Under Article 23 of the Constitution, all educational institutions – public and private – are funded on an equal basis. Schools and other educational institutions annually receive one budget from the central government for the costs of materials and personnel. This financial support is offered through a lump sum financial model. Institutions have the discretion to determine how they spend this funding. The Inspectorate of Education monitors the financial policies of educational institutions.

This type of funding underpins the objective of the Ministry of Education, Culture and Science to impose fewer rules on schools. A lump sum approach offers more freedom to educational institutions in their policy making. Consequently,  schools have the possibility to improve the quality of education by tailoring their policies to the contextual specificities of their own school, district or city.  

The relationship between educational institutions and the central government is characterized by a high degree of institutional autonomy. The Dutch government solely creates the right conditions under which the educational institutions operate. Schools are automatically eligible for funding if they meet the quality standards and funding conditions set by law for the education system as a whole.

The financial resources are provided both directly and indirectly to educational institutions. The main (indirect) financial support flows are administered through municipalities, for example to fund adult education and accommodation for primary and secondary education. In the Dutch vocational education and training sector (MBO), as well as higher education, tuition fees are set by law. Students pay their fees directly to their respective educational institutions. No tuition fees are charged for primary and secondary schools.

Educational institutions can also generate income from other sources, such as requesting additional grants or subsidies from the municipality for special projects, interest on capital, sponsorship and donations.