Ageing populations and rising skill demands have heightened expectations that higher education systems will widen their offer of continuing education and training (CET) for adults aiming to renew or augment their skills at an advanced level. CET is becoming increasingly important for maintaining a highly skilled workforce in Germany, and particularly in the state of Brandenburg in support of the undergoing structural change of its economy. Coal production in Brandenburg is being phased out, while the state government is seeking to encourage the development of advanced manufacturing and to increase the capacity for innovation activity. These developments will likely increase the demand in the labour market for high-level skills. At the same time, Brandenburg’s workforce is ageing; its people will likely be expected to participate longer in the labour market than in past.

Brandenburg’s economy is undergoing structural change. Coal production in the state is being phased out, while the state government is seeking to encourage the development of advanced manufacturing and to increase the capacity for innovative activity. At the same time, Brandenburg’s workforce is ageing; its people will likely be expected to participate longer in the labour market than in past. Overall, the structural change will likely bring considerable technological and societal changes and these developments will likely increase the demand in the labour market for high-level skills.

Continuing education and training (CET) is of growing importance to the German economy and, in particular, to the economy of Brandenburg; the ageing population and the advances of automation and other forms of technology mean that workers will need to update their skills frequently in the future, as skills demand evolves and changes. However, the complexities of European law – and especially, the EU state aid rules – mean that the state government and Brandenburg’s higher education institutions (HEIs) are uncertain about the legality of public funding of CET. This poses risks of under-investment in CET – which, in turn, poses risks for workforce development. The OECD project team has commissioned an analysis of the legal constraints of funding for CET, which is set out in this report.

This chapter lays out the legal framework of the European Union (EU) for regulating state aid. It explains the rationale for the prohibition of state subsidies for programmes that have the potential to distort free trade in the single European market. It defines the terms used in the regulatory instruments and identifies what lawyers look for in analysing a particular activity to check its compliance with the law. It also describes the penalties that can be applied if an activity has received a state subsidy contrary to the terms of the European law on state aid. Given the variety of the forms of economic activity in the EU and the complexity of the law, exceptions to and exemptions from the rules have arisen; this has added to the complexity of the law.

This chapter provides first an overview of the criteria for distinguishing between economic and non-economic activities. It discusses the notion of an “undertaking” in EU state aid law in relation to continuing education and training (CET) at public HEIs. It examines the relevant judgments by the European Court of Justice (ECJ), it looks at how the ECJ’s decisions on education-related cases can inform the understanding of state aid rules, and it discusses how those judgments are represented in publications and decisions by the European Commission (EC). The interpretation of the distinction between economic and non-economic activities at HEIs in KMK Guidelines is also discussed. This chapter also elaborates on the exceptions to and exemptions from the rules on state aid and indicates how they apply to CET; and explains how the costs of a programme should be analysed and fees set to remain within the state aid rules.

This chapter looks at the actual practices of Brandenburg’s HEIs in their implementation of CET programmes. It draws from information provided by seven Brandenburg HEIs about the types of CET programmes they offer – including academic programmes, certificate courses, vocational development courses and language courses, among others. The HEIs also reported on how they organise, implement and manage CET programmes. These approaches are then assessed against the legal principles established in Chapters 2 and 3. This chapter also offers comparative analysis of the CET practices of Brandenburg’s HEIs with those of HEIs in Bavaria, Hesse and North Rhine-Westphalia.

This chapter draws on the analysis in the earlier chapters to present a set of recommendations for how the Brandenburg state government and the state’s HEIs might address the legal uncertainties they face. In particular, it presents a set of classification tools to be used by HEIs in the design and development of CET programmes to ensure that their classification of programmes meets EU state aid rules. It recommends to the state government the development of a guideline that will help HEIs minimise legal risk while the EU considers the request for a definitive ruling on the status of CET. It also provides proposals to the European Commission (EC) on how to clarify the application of European law to continuing education and training.

Chapter 3 of this report discussed the fact that, if an HEI undertakes an economic activity, it must levy market-appropriate charges for the use of its infrastructure and staffing in the delivery of that activity.