The new Universities Act will further extend the autonomy of universities by giving them an independent legal personality, either as public corporations or as foundations. At the same time, the universities’ management and decision-making system will be reformed.

Parliament passed the Universities Bill in 16 June 2009. The new law will replace the Universities Act of 1997.

The network of universities and institutions for higher education is also changing. For example universities of Joensuu and Kuopio have formed the University of Eastern Finland whereas the Helsinki University of Technology, Helsinki School of Economics and University of Art and Design have together founded Aalto University. This will increase efficiency and effectiveness.

Timetable and stages

The reform of the Universities Act has been prepared in close collaboration with universities and stakeholders. The preparation began in spring 2007.

• The bill came before Parliament in spring 2009
• Parliament passed the bill in 16 June 2009.
• The Act onf the Implementation of the Universities Act will take effect on 1 August 2009.
• Organisation in line with the new act in autumn 2009
• Start of activities on 1 January 2010

Objectives and key impacts

The reform will facilitate operation in an international environment. Its purpose is for universities to be better able to:

• react to changes in the operational environment
• diversify their funding base
• compete for international research funding
• cooperate with foreign universities and research institutes
• allocate resources to top-level research and their strategic focus areas
• ensure the quality and effectiveness of their research and teaching
• strengthen their role within the system of innovation

Universities to become independent legal personalities

In order to achieve the objectives, the reform will make the universities independent legal personalities. The universities will be separated from the State and they will have the choice of becoming either corporations subject to public law or foundations subject to private law.

The autonomy of universities will enlarge further

The reform will give universities more power by reducing the steering of universities by state administration. The universities will therefore no longer be developed as part of state administration, but in terms of their main mission: education and research.

Universities will take the place of the State as employers.

University staff will no longer be employed by the State. Civil-service employment relationships will become contractual employment relationships, and universities will negotiate in collective bargaining. The universities will be able to pursue independent human resources policies, improve their attractiveness as an employer and in this way strengthen their competitive advantage in order to recruit the best personnel. The interests of the staff will be safeguarded during the changeover.

Universities will have more latitude in the management of their finances

The universities will be better placed to make the best use of their income from capital and to supplement their financing with donations and business activities. This will facilitate the targeting of research and education resources and allow the universities to develop stronger profiles on the basis of their strengths. This will improve their capacity for operating in the international environment. The government may also make financial investments for the universities. The capitalisation of the universities will safeguard their financial standing, solvency and creditworthiness.

Administrative model for stronger university autonomy

As legal personalities, the universities will have full financial liability, which will emphasise the importance of strategic management. The aim of the reform is to consolidate the influence, societal relations and financial skills of the boards of universities subject to public law.

University administration and management will be reformed and strengthened to enable universities to respond more flexibly and independently to the challenges arising from their new financial status. The reform will also consolidate academic decision-making and the position of the university rectors. Members of the university community (professors, other personnel, students) will continue to be represented in the board.

At least 40 per cent of the members on the board of a public university must be persons external to the university. The members are elected by the university collegiate body, which may also decide to have an external majority on the board, if it so wishes. The chair and the vice-chair of the board are elected from amongst the external members.

The board of a foundation university has seven members, three of whom are nominated by the founding members of the university foundation. The number of candidates nominated by members must be at least double the number of seats. The board is appointed by the multi-member administrative body of the university. The foundation universities may also elect a board entirely composed of external members. The chair and vice-chair must be persons external to the university.

Government core funding for universities

Government will continue to guarantee sufficient core funding tied to the rise in costs for the universities. In addition, the univiersities will be able to apply for competed public funding and use the revenue from their busines ventures, donations and bequeaths and the return on their capital for financing their operations.

Position of the students

Students will continue to be regarded as full members of the university community. They are automatically members of the students’ union and are represented on the governing bodies.
Degree education will still be provided free of charge. The legislative reforms will, however, make it possible to charge tuition fees on a trial basis to students from outside EU/EEA countries who are taking part in separate master’s programmes, provided that the arrangements include a scholarship scheme.