Norwegian universities brace for ‘entirely new economic reality’

Job losses and reduced course offerings are likely as Norwegian universities enter an “entirely new economic reality” after years of increasing budgets, sector leaders have warned.

Erika Torgersen, a senior executive at the University of Stavanger (Uis), said institutions were “seeing a real decline in the funding allocations to the university and college sector”.

“The past few years have been characterised by growth and progress, with many [universities] also having access to accumulated funds,” she said. “That is definitely no longer the case now.”

Norwegian University of Science and Technology (NTNU) rector Tor Grande told Times Higher Education that the mood across the sector was bleak. “There’s a general feeling that people are really concerned,” he said. “Not only faculty and students, but also leadership.”

Norway’s December budget saw cuts of NKr50 million to a grant compensating universities for inflation and wage growth, a move Sunniva Whittaker, chair of Universities Norway, described as “a bad signal”. Next year, a new funding system will take effect, ending rewards for institutions that win external grants and publish widely.

As a research-intensive university, UiS “will be hit particularly hard” by the new system, Ms Torgersen said. “In the future, government funding will be more heavily directed towards education, at the expense of research. This means that a larger portion of our resources must be used for education, leaving fewer resources for research.”

University leaders do not anticipate a boost from the government any time soon. “There are other areas that are higher priorities,” said Professor Grande. In the wake of the Russian invasion of Ukraine, he said, “an increased defence budget is obviously a priority, especially in Norway”.

At NTNU, Norway’s largest university, job cuts are on the horizon. “Seventy per cent of the cost picture at universities in Norway is salary,” Professor Grande said. “The most obvious thing is that people who retire will not be replaced. In some cases, we’ll have to be more specific, and there has been discussion of people voluntarily leaving. In the worst cases, we might have to fire people.”

Demographic shifts are expected to compound the economic pressure. “The number of students will decline, and funding to universities is linked to the number of students. That means we have to forecast how we [will be] doing as an institution to estimate our future income,” Professor Grande said. “The institutions that are least successful in recruiting students will suffer the most.”

UiS will also “undergo a significant financial restructuring in the coming years”, Ms Torgersen said, with this year’s budget reduced by NKr80 million and total cuts by 2026 expected to reach NKr200 million. Staff cuts, “preferably by natural attrition”, will be necessary; “this will affect the remaining employees, who may experience increased workload”, she added.

The university is expected to terminate rental contracts, concentrating staff at the main Ullandhaug campus. “We will also have to make changes to our study portfolio,” she said.

NTNU, too, could see its course offering impacted, according to Professor Grande. “In some cases, we can do things more efficiently, so we don’t really need to reduce the number of study programmes,” he said. “In extreme cases, we might have to close down study programmes in order to concentrate our efforts.”

Perhaps the biggest concern among academics, the NTNU rector said, was the preservation of Norway’s scientific competitiveness throughout lean economic times.

“This is maybe the issue which most of the faculty is concerned with: does this affect our ability to still be at the forefront of research?” he said.

emily.dixon@timeshighereducation.com