The Ministry of Education, Culture and Science administers almost all central government expenditure on education, while the Ministry of Economic Affairs funds agricultural education. Under article 23 of the Constitution (only available in Dutch), all educational institutions – public and private – are funded on an equal footing. This means that government expenditure on public educational institutions must be matched by expenditure on private, government-funded educational institutions.
The relationship between educational institutions and the government is characterised by a large measure of institutional autonomy; government merely creates the right conditions. Schools qualify virtually automatically for funding, provided they meet the quality standards and funding conditions imposed by law for the school system as a whole. Every year, all government-funded educational institutions receive block funding (in Dutch: Lumpsum) to meet their personnel and running costs. They are free to decide how to use this money.
On 1 August 2012 a ‘performance budget’ was introduced in primary and secondary education and secondary vocational education (MBO). In addition to the block grant, schools receive funding to spend on specific activities such as teaching of language and numeracy skills, science and technology, supporting the development of gifted students and the professional development of staff. The aim of the performance budget is to boost the performance of pupils, teachers and school leaders.
Funds are channelled from the Ministry to educational institutions both directly and indirectly. The main flows of indirect funding are via the municipalities, for example to fund adult education, and primary and secondary school accommodation. The statutory course and tuition fees paid to the institutions by the students themselves (for instance in higher education) constitute a further source of funding. Primary and secondary schools do not charge fees.
Educational institutions can also generate income from other sources, such as extra funding from the municipal authorities for special projects, interest on capital, contract activities and sponsorship, and donations (in the form of money, goods, services or expertise) from civil society organisations or businesses. Parents also pay voluntary parental contributions or volunteer their time.