Steering, financing and agreements of higher education institutions, science agencies and research institutes

Steering of higher education institutions

The activities of higher education institutions are based on extensive autonomy and the freedom of science. The autonomy of higher education institutions comprises the right to make decisions on matters related to the institution's internal administration. Universities of applied sciences are public limited companies whereas universities are independent legal entities.

The Ministry of Education and Culture and the higher education institutions interact continuously. The institutions and the Ministry hold negotiations at the start of each four-year agreement period, covering the following: common objectives for the higher education system, key measures for each higher education institution, the tasks, profile, core areas and newly emerging scientific fields in each higher education institution, degree objectives as well as the appropriations allocated on the basis of these. The agreement also specifies how the outcomes of the objectives will be reported on.

Other steering measures used by the Ministry, such as steering by information, aim to encourage and engage higher education institutions in other action that require mutual interaction. Ministry representatives visit each higher education institution in the course of each agreement period and organise regional events for actors and key stakeholders in the field to strengthen mutual interaction.

Every year, each higher education institution receives statistical data on their ranking among other higher education institutions. The Ministry also periodically gives written feedback the institutions on their activities and development needs. When necessary, the Ministry also invites the management of the institutions to discuss the special characteristics and specific questions related to different fields.

Financing of higher education institutions

In connection with annual Budget formulation, Finland's Parliament decides on the amount of core funding allocated by the Ministry of Education and Culture to the universities and universities of applied sciences. The Ministry disburses the disposable core funding using the financing models for the two types of higher education institutions. Besides the core funding, higher education institutions receive financing from other sources (external funding), such as the Research Council of Finland, Business Finland, foundations, enterprises, the European Union and other international sources.

The appropriations for core funding are allocated mainly in an imputed way to the universities on the basis of their teaching and research performance, and to universities of applied sciences on the basis of their performance in education as well as research and development. Part of the financing for both higher education sectors is allocated on the basis of their strategies, which are formulated together between the Ministry and each institution. Additionally, the national tasks and duties of the universities are taken into consideration in the central government funding for universities. The purpose of the financing models is to improve the quality, impact and productivity of the higher education institutions.

The model allows the core funding divided between the higher education institutions to be allocated as a single entity. The higher education institutions then decide on the internal allocation of funding independently on the basis of their strategic choices. Central government funding for universities of applied sciences is EUR 954 million (2023) and central government funding for universities is EUR 1,999 million (2023).

Steering of science agencies and research institutes

Science agencies and research institutes within the remit of the Ministry of Education and Culture include the Research Council of Finland, the National Archives of Finland, the Institute for the Languages of Finland, and the National Repository Library. The Ministry works in continuous interaction with the agencies and negotiates performance agreements for four-year periods with the agencies and research institutes under its performance guidance. The agreements outline the agency's mission, targets for its societal impact and operative effectiveness, the management of resources as well as the follow-up of indicators set for the objectives.

The performance agreements are revised once a year, at which time decisions are made on the appropriations proposed for the following year's Budget, and the objectives for operations are revised if necessary. The Ministry of Education and Culture gives annual feedback to each agency on its operations in the form of a statutory formal opinion on its financial statements. As part of the guidance process, the Ministry conducts visits to the agencies and research institutes during the agreement period. 

The activities of the Research Council of Finland, the National Archives of Finland, the Institute for the Languages of Finland and the National Repository Library are financed from the national Budget. Additionally, some of the activities of the Institute for the Languages of Finland and, to help promote science, some of the Research Council of Finland's research appropriations derive from betting and lottery proceeds.

Research Council of Finland's role in science policy

The Research Council of Finland is a major source for funding in scientific research. The Research Council’s task is to improve the quality and appreciation of Finnish basic research with research funding based on competitive bidding. The Research Council finances diverse basic research, which paves the way for innovative applied research and the utilisation of new data. Most of the Research Council's financing is channelled to research carried out at universities. The Research Council also handles the administration of EU research programmes and international research organisations in cooperation with Business Finland.

 

Agreement between Ministry of Education and university for 2021-2024 (Case: Aalto University)

Agreement between Ministry of Education and university on applied sciences for 2021-2024 (Case: Oulu University of Applied Sciences)

Universities of Applied Sciences, core funding model from 2021

Universities, core funding model from 2021

Universities of Applied Sciences, core funding model from 2017

Universities, core funding model from 2017

Evaluation of the Academy of Finland (2022)