The Swedish National Audit Office conducted a survey in 2017 that showed that the government capital of higher education institutions, i.e. money saved, had increased significantly. Since then, no national follow-up has been published, despite the Swedish National Audit Office recommending that it be systematically reviewed. A new compilation shows that the capital for education has decreased significantly.
Universities and colleges can build up government capital by saving unused funds from previous years. In 2017, the Swedish National Audit Office published a review that showed that the higher education institutions' government capital had increased and amounted to 19 percent of their turnover at the end of 2016. The Swedish National Audit Office considered that the higher education institutions were not fully utilizing the scope given for their operations.
Since then, society has undergone changes that have had significant effects on universities and colleges. The corona pandemic led to an increase in the number of students while the conditions for operations changed dramatically for a period. This was followed by a period of sharply rising inflation, which has also led to increased costs for higher education institutions. Both of these events could potentially have affected the finances of higher education institutions to the extent that it affects their saved government capital.
This report aims to follow up on how the higher education institutions' authority capital has developed during the period 2016–2023. Despite the Swedish National Audit Office recommending that authority capital should be followed up, there has been a lack of systematic follow-up at the national level.
We can conclude that the government capital for research is more or less unchanged. There are some differences between different types of higher education institutions, as research capital at, for example, colleges and new universities has strengthened somewhat, while it has decreased at broad established universities. All in all, the development indicates that research has relatively stable and long-term prospects.
Our monitoring indicates that educational activities are characterized by greater challenges. Government capital for education has decreased significantly in recent years, especially in the years 2021–2023. Most higher education institutions have made negative results and have had to take from the saved capital to finance the education. This has also led to a decrease in the overall government capital of the higher education institutions.
As a short-term solution, we propose that the government introduce more flexible rules for how research and education funding can be used. By using more stable research funding to cover temporary budget deficits on the education side, it is possible to stabilize and increase the long-term sustainability of the operation. In the long term, however, education funding needs to increase to cover the increased costs of recent years. The alternative would be to lower expectations for higher education, something we as a knowledge society cannot afford.