The Norwegian government's recent allocation of approximately NOK 1 billion to the university and college sector in Norway will unfortunately do little to ease the financial situation of the Norwegian Academy of Music (NMH).
In the government's revised national budget presented on May 11, NMH was granted an extra allocation of NOK 6.74 million. However, NMH’s board had already allocated an expected 5–6 million NOK to the restructuring and cost-cutting measures decided upon/adopted in March.
The additional allocation does therefore not change NMH's budget situation significally, and the need for restructuring remains as urgent as before.
The state budget for 2023 initially calculated a wage and price increase of approximately 2.8%, which served as the basis for NMH's budget. However, the board had anticipated a higher wage and price increase, which was confirmed when the government announced an adjustment to the allocation in the revised national budget. In March, the estimated increase was 4.9%, and the expectation of an additional allocation of NOK 5-6 million was based on that. The government has now laid down a 5.4% estimate for price and wage growth in the revised national budget.
The additional allocation is not a real budget increase but rather a compensation for costs and salaries that have increased more than anticipated.
This will result in correspondingly increased costs for NMH, such as an increase in rent, which constitutes a large part of NMH's operating expenses. Although the rent increase will not take effect until 2024, the increase will be based on the price increase in 2023, even if the calculated price increase for 2024 is much lower. The wage growth increase, on the other hand, will take effect immediately in 2023.
- This adjustment in funding do not reverse the extensive cuts in the sector
UHR-leder to Khrono
In conclusion, NMH's restructuring needs remain as great as they were in March, and the additional allocation provides little relief to the institution's financial situation.
