Funding and internationalisation
In matters of funding and internationalisation, legal decisions taken at the outset frequently determine how much room an institution has to manoeuvre at a later stage. Lump-sum funding gives institutions discretion over expenditure, but at the same time places full responsibility for those decisions firmly with the board. What staffing obligations remain if a grant is withdrawn and the staffing structure built around it is no longer covered? What conditions apply when collaborating with a private partner? And what are the consequences if a programme taught in a language other than Dutch is required to convert? Questions of this kind bear directly on educational continuity and on the position of the people who deliver it.
Lump-sum funding and grant reduction in education
Educational institutions are funded predominantly through a lump sum: a fixed budget per pupil or student that allows school boards to determine for themselves how the funds are spent. In addition, institutions often receive supplementary grants, such as temporary schemes addressing educational disadvantage or specific programme initiatives.
When a grant expires, or the government opts for targeted funding with enforceable conditions attached, staffing obligations continue while part of the funding falls away. An abrupt withdrawal affects not only the budget, but also the people who sustain the educational provision.
The legislature is increasingly directing how educational funds are spent. Where the lump sum has traditionally afforded school boards freedom of expenditure, targeted funding introduces a further layer: funds to which the Minister may attach conditions as to purpose, timeframe and use, with recovery as a consequence of non-compliance. The direction of travel is clear, even if the detailed elaboration remains subject to parliamentary process.
It helps to map dependencies at an early stage. Which posts are funded from regular funding and which from temporary funds? On the basis of that overview, a phasing-out scenario can be prepared within the frameworks of employment law and the applicable collective labour agreement.
Grant monitoring, audits, and regularity
European and national grants, such as those under Horizon Europe, are subject to strict conditions governing the use of funds. Retrospective checks are carried out to verify whether the institution has complied. For larger projects, a statement from an independent auditor is required upon final closure. The European Commission may conduct an audit, including on-site inspections, even years after the final payment has been made. The concept of an irregularity is interpreted broadly: an administrative error or incomplete time recording is sufficient, without any requirement of intent. This is precisely why early legal input is valuable, ideally from the point at which the project records are being set up.
In addition to European audits, the Inspectorate of Education also carries out reviews. The Inspectorate assesses whether funding has been used in a lawful manner and may recommend recovery where irregularities are found. The most common findings concern:
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Staff costs without adequate time records to support them.
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Hourly rates that are not sufficiently substantiated.
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Costs falling outside the eligible grant period.
Where an auditor identifies a pattern, findings may extend to other ongoing or completed projects. A great deal of subsequent difficulty can be avoided by setting up the grant and VAT records carefully from the outset and maintaining supporting documentation for each cost item.
Public-private partnerships and state aid
Where a university or university of applied sciences collaborates with a private partner on research, the European framework for state aid in the field of research, development and innovation applies. If the private partner derives an unintended advantage through the collaboration, the European Commission may classify the support as unlawful state aid. A recovery order may then affect both the institution and the private partner.
In practice, the issues typically concern arrangements on intellectual property, the price at which research results are transferred, or the allocation of risk between the parties. Where the institution assumes a greater share of the risk than is consistent with market conditions, this may in itself qualify as state aid. Collaborative arrangements also frequently raise tax questions that can have a direct bearing on the project budget, including:
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Whether a grant received is subject to VAT.
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The VAT status of the participants, which determines what proportion of input VAT on costs is recoverable.
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Whether the research activity constitutes an economic activity for corporation tax purposes, a question that affects both the institution and its private partners.
Clear arrangements at the outset avoid a great deal of dispute later, both with the Tax and Customs Administration and with the grant provider.
Balanced Internationalisation Act (Wib): implications for educational institutions
The proposed Balanced Internationalisation Act (Wib) will provide the Minister of Education, Culture, and Science with a new tool to assess whether a non-Dutch-language programme is effective. This assessment will take into account the labour market and the quality of education.
If the institution’s justification does not hold up, the minister may decide that the programme must be converted to Dutch-language instruction. What does such a decision mean in practice? Current international students and staff may lose their legal status, and ongoing agreements and commitments will come under pressure.
In addition, starting in the 2025–2026 academic year, it will be possible to set a separate enrolment cap for non-Dutch-language tracks within a degree programme. A similar due diligence requirement applies in this case. A distinction made without sound justification undermines the free movement of persons within the EU and can quickly lead to indirect discrimination on grounds of nationality.
A sound justification makes all the difference. By clearly identifying, for each programme, why foreign-language instruction or a capacity limit is necessary, the educational institution can maintain control over its own provision.
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