Select Committee on Science and Technology Appendices to the Minutes of Evidence


Memorandum submitted by the Scottish Higher Education Funding Council



  1.  Annex 1, attached to this memorandum[5] explains, in broad terms, the methods currently used by SHEFC to fund research and knowledge transfer activities in Scotland's universities and colleges of higher education. The majority of the Council's research funding (about 75 per cent) is currently distributed using a method that draws primarily on the outputs of the Research Assessment Exercise conducted in 1996. About £116 million was allocated in 2001-02 through the Council's RAE-Based Grant.

  2.  The method of distributing funds using the RAE-based method is broadly similar to the methods used by the Higher Education Funding Council for England (HEFCE) and the Higher Education Funding Council for Wales (HEFCW) in their QR funding streams. In other words, the available resources are distributed first between units of allocation (or subject areas) using a number of factors; and secondly, between eligible departments within the units of allocation using indicators of quality and volume drawn mainly from the RAE.

  3.  The main difference between the method of funding used in Scotland and that used in England is that SHEFC uses a Quality factor—derived from the RAE—in the first stage of allocating funds to subject areas. The use of this factor allows the Council to take into account differences in quality among subjects in Scotland. This is particularly important in a small country such as Scotland, where it is more difficult to sustain critical mass at international levels of excellence in all or most of the 68 units of allocation (or subject areas) used in the RAE. The Quality factor therefore allows additional resources to flow to the strongest subject areas in Scotland. There are also some other minor differences in the methods of allocation used by the different UK Funding Councils.

  4.  Although the data from the 1996 RAE has been used primarily to inform funding through the RAE-Based Grant, volume data from the Exercise has also influenced the allocation of funding from the Council's formula-driven Knowledge Transfer Grant (£6 million per annum). The purpose of this funding stream is to promote the acceleration of research and knowledge from the research base to the wider society, particularly where this will achieve enhanced economic, social, educational, healthcare or other benefits. Both quality and volume data from the 1996 RAE have also been used to influence the Council's allocation of funding through the UK-wide Science Research Investment Fund for 2002-03 and 2003-04 (£65 million) and a one-year SHEFC Research Investment Fund introduced for 2001-02 (£10 million).


  5.  The Council has recently completed a fundamental review of its policies and methods of funding research. The purpose of the review was to look ahead, and to consider objectives for the future funding of research over the next five to 10 years. There were two stages to the review:

    —  The first stage involved an initial consultation (Research and the Knowledge Age) which discussed the policy objectives for the Council's future funding of research, identified the major challenges, and sought to identify—in outline—a number of possible funding options.

    —  A second stage consultation was published in December 2000. That consultation described the methods that the Council proposes to introduce from 2002-03 to fund research in Scottish higher education institutions (HEIs) and invited views on their introduction and operation.

  6.  The consultation process was deliberately wide-ranging and included discussions with business and industry, higher education institutions, charities, subject associations and Government departments.

  7.  Many of the respondents to the consultations shared the view that the structural arrangements for funding research in the UK—through the dual support system—have contributed significantly to the quality and diversity of the research base. The respondents also argued that the Council should continue to allocate the majority of its funds for research on the basis of assessments of quality carried out at a UK-wide level. As the Committee will probably be aware, evidence from studies commissioned by the Higher Education Funding Council for England, as part of their own review of research funding, have confirmed the beneficial effects of successive assessments of research quality on the quality of the research base in the UK.

  8.  The Council has also noted the view of the Scottish Parliament's Enterprise and Lifelong Learning Committee that "There are advantages in allowing Scottish universities to continue to be able to compete on the UK playing field through the RAE".[6] The Council proposes therefore to continue to allocate the majority of funds for the research infrastructure selectively, and formulaically, through a Main Quality Research Grant (formerly called the RAE-based grant) from 2002-03, using the results of the 2001 RAE. The broad method of distribution will be similar to that for the existing RAE-based Grant. The Council also proposes to establish:

    —  a Research Development Foundation Grant to support new, emerging and developing areas of research. This will be focused on those departments that have not yet achieved recognition through the RAE but which have evidence of purchaser demand for their research. The distribution of funding through this grant will articulate with the Main Quality Research Grant through the method of allocation and will, therefore, be influenced by the outputs from the 2001 RAE;

    —  a new Strategic Research Development Grant will also be established. This will be a non-formulaic grant scheme that should enable the Council to address strategic priorities, particularly those that might emerge from the recently published Science Strategy for Scotland. (This grant scheme will replace the Council's existing Research Development Grant).

  9.  In addition, SHEFC will also maintain a UK Activity Funding stream. The purpose of this funding is to provide HEIs in Scotland with access to UK funding activities—such as to the Arts and Humanities Research Board—where it is recognised that participation in such activities is important to maintaining the national and international competitiveness of the Scottish research base.


  10.  In the SHEFC review of research policy and funding, the Council highlighted the possible resource consequences of continuing increases in the volume of high quality research through the Research Assessment Exercise. And set out priorities—openly, transparently and realistically—for addressing these in ways that are intended to ensure that Scotland can continue to support an internationally competitive research base in a sustainable way over the next five to 10 years. In particular, the Council indicated that its priority would be to seek to maintain average levels of funding for the highest rated research.

  11.  As the Committee will be aware, the results of the 2001 RAE have shown a significant increase in the proportion (and volume) of staff in the highest rating bands. In Scotland, 85 per cent of all academic staff submitted for assessment in Scotland are now in departments rated 4 and above (compared to 57 per cent in the 1996 RAE), and nearly 50 per cent of all staff are located in 5 and 5* departments (21 per cent in 1996). Among the particularly strong science and technology subjects in Scotland with significant number of researchers that are internationally competitive are:

    —  Biological Sciences (383 staff)

    —  Hospital-based Clinical Subjects (254 staff)

    —  Clinical laboratory Sciences (142 staff)

    —  Electrical and Electronic Engineering (136 staff)

    —  Applied Mathematics (101 staff)

    —  Veterinary Science (160 staff)

  12.  However, the significant improvement in quality ratings now presents the Council with difficult choices about funding. Within existing levels of resource, it will not be possible to maintain funding for the highest rated departments and continue to fund formulaically through the Main Quality Research Grant all departments in the 3a and 3b rating bands. The Council has been asked to provide the Scottish Executive Minister for Enterprise and Lifelong Learning with advice on research funding and met on 11 January 2002 to consider a number of funding options. The Council's confidential advice will be submitted to the Minister shortly. Decisions on research funding for 2002-03 will be announced by SHEFC in its Main Grant Letter to higher education institutions on 20 March 2002.


  13.  Although the Council's review of research policy and funding revealed widespread support for a funding method that continues to allocate the majority of funding for research on the basis of UK-wide assessments of quality, there were nevertheless concerns expressed about the current Research Assessment Exercise. These included concerns that the RAE does not recognise sufficiently the different characteristics of excellence in all types of research—particularly applied research. This view was also put forward by the Scottish Parliament's Enterprise and Lifelong Learning Committee in its report on the Inquiry into the SHEFC reviews of teaching and research funding. In particular, the Committee argued that "...practical outputs from research, such as patents and spin-outs are not as highly valued as, for example, papers in academic journals".

  14.  The Council believes that more evidence is needed about the effects of the Research Assessment Exercise and that some of the concerns expressed may not have fully taken account of the changes made to the 2001 RAE.

  15.  There is now a body of evidence that points to the significant improvement in the quality of research in the UK over the last 15 years, and to the contribution of the RAE to this improvement. Analysis of institutional strategic plans, and evidence commissioned by HEFCE as part of its review of research policy and funding, show that there has been an increase in the strategic management of the research environment in higher education institutions since the introduction of the RAE.

  16.  However, the Council's view is that there is now a need for a more fundamental review of the current Research Assessment Exercise and its relationship to the funding of research in the UK. The high proportion of research that is now rated in the highest rating bands—5 and 5*—could threaten to undermine the original objectives of the Exercise by creating a funding system that will be progressively less selective if the RAE—and the link to funding—simply remains in the present form.

  17.  The Council has agreed therefore that it should take part in a fundamental review of the future mechanisms for assessing research in the UK with its sister funding bodies in the UK in order to ensure that any assessment of research quality meets our long-term needs.

January 2002

5   Not printed. Back

6   This view was expressed by the Enterprise and Lifelong Learning Committee in a report to its Inquirty into the Council's reviews of teaching and research funding. The report was published on 23 October 2001. Back

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