The financial situation of French higher education is very worrying. At the call of France Université, many higher education institutions are sounding the alarm about “universities in danger”. Beyond the question of resources, it is the way universities are managed that must be questioned, and in particular the measures inspired by new public management, which has revealed its dead ends. A new management must be invented.

30% of French universities were in deficit in 2023 ( 60% will probably be in 2024 ). The objectives of the LRU (Freedoms and Responsibilities of Universities) law relating to their financial autonomy now appear very far from us. French universities are increasingly dependent on the State budget and reversible funding. Due to a lack of financial visibility, they often have to undertake significant austerity cuts to keep their activities afloat. At a time when their budgets are going to be discussed in the National Assembly as part of the adoption of the State budget, the economic model of these universities is being questioned.

40-year-old management principles

The LRU wanted to apply the precepts of NPM ( New Public Management ) to French universities. The ideological bases of this management mode were first developed in the 1980s in the United Kingdom (Thatcher Government), in municipal administrations in the United States (for example, Sunnyvale in California) and then in public administrations in New Zealand and Australia.

In the early 1990s, public management researchers synthesized the founding principles of NPM, for example Hood or Osborne and Gaebler . They are mainly based on the separation of the steering and control functions of administrations and operational functions, the creation of autonomous administrative units, the control of these units by results, the monitoring of objectives included in contractualization programs and the use of market “mechanisms” as a mode of internal regulation.

Since 2007, French universities have seen these principles applied to them, notably through the LRU law and the transition to extended responsibilities and skills (RCE). On the economic and managerial level, the impact is felt at at least two levels:

• the important link established between the calculation of their budgets and their results (number of students, research contracts, publications),
• based on these results, the development of contracts of objectives and means with the State or other supervisory authorities (local authorities, EU).

The economic model of French universities has therefore become particularly dependent on performance indicators based mainly, as in heavy industry or mass distribution, on production volumes (pedagogical, scientific, partnership). But as many university presidents say, university management based on ratios per student or per researcher no longer works.

Our work indicates that in French public organizations, the desire to respect the fundamental principles of public service management (quality, continuity, adaptability or equality of access) remains but it impacts less and less on the economic model of these organizations. In many countries that were the first to adopt the precepts of NPM (United Kingdom, United States, Netherlands, Japan), its critical analysis has allowed the construction of a post-NPM public management recommending, for example, for universities, university self -management and governance shared between several stakeholders .

In France, instead of considering these new post-NPM managerial principles, as had been done previously with those of the NPM, successive governments have maintained French universities in a regime conditioning their resources on compliance with contracts or obtaining exceptional funding which calls into question, almost every year, their financial capacities and their development.

Constrained financial capacities

For 2025, the spending ceiling granted to higher education and research is planned to be identical to that of 2024 (at just over €31 billion) but excluding inflation and excluding additional budgetary effort, the exact amount of which will be defined during the next vote on the finance law. This new limitation of spending dedicated to French public universities first calls into question their economic model.

This is based on a highly regulated autonomy regime that often requires their management to “ask for alms” from their supervisory authority (the Ministry of Higher Education and Research) and, by extension, their staff to take the same approach with their hierarchy or external funders (companies, other ministries, international institutions). A mission on the economic model of universities, common to the general inspectorates of education (IGESR) and finance (IGF), is underway but the problem is also managerial and organizational.

The current model is defended for its ability to preserve the specificities of the French university system (independence of universities and academics, equality of service and access to universities, free education, etc.). However, by combining public management principles (welcoming all students, autonomy of researchers and teachers, continuity and equality of services) and private management principles (management by results, development of universities’ own resources, optimization of the number of students), the “managerial hybridization” imposed by the NPM places universities and their staff in the face of paradoxical and often insoluble injunctions (“be autonomous but account for your activities”, “provide a public service but seek private funding”, “welcome everyone but improve the average level of your graduates”…).

Faced with these paradoxes, some universities are calling on the Higher Education Directorate (DGESIP) and the IGESR to help them and financially straighten out their accounts, but the problem seems to be deeper. The economic and managerial model prescribed to them seems to be gradually moving away from the public management models now built for many university systems around the world and which are based on more current managerial postulates and adaptable to university constraints.

The necessary adaptation of economic and managerial models

To adapt to contextual constraints but also constraints common to all higher education and research operators, many university systems have drawn inspiration from the reflections and analyses produced by international research in public management over the past 30 years: public value management , activity -based management , the reduction of activity architecture ( cost/revenue architecture ), new public governance .

These approaches make it possible to respond flexibly to complex situations, in particular by organizing the management activities of public universities (governance, educational management, research management, search for funding, management of premises, etc.) not as independent functions but as nested processes geared towards the creation of partnership values ​​which can take social, societal, cultural, environmental, economic, democratic and civic forms.

These new approaches do not necessarily suggest reducing the public resources made available to universities, but rather managing them differently. Indeed, contrary to popular belief, France is far from being the country that devotes the most public money to its universities (a little less than 80% of their budgets ). The Scandinavian countries and Germany, whose virtues in terms of public management are often praised, finance well over 80% of the budget of their higher education institutions, sometimes over 90% (for Finland and Norway). However, in France, public decision-makers in terms of higher education continue to ask universities to apply economic and managerial recipes that are strongly questioned elsewhere.

The problem would be less serious if, despite the deficits, these revenues were ultimately the only ones able to respond to the specificities of the French university system (free studies, non-selection of students or even pedagogical and scientific independence). However, this is no longer even the case. Many universities adopt differentiated registration fees or more or less official systems for selecting students. Their degrees are mainly evaluated on their professionalizing dimensions and their teacher-researchers can often only develop their work by adapting to the research market and its funders.

Thus, it would not seem totally inappropriate to take a closer look at public management approaches that seem to work elsewhere rather than too regularly brandishing the alibi of the “French university exception”. This undoubtedly exists and that is a good thing. But it is not certain that maintaining, in an NPM logic, the economic and managerial model of universities is very favorable to this exception. Some go so far as to predict its future disappearance with that of universities!

Experiment above all

If they have not already done so, public and ministerial decision-makers could experiment, for example, with models of public value creation or public service motivation at the university, the reconfiguration of architecture, shared governance or even meta-governance applied in many university systems abroad.

Conceptual approaches often designed or at least developed in French universities , and taught to their students, but, paradoxically, relatively little applied within them…

It is not certain that these approaches are totally adapted to the management of the French university system. But management and management are above all experimental disciplines and sciences, before being possibly normative. In these times of financial austerity, it would therefore perhaps not be useless to take these approaches into consideration as many university systems in the world have been able to do, often adapting them to their contexts and continuously enriching the economic and managerial model of their universities.

Author Bio: Laurent Meriade is Associate professor of Management Sciences – IAE – CleRMa at Clermont Auvergne University (UCA)