Hannelore Bastian

In the forum on „Continuing Education in Europe - who pays whatand why", Dr. Hannelore Bastian, Director of the Volkshochschule in the City of Hamburg, demonstrated what cuts in resources mean for adult education centres, using the Hamburg Volkshochschule as an exam-ple, and how much effort it takes to maintain the level of work and to deliver adequate education with reduced resources and personnel.

Succeeding with Less?

Change Challenges through Financial Cuts

The Hamburg Case Study

I am a member of the Volkshochschule (VHS) management in Hamburg. We have been going through a process of severe cuts in public subsidies lately, and I am going to talk to you about the changes we have introduced to maintain our work - on a new and different base. In a sense, this has been a local experience. At the same time it is just one example of what is happening everywhere in our country, and I will try to point out some general aspects for you.

1. Hamburg Volkshochschule

To give you an idea of the Institution I am going to talk about, here are just a few facts about Hamburg and its Volkshochschule.

Since the year 1990 the VHS Hamburg has had the Status of a public Utility Company controlled by the government of the Federal State of Hamburg. Unlike many other German federal states, the State of Hamburg has never passed a law on adult and continuing education. In Hamburg, a metropolitan area, there has always existed a wide range of different adult education institutions, private ones of course, but also many institutions funded by public subsidies. So the Hamburg Volkshochschule has never enjoyed the privileged Position of being the main adult education centre in the city. It has always been one education institution among many others.

Up to last year 50 % of our annual budget used to come from the State of Hamburg; 38% came from the fees of our participants - about 70,000 students per year. This ratio is now changing. Since last year we have lost about one third of the subsidies previously granted by the Hamburg government, a loss of about 2 million euros. So from this year on we have to aim at about 50% of our budget coming in from fees instead of the former 38 %.

2. Cuts in Public Subsidies - Challenges to Meet

We could not cope with the reduction of one third in our budget by just slashing some costs here and there. Our Board of Education installed a project group to develop proposals for the future of the Volkshochschule in Hamburg. The main issues discussed reflect the public debate on adult education but also the changing ideas of public responsibility in general.

These were the messages we had to deal with:

  • Reduce your costs - Start leaner production of Services
  • Maintain your quality Standards - or rather, improve them to attract more customers
  • Subsidies are only for education programmes of "public interest"
  • Do not spend money on programmes for which other institutions receive subsidies
  • Do not compete with non-subsidised institutions by offering the same programmes for a Iower price and thus damage competition
  • Make sure to grant reduced fees only to the socially disadvantaged
  • Concentrate on programmes for the disadvantaged
  • Be sure to earn more money with your programmes

As you can imagine, we went through a long process of painful discussions and debates to adopt these aims, some of them contradictory in themselves. It took us almost a year to do so. So what are the Solutions we finally managed to find?

3. New Structure of the Institution

We had to find a new structure able to meet the challenges with a drastically reduced staff, because three quarters of our costs are staff costs - 45 % for regularly employed staff, 28 % for freelance teachers. So the reduction in personnel had to be the main instrument of change. In the end we had to dismiss 40 staff members: 14 of them teachers working for our "second Chance" Programme for young people without a school leaving certificate - we had to dose it down after 29 years.

However, it is important to note: having a work contract with the State of Hamburg meant that our colleagues were not made redundant but were transferred to other Jobs within and outside the Board of Education - certainly a privilege considering the present labour market.

How to continue with a reduced staff? Our main idea for restructuring the organization was the centralization of expertise to serve all units in order to enable us to maintain our educational centres in (almost) all parts of Hamburg, and to maintain the quality Standards of our programmes, of our teachers, of our marketing activities and of the Service level for our customers.

So we installed centralized units for recruiting and training teachers, for planning our programmes and for marketing. Thus we were able to maintain our regional centres throughout Hamburg, and to run these centres with a manager and administrative staff, but without the educational staff they used to have before. We are just now in the process of testing how this works out. The centre managers are supported by the Service units. They are in Charge of their Programme - they conclude annual contracts with the VHS management about available resources and the income they are supposed to generate.

4. Different Levels of Support

What are the future aims and objectives of the Volkshochschule working in this new structure? Coming back to those contradictory messages I mentioned before: two of these options would have meant the end of the main Volkshochschule idea - namely, to offer a broad range of subjects and to make it accessible to everyone.

  • If we had limited our future activities to education programmes for the socially disadvantaged, the Volkshochschule would have become a kind of "educational ghetto" with a reputation of keeping everyone else out.
  • If we had kept clear of all educational programmes offered by other institutions we would have been reduced to minority programmes and would have ceased to be an Institution for the general education of adults.

Fortunately we were able to find a compromise to meet these different expectations. In a contract recently signed by the Volkshochschule and the Board of Education three Segments of our work were defined:

A highly subsidized sector of programmes for illiterates, for "German as a foreign language" and for handicapped persons. Our contract with the Board of Education allocates a fixed amount of the annual subsidies - almost 20% - to this sector. The total number of teaching hours offered to these target groups also is part of the contract. For these courses only low fees are to be charged - fees that will not cover the costs.

The middle sector represents the main Programme for the public. To maintain this sector - which is the heart of what people have come to expect from VHS for decades - we had to deal with those critical arguments mentioned above:

  • To limit subsidies to programmes of "public interest"
  • To keep clear of programmes other education institutions offer as well
  • And to avoid competition with subsidized prices

To get permission to maintain the wide range of our Programme beyond the highly subsidized sector of basic education, we differentiated this main sector into three levels of Support:

  • a so-called basic level
  • an advanced level
  • a level of specialized courses

The chart shows that different amounts of subsidies flow into these levels: the basic level follows the idea that the VHS should concentrate on supporting lifelong learning by offering first Steps in subjects (in language teaching this Covers the level up to B1/B2 of the European Framework).

The advanced level is less subsidized - people who continue learning beyond a basic level are expected to contribute a larger amount of money to the total costs of their learning activities. Courses on this level might be a "unique selling point" of VHS; they might need Special equipment or environments.

The third level has to be calculated without public subsidies as these courses are considered to be mostly of private interest to the participants - because of the personal benefit for their job or contribution to very specialized leisure activities. In this part, the VHS has to compete with the non-subsidized educational market.

Corresponding to these levels of Support, we have set up three different levels of prices: we call them "white", "blue" and "platinum" - the last one is mostly reserved for the third sector of "education on demand" for companies and institutions.

5. Supporting Individuals

Beyond the institutional Support the VHS gets from the State of Hamburg, we give individual Support to people with a low income. They can get reductions on most of the course fees, but have to prove their eligibility. Before the cuts in subsidies we used to get 1.2 mil-lion euros for this Special purpose and had rather generous criteria for reductions. We have now had to limit these - but since the initial directive had been to cancel all reductions, we were pleased to be able to maintain at least some of them.

In this context two decisions might be interesting: old people are not considered to be members of a needy group in general, and university students are seen as highly subsidized individuals who only qualify for a reduction if they receive public Support for their living costs.

Right now we Start to see the consequences of all the changes made - these include raising our fees on average by 10% to compensate for part of the cuts. We have noticed for instance that the number of university students has fallen off alarmingly - a development we will have to discuss. Maybe some of our decisions ought to be revised.

Where do we see our future activities? Above all in better marketing with a fuller knowledge of the educational needs and habits of groups from different social backgrounds - and in finding marketing Partners among well-known companies. For example we have started cooperating with a large drugstore Company with many chain Stores all over Hamburg.

Besides this I would like to mention a registered non-profit organization in Hamburg, called "Citizen's Wealth", which was founded with the explicit aim of assisting the Volkshochschule in its new and difficult financial Situation.

More specifically, it aims

  •  to ensure that disadvantaged and low income groups can be granted reduced fees
  • and that learning projects for these and other target groups can be financed.

"Citizens Wealth" raises funds through membership fees, through public events - like public concerts - and through Sponsoring. In a way, you could say that "Citizens Wealth" is a private answer to public budget cuts, and it may help to uphold the basic tenets of adult education in the VHS sector - even though some people might worry this would undermine political responsibility. We believe it is an enrichment if it helps us to reach people we would not be able to reach otherwise.