Quick question: “Rector Tiit Land, why are we talking so much about money lately
“There’s no secret that the University is currently having an intense financial period,” rector Tiit Land admits. “The reasons for that are both systemic as well as to do with money flow issues, plus some old habits, which are difficult to change in a hurry.”
The rector starts by looking back:
Tallinn University has gone through a rapid expansive development since its formation 10 years ago. Different institutes joined, the numbers of students and staff rose. The expansion was supported by the state funding system and paid studies – every student helped grow our budget.
At the same time, the University invested in renewing our campus as well as creating and developing new study programmes. This brought on new financial obligations. Some programmes ended in a loss, for example, our Business studies centre, which we opened in 2010 and closed in 2012.
During autumn 2012, the demographic situation in Estonia meant the number of students also started decreasing. In 2013, the state decided that all Estonian study programmes must be tuition-free. Therefore, the number of students is no longer directly related to state funding.
Compared to the number of students, TU has too many study programmes. At the same time, compared to the two other large universities, the percentage of our research funding in the whole budget is rather modest.
Overhead has also increased by opening new buildings, but unfortunately we have not amassed a reserve fund nor have we taken into consideration the depreciation allowance. At the same time, we have spent over our actual income.
“To sum up, we have made investments that bring us obligations we will struggle to fulfil, especially taking into account the changes in the external environment,” Tiit Land admits.
What can be done now?
One of the goals of our structure reform is ensuring financial stability in the future. “Focusing our actions also means we cannot continue with all the current study programmes, i.e. all the programmes do not fit within the framework of the new focus fields,” he assesses.
We need to continue reduce the number of study programmes, eliminate overlapping programmes within the university and re-evaluate the workload of our staff. We wish to increase the percentage of research funding by applying for funds from the ASTRA measure (“Institutional development programme for research- and development institutions and higher education institutions”)
Are we in danger of bankruptcy?
“Certainly not, if we can understand the severity of our financial situation and act within the boundaries of our existing budget,” the rector estimates.
The senate decided on January 26th to limit our budget consumption by 10% for 8 months this year (February 1st – August 31st), to assure financial liquidity and give a better starting position to the new units on September 1st. This is vital and we have to stick to that.
The structural reform will also reshape our management and financial systems, which will bring stability in the long run.