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ETH Zurich: "With less funding the quality of teaching decreases" (S. Spiegel, VP for Finance)

News Tank Academic - Paris - Interview #322900 - Published on 06/05/24 at 13:16
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©  ETH Zürich / Markus Bertschi
©  ETH Zürich / Markus Bertschi

"We have to look to the future, and the federal budget won't increase so we think that it will be very difficult to maintain ETH’s high quality in the coming years. Financial boundaries will stay and so will the pressure on our budget, therefore we need to take structural measures - possibly even ones that hurt the university. We need to see what’s possible", says Stefan Spiegel, Vice President for Finance and Controlling at ETH Zurich, in an interview with News Tank on 23/04/2024.

The university is faced with "significant financial challenges" due to a budget not following rising student numbers, the university says on 18/04/2024, following the publication of its annual report the same day.

Stefan Spiegel explains that ETH Zurich is "currently living on its freely available reserves, but they will be completely exhausted by the end of 2025".

The university, located in Switzerland, welcomes 25,380 students from 119 countries and employs 10,689 staff members, including 519 professors. ETH Zurich is 23rd in the Shangai ranking and 7th in the QS ranking of 2023.

In 2023, the university benefited from a federal financial contribution of 1,365 M Swiss francs (€1,442 M), up 3% compared to 2022, 132 M Swiss francs (€136.4 M) of donations and bequests, up 25%, and 383 M Swiss francs (€395.9 M) of research contributions, up 3%. The repartition is decided in the Education, Research and Innovation (ERI) Dispatch, regulating the funding and duties of the Swiss universities and the research and innovation funding organisations.

A "very attractive university" with a "rising number of students" but a stagnating federal funding

You mentioned the federal funding not following the growth of students as the main reason why ETH Zurich was financially in difficulties, when did the federal funding stop following the increasing number of students?

It never followed. We get a global credit line from the federal government, the funding roughly follows the growth of the GDP, but student numbers are growing more than the GDP Gross Domestic Product . This is how the funding for ETH Zurich is decided, political decision-makers don’t look at performance or student numbers, it’s just a matter of how much money they have to spend on ETH Zurich.

What measures were taken to manage to still generate a consolidated surplus of 50 M Swiss francs last year?

We had to postpone construction projects like expansions and slow down the recruitment of new professors to be able to make this minor surplus.

Are you hoping for a reconsideration of the federal funding following the federal election of 2023 and the new council?

No, it won't change anything, elections were last year and the new parliament is following the path of the precedent one. The Debt Break law prevents the state from making too much debt, by law they have to cap the money they distribute. Parliamentarians can only make adjustments to around 35% of the total federal budget - in other words, if we receive more money, it will affect another area.

What is the plan to meet the additional saving targets imposed for 2024 and 2025?

We already decreased the budget 2024 by 60 M Swiss francs. At the moment we don’t actively push additional saving measures for 2025 because we can live on our reserves, but we are now envisaging different structure measures like capping the growth of students, generating additional income in services such as seismology or economic research and we need to examine prioritisation in research topics and study subjects. We have to look into the research and study to cap spending.

We have to look to the future, and the federal budget won't increase. »

We have to look to the future, and the federal budget won't increase so we think that it will be very difficult to maintain ETH’s high quality in the coming years. Financial boundaries will stay and so will the pressure on our budget, therefore we need to take structural measures - possibly even ones that hurt the university. We need to see what’s possible.

Why do you think is the number of students continuously rising? As ETH is thinking about capping the growth of students, would it target Swiss citizens or foreign students first?

We are a very attractive and successful university because the conditions for research and learning are very good at ETH. We are present in very attractive fields (robotics, AI, engineering, quantum engineering,…) and our students have very good perspectives going into industries or building their companies, an ETH education is very valuable.

We will maybe start implementing measures in 2026 if the budget pressure is maintained. »

This is the first time we are thinking about capping the student numbers. If we do it, we have to look at the law and the possibilities. On the bachelor's side, there are more students from Switzerland and we have strict legal requirements here. But for Master's and doctorate students it’s 50/50 or sometimes there are even more foreigners. But we can't say which students we are looking to limit yet.

Right now we are examining the measures, we will maybe start implementing them in 2026 if the budget pressure is maintained but it would depend on federal funding.

Why not increase the tuition fee?

It is a specificity of the Swiss system to allow everybody to go to a university, all universities here have very low tuition fees compared to other countries like the U.S., it’s a social contract, everybody should have the possibility to go to ETH Zurich.

ETH Zurich charges tuition fees of 730 Swiss francs (754 €) per semester and student, which make up around 1.85% of its total revenues.

The Swiss challenge to maintain the quality of teaching and research in HEIs

Do you have an idea of the financial situation of other universities of similar stature in Switzerland, do they face the same challenges and financial difficulties?

I know EPFL Lausanne has the same problems. The other universities have different financing: both ETH universities are financed by the federal budget, while the other universities are mainly financed by cantonal budgets. They have the advantage that part of their income is by law linked to the number of students.

But in the end, if the pressure on the federal budget keeps increasing the problem will extend to other universities too. There is a press release from Swissuniversities (the Swiss rector's conference) calling the ERI Dispatch too low.

"There will be fewer financial resources available to the ERI sector in 2025 than in the previous year. As a consequence, there is a risk that the level of services will be cut back and that some of the projects carried out in the interests of Switzerland’s economy and society will have to be suspended", declares Swissuniversities, the Swiss Rector's Conference, on 22/04/2024.

According to them, it will be the first time since the 1990s that the federal funding for ERI (Education, Research and Innovation) will be lower compared to the previous year.

"Despite declining growth in financial resources, the ambitious goals and tasks that the Federal Council sets out for the ERI stakeholders in its dispatch remain unchanged", says Swissuniversities.

"The ERI actors are thus faced with having to cut back the services they provide and to suspend projects that are of great importance to Switzerland’s economy and society."

"Consequently, the mission to be performed in the interests of Switzerland’s economy and society will be in jeopardy: the two Federal Institutes of Technology and the four ETH Domain research institutes will be forced to suspend or scale back projects and initiatives, such as those in the field of artificial intelligence (AI).

Moreover, projects in the fields of sustainable agriculture, healthcare, advanced materials and digitisation will also have to be dropped."

What are the strategies in mind to deal with the budget limits without impacting the quality of teaching and research at ETH?

We are looking into improving the efficiency of our administration with simplifications and automation, solving vacancies by redistributing tasks rather than recruiting new staff, and trying to offer new forms of teaching with fewer resources, e.g. using AI Artificial intelligence for some preparation and learning courses.

We are working with our foundation handling donations for research projects and looking for more funds. If this third funding part increases we can continue with specific research projects, but we don’t have additional funds to run the daily operational tasks of the university like teaching.

Are researchers having difficulties?

Yes in different ways, Swiss is not part of Horizon Europe at the moment, so we can make applications but we won't get grants for research projects from this programme. In certain European research programmes (like space and quantum), Switzerland is excluded so researchers are already impacted by a lack of funding but also by the lack of collaboration, it’s important to have different views and strengths to conduct research successfully.

At ETH Zurich, certain research projects are delayed at the moment. »

Switzerland started negotiating for a new collaboration with the EU European Union , so there is a possibility that we will be a part of Horizon Europe in 2025.

At ETH Zurich, certain research projects are delayed at the moment (in fields like electron microscopy and agriculture) because of budget limits. We also have unfilled vacancies within scientific staff like professors, so the teaching workload is growing disproportionately.

What were your intentions, and the intentions of the president, Joël Mesot, in making public the financial difficulties of the school?

Normally, we get strategic goals from the federal council that we have to fulfil, for example, ETH has to remain one of the leading universities in research, the top institution in international comparison and a world-class teaching and research centre, but these goals do not fit the financial situation.

We need to make certain decisions to adapt to the funding, we can't have that power over research as we could have otherwise and we want to show the consequences: with less funding the quality of teaching decreases.

What are you expecting to happen after that?

In Switzerland, there is a process in the parliament to discuss all the budget issues. So in December they will decide on the budget for next year, so they will start the process soon and will make decisions on the allocation of funds.

Like other sectors, we have to show the consequences of a lack of funding and the importance of research, teaching and knowledge transfer for innovation in a country like Switzerland, whose only raw material is our knowledge.

Stefan Spiegel

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# 51474, created on 29/04/24 at 17:05 - Updated on 29/04/24 at 17:22

©  ETH Zürich / Markus Bertschi
©  ETH Zürich / Markus Bertschi