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The rise of performance-based funding

The rise of performance-based funding

Photo Credit: iStock.com / monsitj

Performance-based funding (PBF) of post-secondary education may be an old idea, but it’s one that’s gathering new steam in Canada.

Canadian provinces have traditionally funded post-secondary institutions, for the most part, to reflect enrolment, and the growing focus on PBF stands in marked contrast to that pattern. While different PBF systems exist, they are all based on funding allocation benchmarked to goal setting and “progress” achieved according to performance measurements such as course completion rates and graduate earnings.

The political posturing has been pronounced in Ontario and Alberta where the provincial governments adopted PBF approaches by tying significant amounts of funding to several performance measurements, with governments trumpeting catchy but vague phrases about “wise use of tax dollars”, and the achievement of “broad societal and economic goals.”

At last year’s announcement, Ontario’s Minister of Training, Colleges and Universities, Merrilee Fullerton, said the new funding metrics align with the government’s, and not universities’, priorities: “We really need to have performance-based funding…in order to keep the economy going the way it needs to go, allowing students to find jobs.”

Manitoba and Alberta are following suit, with the latter promising to “measure labour market outcomes of post-secondary programs to identify the correlation between provincial subsidies and economic returns for taxpayers.”

Saskatchewan and New Brunswick are also considering PBF. Few details surrounding the plans have been announced, but Ontario has made it clear that ten measures, including categories such as graduate earnings, “innovation” and “community impact”, will be tied to increasing increments of a university’s total operating funds until 60% is reached in 2024. Alberta has postponed its decision until the end of May, but the formula will eventually tie 15 per cent of operational budgets for 2020-21, gradually increasing to a maximum of 40 per cent by 2022-23.

What none of the announcements note is that PBF — also called accountability or outcomes based funding — has a long history of failing in many other jurisdictions, as well as in Canada. Nor do the announcements advise that several countries have abandoned PBF.

“These are tired ideas from unoriginal governments copying other systems that have already failed,” sums up Marc Spooner, a professor in the Department of Education at the University of Regina. Spooner, who studies how corporatization, audit culture and neoliberalism affect scholarship and higher education, is sounding alarm bells about Ontario and Alberta’s plans, which not only tie far higher funding percentages to metrics than ever before, but are “of great concern and potentially devastating” in light of the well-studied, negative impacts already observed in other jurisdictions.

With over a dozen countries or districts having introduced national performance based research funding systems in recent years, Spooner says the implications are playing out in full view and serve as a bellwether “offering revelatory insights, or a distant early warning, to their dysfunction.”

“However they are operationalized, PBF models lead to a narrowing of scholarship, of what is possible, both in teaching and research,” he says. “They are, in practice, end runs that allow the funding body or university to effectively bypass academic freedom without direct confrontation, and foster the banal herding of our ‘selves’ through metric funnels onto productivity treadmills.”

The introduction of PBF in Alberta, alongside deep cuts to core funding of PS institutions — the province’s 2020 budget imposes a six per cent reduction across the board with future cuts promised — has shocked observers who see great risk to jobs, course offerings and the very notion of what makes a university or college thrive.

The impact to the integrity of Mount Royal University (MRU) in Calgary prompted Roberta Lexier to resign last February as the faculty representative on the school’s Board of Governors (BOG).

She explained her position in a series of tweets aimed at the province’s Minster of Advanced Education, Demetrios Nicolaides: “Today I wrote [Nicolaides] to resign from the #MRU BOG. By choosing to acquiesce to govts new funding model for #abpse IMO the Board is abandoning its responsibility for an excellent educational experience for our students that will benefit them, and wider society…in taking this duty seriously I can no longer in good conscience remain on a body that has chosen to support a funding model that will for generations devastate the sector and harm the students we educate.”

Lexier, an associate professor in the MRU Department of General Education, focuses her teaching and research on social movements, activism and change. She says the imposition of PBF is a thinly veiled attack on public education.

“The overall goal is not about performance metrics. The real goal is to de-fund public education and to shift more responsibility to — in their terminology, ‘customers’ or ‘users’ — who I would call our students, or human beings.” She hopes her resignation will inspire others to think deeply about the effects of PBF.

“My goal is to shift my focus to organizing on campus and getting us moving to resist this as much as we possibly can.”

Spooner enumerates the negative impacts of PBF, citing CAUT policy: “Scholarship is best assessed through peer review and not by performance metrics. Reliance on metrics can violate academic freedom, interfere with collegial governance, hiring, tenure and promotion decisions, compensation, working conditions, and disciplinary actions.”

He also cites “massive” studies conducted on PBF in higher education systems, or “audit culture”, implemented in the United Kingdom and other European countries, and says the results are “horrifying.” In particular, he points to the well-established UK Research Excellence Framework (REF) which critics say costs more than £1 billion ($CAD 1.78 billion) to administer, and which has profoundly and negatively impacted the integrity of research and teaching, instead rewarding institutions to maximize REF scores by driving how and what is researched and studied, where it is published, and who is hired and promoted, with candidates’ “REFability” trumping other considerations.

The New Brunswick government’s musings about PBF purportedly stem from the prediction that more than 100,000 jobs in the province will become vacant over the next decade, with little prospect of being filled. The province has the lowest percentage of population holding a university degree anywhere in the country, with the gap widening.

But the notion that PBF will solve such a problem is based on “wishful thinking” according to a position paper released recently by the Federation of New Brunswick Faculty Associations (FNBFA).

The paper’s authors take issue with two misunderstandings that lead the government to consider PBF a solution. The first “error stems from the belief that there exists a direct and inescapable ‘pipeline effect’ between university programs of study and seemingly related employment sectors.” The second problem relates to funding, which is inadequate, and which “depends entirely on the whims of the government of the day.”

“PBF was never about achieving the fundamental missions of the university; it is about budget cuts and control to be exercised by government; it adds another layer of unnecessary bureaucracy to which universities must respond to the detriment of their fundamental mission,” the paper concludes.

The authors also address the illogical admiration that has existed for the Tennessee PBF system, most ostensibly demonstrated by the Higher Education Quality Council of Ontario (HEQCO).

HEQCO has studied PBF extensively, and convened a panel several years ago consisting of ten “experts” — university presidents, corporate executives, a single academic, and Richard Rhoda, the then head of the Tennessee Higher Education Commission — who visited the US state, apparently in order to examine its PBF system at close quarters. The panel produced a 2013 report that concluded “the funding formulas are the major levers available to government to motivate and steer change. The current funding formulas should be amended to target some proportion of an institution’s funding to the achievement of specific outcomes tied to specific institutional mandates.”

But as the FNBFA paper highlights, HEQCO illogically remains an enthusiastic proponent of PBF in Canada despite “the comprehensive review of the literature and the consultation of experts HEQCO undertook a few years ago [which] did not paint a promising picture for the implementation of PBF in Canada. The evidence is underwhelming.”

There is a major disconnect in the admiration of the Tennessee PBF system, or for any other south of the border: the majority of US states tie quite small percentages of public funding to metrics with the specific goal of increasing graduate rates, which are strikingly low compared to Canada. The National Centre for Education Statistics reports that the 6-year graduation rate for first-time, full-time undergraduate students who began seeking a bachelor’s degree at public 4-year degree-granting US institutions in 2011 overall was 60 percent. Even fewer graduate from two-year college programs.

In contrast, Statistics Canada reports that nearly three-quarters (74%) of students at Canadian institutions who started their undergraduate degree programs in 2010 had completed their undergraduate degrees by the sixth year after first enrolment.

The difference in graduation rates, combined with the fact that large amounts of public funding are now being tied to a wide variety of metrics in Ontario and Alberta, is a novel experiment according to Spooner, who calls the approach “something entirely new, really just crazy, and not a useful exercise.”

Overwhelmingly, analysis has revealed a near-complete failure of PBF to nudge US graduation rates higher, and a 2019 analysis of Ohio and Tennessee — which are notable exceptions in tying nearly all state funding to metrics — found “no evidence that these programs improve key academic outcomes.”

According to the FNBFA’s paper, the solution to NB’s PSE low graduation rates has been proven: reliance on traditional inputs such as affordability for students, adequate multi-year investments providing stability to the system, faculty complement and an environment fostering robust academic freedom will “ensure quality education and research.”

Spooner urges resistance to the imposition of PBF. “The situation is so critical that it necessitates the full attention of our associations. We must work with students, parents, members of the public, the business community, as well as our own university administrations and boards, as we call out the perils of these kinds of performance-based funding models.”

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