Funding TVET and Universities in Kenya has continued to experience challenges over time. TVET sub-sector has grown exponentially both in the number of institutions and enrolment. This phenomenon is witnessed in many other parts of the world, including the developed world. Governments are giving attention to TVET because it provides opportunities for youths to acquire skills for employment and entrepreneurship.
The rapidly changing technologies and dynamics of the labour market require that TVET link with industries to update skills and training equipment. Hence the need for adequate funding in TVET.
Since the adoption of DUC and the cessation of module II programmes, public Universities have faced unprecedented financial challenges, which have affected University education. Funding from the National Treasury has not matched the cost of University education, University expansion, and rising student enrolment. This, coupled with the failure of the Government to fully implement the DUC and limited internally generated revenue, has plunged Universities into a financial crisis.
In addition, weaknesses in the governance of public Universities compounded the problem. In light of the projected increase in enrolment, having a sustainable financing framework for Universities is essential.
The Government has been implementing a policy on massifying Universities towards establishing a University in each county. Consequently, there has been a rapid expansion of the number of Universities without regard to the financial implications. Thus, many newly established Universities lack the basic infrastructure to facilitate teaching and research, thereby threatening the quality of University education. Moreover, the lack of a model for capital development has resulted in dilapidated infrastructure in most public Universities and TVETs; indeed, some high schools have better infrastructure than many Universities.
Funding for research is neglected, especially because there are no sufficient funds. What is available is also not disbursed in a manner to have an impact on the national agenda. Further, there are many research institutions in different sectors, and all of them get a budget allocation. Thus, there is duplication of functions and even double budget allocation in some instances.
Recommendations on Financing of Tertiary Education
- Government to implement the Variable Scholarship and Loan Funding (VSLF) Model to replace the Differentiated Unit Cost Model (Appendix 10.2). The Model combines scholarships and loans and is appropriate for different categories of students: Vulnerable, extremely needy, needy, and less needy
Scholarships and loans will be distributed to four distinct categories of Universities/TVETs/TTCs students as shown below:
| Student category | Scholarships (%) | Loans (%) | Household (%) |
| Vulnerable | 82 | 18 | 0 |
| Extremely Needy | 70 | 30 | 0 |
| Needy | 53 | 40 | 7 |
| Less Needy | 38 | 55 | 7 |
Note:
- Funding based on the actual cost of the program in a University and TVETs;
- An average of 61% of the University and 58% in TVET of the cost of the programme shall be a Government Scholarship;
- An average of 36% for the University and 32% in TVET of the cost of the programme shall be Government Loan;
- An average of 7% for the University and 10% in TVET of the cost of the programme shall be household
- Government to provide for conditional grants for `VTCs, ring-fence the amount for the
- MoE to provide a minimum essential package to facilitate operations of the new public Tertiary
- Salaries and Remuneration Commission (SRC) to review the Job Evaluation and grading structure for University academic staff, taking into account comparative skills and remuneration in the
- Government to incentivise Universities and TVETs to improve performance in research and innovations by:
- In order to spur STIs and other strategic social and economic sectors, the Government to implement 2% of the statutory provisions provided in Science and Technology Innovation Act,
- Developing a framework for engagement of Universities and TVET in consultancies in government ministries, including criteria for affirmative action to promote such
- Government to provide research funds to support post-graduate training through the National Research
- MoE to develop and implement a performance-based formula for capital infrastructure development for Universities and
- Universities should rationalise senior administrative positions (e.g., DVCs, Registrars, Directors, Deans and Departmental Heads) as cost containment measures, and review and strengthen their internal financial management systems to make them
- Universities and TVET institutions should strengthen a framework for internal mechanisms of resource mobilization.
