Editorial: University cannot be treated like a business

The University of Malta is facing a financial problem, recording an €11.17 million deficit in 2023 and holding liabilities that exceed its assets by nearly €19 million. Consequently, independent auditors have warned that the institution’s future survival is uncertain, especially as critical infrastructure projects stall, the government demands financial self-sufficiency and ongoing union negotiations threaten to push wages even higher.

It is not the first time the state of the University of Malta’s finances made the news. Back in October 2024, Finance Minister Clyde Caruana publicly criticised the University of Malta, accusing it of inefficiency and poor financial management. He questioned how the university uses public funds and suggested it must justify its budget more clearly.

The comments sparked backlash from academics and student representatives, who argued the university is underfunded, and that the minister’s remarks were unfair and harmful to higher education.

The incident led to further cost-cutting measures, including the blanket suspension of casual lecturers for elective units and a more stringent approach to employing full-time academics and extending their contract beyond retirement age. One still questions whether there are other areas which can be better managed and whether all academics employed are giving their due share to justify the expenditure towards their salary.

The opposition has made an interesting observation: the government financially aids band clubs, including buying properties to prevent evictions, and questioned why equivalent university funding is not being considered.

Over the past few years, the government deployed a wide array of financial support mechanisms, grants and tax incentives for businesses and SMEs, NGOs, and the construction sector and real estate, including a €1 million fund for businesses that incurred damages by Storm Harry.

Why can’t these initiatives, designed to stimulate economic recovery and foster sustainability, also be applied to our university, an essential arm of education?

For the University of Malta to address its deficit, it must align its strategic objectives with adequate resources, ensuring that both daily operational costs and crucial investments in human and intellectual capital are met. Preserving the university’s mission in the face of modern pressures also requires that other models be entertained, ultimately moving toward a fundamental restructuring of how education is valued, designed and financed.

However, this budgetary rationalisation cannot mirror standard corporate models. Unlike private enterprises reliant on direct product revenues, universities require diverse public and private subsidies because their fundamental activities are designed to serve the public good, diverging sharply from private market norms.

The marketisation of higher education, already observed in countries like the UK where institutions operate like businesses and students are treated as consumers, poses big dangers.

When revenue generation and cost-cutting take precedence, pedagogical quality inevitably suffers. Institutional pressures to keep customers satisfied often lead to grade inflation and diminished academic rigour.

Furthermore, as universities transform into market-responsive providers chasing global rankings and prestige, valuable resources are diverted from genuine educational priorities toward marketing and public relations. Consequently, the intrinsic value of research is distorted.

As the shift toward knowledge-based economies drives a global surge in higher education, we risk reducing our university to a mere credentialling factory. We must remember its true scope – a vital public sphere bound by a profound social contract.

The university’s mandate is dual: to train the essential professionals of tomorrow and to foster the autonomous, critical citizens our democracy requires today.

If we truly value this broad mission, the government must match its rhetoric with sustained financial support. Ultimately, funding higher education is not just an economic calculation but an investment in the very fabric of our society.