Is university research well-funded?

Three issues to highlight with the current system are in the lack of longer-term approach to research funding, the need to support higher-cost STEM subjects, and a need for diversity in people and research.

Instability, uncertainty, and lack of a longer-term approach to research funding all contribute to reduced confidence in Government investment in research and development. Chemistry in the UK benefits significantly from the funding and the collaborative networks offered by the EU Research and Development programmes, particularly the Horizon programmes, which many across the sector hope for a speedy UK association to.   

Funding systems must continue to enable study of higher-cost STEM and medical subjects, so that students can study these beneficial subjects, including chemistry, for the same fees as other, lower cost courses.  Chemistry, like other STEM subjects, has necessarily high running costs (for practical teaching, infrastructure, maintenance, energy etc) and is hard-hit by inflation. Universities also rely heavily on domestic and overseas student fee income to subsidise research.

It is important to ensure there is sufficient funding available for researcher-driven,  fundamental and discovery research as well as mission or challenge driven research that is becoming increasingly popular with funders and for university programmes to ensure diverse and inclusive student and staff cohorts.

We need to implement longer-term policy and funding decisions to re-establish confidence. We also need to ensure support for high-cost strategic subjects increases in line with cost increases whilst also supporting measures to make laboratory work more environmentally sustainable. A reduction of costs and bureaucracy of visas for overseas students and researchers is essential to maintain UK attractiveness for international talent.

Higher education providers face long-term, systemic, pressures on their financial sustainability and viability. The majority of these challenges are long-term  and as such require long-term and stable funding to be addressed. 

Publicly funded teaching and research make a loss across the sector once the full economic costs of those activities are considered. It is becoming increasingly difficult for UK universities to fund the proportion of Full Economic Costs (FEC) not covered by UKRI grants and other sources of research grant funding. This deficit requires universities to cross-subsidise research from other income-generating activities and leads to an unsustainable system in which research capacity is dependent on other factors. These issues are particularly acute amongst smaller institutions, risking the concentration of research in only a few institutions.

The long-term, flexible nature of QR funding enables universities to act strategically, explore new and high-risk avenues of research that underpin future innovation, and pursue excellence in line with their institution’s and local strengths. However, there has been a real-terms decline in QR across the sector and a falling balance between QR and Research Council funding. This is against a backdrop of increased inflation and running costs, and due to the institutional discretionary nature of QR allocation, while physics as a discipline performs well in the REF, this does not necessarily result in increased resources for physics departments.

Universities need a coherent, long-term strategy, with multi-year funding commitments that allow for predictable and stable support and build confidence in the sector.

The Government should increase the proportion of FEC recovered on all publicly funded research grants to safeguard the sustainability of the world-leading research and ensure long-term capacity exists in all universities to deliver research activity. A more sustainable balance between QR and Research Council funding will allow universities to continue to forge new partnerships with business and industry, invest in the talent pipeline, build research capacity, and use R&D to power future economic growth.

The funding system often makes the position of early- career staff unacceptably uncertain as they move between a series of fixed-term contracts. This is poor for the attraction, retention, and development of the diverse intellectual talent on which the system depends.

The current funding system is unduly dependent on income from international students, especially from China, cross-subsidising loss-making research, and UK education activities.  

This makes the whole UK higher education system financially extremely vulnerable to geopolitical shocks.

The current funding system does not fully incentivise universities in maximising the social and economic impact of their research – instead often trading that off against direct financial return to the institution – for example through equity shares claimed in spin outs, or expensive fees for CPD courses. All three are deep challenges and there are no easy solutions.

The Royal Historical Society funding priority is to ensure historians can engage in research and scholarship, while developing their professional careers within a stable and supportive institutional environment. There are however three main obstacles to this.

Firstly, instability caused by the removal of government caps on institutional student recruitment. In history this led to a few marque university brands massively expanding their recruitment but servicing this additional load by recruiting temporary staff on fixed-term teaching-only contracts; while the many more institutions who consequently experienced declining student numbers in humanities reacted by reducing their staffing costs creating career instability for active researchers across all career stages.    

Secondly, a lack of transparency within institutions as to how recurrent QR funding is allocated and invested.  This makes it difficult to ensure that Units of Assessment receive a proportionate level of support that reflects the revenues generated by their performance during the REF.  Failure to reward excellence reduces the incentive to produce it.  

Thirdly, the year-on-year erosion of the ‘unit of resource’ represented by the capped level of home student fees. This has had two detrimental effects for History and the Humanities as  

universities seek to sustain more expensive courses in sciences by subsidising them from fees for cheaper to teach ‘chalk and talk’ subjects such as History; and universities pivot to those subjects most capable of attracting high fee international students which, primarily for cultural and linguistic reasons, do not include History.     

While the first two problems are relatively easily fixed by reintroducing controls and requiring more extensive and transparent reporting of QR expenditure by institutions, the third is clearly something that will be determined in the political realm. However, one does not have to favour a fee system to recognise that the current value of the unit of resource cannot sustain a high-functioning university sector.