Budget 2018-2021: Positive development with room for important investments

Aarhus University’s financial situation is fundamentally sound, and a healthy balance between revenues and costs is expected in coming years. Although external regulatory measures such as degree programme resizing, the study progress reform and the reallocation contribution continue to pose challenges, they are offset by the positive effects of improved student graduation completion rates and increased student FTE revenues, for example from the engineering programmes.

On 12 December, Aarhus University’s board of directors approved the budget for 2018-2021, and expressed satisfaction with financial projections for the university for the next four years.

“Aarhus University’s finances are healthy. This is not a given at a time when we are subject to considerable cutbacks imposed by the government, so there are grounds to emphasise that this is the result of a tremendous amount of financial restraint and not least strategic initiatives, both of which are beginning to bear fruit,” says Rector Brian Bech Nielsen.

Aarhus University’s finances have been affected by a fall in revenues in recent years. This is due in particular to the two per cent reallocation contribution, degree programme resizing and the prospect of diminished research funding from public councils and foundations. Nonetheless, the budget for 2018-2012 anticipates a positive development in external research funding.

Impact of strategic initiatives

Aarhus University’s budget assumes a slight fall in total revenues towards 2020, after which they are expected to stabilise.

this is particularly due to the effects of the strategic initiative to increase educational activities at ST, which are beginning to make themselves felt. The university is educating increasing numbers of engineering graduates, and a similar initiative to expand IT and maths degree programmes will also have a positive effect on the university’s student FTE funding.

Graduation completion rates for students at Aarhus University have also improved, which means that the university avoided fines for failure to meet time-to-degree targets in 2016 and 2017 – and is also expected to do so in 2018 and 2019. However, the reallocation contribution will continue to put pressure on the financial health of the university’s degree programmes.

Increased external funding

On the other hand, it is expected that the public sector research budget will increase in line with growth in GDP, a development which is reflected in Aarhus University’s budget for the period, which anticipates a seven per cent increase in external funding.

“Once again, we are facing the prospect of an increase– albeit modest – in government research funding, which is positive. In addition, we are earmarking funding for strategic initiatives, which will also contribute to improving the quality of our research, thus strengthening our contribution to society,” says Rector Bech Nielsen.

The framework for the 2018-2021 budget is the long-term financial plan from 2016 and the university’s target of equity holdings of approx. ten per cent of total revenue. AU expects to reach this target in 2021. Equity is currently 13.5 per cent of total revenue. Drawing on the university’s equity reserves will make it possible to continue to develop the university through strategic initiatives.

For more information, please contact:
Head of Press and Communication Anders Correll, +45 2899 2235, ac@au.dk