Memorandum submitted by the Higher Education
Funding Council for England
1993 WHITE PAPER
The 1993 White Paper sought to improve the nation's
competitiveness and quality of life by maintaining the excellence
of science, engineering and technology in the United Kingdom through:
developing stronger partnerships
with and between the science and engineering communities, industry
and the research charities;
supporting the science and engineering
base to advance knowledge, increase understanding and produce
highly-educated and trained people;
contributing, according to the United
Kingdom's strengths and interests, to the international and particularly
European, research effort;
continuing to promote the public
understanding of science and engineering;
ensuring the efficiency and effectiveness
of Government-funded research.
We believe that the approach was generally right,
and continues, broadly, to be correct. It recognises the important
reasons for public funding of research, the significant Return
on Investment from such funding, the benefits of the discretionary
application of funding by institutions, the need to encourage
more applicable research, the inappropriateness of a National
Plan and the necessity to support strategic decision making about
research activities hosted by HEIs, the importance of partnership
and the significance of highly trained individuals as a "research
We consider that the major concern, that we
do not capitalise on the strength of our science base and translate
it into economic and quality of life improvements was valid, as
was the concern that there should be greater public understanding
We consider that there has been a cultural change
in respect of both these areas of concern. There is within HEIs
a much improved ability, and greater willingness, of researchers
to engage in knowledge transfer activities, and schemes have been
developed to embed such activities within HEIs as a core mission.
The most authorative account of the change that
has occurred since 1993 is that provided by the 1998 PREST study
which document increasing performance in a number of areas including
the number of patents filed by HEIs; and the number, depth and
variety of relationships between HEIs and commercial organisations.
However, it did also identify that good practice was patchy; spreading
and embedding good practice in this area is one of the key objectives
of the HEROBC initiative we recently launched with DTI and DfEE.
It is also clear that "pull" from industry needs to
increase. Industry's investment in the UK research base is increasing
at almost 10 per cent per annumin recognition of the added
value provided by the UK research base. However, as shown in table
1 below, in-house corporate R&D in the UK is low compared
with that in other OECD countries. This evidence illustrates the
need for an increase in the capacity of UK industry to engage
in research and knowledge transfer.
In-house business R&D as a proportion
of GDP (1997)
|UK||1.2 per cent
|Germany||1.6 per cent
|France||1.4 per cent
|Italy||0.6 per cent
|Canada||1.0 per cent
|USA||2.0 per cent
The Government's strategy to increase the academic-industry
interface has been supported by the development of a number of
Co-operative Awards in Science and Engineering
Teaching Company Scheme
The HEFCE has made its own contribution through the Joint
Research Equipment Initiative (JREI) and HEROBC. Also, changes
to the assessment process for the 2001 RAE, and those proposed
for any future exercise, will further encourage applicable research.
However, we do not believe that the assessment or funding processes
should provide a premium for work with industry. Rather, we note
the benefits of increasing HEROBC funding to support knowledge
Another facet of the increase in the level of engagement
with the world outside of HE is a significant improvement in the
public understanding of science. In addition, there have been
positive changes in the relationships between funders, and national
international changes in the research landscape mean that it is
timely for the White Paper vision to be revisited.
We address below both the specific and general issues raised.
The annual publication of the Forward Look
As the science and engineering base becomes increasingly complex,
and its importance as a source of knowledge to be transferred
into business, and the community more broadly rises, it is vital
that all stakeholders in the research base have a clear understanding
of the Government's policies, as it still remains overwhelmingly
the major funder and provides a solid structural basis for investment
We consider that replacing the annual review with the Forward
Look has improved the ability of Government to communicate
its aims and objectives, and signalling them to the research community
and other funders and stakeholders helps to support coherence
The Forward Look, as a single document containing
most salient information about policy and performance, is particularly
useful for those who wish to rapidly access and understand key
information on how the research base is organised, how it is performing
and how it is likely to perform in the future.
The creation of Foresight
We believe that Foresight continues to be valuable in bringing
together stakeholders in the science and engineering base. The
refinement of its objectives and processes over time has produced
an effective framework for identifying the significant problems
we face in the future and how funders, researchers and users may
act in concert to address these problems.
We are pleased that the process has broadened, and developed
a more thematic approach alongside the sectoral approach adopted
in the first round, both of these enhancements will ensure a more
considered and effective response to solving the problems we face
as a society.
The Council will continue to play its part in promoting Foresight.
Many project funders have Foresight-related strategies and institutions
need to build research capability in these areas. We are committed
to ensuring that within the boundaries defining high quality research
the RAE recognises work addressing Foresight and other Government
We remain committed to a very visible contribution to Foresight
through our continuing sponsorship of the scheme we created in
response to the launch of Foresightthe Joint Research Equipment
Initiative. JREI has been running for three years with the primary
aim of providing the infrastructure for high-quality research
in HEIs, especially where relevant to Foresight priority areas.
It has proved to be extremely effective with over £170 million
of equipment purchased so far by HEFCE, with the assistance of
matched funding from industrial partners.
New approaches to technology transfer initiatives and improving
access for SME's to innovation
We prefer to use the term knowledge transfer as a generic
term to describe the wide variety of interactions between HEIs
and userswe also recognise that this transfer may be much
wider than to businesses, as important as that is, but also includes
what is broadly described as the "community"the
voluntary sector and other not for profit organisations who make
a vital contribution to social development of our nation. A broad
definition is also necessary to include work involving government
departments such as the Department of Health.
We believe that there has been a fundamental change in the
agenda for higher education since the publication of the last
White Paper. HEIs are now widely acknowledged, within the sector
and outside, to be central to society's attempt to address issues
of profound economic and social importance, many of which have
a significant regional dimension. This shift from a conception
of the university as an "ivory tower" to one of universities
and colleges taking an important and, in some cases, central role
in delivering key public policy objectives is one of the most
important underlying trends of recent years.
An important part of HEFCE's strategy is to ensure that higher
education is responsive to the needs of business and industry;
HEFCE encourages partnerships between HEIs and industry, knowledge
transfer, and the development of employment skills.
For 1998-99, we allocated £20 million for the long standing
Generic Research Initiative to provide incentives to institutions
to collaborate with users on long-term research leading to expertise
and knowledge which can be used by higher education, industry
and the community at large.
It is in part to spread and intensify much of the good practice
that exists in the HE sector that we launched our most recent
initiative, the Higher Education Reach Out to Business and the
Community fund. This targeted funding for institutions will provide
an incentive to build a sustainable and broadly based capability
to respond to the needs of industry and the community.
The emphasis on building general capability, to support the
myriad of possible types of interaction between HEIs and users,
distinguishes this approach from that of other specific funding
initiatives in a parallel with the dual support system. Funding
provided to HEIs under the proposed programme will lead to improvement
not only in their delivery of knowledge and services to industry
but also in their capacity to respond to related initiatives mounted
by other agencies. It is also hoped that this approach will embed
knowledge transfer within HEIs as a third core activity alongside
teaching and research.
It is clear that HEROBC should fund interactions that are
more complex than HEIs working with major industrial employers.
Technology transfer also needs to occur into SMEs, the public
sector, and the community. Also, in making HEROBC a success, it
will be essential that institutions with a smaller research base,
but which demonstrably "punch above their weight" in
terms of facilitating relationships with users (often these will
be institutions interacting with SME's) are rewarded for their
excellence in this area.
We have also, as part of our recent Fundamental Review of
Research Policy and Funding, developed a proposal to provide a
modest amount of new funding for a "Capability-development"
funding stream. This initiative would provide a framework for
research that had a distinctive contribution but which might not
be best supported by QR and the current approach to selectivity:
emerging subjects requiring capability building;
research of national, regional or local importance.
Although we believe the case for HEROBC, newly established
in partnership with DTI and DfEE, is clear, and that the capability
development funding stream will provide significant benefits,
overall we would prefer to see a reduction in the number of initiatives
to which HEIs and others are subject. We therefore welcome moves
on the part of DTI to simplify the structures under which companies
can access help to innovate from Government. The panoply of schemes
can be confusing even for the users who have individuals dedicated
to interacting with the research base, it is even more confusing
for SMEs who can not justify such staff.
We also welcome the Government's recent move to provide tax
relief for SME's investing in R&D. This is a significant change
in policy from that outlined in the 1993 White Paper and will
enhance the "pull" from industry, an area where we compare
poorly with other OECD countries, at the same time as rising public
funding for knowledge transfer increases the "push"
The re-organisation of the Research Councils and associated
We believe that there is considerable merit in the present
RC structure, as it establishes research project funding organisations
that can communicate effectively with, and provide funding intelligently
to, their broad subject communities who differ somewhat in their
requirements and organisation.
However, as research becomes increasingly collaborative and
inter and multidisciplinary, the RCs must function increasingly
effectively at the areas where they interface with one another
(and with the Arts and Humanities Research Board as their analogue
in this area). We consider that there are particular benefits
of HEFCE funding in facilitating the "joining up" of
research funded by others. We expect individual project funders
to be increasingly interactive with each other.
Also, we would wish overall to reduce the accountability
burden on institutionsto free up management and academic
timewithout reducing the appropriate level of scrutiny
of those in receipt of public funding. We believe that significant
gains can be made in this area if public funders work more coherently
in partnership together, and
(a) do not ask for more information than is necessary;
(b) can agree to rely on data provided to others for their
own purposes so that information is only provided once.
We would wish to work closely with the individual RCs in
It is vital that we continue to encourage applicable researchwhether
it contributes to wealth creation or quality of lifethe
explicit commitment to this objective in the missions statements
of the RCs was therefore welcomed. We have made our own commitment
in this area through the Guidance to Panels for the 2001 RAE and
there are a number of recommendations to further encourage applicable
research arising out of our Fundamental Review of Research Policy
and Funding. As noted above, one of these recommendations is the
creation of a "capability development" funding stream
to support applicable research and research or local, regional
or national relevance. However, we would caution funding research
just because it is "relevant". It would be intolerable,
for example, if in the RAE research were marked up because it
was deemed to be "useful", or if high quality research
were marked down because it was deemed not to have potential for
application. It is notoriously difficult to assess the potential
utility of much research, and there are ample examples of discoveries,
which proved unremarkable at the time which subsequently had decisive
impact. We see no dichotomy between quality and applicabilityapplication
is often just a question of time, and with the increasing speed
to market of products based on research-led innovation this time
is shortening. We are committed to ensuring that the RAE "sees"
the quality in all research types of researchirrespective
of its nature or purpose.
Given the level of resources allocated by OST (including
the contribution to training of researchers and costs of access
to international and national facilities)we believe it
is essential that there is a Director General to oversee the coherent
and co-ordinated development of funding policies between and within
the Research Councils. We also believe it is important that there
is someone who can speak with a single voice to Government, and
others, on behalf of the Research Councils as well as listening
to the views of stakeholders.
Increasing the public understanding of science
We consider that public funders of the science and engineering
base have a responsibility to encourage researchers to share their
research with the public, and this encouragement should exist
at all levels within the science and engineering base. However,
we believe that this is most effectively done by reflecting the
particular missions of funders, drawing on the natural leverage
that they have, rather than adopting a one-size-fits-all approach.
We consider it appropriate that the Research Councils have
a range of approaches in this areasome specific initiatives
with ring-fenced funding and other, more systemic approaches.
The Higher Education Funding Council for England considers
dissemination of research to be part of the core mission of all
institutions. We encourage university researchers to disseminate
their work not only to their peers in reviewed publications, but
also to the general public more generally. We consider that by
encouraging a more strategic approach to research, the Research
Assessment Exercise (RAE) has increased both the quality of the
research and its dissemination and impact. The Funding Councils
have encouraged 2001 RAE panels to consider dissemination, and
impact outside the discipline, as secondary quality indicators.
Such an approach has been enthusiastically embraced by the education
panel, for instance.
As part of the fundamental review we commissioned two substantial
pieces of work from the Higher Education Policy Unit of the University
of Leeds that provide evidence of increased relative output, greater
growth in national and international collaboration in the UK than
in other countries, increasing interaction within industry, and
greater correlation of industrial and public funding. This indicates
that UK researchers are much more likely to communicate the outputs
of their research. This, of course, is different from targeted
attempts to improve the public understanding of science in specific
areas like GM foods and the human genome, which is the legitimate
role of the Research Councils (and Royal Society) but is powerful
evidence of HEFCE policies contributing to an increasingly outward
looking academic community that is engaged in the problems of
today. In addition, the HEROBC funding stream rewards collaborative
research with business and the dissemination of research results
with a potential for commercial development.
1993 WHITE PAPER
We consider that one of the most significant changes to have occurred
since 1993 is the increasing extent to which research funders,
users and researchers have worked in partnership to achieve common
aims. HEFCE has a unique contribution to make in this regard,
as it funds across the entire research landscape and has access
to information about, and ability to influence, institutional
as well as disciplinary activities. Thus, for example, we established
the Arts and Humanities Research Boardin partnership with
the British Academy, SHEFC, HEFCW and DENI and we have established
a number of joint task groups to address areas of concernfor
instance with the Confederation of British Industry, Royal College
of Veterinary Surgeons and Department of Health. In fact the latter
has led to the creation of a strategic alliance with the Department
of Health that outlines the basis on which the two organisations
will work together to develop efficient and effective policies
to support health-related research.
The partnership with OST, along with the other Funding Councils,
in support of the dual support system, is absolutely key to the
effective development of the research base. In particular we consider
that HEFCE funding has a unique role in sustaining research rigour
and facilitating the "joining up" of research funded
by others. The Science and Engineering Base Co-ordinating Committee
plays an important role in supporting this partnership, recently
enhanced through being joined by the Director of Research and
Development for the Department of Health. Both the first and the
current DGRC have been invited to become members of the HEFCE
board, and there are in addition many other examples of cross-representation
to ensure that research issues across the dual support boundary
are addressed coherently and complementarily.
We consider therefore, that the reorganisation of the Research
Councils, and new management structures have improved the basis
on which public funding for research is provided. However, we
believe that the enhancement of the links between OST and HEFCE
will continue and further augment the efficiency and effectiveness
of the dual support system.
However, we also recognise the importance of the Charitable
sector in support of research activity and, increasing particularly
through the Wellcome Trust in particular, research infrastructure.
This contribution is not only extremely welcome generally, it
is particularly important in, and may in fact in large part be
responsible for, the very high levels of performance of the UK
biomedical science community, a key area to support health care
provision and economic development. We were delighted that by
joining JIF we were able to build on the joint initiative we had
previously established with the Wellcome Trust to fund research
equipment in the life sciences. We consider that the importance
of the charitable sector will grow and we have therefore recently
commissioned a study to map links between HEIs and the charitable
sector in order that best practice can be identified and then
Efficiency and effectiveness of Government-funded research
We believe that the evidence in table 2 below demonstrates
that the provision of public funding for research in the UK is
extremely efficient and effective. The dual support system has
proved extremely resilient, despite the funding strains, and continues
to support plurality, diversity and dynamism. Unfortunately, there
is no mechanism to determine how much more successful the UK could
have been if the system had been better funded, or what additional
value would arise from greater efficiency and effectiveness.
PAPERS PER $ MILLION, CITATIONS PER $ MILLION, AND PAPERS
PER RESEARCHER FOR SELECTED LEADING INDUSTRIALISED NATIONS (1997)
| ||Papers per $ Million
||Rank||Citations per $ Million
||Rank||Papers per Researcher
Source: Katz, 2000taken from OECD, Main
Science and Technology Indicators, OECD Statistics, 1999 and ISI
National Science Indicators.
As part of the Transparency Review announced in the previous
Spending Review White Paper, new costing processes are being piloted
at eight universities with the expectation that an agreed approach
can be rolled out to the sector that will provide institutions
with a much better understanding of their expenditure on different
activities; and cost dynamics, so that the efficiency and effectiveness
of their expenditure will be increased.
However, there is a continued concern about research infrastructure
in relation to our ability to compete in an increasingly global
research base, and this will not be addressed by an increase in
efficiency and effectivenessthis requires additional funding.
We welcome the recent injection of capital funding by the Government
and the Wellcome Trust via the Joint Infrastructure Fund (JIF),
to which the HEFCE also contributes. However, we see a continuing
need for further capital and recurrent support and a need to establish
a proper and sustainable project/infrastructure balance. The announcement
of £1 billion for the years 2002-04 from public funding and
the Wellcome Trust is a very important contribution on the capital
side, but the Funding Councils recurrent funding for these three
years is not yet known.
Another area of concern is the environment for, and experience
of, research trainees, who may be working in less than optimal
conditions. We also believe that financial constraints prevent
the development of an appropriate research base in a number of
significant emerging areas.
As indicated in Table 2 above, the United Kingdom's HE research
base, at a high level of aggregation, is very successful. On many
measures, our performance matches that of the best in the world
in terms of its quality, its impact and its efficiency.
Other evidence we have collected as part of our Fundamental
Review of Research Policy and Funding indicates that the application
of a policy of selectivity over a long period has stimulated a
constructive and coherent management response by institutional
managers, who have become more strategic in their approach to
research management. It has also produced an increase in concentration
of research funding. As a result of these influences, the output
of the most active universities has both increased and improved:
they are delivering more, better research. Since both the volume
and the quality of research have increased at a faster rate than
the funding inputs, there has been a significant increase in efficiency.
The timing of these changes in the productivity of the research
base can be demonstrably linked to the inception of the RAE cycles
and seems, therefore, in large part attributable both to the policy's
funding effects, as Funding Councils and institutional funding
has been targeted to encourage and reward high quality research,
and to better management of resources.
However, we consider that the present system of dual support,
which allows a plurality of decision and funding points and permits
institutions and individual academics to exercise judgements about
what research to pursue, has also been essential in supporting
this change. We believe there has been a powerful combined effect
from the dual effects of selectivity on the one hand and changes
in the structure of the Research Councils which have seen them
become more innovative, focused on more appropriate and coherent
disciplinary groupings, and taking a more strategic approach to
funding which complements that of the Funding Councils.
It is particularly important to build on the HE sector's
success in working alongside industry to produce research that
contributes to the economic development of the country, and to
produce research that is of interest to users and other partners
to enhance the health and social development of the nation.
Evidence we have collected as part of our Fundamental Review
demonstrates that closer correlation between public and commercial
funding in the UK than in the USA, although the average industrial
funding of USA universities is higher (11 per cent compared with
public funds, whilst it is about 8 per cent in UK).
In the UK, income for pure research (from public sources
including Research Councils and charities) and applied research
(from industry and commercial sources) is broadly correlated across
small and large institutions, and this does not change much when
small institutions are excluded (0.88 for all institutions, 0.86
after excluding minor research institutions). It appears, therefore,
that those institutions most successful in attracting research
grants tend also to be those most likely to attract industrial
funding. There is no evidence of a separation of innovation and
application. In the US, income for pure and applied research is
only poorly correlated across small and large institutions.
However, it is also clear from OECD statistics in table 1
that UK companies are not investing enough in their own innovation,
outside the HE sector. The UK corporate spend on non-HE research
in 1997 of 1.2 per cent of GDP, compares unfavourably with that
in Germany (1.6 per cent), France (1.4 per cent) and the USA (2.0
We welcome the recent changes announced by the Chancellor
to promote corporate investment in R&D, particularly by SME's
but consider more needs to be done to increase the innovativeness
of UK companies and their desire to "pull" from the
We consider that this should be a key aim, and is essential
in order to reduce the confusion for academics and industry alike
about the nature and purpose of public support for knowledge transfera
recent HEFCE survey of schemes in this area identified that there
were in excess of 60 publicly funded schemes supporting HEIIndustry
interactions. Many of these schemes are too small and of too short
duration, often seeking to respond to manifestations of problems
rather than the underlying problems.
Longer term, and more substantial support is required in
this area to embed knowledge transfer activities within institutions
as a core activity.
Regional networks and collaborations between institutions
will be an increasingly important feature of the HE landscape
in the future.
All regions present academics with research opportunities,
either because organisations in a region sponsor, or collaborate
in, research activity or because regional social, economic or
other factors may themselves form a topic for research.
However, we believe it is erroneous to suggest that there
is a dichotomy between research of international quality and regional
relevance. We do not believe that there is any inherent conflict
between developing excellent research and engaging with the regional
agenda. Rather that there are dangers that research can become
parochial and inward looking if it is not linked to the wider
research effort. In addition, excessive focus on incremental regional
research may mean that transformational national or global developments
are not embraced. The consultancy study we commissioned as part
of our Fundamental Review of Research Policy and Funding confirmed
that researchers do not see regional links as sufficient to sustain
leading edge research capability on their own.
In today's environment global companies can go wherever they
wish to find the research they need: it is international excellence
a region needs to attract such companies. Smaller technology-based
companies also locate themselves where there is a research base
of international excellence, or are spun off by institutions on
the basis of excellent research. Evidence collected for us on
collaboration between HEIs and user communities demonstrates that
institutions also recognise that interaction with local and regional
users makes a vital contribution to their own mission, not merely
because industrial or commercial users have access to resources
which can support fundamental research to international levels
of excellence, but also because a balanced portfolio of fundamental
and applied research is recognised as a necessary goal in itself,
setting up two-way flows of information, people and skills to
the benefit of researchers as well as users.
Thus for global companies, who have the resources and knowledge
to seek out the best research wherever it is found, in the UK
or abroad, the distinction between national and regional locations
is usually unimportant.
There are also user communities, however, for whom locality
is much more important. Companies without a history of engagement
with the HE sector need to be able to commission research of relevance
to their needs from a local institution without being forced to
navigate the complex landscape of research in UK higher education.
Local government and NHS Trusts need to be able to commission
research relevant to local service delivery. This research must
be good enough to meet the purposes of the users. In addition,
we recognise that there are subjects that are regionally basedlike
health care delivery. This means that we must have a concern for
the accessibility of internationally excellent research to sophisticated
users, but we must also have a concern for the excellence of the
research which is accessible to users with narrower horizons or
less experience of interaction with the HE sector, who are less
able to identify and access the best research or whose problems
may not be demanding enough to engage the attention of the most
One of the principal outputs of the research base is a supply
of trained researchers. These individuals may go on to pursue
academic careers, but increasingly their skills and knowledge
are valued by society more widely, and by industry in particular.
RAE panels have been encouraged to place more emphasis on
assessing the research culture in the 2001 exercise, and in this
context they will consider factors related to postgraduate training.
However, we consider that research training is a key indicator
of sustainability and therefore warrants more explicit recognition
in the assessment process. We will therefore be recommending as
part of our Fundamental Review of Research Funding and Policy
that research training be the subject of an explicit, but linked,
assessment process involving minimum standards agreed with the
Research Councils, Industry, Charities and others.
A different issue as regards postgraduate research training
is the number of PhDs being produced. We consider that an advanced
modern society needs a significant number of students with higher
degrees. As an indicator of R&D capacity the number of PhD
graduates is particularly important. Such graduates are needed
to underpin teaching in universities and colleges, particularly
for third year work at bachelors level and for postgraduate programmes.
They are also, of course, needed to carry out and develop research
in universities, industry and the wider economy. Most importantly,
it is from PhD students that the next generation of academic staff
Taking 1997-98 as the last year of fully compiled statistics,
the UK produced 258,800 first degree graduates and 11,000 doctorates.
There were 54,000 other higher degrees awarded. On average there
are 4.2 PhD's produced for every 100 first degree graduates. This
is well over the 1 per cent we estimate is needed for replenishment
of the academic profession, although the general appeal of academic
salaries and conditions of service now causes growing concern.
But for some disciplines, which compete head on with outside professions,
there is a serious shortfall of research trained university and
college teachers. We have identified a significant number of subjectssome
with significant student demand at first degree levelwith
hardly any PhD output at all.
We consider that the UK science and engineering base is performing
well on a global basisin addition international collaboration
However, the global research base is becoming increasingly
competitive; globalisation is shifting the headquarters of previously
UK domiciled companies to other countries; and UK industry invests
a lower proportion of its income on in-house research than industry
in most other OECD countries, thus reducing its ability to "pull"
from the research base. And, despite the dramatic increase in
recent years, there is still some way to go before knowledge transfer
activities are embedded in all HEIs at an appropriate level.
There are also structural problems to be addressed. In particular,
an appropriate balance needs to be established between expenditure
on projects and on the research infrastructure; and issues arising
from human resources issues need to be addressed, particularly
pay, career development and equal opportunities.
There is therefore no basis for complacency.
17 June 2000
Higher education R&D expenditures in 1997 in $ dollar PPP. Back
Number of citations per paper from ISI National Science Indicators. Back
Number of papers per researcher, OECD sources. Back