Aarhus University's budget for 2020-2023 was approved by the board on 13 December. With the controversial reallocation contribution on degree programme revenues finally out of the picture, the financial future at AU looks brighter overall, and the university now has room to manoeuvre in continued strategic initiatives. However, finances will be under pressure over the next couple of years in parts of the university, due to previous years’ cuts and lower-than-expected student intake in some places. The university will face these challenges in a spirit of solidarity and unity.

2019.12.17 | Sys Christina Mehlsen Vestergaard og Louise Asmund-Hjorth

Photo: Colourbox

Overall, Aarhus University’s finances in the coming budget period look solid, not least thanks to the discontinuation of the annual two-percent reallocation contribution on the degree programmes which has been squeezing university education since 2016. In addition, the government has decided to carry over the existing taximeter increase for the humanities and social science degree programmes into the new Finance Act. Finally, the university has been successful in attracting external funding, the positive effects of which on the university’s budget are expected to be significant in the period from 2018 to 2023. The expected growth in expenditure of external funding will lead to an increase in research and teaching activities.

"After many years of cutbacks, the 2020 Finance Act represents a turning point for higher education. The coalition parties behind the Finance Act stress that strong universities have a decisive role to play in the development of our society. In light of the positive measures in the Finance Act on top of a solid financial foundation at Aarhus University, we intend to maintain our high ambitions. We also to intend to continue investing so we can put some muscle behind the university’s strategy for 2020-2025,” says Connie Hedegaard, chair of the AU board.

Strategic initiatives to be partly financed by drawing on equity

Aarhus University’s 2020-2023 budget includes a planned deficit. The university’s equity is currently approx. 13% of revenue, and the goal is to reduce that figure to 10% during the budget period. This investment of equity is one of the measures that will make it possible to continue AU’s strategic investments in digitalisation, engineering and business, ensuring a strong Faculty of Arts, Campus 2.0 and new initiatives. For example, Aarhus University’s new climate strategy is expected to be approved in the spring of 2020.

Another area that will receive special attention in the budget period is the business initiative, which is focussed on ensuring attractive careers for the university’s graduates and contributing to innovation through closer collaboration between private companies and public sector institutions. This includes a stronger focus on entrepreneurship.

Working together to solve challenges

Fortunately, the new Finance Act is putting an end to the cutbacks on university degree programmes imposed over the last several years. But their effects are still being felt: some parts of the university still face budgetary challenges. In addition, the natural science and technical degree programmes admitted fewer new students than expected in 2020, and there will be costs associated with division of the Faculty of Science and Technology into two new faculties. On the recommendation of the senior management team, the board has decided that the university will address this challenge in a spirit of solidarity, an approach which Aarhus University has a tradition for. This means that Science and Technology will receive DKK 19 million annually in extra support in 2020 and 2021, half of which will be repaid by the faculty in 2022.

“Aarhus University is a single, unified university. In good times and in bad. So I’m very pleased that a unanimous senior management team team supports this unified front on providing the support necessary to deal with the challenges we will face in coming years. Cooperation across faculties, schools and departments is decisive if we are to deliver solutions to society, and so it benefits the entire university that we have four – soon to be five – strong faculties that are working together,” says Brian Bech Nielsen, rector of Aarhus University.