Universities face sanctions if they fail to raise some of their funding from the private sector, under new plans drawn up by the Higher Education Authority (HEA).
The State would also gain much-tighter control of university spending under the confidential plans. These could see the HEA refusing to approve courses in colleges unless they meet overall national economic objectives.
The HEA proposes that it could retain up to 15 per cent of core funding and allocate this to colleges that best respond to national economic and social needs. The proposals have provoked a storm among some academics, amid concerns about loss of traditional academic freedom.
The HEA discussion paper, circulated to university heads, is seen as further evidence of a drift towards "privatisation in the university sector". The HEA has proposed that some universities should be allowed to step outside State control, in its submission to the current OECD review of the third-level sector in the Republic.
The HEA discussion paper on funding is seen by some as a "pre-emptive strike", as the OECD is expected to make similar proposals later this year.
The 10-page HEA paper says universities will be penalised if they fail to get at least 5 per cent of their income from private sources. Essentially, funds would be withheld if universities fail to forge new alliances with the private sector.
Funds would also be withheld if the HEA is not satisfied that particular courses are meeting overall national objectives.
The paper will be seen as further evidence that the HEA is pursuing a "pro-business" agenda which threatens the traditional freedom of the colleges.
The authority says its paper is designed to put a new funding model in place which will enable "increasingly autonomous and market-driven institutions to respond to public interest agendas ... while also taking a greater responsibility for their own financial sustainability".
The HEA says there is a need to balance the traditional freedom of colleges with "meaningful accountability". It says higher education is facing several key challenges including:
- Growing concern with issues such as quality, relevance and value for money;
- Diminishing State funding;
- Broadening access (for mature students, those from lower socio-economic groups, students with disabilities and those from ethnic minorities).
The HEA suggests a fundamental shift in funding. At present, universities receive a large slice of their income in a block grant based on student numbers. But the HEA prefers a new system which would be linked to college performance.
It hints that colleges could be rewarded, for example, if they met national economic objectives. Colleges could be given extra money if, for example, they provided much-needed science graduates or broadened access for poorer students.
The paper points out that incentives are in place to encourage colleges to secure more than 5 per cent of income from non-State sources. "However, no adverse consequences have been applied in these institutions. This needs to be further considered."
State funding accounts for about 85 per cent of university funding in the Republic, a very high proportion by international standards. The abolition of fees has increased this reliance.
A report commissioned by the HEA from an international expert says universities worldwide are moving to a more performance-based funding model.
The seven universities have been asked to respond to the HEA discussion paper by the end of this month.