APPENDIX 72
Memorandum from Universities UK
INTRODUCTION
1. Universities UK is pleased to be able
to submit evidence to the Science and Technology Committee and
aid its inquiry. On the 30 November Diana Warwick wrote to the
Committee Chairman to outline Universities UK's initial views
on this issue in the light of the announcement of the proposed
closure of the Chemistry department at the University of Exeter.
We hope that this letter was helpful in informing the session
held with the Science Minister, Lord Sainsbury, on this matter.
This written memorandum reiterates and builds upon the key points
made in that letter.
2. We acknowledge the concerns, expressed
by the Committee and many others, about the closure of Chemistry
departments within the HE sector. Universities UK's membership
is currently looking at how we can explore further the implications
of such closures at a local, regional and national level, and
have been discussing with Government and the Funding Councils
the underlying problems and possible measures that may need to
be introduced to address them.
3. The reasons for such closures are complex
and vary from case to case. However, we would make the following
broad points:
— Funding for both teaching and research
in English universities is currently inadequate. In general, both
are loss-making activities for universities. This leaves Vice-Chancellors
with little room for manoeuvre and especially vulnerable to changes
in the allocation methodology or fluctuations in student demand
for certain subjects.
— The Government's stated policy to
further concentrate research funds in top-rated departments is
misguided. We warned in 2001 that it could have an adverse impact
at the level of individual subject provision, and believe that
our predictions have been proved accurate. Our fear is that the
impacts of any further concentration of research funds may prove
irreversible. The Government should reconsider the policy of concentrating
research funding further before further damage is done to the
strength of the research base.
— While we understand that the Committee
has a particular interest in Science and Technology subjects,
we note that the funding constraints and policy decisions outlined
above are likely to impact on a wide range of subjects. We do
not believe that intervention on behalf of, for example, Chemistry
would be sensible if it meant removing funding from other subjects
or other parts of the system. A large proportion of teaching and
research in HE is not science and technology based, though is
just as vital to the UK as a whole. Indeed, the letter from the
Secretary of State for Education to HEFCE has asked for views
on minority languages and vocationally oriented courses of particular
interest to employers in areas of growing importance to the UK
economy, as well as science-technology-engineering-mathematics.
4. Universities UK believe that there is
a need for open and transparent dialogue between the higher education
sector and all relevant parties. In particular, it will be important
to make progress based on robust and relevant evidence. Universities
UK look forward to responding to the Funding Council's proposals.
SUMMARY
5. In December Universities UK wrote to
the then Secretary of State for Education, Charles Clarke, in
response to his letter to the Funding Council outlining the agreed
views of the UUK Main Committee. The key points in this letter
can be summarised as follows:
(i) There is a real concern that HEFCE
intervention will compromise institutional autonomy and investment
decisions will be distorted.
(ii) Despite improved funding settlements
in recent years, the sector's finances remain finely balanced:
institutions cannot afford to subsidise courses for which there
is insufficient market demand;
(iii) The financial effect of increasing
research concentration also needs to be considered: the combined
impact of low demand and cuts in funding for departments rated
4 has compelled universities to make difficult decisions about
the future of specific departments;
(iv) Uncertainty about the funding impact
of the next RAE is a further constraint on institutions' long
term financial planning;
(v) The underlying problem of variable
demand relates to decisions made by students in schools and greater
priority needs to be given to stimulating interest in national
priority subjects in school. (In some of the examples employers
would have a role in sending a clearer market signal);
(vi) Any assessment of provision in
these subjects in England needs to take account of the position
in other parts of the UK.
6. As we have made clear in previous submissions
to the Committee, Universities UK believes that reasons for decisions
to close a department can be complex and reliant on a number of
factors. Departments rated 5 or 5* which are also recruiting students
may remain secure, but when one or other side of this equation
is changed, a department may become vulnerable. In some cases
the combined impact of falling student rolls and cuts in university
research funding can leave Vice-Chancellors with little choice
but to close a department.
7. Much may be achieved by stimulating student
demand, particularly by encouraging potential scientists during
the 14 to 19 phase. The problems with demand in Science Engineering
and Technology subjects (SET) were analysed in some depth in Sir
Gareth Roberts' report, SET for Success, and we welcome
the government's move to support many of Sir Gareth's proposals.
We do recognise, however, that this will represent a practical
challenge for schools, and that these are long-term solutions
that will need time to bed down. Meanwhile universities are working
hard to reach out to potential students and there are some notable
example of efforts to encourage participation in science in Universities
UK's 2002 report Social Class and Participation[46].
For example, the University of Ulster runs a programme called
"Step up to Science" which targets school pupils from
the lower social classes who are about to start GNVQ studies in
science subjects.
8. In some cases, falling student demand
does not appear to be a factor. Universities UK believes that
the effects of cuts in funding for departments rated 4 in the
RAE have been deeply damaging. We have welcomed the committee's
support for our view that the concentration of research funds
has gone far enough, and that Government should provide public
funding to sustain research of the level described by the 4 grade,
because of its importance in regional terms, but also because
this is the research which is likely to provide the basis of future
world-class discoveries.
9. Whilst we welcome the substantial additional
funding provided in the last two spending reviews to meet more
of the full economic costs of research councils projects, up to
80%, the pressures on university research departments may well
increase in coming years as HEIs move towards implementing full
economic costing and ensuring that the research base is sustainable
across all activities. For example, as the full costs of EU funded
activities come into focus, research funded through the Framework
Programme (FP) will be potentially unsustainable in the medium
to long term. This will undoubtedly result in a reduction in the
current volume of EU funded research. UK universities will therefore
not be in a position to take advantage of any increase in the
budget under FP7 and risks losing its position as the premier
recipient of EU research funds unless the UK Government is able
to provide support for this at a national level and ensure that
more of the full economic costs is provided by the EU. Failure
to address this problem could result in significant damage to
UK higher education and UK competitiveness as a whole. It is not
unlikely that increased pressure on this front will add to the
vulnerability of some academic departments.
10. If the general financial circumstances
of our universities were healthier, Vice-Chancellors might well
be able to put off, or avert completely departmental closures.
However, there is currently little slack in the system and Vice-Chancellors
may have to make tough decisions in the interests of the survival
of the rest of the institution. We hope that the introduction
of variable fees in 2006 will begin to address at least part of
the problem by reducing the extent to which universities make
a loss for teaching certain subjects. However, there will continue
to be a significant funding gap.
11. We firmly believe that if the Funding
Council does decide to introduce measures to address vulnerable
subjects and courses, they should be supported with additional
funds, and should be sustainable in the long term.
SELECT COMMITTEE
QUESTIONS
The impact of HEFCE's research funding formulae,
as applied to RAE ratings, on the financial viability of university
science departments.
12. The key issue here concerns the rules
for funding QR following the outcome of the 2001 RAE. The results
of the 2001 RAE exceeded expectations, but the failure of the
Government to fund fully the results caused extreme concern to
the academic community. In many cases, Vice-Chancellors had invested
heavily prior to RAE 2001 in the expectation that if they were
successful in raising the quality of research in a department
to a level of national and some international excellence, funding
would follow roughly in proportion to past RAEs. Indeed of the
research submitted at the last RAE, 64% was found to be of national
or international excellence, a rise from 43% at the previous RAE.
This outstanding success of UK research in universities made the
impact of the actual funding decisions following the 2001 RAE
doubly hard to bear.
13. In particular, Universities UK has been
deeply concerned by the cuts in funding to departments rated 4
and below. These changes have had a significant impact the finances
of those institutions affected by the cuts. We know that Professor
Steve Smith has provided you with information which shows that
in the University of Exeter a 4 ranking unit got 55% of the funding
per staff member given to a 5* unit and 66% of the funding for
a 5 in 2001-02, by 2003 that had fallen to 30% of the 5* and 36%
of a 5.
14. Use of the HEFCE funding formula to
manipulate retrospectively is highly damaging to sector and we
remain concerned that the funding outcomes following RAE2008 will
continue to be open to manipulation.
15. Universities UK is therefore concerned
that there is as yet no clarity about the future relationship
between research assessment and funding for RAE2008. If universities
are to sustain their activities and avert closures they must be
able to plan on the basis of some reasonable assumptions about
future levels of income. This issue should really have been considered
as part of the 10-year science and innovation framework given
that this was intended to provide an overarching strategy for
the medium term and allow more for effective planning within the
research base. Universities UK has stated that it is essential
for the funding for the different rankings to be reasonably predictable
so that higher education institutions can invest and plan within
a stable financial framework.
The desirability of increasing the concentration
of research in a small number of university departments, and the
consequences of such a trend;
16. All the evidence suggests that the current
basic research profile of UK universities shows research of international
standards. We are gravely concerned that increasing levels of
selectivity in research funding will damage this. It is critical
that the balance between funding top-rated departments to support
excellence, protecting areas of research excellence across the
sector and the encouragement of new and developing areas of research
is not further distorted through fundamental revision to the allocation
of public funding.
17. As the Committee will be aware, in 2003
Universities UK commissioned a report from Evidence Limited, Funding
Research Diversity[47],
to explore the impact of any further concentration on university
research performance and regional research capacity. The study
aimed to gather evidence to test the assumptions and implications
of the UK government's White Paper proposals for university research
funding. The policy as proposed is not based on any clear evidence
though would change the structure of the research base by concentrating
funding in the largest and most highly rated university units.
18. The Evidence Ltd study was very clear
in its conclusions. It found that firstly there is no evidence
that there is a current problem with performance of the UK research
base that needs to be addressed, either overall or at the level
of the units most likely to see a funding loss. Second, if there
were an emerging problem, then there is no clear evidence that
the UK's research performance would benefit from further concentration
of research funding. Third, there is evidence that research concentration
as proposed would seriously exacerbate existing regional differences
in research capacity and performance. We have included a copy
of this report with the submission.
19. The report specifically looked at the
impact of research concentration on regional research capacity,
which is a key consideration when looking at this issue. If all
regions had similar proportions of four and five graded staff
and units, and similar distributions by subject then policy changes
would be balanced by pro-rata losses and gains. However, this
is not the case and selectivity and concentration will inevitably
favour those regions that already have a relatively high number
and proportion of research excellent staff and units. It therefore
pertains that regions with a relatively high proportion of four
units, and a high proportion of staff in such units, will lose
relatively more of their capacity if funding is reduced for four
graded units. Regions with a high proportion of five units will
make a relative gain if funding is more selectively concentrated
on the highest performing units. For those institutions facing
cuts this will inevitably present difficult choices when considering
which departments are financially sustainable.
20. Universities UK made these arguments
clearly to the Government in our 2004 Spending review submission,
Achieving our vision[48],
which also suggested that removing or reducing funding from departments
graded three and four would have a significant impact on individual
subject areas and would likely damage the teaching mission.
The implications for university science teaching
of changes in the weightings given to science subjects in the
teaching funding formula;
21. The impact on science teaching of recent
changes in the HEFCE formula for allocating resources for teaching
to institutions for science based subjects will vary across the
sector depending on the particular circumstances of that institution
and the way in which resources are allocated internally. Universities
UK believe, however, that there are two additional and more fundamental
issues that need to be considered—the inadequate funding
base for university teaching and learning and the historic basis
upon which the funding is allocated.
22. The inadequate public funding base for
teaching and learning provided for English institutions through
HEFCE remains a major difficulty for the sector. It is well known
that there has been a 40% reduction in the level of unit funding
in the last 10 years alone, and significant damage has been done
by many years of under-funded expansion. As stated in our 2004
Spending Review submission, Transparency Review data demonstrates
that the total overall cost to universities and colleges of delivering
teaching and learning activities is significantly in excess of
the price paid for them by government. This situation was worsened
by HEFCE's recurrent funding allocations for 2003-04, when in
attempting to make provision for the additional costs to institutions
of recruiting and retaining widening participation students, it
chose to top-slice the mainstream teaching grant to increase widening
participation funding. UUK have consistently asked that the additional
costs of widening participation be identified and met by the funding
councils from additional funds provided by government. As UUK
stated in our response to the Government's White Paper[49]
"Mainstream teaching does not cost less because widening
participation costs more". Unfortunately, in a number of
institutions, this policy hit funding for science based subjects
particularly hard.
23. Part of the problem is that the HEFCE
allocation formula is based on a combination of historical assumptions
and annual expenditure data. Any formula for allocating funds
to institutions needs to be informed by a full economic cost model.
A full cost model would, for instance, take into account factors
such as capital depreciation and the need to reinvest in teaching
and learning infrastructure. We therefore welcome the incorporation
of this element into the current review of the funding formula.
24. As we have suggested, if the financial
position of universities was healthier, institutions might be
able to put off or postpone difficult decisions, or, perhaps more
importantly, make decisions based on non-financial criteria. The
most recent financial forecasts for English higher education institutions
provided to HEFCE reveal a continuing level of instability in
the sector's operating base. HEFCE previously estimated that the
sector in aggregate needs an operating surplus of at least 3 to
4% of income per annum to provide a positive cash flow for reinvestment
and to fund future developments. In fact, the operating surplus
for 2002-03 was 1.3% and for 2001-02 was 0.4%. These are average
figures across the sector—large numbers of individual universities
are in a far worse position and will be making business decisions
based on the need to reverse historical deficits.
25. We hope that the introduction of variable
fees in 2006 will begin to address at least part of the problem
by reducing the extent to which universities make a loss for teaching
certain subjects, however, it is essential that income from fees
is truly additional and that the publicly provided unit of funding
is not further eroded.
The optimal balance between teaching and research
provision in universities, giving particular consideration to
the desirability and financial viability of teaching-only science
departments.
26. We do not believe that there is any
such thing as an optimal balance between teaching and research.
Not only would this be impossible to define and prescribe but
also, quite rightly, this differs across institutions depending
on their own institutional priorities and missions. However, Universities
UK has maintained that higher education institutions benefit from
the vital interdependence of teaching and research and that removing
or reducing funding for departments graded four and below will
have a significant impact on individual subject areas. Removal
of research funds is likely to damage the teaching mission, as
staff will lack the necessary resources to maintain their knowledge
at the cutting edge of their discipline.
27. The work of Professor Sir Graham Davies'
Research Forum has been helpful in informing this debate. In their
advice to Ministers[50]
the Forum have suggested that "in each academic department,
(or within each course team), there needs to be appropriate resources,
a reasonable research culture, and sufficient research activity
(broadly defined) to enable such programmes of study to be designed,
led and taught effectively." The Forum go on to suggest that
"It is clear to us that, effectively managed, student learning
can benefit immensely from staff research, and that students not
exposed to staff research in an appropriate environment may be
at a disadvantage as compared to those who are." Universities
UK would support this view.
28. The Forum also suggested that the focus
on research in RAE terms can have a distortionary effect on overall
provision within the sector. ". . . since the RAE is at present
the only mechanism by which basic funding to support research
in departments is delivered, the pressure to be research active
in RAE terms is immense—and distorting of what the sector
overall requires. It is clear, therefore that more imaginative
approaches are needed than those currently available for providing
research resources to underpin teaching at a higher education
level." This conclusion has led the Forum to proposed a funding
model that would provide for a practical level of funding to support
research informed teaching in HEIs with low levels of QR funding.
Universities UK have welcomed the Government's recognition of
the principle that "less research intensive institutions
should be supported in developing a research informed teaching
environment"[51];
however, we are still concerned that the level of investment proposed
falls far short of the investment level that would be needed to
deliver a meaningful impact.
29. In summary UUK believe that a research
culture is integral to teaching at university level. The financial
viability question is, therefore, not about the viability of teaching
only departments, but instead about the level of resource that
would be needed to effectively sustain a research informed environment
across the sector.
The importance of maintaining a regional capacity
in university science teaching and research.
30. Universities UK recognise the vital
importance of science, engineering and technology (SET) to the
UK economy at regional, national and international levels and
the key role that universities play in delivering this. Universities
also engage through a wider range of activities that impact on
quality of life, social inclusion, societal infrastructure and
cultural enrichment. We would therefore accept that there is a
need to ensure a sound, broadly based capacity in teaching and
research across all key areas in order to allow institutions to
respond to current and future demands.
31. It must be remembered, however, that
the role that individual universities will play in sustaining
capacity in university science teaching within a region will differ
significantly across the UK. It, therefore, may not be necessary
to have a chemistry department in every university in the country
and it will not always be true that it is wrong for a university
to close down a department. In addition if a department is closed
within any institution this may not mean that work has completely
ceased in that area. Provision in that discipline may be maintained
within a department of a related disciple. We therefore doubt
that a one-size-fits-all approach to this issue would be helpful—indeed
we are concerned that justifiable public and political concern
about certain subjects, such as chemistry, may lead to policy
makers ignoring problems in other areas, which may be equally
significant in the long term.
32. Evidence suggests that the concentration
of research funding disproportionately affects some regions over
others. We note the Association of University Teachers publication
The Risk to Research in Higher Education in England[52]
that draws attention to the fact that "in some English regions
less than half the assessed research has a secure funding future".
We also note that there are a wide variety of "vulnerable"
subjects (if you take loss of research funds as an indication
of vulnerability), and that it may be difficult to judge the relative
impact of the loss of capacity in certain subjects as compared
to others. Further work in this area is needed, and while Universities
UK is currently considering some of the issues raised by our Evidence
report with a view to adding to this debate, we believe Government
and the Funding Council could also play a role in gathering evidence.
33. Any review should also consider the
articulation between different areas of Government policy. In
particular we are concerned about the the tensions inherent in
policy alignment at national and regional level. This issue is
explored in a recent report by the Higher Education Policy Institute
(HEPI), Research and the Regions[53]
which makes valuable inroads into exploring the regional aspects
of research structure in the UK, and we commend it to the committee.
The report explores the connectivity between university research
activity and economic performance and, on the other hand, the
importance of proximity to the transfer of research findings from
discovery into application. Significantly it examines the impact
of the current research policy environment. A key conclusion of
the report is that it is not always clear that the emergent regional
framework is consciously linked to pre-existing, and nationally
oriented, policies and agents relevant to knowledge growth and
exploitation. This effectively means that the goals and objectives
of regional policy may pull in a different direction to those
at national level, a contradiction that can leave institutions
in a position where they may have to make very difficult decisions.
34. The Universities UK report Patterns
in Higher Education: Fourth Report[54]
also provides a useful overall analysis of the geographical differentiation
and diversity within the sector. Interestingly the report shows
that there is actually little coherence in the concept of the
regions in regard to higher education. Geographical boundaries
between regions of England are such that natural groupings of
institutions are separated, while some areas within several regions
are without any local HE provider. As the report suggests, this
echoes the findings of the HEPI report on Research and the Regions,
which noted that "it remains unclear whether there are regional
dimensions to the suite of university research services that could
be distinguished from the local (city) scale and the wider (national)
scale".
35. We have included a copy of the Patterns
4th report with this evidence as this also provides clear information
on trends in numbers of enrolments in SET subjects and changes
in numbers of institutions making provision for teaching major
subjects (at a national level) in these subjects.
The extent to which the Government should intervene
to ensure continuing provision of subjects of national or regional
importance; and the mechanisms it should use for this purpose
36. As we have stated the reasons behind
departmental closures can be complex and reliant on a number of
factors, which include overall under-funding of teaching and research
and a lack of student demand. Whilst it is still to be seen whether
any of the short term solutions that have been proposed in recent
months would be appropriate, UUK feel that it is far more important
to look at the broader policy and funding context in the medium
to long term to ensure that this is structured so as to give institutions
the sufficient levels of funding and freedom that they need to
respond effectively to needs at regional, national and international
levels.
37. If progress is not made based on robust
and relevant evidence that helps identify the true nature of the
problems and informs longer term sustainable solutions we could
ultimately end up with short term micro management of the research
base in a response to current `hot spots' which, aside from its
own unintended consequences, would distort institutional strategies
and priorities. This would not be desirable.
February 2005
46 Social class and participation (2002), Universities
UK. Back
47
Funding Research Diversity: summary report (2003), Evidence Limited. Back
48
Achieving our vision: Universities UK Spending Review Submission
for England and Northern Ireland (2004), Universities UK. Back
49
Universities UK's response to "The Future of Higher Education"
(2003), Universities UK. Back
50
Advice from the Forum to Ministers can be found at http://www.dfes.gov.uk/hegateway/hereform/heresearchforum/index.cfm Back
51
Secretary of State's grant letter to HEFCE on funding 2005-06
to 2007-08. Back
52
The risk to research in higher education (June 2003), Association
of University Teachers Back
53
Adams and Smith Research and the Regions: an overview of the
distribution of research in UK regions, regional research capacity
and links between strategic research partners (2004), Higher
Education Policy Institute. Back
54
Patterns of higher education institutions in the UK: Fourth
Report (2004), Universities UK & Standing Conference of
Principles. Back
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