The funding of universities in the Netherlands: developments and trends

Recently, the Dutch Minister of Education, Culture and Science proposed that the funding system of Dutch universities be drastically altered by introducing a system of capacity funding. The intention is to abandon the current (direct) student dependence in funding and, instead, to offer a stable, long-term funds perspective. If this capacity funding is actually adopted, a trend break in the funding system of higher education and research in the Netherlands will occur.

This article describes the developments in the funding of Dutch universities over the past decades and the (expected) developments for the future. With regard to the near future and in addition to the capacity funding intended the author will also discuss other developments anticipated by him.

It will be shown that during the last forty years four “generations” of funding models have been used in the Netherlands. Soon the changeover to the fifth generation will possibly be made. A number of issues will be discussed, such as the introduction (and enlargement) of lump sum funding, elements of output funding (performance based funding) and competition on the basis of quality.

First, some basic characteristics of funding systems in general will be presented. They will be used to analyse the relevant developments in the Dutch higher education allocation systems.