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Funding in Education

Denmark

3.Funding in Education

Last update: 9 February 2024

Primarily, the state and the municipalities finance the Danish education system. In addition to public funding, tuition fees are charged at private schools and continuation schools, and there is typically a tuition fee for adult education and continuing training programmes provided by educational institutions and adult education and training centres.

Some institutions are self-governing, while the state or the municipalities own other institutions. The table below illustrates the main sources of funding and forms of ownership for selected groups of institutions.

  State institutions State-funded, self-governing institutions Institutions funded by the municipalities Tuition fees
Public primary and lower secondary schools     x No
Private primary and lower secondary schools   x   Yes
Continuation schools   x   Yes
Upper secondary schools   x   No
Maritime schools x     No
Higher educational institutions (business academies, university colleges, and universities)   x   No
Academies of music, theatre, film, and fine arts x     No
Adult education and training centres (VUC)   x   Yes
Folk high schools   x   Yes
Evening schools     x Yes

The institutions’ revenue and activity levels

The self-governing educational institutions have two sources of income:

  1. Government grants;
  2. Their own income from income-generating activities, participant fees and fees paid for unemployed people in activation programmes etc.

The government grants amount to approximately 80 per cent of the total funding and are thus the primary source of revenue for the institutions. Of this amount, activity-level determined grants total approximately 92 per cent. Hence, the greater part of state funding consists of taximeter funding. The taximeter system is thereby the primary appropriation model for distributing state funding.

The taximeter system

The taximeter system is a financing system based on per capita grants (cash per student) to educational institutions. Primarily, the grants are calculated according to the number of registered students who pass an examination.

Taximeter management entails that, with the state’s total financial framework for educational purposes, activity-level dependent appropriations are distributed to the individual educational institution based on:

  • Objective goals for activity levels;
  • Politically determined taximeter rates per activity-level units.

The taximeter rates vary depending on the field of study and level of education and are determined on the annual Finance Act.

The taximeter system is combined with a basic grant designed to finance the basic expenses of the institutions. The grants are provided as block grants, which the institutions are free to use as they see fit within the frameworks of the preconditions and rules of disposal and in accordance with the objectives that have been determined for the individual educational programmes and institutions.

Furthermore, a number of possibilities exist for supplementing the activity-level dependent taximeter grants with activity-independent grants, which, seen as a whole, contribute to creating the necessary flexibility in allocation distribution in relation to various needs.

References

Bibliography

Ministry of Children and Education, 2018: The taximeter system. [Accessed 20 October 2022]

Ministry of Higher Education and Science, 2021: The Danish Education System. [Accessed 20 October 2022]

Ministry of Higher Education and Science, 2022: General Organisation and Administration. [Accessed 20 October 2022]

Legislation and Official Policy documents

Ministry of Finance (Finansministeriet), 2023: The Finance Act for 2023 (Finansloven for 2023). [Accessed 3 January 2023]