Spring Memorandum: higher education must also cut back

We cannot keep handing out money; that is the government’s message in the Spring Memorandum (in Dutch), which Minister of Finance Sigrid Kaag sent today to the House of Representatives. It contains the government’s financial windfalls and setbacks, along with the new expenditure and cuts.

Because of the high energy prices, the war in Ukraine, higher interest rates and other setbacks, costs are in danger of spiralling out of control. Almost all ministries have to cut their expenditure.

The only exceptions are the Ministries of Defence and General Affairs (including the King). But the Ministry of Education, Culture and Science will contribute hundreds of millions of euros – up to 664 million in 2027. Some of that – up to 198 million euro in 2027 – will be at the expense of higher education and research.

First-year students

First-year students will feel the pinch most: from September 2024 their tuition fees will no longer be halved, and that will save more money than originally thought. The total amount will be around 450 million euros in the years 2024-2027.

The rest are small savings here and there. From 2029, the Dutch Research Council (NWO) will get three million euros less. From that same year, the universities will get 20 million less out of the hundreds of millions in ‘study advance funds’ (a remnant of the old student loan system). The Ministry is also stopping the already expiring subsidies for second teacher training programmes and for ‘open and online teaching’.

It is also clear that the government will not fork out any extra money for salaries in education, except for wage and price adjustments based on estimates from CPB Netherlands Bureau for Economic Policy Analysis. The employers wrote a letter requesting this, otherwise they would be faced with an impossible dilemma in the negotiations with the unions over a new Collective Labour Agreement. The unions are asking for 14 percent. The government has not yet responded.

Windfall

There are nevertheless windfalls in the Ministry of Education’s budget. For instance, student financing will be less expensive: the Ministry expects fewer students than previously estimated. That apparently makes a difference of 160 million euros next year.

Those lower student numbers also make a difference to the funding needs for higher education. Add to that the fact that fewer babies have been born, so fewer children will be going to primary school. The initial savings resulting from the changes are not huge, but the amount rises to 420 million euros in 2028.

The rise in interest rates is a problem for the Treasury, but the silver lining is that the interest on student debt is rising too: it will provide an extra 246 million euros annually.

COVID-19

In addition, there is still money left over from the hundreds of millions of support for education in the coronavirus crisis. In the National Education Programme, for instance, there was an allowance for students whose studies were delayed because of COVID-19.

And fewer free self-tests for students and staff were needed than expected. The explanatory note states that 41 million euros is to be debited from the budget. That money will all revert to the Treasury.

STAP scrapped

Earlier this week, it was leaked that the popular but heavily criticised STAP subsidies of 1,000 euros for additional training are to be scrapped next year. That will save 330 million euros in 2024.

These STAP subsidies come under the Ministry of Social Affairs and Employment. So the cut will not be at the expense of education, but higher education institutions will certainly notice it. Considerably later than the commercial providers, they had just started entering their teaching and courses in the systems of STAP. And in the future, students without student financing were also going to be permitted to use the money for multi-year educational programmes.

But none of that will now be going ahead. In fact, there was a lot of scepticism over the content of some of the training. For instance, you could take courses in alternative medicine, to the dismay of the Dutch Society against Quackery. You could also book a ‘two-day journey of discovery to yourself’ in Paris or Antwerp.

The subsidies replaced the deduction for training expenses in the income tax return. It is not yet known whether that deduction will return. In the time ahead, Minister of Social Affairs and Employment Karien van Gennip will examine how she can continue to promote additional education and training.

HOP, Bas Belleman
Translation: Taalcentrum-VU