The government has announced a new formula for funding public universities designed to ensure efficient use of the funds.

Higher Education Minister Idris Jusoh said the government would withhold five percent of the total funding for these universities starting next year.

This so-called reserve fund would be given to the universities after they met their key performance index (KPI) and complied with extra competency, productivity, performance and success, Idris said.

He said that under the formula, which was decided at the first Putrajaya Higher Education Task Force (PHETF) meeting in Putrajaya yesterday, the reserved fund would comprise input-based funding (three percent) and performance-based funding (two percent).

Previously, the government provided 100 percent funding to the 20 public universities, including for tuition fees, other income, block grants of between 60 and 70 percent, and development, he said.

'Funds not used efficiently'

"The 100 percent (funding) has put Malaysia in 12th place in terms of ranking, while the output (outcome) put the country at 44th place.

"This clearly shows that the funds are not being used efficiently. That is why we have introduced this new funding scheme," Idris ( photo ) told reporters after the meeting.

He said the enrolment, the number of graduate students, minimising of failure rates and the universities' ability to create innovative products would also be considered before the reserve fund was disbursed.

He said Malaysian public universities were overly dependent, by 75 to 95 percent, on government funding while universities around the world recorded 30 to 40 percent dependency.

Idris said the current five percent reserved fund would be increased on a yearly basis and was expected to reach 40 percent in 2025, when the Malaysia Education Blueprint (2013-2025) is fully implemented.

"We want public universities not to be dependent on government funding only. We want them to move towards greater financial sustainability too.

"So far, public universities have been generating income for the past nine years and other universities for about three years," he said.

Asked what will happen if public universities did not claim their five percent reserve fund, Idris said: "Then, we will need to see the possibility of changing the vice-chancellor of the university."

- Bernama