The Fallacy of Mixing Apples and Oranges
The data used in this article are public and readily available on official websites.
Not all ministerial funds to the university system are created equal, nor are they perfectly fungible. A euro allocated in 2024 does not possess the same purchasing power as one from 2010—its value has been eroded by inflation. This discrepancy was starkly highlighted when a 4.8% salary adjustment, intended to align university professors’ wages with current prices in 2024, caused considerable consternation among institutions. The nominal hike in wage bills was not matched by a commensurate inflation adjustment in the ordinary funding pool (FFO).
A closer look at the non-earmarked UNISS FFO allocations reveals that while the nominal disbursements in 2015 and 2024 are nearly identical, their real value has contracted by a staggering €17.5 million. Such figures underscore the pitfalls of equating funding across different periods without accounting for the eroding effects of inflation.
Moreover, the funds emerging from PNRR projects—often touted as a ‘super bonus’ akin to an incentive in the construction sector—differ markedly from those in the ordinary funding stream for at least three reasons:
• Finite (or short-run) Versus Perpetual (long-run) Funding: The PNRR is a time-bound initiative with a clear beginning and an end, in stark contrast to the structural FFO, which, despite annual variations, provides a continuous financial lifeline to universities.
• Project-Based Dynamics: PNRR resources are allocated on a project basis, earmarked for acquiring goods and services. While such projects can generate new revenue streams, they invariably bring additional costs and engage valuable human resources, thereby imposing an opportunity cost. Their immediate effect does not directly enhance a university’s economic sustainability—though indirect benefits may emerge over time.
• Legacy Costs and Risks: Expenditures under the PNRR leave a long-lasting legacy. Investments made under these projects may strengthen a university’s capacity for research and teaching if they are well deployed. Conversely, they might also saddle institutions with ongoing costs—for instance, expenses related to stabilising temporary staff or maintaining newly acquired infrastructure. Adding to this risk is the potential for funding revocations should projects fall behind schedule, a scenario that could force universities to absorb the costs through subsequent tenders. It is no coincidence that best practices among institutions holding PNRR funds include the establishment of budgetary reserves to hedge against such eventualities.
It is therefore misleading to conflate structural (FFO) and non-structural (PNRR) funding. When analysing public expenditure on higher education, segregating funds into homogeneous categories is far more illuminating. For example, only the unencumbered portion of FFO should be scrutinised in considering the routine operational costs—utilities, salaries, and the like—. In contrast, PNRR funds are intended for capital investments and services; once expended, any continuing services, such as those provided by temporary research staff, must be financed through other means. Furthermore, capital items purchased with PNRR money entail ongoing maintenance and depreciation costs that outlast the initial funding.
The same logic applies to project-specific allocations and earmarked FFO funds for extraordinary plans. Such resources, dedicated to specific purposes, cannot be expected to underwrite universities' general operational costs independently of these projects.
Aggregating FFO, PNRR, and other funding streams to argue that university finance has increased is a classic case of misleading arithmetic. Equally deceptive is comparing funding levels from 2009 to 2024 without adjusting for inflation. One can only hope that those who indiscriminately lump these disparate sources together do so out of bad faith, fully aware of the distortions involved. Even more troubling would be if this conflation were committed in good faith, as Carlo Maria Cipolla famously intimated. At the same time, one might guard against malefactors, it is far more difficult to defend against stupidity.
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