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How to solve the supply of premises and reduce the feedback loop

For many higher education institutions, Akademiska Hus is the property owner and rents out the properties for the institutions’ needs. This model is questioned for many reasons, not least the transfer of resources that takes place when Akademiska Hus provides the treasury with billions in dividends every year.

In practice, the model means that the funds allocated by the government and the parliament for universities to conduct education and research are returned to the state through the surplus profits generated by the rental model.

Right now, we are stuck in an economic stranglehold that effectively sucks the energy out of the universities’ activities, as I wrote about in a post https://www.kth.se/blogs/president/2024/05/enough-is-enough/ a few weeks ago. But, for the reform-minded and progressive politician looking for a basis to shape a new solution for premises provision, there are several ways to go.

One relatively simple measure that should be implemented immediately is to change the ownership directive for Akademiska Hus so that a cost-based rental model replaces the current market-based model. A variant of this change is to retain market-based rents but to return the funds received from state-owned Akademiska Hus back to the higher education policy area within the framework of the government budget.

A variant of this change is to retain market-based rents but to return the funds received from the state-owned Akademiska Hus back to the higher education policy area within the framework of the state budget. One of these two measures needs to be implemented immediately, no later than the 2025 budget, to ensure that the university sector is not forced into the abyss of eroded funding and increased rents. At the same time, the rent increases of recent years should be compensated through targeted funding for universities and colleges.

In the longer term, the entire current model should be scrapped. As long as authorities cannot own their own properties, the properties currently owned by Akademiska Hus should be transferred to foundations linked to the respective higher education institutions, which should also have control over the foundation’s operations. In this way, rents can be set either on a cost basis or in line with the market, with surplus profits being returned via the foundation controlled by the university.

I realise that those who are against change can find many arguments against change, but I am equally convinced that those who want to see change can find their way through the regulations so that we can have a reasonable and business-like model for managing the accommodation needs of universities. It is time to address this. It is time for responsible politicians to recognise what is currently the greatest threat to the universities’ activities and, by extension, to the supply of skills for Swedish society and for the country’s long-term competitiveness.

The role of academia in turbulent times

People come to KTH from all over the world to study and do research. They, like our employees, should of course be able to feel safe on our campuses – regardless of opinion or background.

Being part of a global world means that geopolitical conflicts are also discussed and, as we have now learnt, that such conflicts also give rise to loud protests and tent camps on campus. What has already happened in many other countries is now also a reality in Sweden.

It is important to emphasize and understand that it is not our role to take a stand in geopolitical conflicts; KTH must be free from political positions. The government is responsible for Swedish foreign policy. We will therefore not take any position on the conflict between Israel and Hamas.

Free co-operation between academic institutions is part of the open society and also part of the freedom enjoyed by researchers and teachers. From time to time, we have such collaborations in regions where there are wars or conflicts, and in many cases it is precisely then that it is important to allow academic dialogue to take place. Today we have an agreement with an Israeli university. There is no activity within the framework of that agreement and we see no reason to reconsider this at the moment. In other words, there is no exchange.

I and many others at KTH have received signals, in many different channels, that people feel uneasy and uncomfortable with the protests in the courtyard that have been going on since last week and the demonstration held on 21 May.

Our assessment of the situation on our campus and how the protests should be handled is based on the police’s assessment, and we are continuously monitoring events and are in contact with other higher education institutions that are currently experiencing the same types of protests on their campuses. The perceived insecurity and intimidation that some of our students and staff are experiencing is juxtaposed with the constitutional right to freely express their views.

Academic freedom and freedom of expression are essential to a democracy and must be defended again and again. But at the same time, this freedom does not mean that everyone should think the same or that one side should be forced to think the same as another.

Employees and students who remain silent out of discomfort or even fear are devastating for a university. A free search for knowledge, exchange of ideas and respect for each other is the foundation of KTH. Even in these challenging times, we must hold on to these values.

KTH supports the statement issued by the Association of Swedish Higher Education Institutions (SUHF) in response to the war between Israel and Hamas. suhf.se/om-suhf/nyheter/ (in Swedish)

Enough is enough

At many universities around the country, major changes are now taking place in the use of premises as a result of sharply increased rents. This is also the case at KTH, where extensive efforts are being made to reduce the need for premises in the departments and in the University Administration. More cramped office solutions, officeisation of certain open spaces and closure of labs are now commonplace around campus. There are certainly opportunities to optimize the use of premises and, not least after the pandemic, there are opportunities to reconsider how we use our offices and educational facilities.

But enough is enough. Rent increases of 20 per cent in two years cannot be compensated for by reduced use of premises, and the reduced use of premises will not be translated into reduced costs until the day the contracts can be terminated, and the contracts cannot be terminated until we have succeeded in consolidating vacant space to such an extent that we can vacate large parts of certain buildings or entire blocks of buildings. This takes time. Like the fox caught in the fox scissors, we will soon be gnawing on its legs. By the way, fox scissors are banned!

There is a need for an emergency commission to develop sustainable alternatives for the provision of university premises. A starting point must be that universities do not operate in a market; in a market, buyers and sellers can choose whether to do business with each other. We, as universities, have no choice in our premises provision and our premises cannot be used for anything else. In a market, the buyer can pass on its increased costs to its customers. We have no such options. When the state-owned Akademiska Hus raises rents, the state as financier does not react at all – by compensating our increased costs.

In a market, companies can be closed down, moved abroad, sold or merged to create better long-term conditions. We have only one option when the state-owned Akademiska Hus raises rents by 20 per cent in two years and the state as financier does not react: we must cut costs. And we are doing that, but enough is enough. The foxhole has closed. We are stuck.

We are part of the higher education policy area. What is needed now is a policy that understands what is happening and takes responsibility for a new model and, in the meantime, compensates us for the increased costs of recent years. The money is available through the share dividends that Akademiska Hus has delivered to the state and if that is not enough, the owner can always bring home a little more from their balance sheet. Enough is enough!

 

Inspiring role models and funding models

Switzerland and the Netherlands are often cited as role models when various issues in the university sector are discussed, such as research performance, institutional autonomy, quality systems, funding or responsible internationalization.

I have had the opportunity to visit technical universities in both countries on a couple of occasions this spring and last year.

It is always difficult to compare the situation in different countries. The systems and conditions for universities differ so much that it is not possible to compare figures directly. But, despite this, we can still reflect on some of the differences between us.

In Switzerland, the state owns the buildings and the universities use them without paying rent, but on the other hand they have to pay for maintenance, renovation and new construction. Unlike the pretend market with huge profits for property owners that has been created for the provision of premises for Swedish universities, the system in Switzerland is based on a model where the universities are responsible for the actual costs of the properties.

In Sweden, universities are severely plagued by the current model where we not only pay the costs of property management, but are also forced to contribute to surplus profits and share dividends that go back to the state.

In the Netherlands, there is a well-developed cooperation between universities on the one hand, and between universities and the government on the other, which enables joint work on problem solving and development, for example in the work on responsible internationalisation or through the development of quality systems for higher education. We have good collaboration between universities in Sweden as well, but not really in a way that allows us to jointly shape solutions for the future with politics.

Switzerland and the Netherlands still have the system whereby a degree obtained at an earlier stage in the education system gives access to higher education. This is similar to the system of matriculation examinations that we had in Sweden until the late 1960s. Universities thus have no control over the number of students coming to the various programmes, but must accept all those who come – resulting in a high drop-out rate in the first year.

In Sweden, our system provides great opportunities to dimension and shape the supply strategically and in the long term within the framework of a relatively large autonomy for the universities. In comparison with Switzerland and the Netherlands, this autonomy is a major advantage.

However, what remains in the memory after the visits is the funding model. The majority of research is funded by basic funding and a smaller proportion by competitive grants – unlike the situation in Sweden – which means that academic staff have a more secure position.

Universities also receive one single funding for research and education, as opposed to the rather artificial division into two separate grants that we have. In addition, the funding levels are much more generous than in Sweden.

What is most important, however, is that we have developing co-operation and exchanges with our friends in both Switzerland and the Netherlands. Together, we can help solve the problems of the future through both research and education. After all, even if the systems are different, we find many opportunities for co-operation through jointly formulated research questions.

“We need all the tools”

The Minister for Higher Education made a statement on 9 April  that he would like to see fewer independent courses and especially fewer distance learning courses. Instead, he wants to increase programme courses for engineers and nurses, among others.

The debate article attracted a lot of criticism and the Minister’s Saturday radio interview probably didn’t help . Everyone seems to be wondering how this is supposed to happen. Should the government go in and control the supply at each university in detail and actively point out which parts of the supply should be removed? If so, this would be an unprecedented micromanagement and a level of control that would be almost impossible to implement.

On the other hand, the government can do pretty much what it wants. If it wants to micromanage, it can do so; if it wants to express goals for each higher education institution, it can do so; if it wants to move financial resources on a flat-rate basis from one higher education institution with a high proportion of courses to another higher education institution with a higher proportion of programmes, it can do so and hope that the outcome will be a lower proportion of courses and a higher proportion of programmes.

Within the framework of a major change programme, Future Education, KTH has formulated overall principles to guide our change work and has also launched a number of development projects to realise these. We have also recently decided on the direction of the review of our programme offering, which will lead to a prioritisation of urgent projects for programme development during the year.

It is important that we can work with all tools when doing this. And as some of my colleagues write in a opinion piece that many of our societal challenges require an interdisciplinary approach https://www.dn.se/kultur/kth-professorer-stall-inte-olika-kunskapsomraden-mot-varandra/ (In Swedish).

We need to define the technical subject knowledge to be conveyed and add sustainability and gender equality perspectives. Ethical and policy issues also need to be included when equipping future engineers to solve all the intractable problems that await them in their professional lives.

We are basically a programme-intensive university, but in recent years we have developed an increasing range of independent courses as part of our efforts to develop our contribution to lifelong learning. It is essential that we are free to assess and shape our provision in terms of programmes, at different levels, and courses without being constrained by governmental micromanagement in this regard.

It must be the responsibility of each university to put together an offer that meets the demand of the students and the requirements of the labour market, and then we need to be able to use both programmes and courses.

My hope is that we can continue to be given this responsibility and that we can also have a dialogue with our clients about how we can best contribute to what Sweden needs in the future from a higher education institution like ours.