Funding Issues 10. The funding of higher education institutions depends on factors such as student numbers, success in research and other income generating activities. Public sector funding is dictated by political considerations whilst private sector funding is largely dictated by the business objectives of industry and commerce. Universities must compete for students and research grants from industry and the various Research Councils. Many Universities are keen to improve their appeal to the Research Councils.
Diversity is made difficult in a market dominated by a uniform funding model, however.
Considerable changes have taken place as a result of the Dawkins reforms. However, the evolution of the expanded higher education sector is still at an early stage and further mergers of universities are possible. There is likely to be a considerable repositioning within the sector over the next five to ten years due to key drivers of competition and collaboration and the importance of audit and review processes aimed at assessing the quality and effectiveness of higher education. Australia, like the USA, the UK and other OECD countries before it, appears to be heading for a period of a tightening of government budgets for education. Other proposals to increase the class size or the teaching duties of teaching staff are considered unacceptable by teachers, students and employers as being detrimental to the quality of education.