Funding for IVET
Decentralisation of educational administration has been a key aspect of education policy since the 1990s. Decision-making has been increasingly handed over by central government to education providers. This also applies to funding: education providers have relatively extensive powers to decide on the use of their funds. In recent years, attention has also focused on the effectiveness and quality of vocational education and training.
State subsidies for operating costs (including teachers' wages) are granted according to annual calculations per pupil, lesson or other unit. Unit prices are scaled to allow for cost differences between various fields of education. Other factors included in the calculation are special educational needs. Funding criteria are uniform irrespective of ownership.
The subsidy is calculated to cover 45.3 % of operating costs. The most significant factor influencing the amount of state subsidy is the number of students. The municipality must fund its students even where they choose to study at a provider elsewhere. The state subsidy is payable to the education provider; it is not earmarked for a particular purpose. In addition, some vocational institutions are awarded performance-based funding. Training providers can also sell services to raise income.
Performance-based funding was introduced in 2002 when education providers were granted separate state subsidies based on their performance. The system became a part of the unit price determination in 2006. Performance-based funding is approximately 2 %, roughly EUR 20 million of the whole funding of vocational education. In 2004, total operating costs of vocational institutions amounted to EUR 1 107 million: the average unit cost per student was EUR 8 467.
The allocation of performance-based funding distribution is based on the performance-based funding index, which has been combined from the following indicators:
- effectiveness (job placement and further studies);
- processes (dropping out, % ratio of qualification certification holders to entrants);
- staff (formal teaching qualifications and staff development).
