Executive Summary

The Flemish Community of Belgium has a diversified publicly funded system of higher education, with five research universities and 16 professionally oriented university colleges. This network of institutions and the wide range of programmes they offer have ensured broad access to higher education for large sections of society and allowed the Flemish Community to achieve high rates of tertiary education attainment. The recent transfer of short-cycle associate degree programmes from the adult education sector to university colleges has further expanded the scope and reach of the higher education system. Over the last decade, academic staff in Flemish universities have been instrumental in achieving a significant increase in the number of publications produced by the Flemish research system. The Flemish Community now ranks among the top-performing OECD jurisdictions in terms of research productivity and citation impact.

Average spending per student on higher education institutions in the Flemish Community is around 30% above the OECD average, at a level similar to that in Austria and the Netherlands. Around 85% of total spending on higher education institutions comes from public sources. The Flemish Government uses carefully designed formulas, incorporating output variables, to allocate funds for core operations and for research to institutions and has significantly increased investment in research in recent years. However, budget envelopes for core operating funds have not fully kept pace with increased enrolment in the last decade, which, in combination with a largely open access admission system, has placed strain on institutional budgets. Moreover, challenges exist in a number of areas, including student progression and completion rates, support for research in university colleges, gender balance in the senior ranks of universities and the capacity of the system to respond to growing demand for lifelong learning. The table below provides a more detailed summary of key policy issues identified during the review and the corresponding recommendations formulated by the review team.

Table 1. Summary overview of main findings and recommendations
Policy issues	Recommendations
1. Operating funds for higher education institutions
Public funding – the main source of income of Flemish higher education institutions – has not increased in line with enrolment growth over the last decade, leading to a real-terms decline in funding per student.	1. Over time, seek to increase the value of the budget envelope for the operating grant to higher education institutions to restore the real-terms value of payments to institutions.
Planned multi-annual budgetary allocations for higher education institutions (growth paths) have been established in legislation, but subsequently not implemented.	2. Revise the budget trajectories (growth paths) for the budget envelope for the operating grant established in legislation to ensure they are realistic and can be respected in practice.
Funding systems that establish fixed unit payments (per credit or per student) provide greater income predictability for institutions than purely distributive models like that in the Flemish Community. However, such a system may not be compatible with an open access admission model.	3. Analyse the budgetary implications of a funding model for the operating grant that establishes fixed unit payments in advance.
The funding model for university colleges uses multiple weighting factors between 1 and 1.6 for different subject areas, often without a clear link to real differences in the cost of providing the programmes.	4. Analyse the impact of using a simplified set of subject-area weightings for professional programmes, with a view to reducing the complexity of this aspect of the funding model.
Comparatively long times-to-degree remain a challenge. Previously proposed and apparently viable reforms to help address this have not been implemented.	5. Revisit previously proposed reforms to promote student progression, including changes to the “learning credit" system.
The Flemish Community has made considerable efforts to enhance information and guidance to support prospective students in making good study choices.	6. Continue to support initiatives and tools to help students to make sound choices about what and where to study.
Mechanisms for ensuring the accountability of higher education institutions to citizens and government are less developed in the Flemish Community than in many comparable jurisdictions.	7. Consider introducing a system of institutional agreements between government and higher education institutions to provide a clear accountability framework.
The Flemish Government provides limited funding specifically for future-oriented investments. In other OECD jurisdictions, such funding is linked to institutional agreements with positive effects.	8. Create a future-oriented “strategic investment fund” to support higher education institutions achieve key goals.
Earmarked public funding for capital investment is insufficient to meet needs and institutions fund most capital investment from their own funds. Further analysis is required to clarify investment needs and to inform a revised approach to capital investment.	9. Quantify the capital investment needs of the higher education sector as a basis for redesign of the approach to capital funding.
2. Direct-grant funding to higher education institutions for research
Despite recent increases, Flanders has not yet reached its target of allocating the equivalent of 1% of GDP to research from public sources.	10. As public finances allow, continue to increase public funding for research in higher education.
The research component of the operating grant to universities and the Special Research Funds (BOF) use different allocation parameters.	11. Analyse the impact of allocating the research component of the operating grant using the same parameters as for the BOF.
The Flemish university research is highly productive, annual changes in research performance are modest and research is a long-term activity.	12. Analyse the detailed effects of allocating the BOF to universities, for four or five-year periods at a time.
A move to longer-term funding allocations would justify further accountability and transparency measures to demonstrate use of funds.	13. Consider requiring universities to publish institutional research strategies, potentially as part of institutional agreements.
The increase in externally funded, project-based research activities in universities has increased use of institutional infrastructure and central services without adequately covering the costs of these resources.	14. Take steps to increase the overhead rates applied for resource-intensive research projects funded through Flemish external competitive public funding mechanisms (such as the FWO).
If government agencies increase the overhead rates paid to institutions for research projects, it is fair to ask the same of private funders.	15. Higher education institutions should be required to apply the same overhead rates for research financed by private funders.
Government and society lack transparent information on the costs of activities, including overhead costs, in higher education institutions.	16. The Flemish higher education sector should develop and introduce common standards for activity-based cost accounting.
There is scope to develop a clearer, common vision of what effective practice-oriented research looks like and share good practice.	17. The Flemish university college sector should develop a system-wide strategy to guide the future of practice-oriented research.
University colleges lack the resources to expand their activities and fulfil their potential in the area of practice-oriented research (PWO).	18. Progressively increase the share of total public funding for research (and level of funds) provided to university colleges.
While a case exists to invest more in practice-oriented research in university colleges, a clear strategy for using any extra funds is needed.	19. Require university colleges to develop institutional strategies for practice-oriented research, complementing the system strategy.
3. Funding for students
The financial aid system for students is well designed, but there is scope to improve information for students about the full costs of study.	20. Examine options for improving information for students about the full cost of study on relevant websites.
The allocation method for public funding for student services (STUVO) does not differentiate payments to account for differences in support requirements from students with different profiles.	21. To inform possible reform, analyse how the allocation of the funds for student services could be adapted to take better account of variation in student needs between institutions.
The “grant credit” system regulating eligibility for student grants is aligned with the “study credit” system regulating funded study places.	22. Ensure this alignment is maintained if changes are made to the study credit system to promote swifter progression (see 5).
4. System-level frameworks governing human resources in higher education
Despite measurement challenges, it is clear that student-to-staff ratios in Flemish higher education are among the highest in the OECD.	23. Ensure that a proportion of additional public funding for higher education (see 1) can be used to create new staff posts.
Men occupy a large majority of the senior ranks in higher education institutions in the Flemish Community – particularly in universities.	24. Closely monitor progress towards the goals of the Charter on Gender in Academia, introducing binding targets if required.
Rigorous Dutch-language requirements for permanent academic staff positions make it hard for Flemish higher education to attract and retain the best international talent.	25. Introduce greater flexibility in the formulation and application of the Dutch-language requirements for initial appointments to permanent academic posts.
5. Key trends in higher education with an impact on future resourcing policy
Flemish higher education faces challenges, including increasing the offer of post-initial continuous learning and exploiting the potential of digitalisation, but, unlike some comparator jurisdictions, the system lacks a coherent overarching strategy to guide future policy and investment.	26. Collectively develop an overarching Flemish strategy for higher education, encompassing all key missions of the sector, as a core reference document.