Funding

Main policy goals of public funding

According to the Constitution of the Republic of Lithuania, education at state and municipal schools of general education, vocational schools, and schools of further education are free of charge. In order to implement this principle and keep the funding sustainable, the state introduced the ‘money follows the learner’ principle or the ‘pupil’s basket’. This has been implemented in general education since 2002, in pre-primary education since 2003 and in pre-school education since 2011 (20 hours a week funded in pre-school education). These funds could have been used for the costs of the educational process: teachers’ salaries, teaching supplies, etc. Each school’s owner – the state or municipality – had to allocate housekeeping and other needed funds. In the case of private schools, an additional fee might be collected from the parents.

The ‘pupil’s basket’ aimed to achieve these goals: establish a clear funding system; more effectively use the allocated funds and improve the quality of education; encourage healthy competition between schools through their diversity; broaden the private education sector; allow parents to choose an education institution more flexibly, etc. The provision of the education process improved and became more even. Over time, the ‘pupil’s basket’ was not implemented fully and its flaws became evident. In addition, the ‘pupil’s basket’, when schools received funds according to the number of their pupils, made it harder for rural schools to survive. Political decisions were sought on how to improve the ‘pupil’s basket’ and how to change it. In 2016, ‘class basket’ tests started. According to this method, education funds were allocated to the class and other funds (such as education aid, management, teaching supplies) allocated to each pupil.

In 2018, a mixed funding method changed the ‘pupil’s basket’. It is a modified ‘class basket’ tested in 2016. The majority of the funds are calculated for a class or kindergarten group and some costs according to the number of children or pupils (popularly it is still called the ‘class basket’). The new funding principle’s aim is to encourage city schools to refuse overcrowded classes and give smaller schools financial stability. As well as the ‘pupil’s basket’, now the state funds the educational costs and the owner of the school has to fund the housekeeping costs. If it is a private school, an additional fee may be collected from parents to fund housekeeping and other costs. More about this model can be found further in this chapter.

The state allocates the former ‘pupil’s basket’, now the ‘class basket’, to pupils learning in state, municipality and private schools. This decision allowed the network of private education institutions to enlarge. However, it is still not broad[1]. In bigger cities, this funding solves the problem of the shortage of vacancies. It is especially relevant in pre-school education, where for example in Vilnius there are not enough vacancies for all children. Equally, the funding of private schools has encouraged new schools with a specific education process. Parent can choose private schools with a lesser financial burden. Still, there are discussions as to whether a state with limited financial resources should allocate funds to private schools and children whose parents ‘can still pay for education’. In the second half of 2019, these discussions became heated, when the Minister of Education, Science and Sport prepared legal amendments which stated that profit-making private schools could not receive a ‘class basket’. It is estimated that there were 13 private profit-making schools on September 2019. This means that their legal form was a joint-stock company, an individual company, etc. In September 2019, 1308 pupils learned in these schools, and 2.2 million euros are allocated for these schools in the state budget for 2020.

Mixed funding method (‘class basket’)

Since 1 September 2019, a mixed funding method has been applied to fund pre-primary, pre-school and general education curricula in state, municipality and private schools. It is a basket of basic education costs, linked with the implementation of education content. This means that a formula is calculated for each school according to the actual number of hours needed to implement the education plan. The number of pupils in a class is counted. Popularly this method is called a ‘class basket’. The Government approved the Rules for calculation, allocation and application of teaching funds.

This is a fixed state subsidy to cover teaching costs. Teaching funds contain:

• Funds for the implementation of an education plan. In principle, these are funds for salaries calculated according to the number of teachers needed for the implementation of an education plan.
• Funds for reducing the difference between education funding needs between schools. This is 2.4% of the funds for the implementation of the education plan. These funds can be used to increase teachers’ salaries, improve education quality and accessibility, for example to fund home-schooling, or to introduce various forms of pre-school and pre-primary education. If necessary, learning a foreign language in smaller groups than set out in the General Education Plans can be funded. In addition, municipalities can fund measures that are aimed to reduce learning differences for pupils from an adverse social, economic, cultural environment.
• Funds for other education needs. These funds are allocated separately for municipalities and schools for education needs.

Municipalities receive funds to organize and manage the educational process; provide education aid in schools and in pedagogical psychological aid institutions (these are funds for preventive programmes, education aid specialists, implementation of the educational process, when it becomes more expensive due to children with special education needs, education aid for migrants); to assess learning achievements; or to fund curricula supplementing formal education.

Schools receive funds to buy textbooks and other education supplies and to additionally fund the educational process when pupils learn in a national minority language or in the state language in a multilingual environment[2]; for pupils’ cognitive activities and professional orientation; for the improvement of qualifications for teachers and others participating in the educational process; and for the introduction and usage of information and communication technologies (ICT). The funds for this group are calculated according to the real number of pupils.

When teaching funds are calculated, in pre-school, pre-primary and every general education class the basic size of a group (maximum size) is set and the minimum possible number of children/pupils in the group/class is indicated. In addition, a conditional size of a group/class is indicated, i.e. several class options are listed, indicating the interval number of pupils in it. For example, if in Grade 1 the minimum number of pupils is 8 and the maximum number is 24, there are three possible class options: up to 11 pupils; 12-20 pupils; and 21-24 pupils. According to the class size, the number of contact hours per year is indicated. Knowing these indicators and the number of average contact hours for a teacher per year, the number of teachers needed for a class is calculated. In the calculation formula, the teacher’s salary’s factor, which depends on experience and category of qualification, is applied. Basically, the teaching funds are tied to the basic amount of the salary. This changes if the basic amount of the salary changes. It was 173 euros in 2019.

Additional funding is allocated:

• If pupils learn pre-school and pre-primary education curricula in special schools or special groups, the basic education funds[3] are doubled.
• The actual number of pupils with major or severe special education needs learning pre-school or pre-primary education curricula in general groups is doubled.
• Basic education funds are increased by 5% for pupils learning pre-primary curricula in an ethnic minority language or learning its language.
• For state or municipality schools implementing land or sea cadets’ curricula or its elements, also specialised primary, lower secondary and upper secondary education with engineering curricula, which do not have joint classes. In these cases, the indexation factors of the conditional number of teachers needed for a class are increased by 10%.
• For special education centres intended for the whole countries’ or region’s pupils with special education needs. In this case, the indexation factors for the conditional number of teachers needed for a class are increased by 5%.

Schools do not have to calculate the allocated funds themselves. There are special formulas for that, and registry data is used.

Education funding participants

The state funds education from the state budget. This is a purposive state subsidy – a basket, part of which is directly allocated to the school and municipalities receive a smaller part for further reallocation. Additionally, through differed programmes, the state can allocate investment funds for the development of education. These can be funds for the construction, renovation or restructuring of schools, or the development of human resources. National expenditures on education are supplemented by EU structural funds. These are used to finance the education infrastructure and various projects used to improve the quality of education. 

Municipalities’ investment funds for the development of education are allocated in accordance with the programmes specified in the budgets approved by local government councils. Local government investment programmes are developed with regard to state investment programmes pursuant to the strategic plan of the local government concerned. 

The municipalities also provide schools with housekeeping funds. These funds are used to pay the salaries of service staff and to cover the operating costs of the school such as heating, electricity and stationery supplies.

Financial autonomy and control

The state allocates approximately 80% of its education funds (‘class basket’) to the school, the rest to municipalities.

Almost all of the funds allocated to schools are used for salaries. A small percentage of the ‘class basket’ is intended for schools’ other education needs. These funds are calculated by multiplying factors provided in the methodology for each group of education needs by the actual number of pupils. No less than 80% of the funds calculated by this methodology must be allocated to textbooks, other education supplies, pupils’ cognitive activities and professional orientation, and the improvement of the qualifications of teachers and other pedagogical staff. No less than 40% of funds calculated by the methodology must be allocated to the introduction of ICT, i.e. to introduce and use the internet and databases, to manage electronic record books, to pay ICT staff, and other related ICT needs.

The state allocates approximately 20% of the ‘class basket’ to municipalities. Municipalities allocate these funds according to their set rules. Still, the state provides certain requirements that must be set out in these rules. Municipalities must allocate 100% of the funds calculated by the methodology for educational aid[4] and the implementation of curricula supplementing formal education. These funds cannot be reallocated for other needs. The state recommends that municipalities allocate no less than 8% of the education process organization and management funds to the variable part of the salaries of principals, their deputies and education organization division heads. Municipalities can allocate the remaining funds and funds for the assessment of pupils’ achievements by demand. Municipalities must allocate all of the funds for the reduction of education funding between schools for schools.

In order to increase the autonomy and independence of schools, a new Guidance on Pay for the Staff of Educational Institutions and Educational Staff of Other Institutions was approved in 2009. Later the law regulated issues regarding the salaries of pedagogues, pedagogical staff and headmasters. Annex 5 of the Law on Pay for the Staff of State and Municipal Institutions and for the Members of Commissions sets out in detail the salaries of pedagogues, pedagogical staff and heads of education institutions. The highest and lowest rates in a scale of position-based salaries are set. The school principal, in agreement with staff representatives, establishes the specific rates of position-based salaries. The school owner does the same for the headmaster.

The school is accountable for the purpose-specific use of the funds to the school founder. The founder also has the right to check whether the school uses the received funds according to their intended destination. In municipal schools, this function is performed by the Internal Audit Service. 

Fees in public education

As municipal councils are the founders of state pre-school education institutions in Lithuania, it is the municipal council of every municipality that establishes the fees for a child’s upkeep in the municipal pre-school education institution. The parents must pay for the provision of meals for children in pre-school institutions.

The payment for the children’s upkeep in pre-school institutions (except private ones) is reduced by 50% in the event that:  

• the child (children) has (have) only one parent;
• the family is raising three or more children;
•  a child has major or severe special education needs;
• a child is ill with cancer, diabetes, asthma, epilepsy and severe allergy;
• both parents have up to 40% working capacity level;
• the child grows up in a family of students where one of the parents is a full-time student of the daytime department of an educational institution. 

The Law on Education specifies that education according to the pre-primary, primary, lower secondary, upper secondary and vocational education and training curricula (if it is for the first qualification to gain) is free of charge in state and municipal schools. 

Learners studying according to the pre-primary, primary, lower secondary and upper secondary curricula use textbooks free of charge. Learners studying according to the formal vocational education and training curricula are provided with textbooks partially free of charge. They can be provided with textbooks fully free of charge on taking into account the social status of the parents (foster parents or guardians) and learners. Individual school supplies (exercise books, pens, calculators, etc.) are provided for learners by their parents (foster parents or guardians). 

Fees for additional services specified in pre-school and general education school regulations and provided at the parents’ (foster parents’, guardians’) request (such as extended day groups, after-school care, studies, clubs, extracurricular activity groups, camps, excursions, etc.) are determined by the school founder. These fees may be reduced depending on the social status of learners and their parents (foster parents or guardians). 

Financial support for learners’ families

The Law on Social Assistance to Pupils distinguishes two forms of social support for learners:

• the provision of free school meals (breakfast, lunch and meals at daytime summer camps organised by schools)
• the provision of basic school supplies.

Provision of free meals

Pupils have the right to free school meals and support to purchase basic school supplies if the average income for family members is less than 1.5 of the state-supported income. In 2019, the state-supported income was 122 euros. In 2020, it is estimated to be 125 euros.

Other cases (related to sickness, accident, loss of the breadwinner, provision of assistance to a pupil of disabled parents or from a family with three or more children, etc.) specified by the council of a municipality which takes a decision on the allocation of social assistance to pupils are subject to the following regulation with a view to the living conditions of the family – pupils are entitled to a free school meal if the average monthly income per family member is lower than the double amount of the state-supported income.

From 1 January 2020, free lunches will be provided to pre-primary education pupils and pupils of Grade 1. In the first stage, free meals will be provided starting 1 January 2020 in pre-primary education institutions with self-service canteens (full or partial buffet). The Minister of Social Security and Labour will approve a list of these schools. From 1 September 2020, pupils who are learning pre-primary curricula or primary curricula in Grade 1 will have the right to free lunches. Parents’ incomes will not be taken into account.

Provision with school supplies

An allowance of two basic social allowances (BSA) is provided once per calendar year for the purchase of basic school supplies. In 2019, the BSA was 38 euros. From 2020, the BSA is estimated to be 39 euros.

Other support

In order to ensure that schools are accessible to all pupils, municipalities compensate transportation expenses. The municipality establishes its own regulation on expenditure compensation. Pupils of Grades 9-12 (Grades 1-4 at gymnasiums) in small towns and rural areas can go to and from general education, vocational education and training and non-formal education schools that are closer than 40 km free of charge. This concession is applied to these pupils during working days. If the pupils attend a non-formal education institution, this concession can be applied on Saturdays and Sundays as well. For pupils from Grades 1-8 and in pre-primary education, the transportation is provided to reach the closest education institution. 

Financial support for families of pupils with special educational needs

The founder of the school arranges for the free transportation of pupils with special educational needs to school and back home according to its regulations.  

Financial support for learners

In Lithuanian state and municipal schools, education according to pre-primary, primary, lower secondary, upper secondary, and vocational education and training, where the first qualification is being sought, the curriculum is free of charge. As a result, no special state support for pupils is provided, except in the cases previously described. Students from higher education institutions can apply for a state-funded place. 

Lithuania can boast of some private initiatives to support children’s education. For example, the Mstislav Rostropovich Charity and Support Fund “Support for Lithuanian Children” promotes the development of extraordinary talents in Lithuania – exceptionally gifted children – creating conditions for them to become world-class stars, and also provides assistance to children suffering from rare intractable diseases. 

The programme Lithuanian Maximalist is a learner achievement programme that aims at motivating Lithuanian children to learn and achieve the highest ratings. It promotes children’s progress in the field of education and science. Participants of the programme who are pupils of grade 10 can be rewarded for their academic achievement with scholarships and holidays in summer camps abroad. 

Gifted pupils are also encouraged by scholarships or other benefits by individual municipalities in their own established manner.

Private and grant-based education

The education of pupils in private institutions of early childhood education and care and general education schools is also funded through the ‘class basket’. Every year, private and general education schools have to report on the use of ‘class basket’ funds to the Ministry of Education, Science and Sport. The National Audit Office checks how effectively private schools use the ‘class basket’ state funds received and whether they are used according to their intended destination. 

Despite the fact that private schools receive a ‘class basket’ for their pupils’ education, they may also charge fees for covering other education-related costs. The amount for this additional contribution is determined by the school founder. The fee is paid on a contractual basis.

Funding for non-formal education

‘Pupil’s basket’ funds for the non-formal education of children can be used for teachers’ salaries and for social security contributions and expenses for teaching materials and other expenditures that are directly related to the implementation of non-formal education programmes for children. The ‘pupil’s basket’ funds allocated by the state and local governments cannot be used to cover expenditures for recreational activities or other expenses related to such activities; children’s non-formal education programmes provided by general education schools; education programmes that complement formal education; expenditures for repair, reconstruction or building; or the debts of the provider of non-formal education for children. According to an order adopted by the Minister for Education, Science and Sport, the ‘pupil’s basket’ for non-formal education is 3.18 euros per month per child.

The Ministry of Education, Science and Sport strongly recommends that local governments should top up the ‘pupil’s basket’ to give a final figure of 15 euros per month per child.