The immediate and obvious measure would be either to introduce a cost-based rental model and exempt Akademiska Hus from yield requirements, or to return the distributed funds to the higher education sector. However, other measures are also conceivable. When the model was introduced 30 years ago, it was one of many reforms carried out over a few years in the early 1990s with the aim of increasing market governance, commercialisation of public services and deregulation. It was done in a number of areas.
For higher education institutions, we got a strictly market-based model for the provision of premises. This means that commercial property companies own the premises, which are then leased to universities. The market is good, but one concern is that it is only the market at one end of our profit and loss account.
Every business in the city – ICA, Vattenfall, the dry cleaner on the corner, Ericsson, for example – that lives under commercial conditions has to constantly balance its costs and income. If costs spiral out of control, for example due to a sharp increase in premises costs, management must assess whether this can be passed on to customers in the form of higher prices or, alternatively, whether it can be managed to some extent through lower profits or increased internal efficiency.
In the model under which universities operate, costs are spiralling and we are forced to reduce our costs and increase efficiency.
However, we have no influence on the details of the prices we charge our customers. The state, which receives the surplus profits from Akademiska Hus, has full control over the prices we can charge our customers in the form of the per-student price list decided in the budget bill, and these prices do not increase at all in line with costs.
If it is to be a free market, it is conceivable that educational institutions would be given the right to raise prices to compensate for increased costs: it would simply be more expensive for the buyer, in this case the state, to buy education from universities if costs rise sharply.
This is not an unreasonable model if you want a market model for what we do.
The problem now is that there is a market at the end where the costs increase, but government planning at the end where the revenue is generated. And even though it’s the government at both ends, there doesn’t seem to be an understanding that one hand is creating unreasonable consequences that the other hand is not compensating for.
Of course, we would have to maintain the requirements for constant efficiency improvements, but it’s not possible to conjure up the consequences of a nearly 20 percent increase in the cost of premises in two years through efficiency improvements.We just have to raise prices too!