Select Committee on Science and Technology Second Report


Dual support system

5. Government funding for UK higher education research is channelled through a system of dual support. Project funding for scientific research comes from the Office of Science and Technology's Science Budget, through the six grant-awarding Research Councils.[1] Their combined budget for 2001-02 is just under £1.5 billion, of which around £600 million funds research within universities.[2] This is essentially responsive funding for which researchers make application to one of the Councils. Projects are also funded by other Government Departments, industry, charities and the EU. Staff and most infrastructure and equipment costs are provided by the Higher Education Funding Councils, from the budgets of the DfES and the devolved administrations.

6. Arts and humanities research project funding is available from the Arts and Humanities Research Board (around £50 million annually), which is largely funded by the Funding Councils and the British Academy. Consideration is now being given to awarding the AHRB Research Council status.[3]

Higher Education Funding Councils

7. While the Research Councils fund discrete research projects in higher education (HE) institutions, public funds for general teaching and research activities in universities and colleges in England are distributed by the Higher Education Funding Council for England (HEFCE). Its total budget for 2001-02 was £4,757 million, comprising £3,162 million for teaching, £888 million for research, £627 million for 'special funding' (a wide range of initiatives, including money for infrastructure) and £80 million for university staff development.[4] Each university is funded through an annual block grant comprised of teaching and research elements, but is free to allocate this grant between these functions as it wishes. The teaching element is based on the number of students, the course and the nature of the institution. Although teaching quality is assessed, the results do not determine the levels of funding.[5]

8. Most of HEFCE's research budget - £868 million in 2001-02 out of a total of £888 million - has been allocated as quality-related research (QR) funding, which is informed by the Research Assessment Exercise (RAE). The remaining £20 million has been spent as generic research (GR) funding, which has been awarded to institutions on the basis of their success in attracting external research funding. It was announced in March 2002 that GR funding would be scrapped and the QR stream increased by the same amount.[6]

9. The 'new' universities (mostly former polytechnics) have been able to access additional research funding to build up their research capability. Between 1992 and 1997, new universities in England could apply for HEFCE funding from an annual £16 million funding stream called DevR (development money for research). This was replaced in 1998 with CollR, which offered the same amount to encourage "collaboration as a way of developing research potential".[7] 2001-02 is the last academic year for which CollR is available.

10. While the OST and the Research Councils have a UK-wide remit, HE is a devolved responsibility. The Scottish Higher Education Funding Council (SHEFC) had a £116 million budget in 2001-02 for quality-related research funding. In Wales, the Higher Education Council for Wales (HEFCW) had a quality-related research budget of £46 million and the Department for Education and Learning for Northern Ireland (DELNI) spent £24 million based on the RAE. Scotland also had a Research Development Grant, amounting to £18.5 million, to address its strategic priorities for research. Wales had a Contract Research (CR) fund of £1.5 million similar to HEFCE's GR funding.

11. The Funding Councils' research funding is intended to provide for the research infrastructure in higher education institutions, to cover a significant volume of the indirect overhead costs of basic research and to contribute to the fixed costs of research (staff, equipment, libraries etc). Research Council funding is intended to provide for direct project costs and to contribute to indirect project costs.[8] Over the years, a marked imbalance has arisen between the two streams. Research Council funding has increased disproportionately to HE funding, and funding from other sources (such as charities, industry and the EU) has increased substantially in recent years particularly in the medical and biosciences. Charities funded almost £500 million worth of research in UK universities in 1999-2000, but, with the exception of the Wellcome Trust, made little contribution to indirect research costs.[9] Between 1993-94 and 1999-2000, project funding to universities from all sources increased by 52%; research funding from the Higher Education Funding Councils increased by only 25%.[10]

Capital infrastructure

12. Over many years there has been insufficient capital spending on universities' research infrastructure. The 1997 Dearing Report concluded that -

"The resources must be found to enable the UK to maintain its place as one of the world's major research centres. Without it, our universities will no longer be able to attract funding from industry or international institutions on the scale they have in the past".[11]

Our predecessor Committee agreed, concluding that -

     "We are convinced that there is still a real and urgent need for the Government to provide additional resources to resolve the immediate crisis in research infrastructure in the UK's universities".[12]

In response to Dearing, in 1998 the Government launched the Joint Infrastructure Fund (JIF), a £750 million partnership between the Wellcome Trust, the OST, and HEFCE. JIF was allocated through a bidding process. The Government replaced JIF with the Science Research Investment Fund (SRIF) in 2001. £1 billion has been made available (£225 million from the Wellcome Trust, £300 million from HEFCE (England only) and £475 million from OST) for 2002-03 and 2003-04.[13] Unlike JIF, SRIF money goes to all institutions that receive QR funding. SRIF is awarded according to QR and total project funding but institutions must provide details of how they will spend the money. As with JIF, institutions must provide at least 25% of the investment costs.

Knowledge transfer

13. There is a third leg to research funding, running alongside the dual support system, which provides support for knowledge transfer. The HEROBC (Higher Education Reach-Out to Business and the Community) fund was created by HEFCE in 1999 and provides £20 million a year until 2001-02.[14] This has now been incorporated into the Higher Education Innovation Fund (HEIF), worth £140 million over three years, which is provided by the OST and HEFCE.

1   The Biotechology and Biological Sciences Research Council (BBSRC), the Engineering and Physical Sciences Research Council (EPSRC), the Economic and Social Research Council (ESRC), the Medical Research Council (MRC), the Natural Environment Research Council (NERC) and the Particle Physics and Astronomy Research Council (PPARC) Back

2   Science Budget: 2001-02 to 2003-04, DTI, November 2000. Back

3   See Minutes of Evidence of the Science and Technology Committee, Wednesday 19 December 2001, HC 459-i, Session 2001-02, Q29 Back

4   HEFCE Report 01/12, Recurrent Grants for 2001-02, March 2001 Back

5   The assessment is undertaken by the Quality Assurance Agency. It awards marks for curriculum design and organisation; teaching, learning and assessment; student progression and achievement; student support and guidance; learning resources; and quality management and enhancement.  Back

6   HEFCE, Report 02/11, Recurrent Grants for 2002-03, March 2002 Back

7   HEFCE, Review of CollR, available via Back

8   Ev 48, para 4. Back

9   Ev 8, para 11 Back

10   Ev 9, para 11 Back

11   National Committee of Inquiry into Higher Education, 1997 Back

12   First Report of the Science and Technology Committee, Session 1997-98, The Implications of the Dearing Report for the Structure and Funding of University Research, HC 303-I, paragraph 35 Back

13   The OST's money is available to Wales (£14 million), Scotland (£44.6 million) and Northern Ireland (£7 million). In addition, SHEFC has set up its own SRIF of £20 million for the same two-year period and HEFCW has set up a £21 million SRIF. See HEFCW Circular W01/18HE, 2001; SHEFC Circular HE/OS/2001 Back

14   HEFCE, Invitation 99/40, June 1999 Back

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Prepared 24 April 2002