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Funding Reforms in Higher Education and IVET: Hungarian Perspectives

Explore the Hungarian reforms in funding Initial Vocational Education and Training (IVET) and the challenges faced in restoring the prestige of manual skilled work, responding to labor market requirements, and allocating budgetary support. Learn about the vocational contribution of companies, vocational school scholarships, and other financial supports and grants. Delve into the complexities of funding vocational education and training and the importance of accurate data in creating an effective funding system.

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Funding Reforms in Higher Education and IVET: Hungarian Perspectives

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  1. V4 – Ukraine: Chernivsti Conference on Higher Education Reform/Funding of Higher Education and Science Some Hungarian reforms in funding Initial Vocational Education and Training (IVET) 13. October 2015 Chernivsti

  2. Three pillars of funding IVET Basic challenges in Hungary: A.) How to restore the prestige of manual skilled work among youngsters B.) Accordingly how to better respond the labour market requirements (employers) From financial side as a tool: I. Budget II. Vocational Contribution (as tax) of companies III. Vocational School Scholarship IV. Other financial supports and grants (national or EU)

  3. I. Budget funding: Hungarian budget spends 4.7% of GDP on education (OECD data) Within the educational budget, proportions are: Kindergarten: 16% Primary and lower secondary level schools, 8 grades: 35% Secondary level: 19% 4. Higher education: 21% 5. Other educational areas (e.g. adult education and training): 3% 6. Other costs (maintenance, constructing work): 6%

  4. Ratio of IVET costs on secondary level: Ratio of IVET budget costs on secondary level (within the 19%): • Vocational school: 5% • Vocational secondary school (4 grades, giving matricula): 7% • Grammar school (gymnasium): 7% Total share of IVET costs on secondary level: 12%, but reducing the general learning subjectcontent, it can be less.

  5. Budgetary support of adult IVET schooling If educaton is delivered in daytime programmes, budgetary support is: 100% If education is delivered in evening courses, budgetary support is: 60% If education is delivered in correspondence programmes: 20%

  6. Average monthly salaries of teachers and instructors in vocational schools and vocational secondary schools, gross amounts with 27% social contribution:EUR 1.365 / month Direction of reguest for money transfer of salaries from the Treasury: VET Centre (School)National Office of VET and ALE (Novetal) State Treasury. Direction of money transfer of salaries: TreasuryBank account of the teacher/instructor. Direction of other transfers (e.g. maintenance): TreasuryVET Centre

  7. If practical training shop is within the school and maintained by the school, the funding arrives from the budget. • Theoretical training is always funded from the state budget. • If a part of the practical training is provided at a company under a „co-operation agreement „ between the school and the company, the school pays, but funding comes from the budget, too.

  8. II. Vocational Contribution (as tax) of companies: • Law on the vocational contribution and on supporting the development of vocational training, Nr. CLV of 2011 (more times modified) • Vocational contribution is 1.5% after the previous year’s gross salary amount at the company • Capable and willing companies are authorised to conclude training contract with students (apprentice scheme) and accordingly reduce their relevant tax contribution, evenupto 100% or plus… • Hungarian government and Chambers are very keen, highly supportiveon this scheme….long term interests of companies and national economy. • o, keeping apprentices is (theoretically) a general economic interest. • Companies not interested, remain net tax-payers • This is also an indirect budget funding

  9. Amounts of the monetary allotment provided to students if they have training contract with a company

  10. III. Vocational School Scholarship (nor for vocational secondary schools) • Merit based scholarship for students (apprentices) in VET schools in order to subsidize students participation in full daytime learning/training.

  11. (continuation) • VET Scholarship is to be obtained after job shortage trades (10/county, recently already 20) • Job shortage trades (vocational qualifications) to be defined by the County Development and Training Councils (and communicated in government decree) • Funded from the National Employment Fund Training Sub-fund that is one of the resources supplied by the 1.5% vocational contributions • Operated by the OVETAL that is a medium-level authority is Hungary. • If learning results are under 2.51, remedial training is possible in four-student-group and this case the teacher receives the financial support • Evidence-based figures: Regarding number of students, 50% scholarship – 50% remedial, regarding resource: 75% scholarship – 25% remedial.

  12. Some food for thoughts, some dilemma: • Trades, consequently vocational qualifications continuously change in their content, in their important parts. Therefore tools of funding can also change (flexible or more rigid regulations)? • If the governance is not fully centralized, regional and local organs probably can cope with challenges in a more efficient way? • Also a basic question: can we spend more on funding or not? Is the present level of expenditure enough: • Are we in possession of all relevant data to carry on a really good funding system? (Number of students, staff, demandon maintenance, etc.

  13. Thank you for your kind attention: György Szent-Léleky (Mr.) Senior Counsellor Ministry for National Economy, Hungary Gyorgy.szent-leleky@ngm.gov.hu

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