On December 21, 2017, draft legislation was approved by the government by which a new financing model for vocational education will be implemented in 2018. Financing will be provided for the activities and performance of education institutions as a whole. The present model is based on financing the number of students engaged in state-commissioned education, which means that school budgets fluctuate as students change their preferences. The present financing model also fails to ensure the work of support specialists, teaching young people who need a more individual approach, or motivating schools to perform better.
The new model consists of basic financing and performance-based financing. Basic financing for vocational educational institutions will grant them stability and reassurance. Performance-based financing will support educational innovation and a stronger connection between employers and schools.
Basic financing is fixed for three years to ensure budgetary stability in schools with respect to operating, administrative and staff costs. It ensures the resources required for the primary activities of schools and is calculated based on the number of learners, the areas taught, the salary rates of teachers, the specific features of specialties, students with special needs, the need for support specialists and the infrastructure used by the school.
The new financing model will result in an increase in funding for vocational education. Once the new model is in place, no schools will lose out compared to the present level of funding. The total basic financing budget will be EUR 66 million per year, 3.25 million more compared to the current system. Most of this money is meant to reinforce the work of support specialists.
Performance-based financing, which values the achievements of schools, is based on performance indicators that support the strategic goals important to the state. These include the share of students who graduate after the standard period of study, the share of graduates who continue their studies or enter the labour market, the share of students who graduate by taking a professional examination, and the share of students participating in apprenticeships.
The objective of performance-based financing is to provide additional financing for cooperation with companies and general education schools. Performance-based funding will comprise approximately 9% of the money the school receives from the state budget.
In 2018, it is planned to implement basic financing in the first stage and gradually to bring in performance-based financing as additional funds are allocated from the state budget.