resources. For theFachhochschul sector the federal govern-ment choose a different approach: it makesno claims to define the financial require-ments of Fachhochschul courses - rather itstates how much it is willing to pay tosupport them. There is no need for Fach-hochschulen to make applications to theministry. If they choose to offer more expen-sive studies, they are at liberty to do so.However, they must then look for othersources of income. They have complete en-trepreneurial freedom, with one exception:they are not allowed to charge tuition fees. 2 They are private in the sense of the Austrian legal traditions which only recognizes a difference betweenfederal and private ownership of higher education institutions. However in most instances public bodies jointhe associations or are shareholders of the companies which own the institution. Therefore one cannot speakof   strictly private ownership.    D  o  w  n   l  o  a   d  e   d   b  y   [   T   h  e   U  n   i  v  e  r  s   i   t  y  o   f   B  r   i   t   i  s   h   C  o   l  u  m   b   i  a   ]  a   t   1   5  :   2   2   1   9   J  u  n  e   2   0   1   3  168HANS PECHAR• As a consequence of those different back-ground philosophies, there are importantdifferences in the sources of income for uni-versities and Fachhochschulen. The univer-sities depend entirely on the federal govern-ment; about 98% of their income comes fromthis source. 3  At the Fachhochschul sector wehave a totally different picture. On average,only 54% of the total income comes from thefederal government: the rest comes eitherfrom other territorial authorities (i.e. Landerand/or municipalities), or from the privatesector of the economy.• A further point refers to the funding mecha-nisms for federal funds. As we have seen,federal funding is basically the sole source ofincome for universities and it is still the mostimportant one for Fachhochschulen. How-ever, universities get that money in the formof earmarked grants, whereas Fach-hochschulen get a lump sum which is basedon student numbers.• After so many differences one should alsoemphasize an important characteristic bothsectors have in common: there are no tuitionfees in Austria, neither at universities nor atFachhochschulen. Attempts have been madeto introduce fees for the Fachhochschul sec-tor but the parliament has decided that stu-dents in both sectors have to be treatedequally with respect to that issue. In recentyears a serious debate on fees started inAustria (Pechar and Keber 1996) and thereis a growing tendency that policy-makersand the general public favour some kind offinancial contribution by students.The Role of the Federal GovernmentBy Austrian constitutional law, higher educationis the responsibility of the federal government.As we have seen, the federal government fulfilsthat responsibility for the Fachhochschul sectorin a very different way from the university sector.It has limited its role to providing a basic fundingfor Fachhochschul courses on the one hand, andto ensuring a overall coordination of the sectoron the other hand.In 1994 the federal government published adevelopment plan for the Fachhochschul sectorwhich determines the size of the sector up to theyear 2000, the amount of money the governmentwill spend per study place, and the conditions onwhich the institutions will receive federal fund-ing. As already mentioned, the sector will growrather slowly: the government has announcedthat it will fund 10,000 study places until theyear 2000. The reason for this cautious develop-ment is not only a lack of money but also uncer-tainty about how the new model of organizationand funding will stand the test of time.In this first phase (until 2000) the federalgovernment will provide only recurrent expendi-tures - no capital expenditures. Capital expendi-tures must come from other sources This shouldguarantee that an institution has substantial sup-port from either regional and local governments,or from the business community. The currentexpenditures are provided on the basis of 'nor-mative costs' per study place. Those normativecosts have been determined on the basis of cal-culations which are also used in the universitysector (Keber 1992). This should guarantee thatboth sectors are treated equally. The normativecosts for technical studies are 105,000 ATS, forbusiness studies 88,000 ATS. However, the fed-eral government pays only 90% of these costs -the rest must come from other sources. It isimportant that the normative costs have beencalculated under the assumption that at least1000 students are enrolled in one institution.Under which conditions are institutions eligi-ble for federal funding? First, a course must beaccredited by the Fachhochschulrat. This guar-antees that the minimum criteria in terms ofacademic quality are met. Second, a course mustfulfill a number of policy criteria established inthe development plan. The federal governmentwill, for example, prefer courses in disadvantagedregions; or part-time courses for students who are 3 The only additional source of income are third party funds . However, little is known about the amount ofthat income; most of it is probably private income of those faculty members who are engaged in contractualresearch and consulting.    D  o  w  n   l  o  a   d  e   d   b  y   [   T   h  e   U  n   i  v  e  r  s   i   t  y  o   f   B  r   i   t   i  s   h   C  o   l  u  m   b   i  a   ]  a   t   1   5  :   2   2   1   9   J  u  n  e   2   0   1   3
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