Budget for 2021 now in place

"We look forward to a 2021 with a solid budget, and I'm very satisfied with that. Covid-19 is clearly an unknown quantity that we will have to adjust for. But 2021 generally looks balanced and reasonable."

This is how Rector Brian Bech Nielsen presented the budget that the Aarhus University Board approved this week. According to the budget, the university is aiming for a deficit of around DKK 48 million in 2021, which will be financed by drawing on equity. 

"We have equity that exceeds our target of 10% of revenues, and therefore we have an opportunity to take a controlled bite out of our equity to invest in university development," he says. 

Being good can be expensive

University Director Arnold Boon expects that the university's total revenues will increase slightly in 2021; primarily because AU’s researchers are faring well in the competition for external funding. This means that derived costs are also increasing, however, because external funding requires a relatively high degree of co-financing.

"External funding from private foundations is becoming increasingly prominent in the university sector, and it is usually more expensive to co-finance than funding from public foundations. This leads to a structural imbalance, which poses a challenge for the university," explains Arnold Boon. 

There is also a number of other challenges and uncertainties for the coming years, which the university will address in early 2021. 

"Looking beyond 2021, however, we can see several challenges and uncertainties, and we need to focus on these already now to ensure that we tackle them before they grow too big," says the university director, and adds:

"We are in the positive situation that we have done a little better than expected in recent years, and we therefore have a good starting point to deal with the uncertainties lying ahead."

We can’t tighten our belt any more

These challenges affect TECH in particular.

Among other things, this is because of the long-standing political cutbacks in public sector consultancy. This means 23 per cent less for the area in the period 2015-2024. TECH will thus lose DKK 100 million of its basic funding for public sector consultancy over this period.

Aarhus University will have to take action on this matter, points out Rector Brian Bech Nielsen:

"We believe that public sector consultancy is an important task for society. We’ve been investing in these environments for many years, and researchers have worked hard to provide solid advice and even attract more external funding. At the same time, year after year, politicians have been asking us to tighten our belts. We can’t tighten our belt any more, and there’s nothing to suggest that the cutbacks will stop," says Brian Bech Nielsen.

What we can do about this is exactly what needs to be looked at early in the new year.

"It's a social task, and we should therefore also have a dialogue with the authorities about how it can be solved properly. As things are today, the public sector consultancy area is not financially in balance."

TECH: Early kick-off for budget 2022

In addition to the savings in the public sector consultancy area, TECH is faced with the challenge that the engineering area at the faculty receives relatively few basic funds. 

"Among other things, basic funds help to finance the research base under study programmes and to put up the co-financing needed for external grants. That's why we in the senior management team are talking about adjusting the internal allocation of basic funds so that we deal with the challenge together, as we have done in the past at AU," says Rector Brian Bech Nielsen. 

He stresses that the long-term goal for Aarhus University is to continue to grow in the engineering the area, because it is the university's job to meet the needs of society. 

"But we also need to be sure that we don't bite off more than we can chew. Growth must match the expected revenues. For the time being, the area is receiving strategic funds from the university, but these are likely to run out in 2025, so by then the engineering area should be in balance. We’re now planning how exactly we can achieve this goal," says Brian Bech Nielsen.