How the UvA allocates the government grant

Fact sheet on the UvA's allocation model*

The UvA distributes the financial resources from the government grant as well as the tuition fees by means of a so-called allocation model – an apportionment tool. The current system was introduced at the UvA in 2006 and was most recently adapted in 2014.

The model apportions funds on the basis of duties and performance (and not according to the previous year’s budget). As many resources as possible are allocated to the faculties. A new model will be considered in the coming months.

Apportionment tool

To determine the faculties’ budgets, the UvA uses an ‘education’ allocation model and a ‘research’ allocation model. The education allocation model apportions the budgets that are available for education (government education grant and (to be) received tuition fees) across seven faculties and the Amsterdam University College (AUC). The resource allocation model apportions the government research grant across the seven faculties and the AUC. The Faculties of Medicine and Dentistry and the AUC receive their allocated share of the government grant. For the remaining faculties the following allocation models apply.

First, second and third flow of funds

The funds that go to the University of Amsterdam can be divided into the first flow of funds (government funding and tuition fees), second flow of funds (NWO and KNAW grants) and third flow of funds (remaining income including resources from the EU and contract teaching and research)[1]. The second and third flow of funds are directly channeled to the faculties. Approximately 90% of first flow of funds are also directly allocated to the faculties. Only the central budgets for governance and policy (€17.6 million in 2014), the thematic budgets (€ 15.2 million in 2014 branched into the budget) and the University Library’s central budgets (€11.9 million in 2014) are deducted from the first flow of funds.

The UvA’s first flow of funds are comprised of the government grant (€484.2 million in 2014) and tuition fees (€63.2 million in 2014). The government grant can be divided in the government education grant (€191.9 million), the government research grant (€190.6 million), the performance premium (€14.3 million) and the support portion for medical teaching and research (€87.4 million)[2]. The latter applies to the Faculty of Medicine and this budget is therefore channeled to the AMC, in which this faculty is housed.  

Allocation models and budgets

Although the government grant is divided into a budget for education and a budget for research, universities are not required to channel the budgets in the same proportion to the faculties. The UvA has nevertheless chosen to do so. This means that the government education grant and (to be) received tuition fees are converted in faculty education budgets and the government research grant  in faculty research budgets. The faculties are in turn allowed to determine for themselves whether they wish to adopt this distribution of resources for education and research. This fits with the integral responsibility of the deans (also see the UvA’s Governance Model

Education allocation model

The education allocation model is meant to apportion money to areas where costs are made. If there are more students, more teaching needs to be provided and as a result more costs made. The number of credits has been chosen as a gauge of the size of the costs. The faculties receive a basic amount of €95.47 for each credit. First-year students require more time and supervision and as a result more costs. In the allocation model, faculties receive €773 extra for each student. The successful completion of a programme with a degree certificate is also rewarded in the allocation model with €3,036 per (Bachelor’s or Master’s) degree[3]. This is the ‘output’ funding which is being widely discussed. Proponents believe this rewards study success, while opponents argue that it produces the wrong incentives.

Not all courses and programmes are equally expensive. The allocation model contains a funding level for each faculty that takes account of this.[4] These funding levels amount to: Faculty of Law (1.0), Faculty of Economics and Business (1.06), Faculty of Humanities (1.15) Faculty of Social and Behavioural Sciences (1.22) and the Faculty of Science (1.55). The funding by credit, degree certificate and first-year Bachelor’s student are multiplied with these factors. In addition, each faculty receives the channeled budgets from the government grant, budgets from the Amsterdam Academic Alliance fund (funded from the performance premium) and in some cases policy budgets and/or additional budgets.

An example of a policy budget for education is the budget of €3 million that the Faculty of Humanities receives for certain smaller programmes. Due to the limited size of the study programmes, the credits will in most cases not cover all of the costs. This is why this budget – funded from a fixed portion of the government education grant – exists.

Research allocation model

One of the criteria for the allocation of the research  budget is that academic research is necessary for academic education. An amount is awarded for each Bachelor’s or Master’s degree certificate in which the reimbursement for two-year Master’s degrees (€6,075) is relatively higher (more research intensive) than the reimbursement for one-year Master’s degrees and Bachelor’s degrees (€3,375). The same funding levels are used for each faculty as for education funding.

A sizeable portion of the government research grant and the research allocation model is the amount that universities and faculties receive for each PhD conferral. This amount is annually calibrated in the framework letter (with which the budget cycle starts) to the level of the most recent government fund letter (€94,541 in the 2014 framework letter) and channeled via the research allocation model to the faculties.

To stimulate high-quality second and third flow of funds research, and because the integral costs of second and third flow of funds research are not always fully covered, a quality research budget is divided among the faculties on the basis of grants that are obtained from the NWO, KNAW, EU (o.a. ERC) and members of Research Europe. In 2014 this budget amounted to €12,8 million and will grow via €19,2 million in 2015 to €25,6 million in 2016.  

In addition, the research allocation model is also comprised for €60,2 million from (historic) research policy budgets. It has been agreed that these budgets must decrease by 1 per cent annually. The resources that are hereby made available are used to financially support university priority areas. The University Committee on Research (UOC) annually gives a recommendation on which priority areas should receive this additional funding. 

The research allocation model also contains earmarked budgets from the government grant which are channeled, and faculties receive in some cases additional budgets. To ensure that all available resources for research are spread across the faculties, and that the available amount is not exceeded, a research coefficient was introduced in 2014. A number of the aforementioned budgets are multiplied with this factor, by which the faculty budgets are exactly equal to the available resources. In the 2014 budget this factor totaled 0.97 and in this year’s budget 0.95.

Total budgets from the first flow of funds by faculty

Abovementioned allocation models lead to the following budgets from the first flow of funds by faculty in 2014:[5]

 

Shared Service Units

Because the faculties receive the bulk of the resources directly, they pay the service provision by the Shared Service Units (such as University Library, ICT Services and Facility Services) themselves. The faculties and service units jointly decide about the level and price of the service provision. Housing costs are also charged to the faculties. For this purpose, a Long-Term Accommodations Plan (MVP) has been created to ensure the proper and affordable housing of (future) teaching and research. The actualisation of this housing plan is annually included as supplement to the budget. Also see the real estate fact sheet

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Footnotes 

*(Disclaimer: This translation is provided for information purposes only. In the event of a difference of interpretation, the original Dutch version of this document is binding.)

[1]For more information about universities’ various flow of funds, please refer to the VSNU website (in Dutch)

[2] For more infomation, see the government website (in Dutch)

[3] As from 2014, these degrees must be obtained within the nominal duration of study plus one year to receive funding from the education allocation model. Prior to this, only Master’s degrees were funded within the education allocation model.

[4] These levels were determined on the basis of the 2003/42 and 2004/24 reports from the Higher Education Funding Council for England, and were actualised before  the 2014 budget.

[5] Source: UvA data, the UvA’s management system.

Published by  University of Amsterdam

16 March 2015