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New budget directive throws Portuguese universities into confusion

A new directive by the Portuguese Directorate General for Budget has caused outrage and confusion among representatives of higher education institutions in Portugal. As the national budget for 2014 is in preparation, the directive establishes a framework for the budget of public entities with the condition of decreasing spending for the next year. Nothing special so far, had the directive not defined that the estimated own revenues of public entities for the year 2014 should not exceed the value of covered revenues in 2012. By limiting public entities' estimation of revenues, the directive tries to ensure that public entities do not establish a budget plan for 2014 which they eventually cannot meet. If this happened, public entities would accumulate debt and the provision of the new directive aims at reducing this risk. As a result, the implementation of austerity measures would be ensured and the risk of an increase in public debt curtailed.

Portugal’s universities, however, are everything but happy with this directive. As many other sectors, Portuguese universities have been affected by the crisis and related cuts in public funding. Yet, imposing limitations on the own revenue of higher education institutions goes too far, according to António Rendas, President of the Council of Rectors of Portuguese Universities (CRUP). Due to austerity measures universities are already not entitled to use all of their available revenues. The additional provision is largely considered a “limitation to the capacity of raising own revenues” and is consequently heavily criticised. As a sign of protest, CRUP announced that universities would refuse to present a budget for the upcoming year and demanded an official meeting with representatives of the Ministry of Education and the Prime Minister.

Only one day after this announcement, on 28 August, State Secretary for Higher Education José Ferreira Gomes tried to calm the tense situation and announced that universities would keep their right to raise their own revenues without limitations, as many universities rely on those to a significant extent.  A higher own revenue would also decrease the overall costs for the national budget.

Much ado about nothing? Whether the reassuring words of Ferreira Gomes will prove true or whether the Portuguese Directorate for Budget might disagree with the State Secretary’s statement remains to be seen. Imposing limitations concerning the own revenues made by universities in times of cuts in public spending seems in any case somehow paradoxical.

Directorate General for Budget - Instructions for the preparation of the national budget 2014 (in Portuguese)

CRUP - Rádio Universitária do Minho Online (in Portuguese) CRUP - Renascença Notícias (in Portuguese)