Public funding of universities set for major shift under proposed changes

The government is considering a new funding regime that would streamline university education which among other things provides sponsorship for postgraduate students.

In the proposed plan, universities that are efficient in graduating their students upon completion of their courses and those whose students get jobs within one year of graduation would get higher funding.

Universities that focus on courses that fall within the key government priority areas would also get more money as the new funding regime seeks to strengthen the national development agenda.

This means that the government will exercise selective funding that may largely benefit students who enroll in the targeted core courses.

Universities with students enrolled outside the core programmes would not get commensurate funding as resources would be channeled to the stated priority areas of focus.

And universities that have carved out a niche in special areas such as agriculture, engineering or science would also get higher allocations as the government encourages specialisation in institutions of higher learning.

The good news, however, is that students with special needs enrolled in universities will be fully funded with all their costs carried by the government.

At the same time, post-graduate students, who have also been ignored under the present funding regime, will also get up to 80 per cent financing from the State.

This means that universities will get more money depending on the number of government Masters and Doctorate scholarships declared in a particular year to develop teaching and research capacity in universities.

However, students who benefit from government postgraduate scholarships, will be bonded to a university for a period of time prescribed by the Fund.

These are some of the new proposals being considered as the government, through the Universities Funding Board (UFB), starts revision of the present funding regime known as the maximum Differentiated Unit Cost (DUC).

The DUC is the amount of money required by an institution to teach one academic programme per year per student.

The DUC has lumped specific costs of programmes into clusters of 18 ranging from the lowest being Sh144,000 for humanities and the highest Sh720,000 for dentistry.

Universities have for the last four years been calling for revision of the DUC to eliminate large disparity between public and private universities.

UFB Chief Executive Geoffrey Monari said a Universities Funding Framework has been developed, reviewing the DUC by introducing allocations of infrastructure funds.

Monari said the proposed formula has been developed to guide apportionment of infrastructure grants, which have not been consistent in the past.

“And this can be observed through the various stalled projects in most of the universities. We shall now have funding criteria for issuance of capital development grants. This will encourage public private partnerships with universities to ease pressure on the Government infrastructure support,” said Monari.

He said the revision of the model will provide a more transparent accountable funding framework for universities in apportioning funds for teaching and learning, infrastructure (development funds) and introduction of performance based funding.

Broadly, the framework makes far reaching proposals on how universities money shall be shared based on four key parameters–post graduate research, national priority areas, institutional factors (age of university) and special needs education.

In the last financial year for example, universities received a block allocation of Sh41.9 billion, shared among them.

However, if the new formula is adopted the block allocation will shared based on allocated weights of the four mentioned parameters.

The new formula proposes that 70 per cent of universities apportionments go towards base allocations which will allow an institution to perform its basic functions such as teaching and learning.

This means that based on last year’s allocation, universities would get 70 per cent of this which translates to Sh29.3 billion.

Some 20 per cent of the total allocation would go towards funding universities that have focused on national priority areas. This would translate to Sh7.2 billion. These are institutions programmes designated as the nation’s priority. (See separate story)

Another five per cent of the total budget would go towards supporting post graduate training, translating to some Sh3.5 billion.

The institutional factor parameter would get some 3.22 per cent allocation which translates to Sh1.3 billion. The grants are given to universities that are seemingly disadvantaged when funds are distributed according to enrollment numbers.

The institutions may have few students or are located in areas where the cost of living is high and therefore pushes the operation cost up.

And the special needs education would get allocation of 1.78 per cent of the total budget which translates to Sh576 million.

If these proposals are adopted by stakeholders, this would be the new funding formula for universities.

Presently, the DUC formula only considers staff costs, students – staff ratio, students’ numbers, cost of infrastructure and operations, student loans and levels of programmes.

Kenyans now have up to August 20 to forward their proposals as the Universities fund opened doors for public participation on the revision process.

Monari said augmenting traditional funding systems is necessary to ensure that quality higher education is achieved even with limited resources.

What will however interest many parents and students is the proposal on performance-based funding, where more money will be allocated to universities that are efficient in transiting their students.

The framework says that this funding will be based on specific performance measures such as course completion, degree completion, equity and gender considerations instead of allocating funding based entirely on enrolment.

The key performance indicators attached to this funding will be the four-year graduation rule and the employability rate of one year after graduation.

Early this year, the government stopped the release of Sh5.5 billion to fund 32,000 university students who had delayed in completing their courses, pending an audit.

Universities research outputs such as number of doctoral and post-doctoral graduates, the patents and licenses issued and research publication units for a specific year will also be considered during funding. The number of industrial attachments and internships facilitated within the industry by the university and the number of joint programmes with industry, commerce and civil Society organizations in each year will also be considered.

Also to attract more funding will be the number of female students enrolled in STEM, persons with disability and students admitted from disadvantaged socio-economic background.

And trainings undertaken on financial management and governance for councils, senior management and senior faculty members will also determine funding for the universities.

“It is a model that provides a fuller picture of how successfully universities have used their government appropriations to support clearly stated objectives or targets,” reads the document.

The shock will, however, fall on universities that have mounted cheap academic programmes that are not aligned to national goals.

The says that increased of universities led to many universities shifting their focus away from their core areas to mounting low-cost programmes which are not necessarily relevant to the economy.

Under the proposed finding plan, universities which shall focus on their niche areas would get better funding.

“The Universities Fund to seek financial support for universities in their niche areas from the National Government, County Government and other interested partners. This can be achieved by sourcing proposals for training and research in areas that target specific socio-economic issues at the County, National and Regional levels,” reads the framework.

Tied to this will be increased funding for national priority areas, where the Universities Fund will allocate 20 per cent of the allocated budget.

“This will encourage universities to operate in ways that advance national priorities for higher education and national goals for social and economic development,” reads the document.

The framework identifies national priority is based on the Big 4 Agenda and the broader Vision 2030.

For special needs students, the framework says that presently there is no clear criteria on inclusion of students with special needs in the university sector.

And now, it is proposed that students who are placed under the special needs affirmative action shall be considered for full government scholarship.

“Students in this category will be funded at 100 per cent of the unit cost in their respective programmes,” reads the framework.

In addition to this, five per cent of the development budget will be set aside to support programmes targeted at developing capacity to special needs programmes — building capacity for “Special Needs Aids”/Lectures.

“To enable special needs education, 1.78 per cent of the total budget should be set aside to specifically go to support students with special needs in Kenyan universities.

“The more students with disability that a university has, the higher the proportion of the institution factor grant the institution receives. This is to aid the university make its built environment more accessible for all PWDs,” adds the proposal.

And newer universities would also get special funding called Age of University Grant.