October 28th, 2015
 Central Council for Education

 As Japan’s faces the issue of depopulation which has brought about a decline in the working-age population, universities play a crucial role to create “knowledge” needed to sustain today’s knowledge-based society.
 The Central Council for Education, upon inquiry by the MEXT Minister, has assembled a report on vigorous deliberations with respect to the qualitative transformation of universities, university governance, realizing the smooth transition between high school and university and graduate school reform. Japanese universities have taken on this important task by independently and actively advancing reforms, while making every effort to tackle issues of 21st century faced by Japan and the global community.

 Amid such backdrop, the Fiscal System Council has indicated its view with respect to the management expense grants for national university corporations. The fiscal council has recommended the budget be mechanically reduced by 1 percent annually over the next 15 years.

 The Central Council for Education believes the fiscal council has failed to notice the serious impacts of the approximately 12 percent decrease in management expense grants over the last 12 years. The budget cut has seriously affected education research foundations to cultivate young researchers. The council’s recommendation to further decrease management expense grants over an extended period of time overlooks issues including universities correspondence to globalization and community revitalization, and society’s expectations towards universities playing various roles to help create innovation and advance Japanese society. The council’s proposal also runs counter to the global trend of expanding investment in higher education, and enhancing education research environments. Although efforts to secure various sources of revenue are needed to raise individual income, a definite increase in income appears to be difficult based on the nation’s current economic situation and that of Japanese households. Thus, the council’s proposal poses a threat to the stable management of universities.
 In order to realize the government’s aim to raise the gross domestic product (GDP) by revolutionizing productivity, and creating a “society with all 100 million-plus people dynamically engaged” and “regional revitalization”, cutting back on investment in higher education will inhibit the creation of knowledge, creating a breeding ground for future problems.

 As such, the Central Council for Education submits the following emergency recommendation:

 The Central Council for Education recommends that the “management expenses and grants for national university corporations” should not be mechanically reduced, but rather, enhanced and secured in order to actively support universities advancing reform, and to strengthen universities education research and social contribution functions.

 In the Central Council for Education’s report “Towards Qualitative Transformation of University Education for Building a New Future” (August, 2012), the education council recommends national universities to redefine their mission by clarifying their strengths and characteristics. Moreover, based on the “2013 National University Reform Plan”, universities have proceeded to firmly advance the reevaluation of education research organizations and human resource wage reforms.
 During the designated three-year period of accelerated reform (2013-2015), national universities have redistributed human and material resources within the schools, and have advanced organizational reform to develop universities’ strengths and characteristics. Moreover, universities have ambitiously advanced education research activities in high demand by society through establishing new organizations upon merging and coordinating the natural science and the humanities departments. Universities are also working to establish new departments in FY2016, such as “regional design science” and “regional resource creation”.

 In the meanwhile, the reduction of management expenses has continued ever since the incorporation of national universities in 2004. A total of 147 billion yen (11.8 percent) of management expenses has been cut back over the last 12 years. In addition, the rise in income taxes and other expenses is further squeezing human resource and foundational education research expenses. As a result, personnel expenses of full-time teachers supporting education research activities, the number of full-time young researcher employees, and students proceeding onto graduate school have decreased. This has caused disadvantages in securing outstanding personnel, and has also reduced the number of research hours and number of theses submitted.

 Under such backdrop, the reduction of management expenses may cause major problems for universities advancing reform. Moreover, although individual efforts to increase individual income through securing grants and joint research with private organs are necessary, such substantial increase as proposed by the fiscal council may lead to rising class tuition which many pose problems to households under difficult financial situations.

 National universities are expected to play a vital role to advance world-class education research, carry out large-scale basic research, and implement pioneering and experimental education research. National universities must also inherit and develop important fields of study not necessarily in high socio-economic demand, and secure the opportunity to receive higher education nationwide.
 Upon reviewing the Fiscal System Council’s recommendations, based on the 2014 governance reform amendments and the “National University Management Strategy” released in June 2015, national universities are in the process of advancing university management from an even greater management perspective through enhancing the leadership of the school dean to strategically distribute resources and secure various sources of revenue. In addition, MEXT has also established three support frameworks so that universities can further enhance their strengths and characteristics, while advancing reform to provide universities with intensive budgetary assistance. In order to realize the true strengthening of universities, upon supplying incentives to universities advancing reform, the Central Council for Education strongly believes in the necessity to enhance and secure management expenses which support sustainable reform for strengthening university management.

 This recommendation is in response to the Fiscal System Council’s proposal to reduce management expense grants for national university corporations. It is essential to strengthen the functions of both national and private universities to advance our nation’s sustainable growth, structural reform for a knowledge-based society, and to cultivate human resources which support regional revitalization. The Second Basic Plan for the Promotion of Education and the Eighth Proposal by the Education Rebuilding Council also indicate the importance of investing in higher education. The Education Council would also like to stress that if Japan does not enhance and secure a budget for higher education notably lower compared to other countries, it may likely decrease the quality of cultivating human resources, and the creation of knowledge by those who will lead our future society.

(Higher Education Bureau, National University Corporation Support Division,Lifelong Learning Policy Bureau, Policy Planning and Coordination Division)