Merit-based subsidies could mean cuts for 74 colleges

Most national universities would see their government subsidies cut if funds were distributed based on academic excellence, Finance Ministry estimates show.

According to the estimates released Monday, 74 of 87 national universities in the nation, or 85 percent of all national universities, would receive less in subsidies under a performance-based system compared to what they get under the current arrangement, which is based on the size and capacity of a school.

The ministry made the estimates in an effort to see how a merit-based system would affect the allocation of subsidies that the government offers for operational costs at national universities.

But the estimates are likely to draw criticism from universities projected to lose out, and are expected to prompt heated debate over how the subsidies should be decided, observers said.

According to financial statements for national universities covering fiscal 2005, state subsidies totaled 1.59 trillion yen, accounting for 45 percent of the operating income of the universities.

The subsidies are the largest income source for the universities, followed by operating profits of university hospitals, which in 2005 accounted for 27 percent, while tuition fees came to 15 percent.

The ministry, which has argued the subsidy allocation system needs to be drastically reviewed to improve the efficiency of state finances, included its merit-based estimates in a document submitted to a ministry council for fiscal issues. Ministry officials also believe levels of academic research and education activities at national universities would improve if a market mechanism was introduced into the subsidy allocation system.

The estimates were made based on assessments of each university's commitment to research and educational activities. To assess commitment, the ministry looked at how two types of subsidies were allocated--those for certain scientific research projects that the government judged to be useful, and those covering research and educational programs that universities came up with on their own initiative.

If subsidies were reallocated in proportion to the ratio of subsidies spent on key scientific research projects, some universities that have obtained subsidies for those research projects would receive a higher allocation under a merit-based system, while some would receive less, the estimates showed.

According to the estimates, 13 universities would receive more in subsidies, including Tokyo University, Kyoto University and Tokyo Institute of Technology. However, this would leave 74 other universities with less in subsidies.

In terms of those likely to see an increase, Tokyo University would receive more than double the amount it does now, with an estimated 112.9 percent more in subsidies. At the other end of the scale, Hyogo University of Teacher Education would receive about 10 percent of its current levels. The estimates indicated that a number of universities specializing in teacher training would face significant cuts in their subsidies.

If a reallocation estimate is based on amounts of subsidies covering universities' original research and educational programs, the number of universities that would receive a bigger allocation was estimated at just 34, or 40 percent of all state universities.
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Education minister blasts report


Education, Science and Technology Minister Bunmei Ibuki on Tuesday criticized the Finance Ministry's estimates, saying, "If funds are used only for technological development and applied research, there will be no money for developing human resources for future generations."

Speaking at a press conference after a Cabinet meeting, Ibuki added the ministry's proposal was like "the grasshopper," an apparent reference to Aesop's fable about the grasshopper and the ants.

The minister also expressed skepticism about relying on market principles when allocating state subsidies, saying, "It's a very dangerous idea to allocate funds only with a view to making profits in the short run."
(May. 23, 2007)
http://www.yomiuri.co.jp/dy/national/20070523TDY01002.htm