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Recently the financial situation of the Wageningen University and other green universities have been in the news. Thijs Breukink , member of the executive board, explained that the university will be threatened the coming years with a budget shortfall. He expects a shortfall of 9 million euro next year. Moreover in the coming 10 years the shortfall will amount up to 100 million euros.  The growing students numbers and the so called ‘2 percent rule’ are brought up as reasons for this problems. But how does these to facts cause the financial problems? This article is written to explain this all. Underneath it is elaborated what the ‘2 percent rule’ is all about, how it causes the financial problems of the University in combination with the student growth and what the expectations for the future are.

Financing of Wageningen University

To explain the current financial problems of the university it is necessary to elaborate on the financing of Wageningen University first. Like other universities in the Netherlands Wageningen University receive financial support by the Dutch government: the ‘lumpsum’. The height of the lumpsum depends on the number of enrolments for bachelor and master studies and secondly on the amount of bachelor and master graduates. Besides universities receive funding for research from the Dutch Organisation for Scientific Reseach (NOW), (international) governments, EU companies and non-profit organisations.

Wageningen University has a special position. In contrast to other Universities in the Netherlands the Ministry of Economic Affairs (in which agriculture is included) is responsible for Wageningen University.  The remaining Universities in the Netherlands are the responsibility of the Ministry of Education. Wageningen University has made special agreements about the financing of the University of the Ministry of Economic Affairs in 2001. This agreement implies that the amount of money the University receives is no more than 2% different than the financial support of the previous year. Which means that if the student growth in WU is more than 2% - for example 7%  the financial support of the WU only rises with 2%. On the other hand, if there is a decline in student numbers of 15% the yearly funding of the university declines by a maximum of 2%.

Decline and rise of students

Why has the University made this agreement? In 1998, the Minister of Agricultural affairs (is now part of Economic Affairs) proposed  cuts in the funding of Wageningen University due to declining student numbers. To prevent the Wageningen University from financial problems due to fluctuating student numbers, Wageningen University and the Ministry made the ‘two percent agreement’ in 2001.

To illustrate: in the academic year 05/06 Wageningen University has only 4561 students (see Figure 1). In the following years the student numbers have been doubled (growth of 100%). At the moment Wageningen University has 8814 students.  The lumpsum however has only grown by only 12,6%, which means the Ministry of Economic Affairs does not cover all the cost arising from the student growth. Therefore  the growing student numbers and the 2% agreement with the Ministry of Economic Affairs, causes the financial problems within the University.

Figure 1

Figure 2

What’s next?

At the moment the Executive Board (EB) of Wageningen UR is lobbying at the Dutch government to acquire financial compensation for the growing student numbers. The minister of Finance Jeroen Dijsselbloem, recently agrees upon 15 million extra for green education. Probably 9 million will go to Wageningen next year, however this extra amount of money is  not a structural measure.  The expectation is the students number keep growing, although it is flattening. Therefore a permanent solution has to be found.

To be continued…

Dossier Explanation of the 2% rule And the financial problems of the WUR