Archive for the Finance Category

The Welsh University Funding Debacle Continues…

Posted in Education, Finance, Politics with tags , , , on February 24, 2015 by telescoper

Although I no longer work in Wales, I still try to keep up with developments in the Welsh Higher Education sector as they might affect friends and former colleagues who do. I noticed yet another news item on the BBC a week or so ago as a kind of update to another one published a few years ago about the effect of the Welsh Government’s policy of giving Welsh students bursaries to study at English universities. The gist of the argument is that:

For every Welsh student that goes to university across the border the fee subsidy costs the Welsh government around £4,500.

It means this year’s 7,370 first-year students from Wales who study in other parts of the UK could take more than £33m with them. Including last year’s students, the total figure is over £50m.

According to the latest news story on this, the initial estimate of £50M estimate grew first to £77M and is now put at a figure closer to £90M.

I did in fact make exactly the same point about five years ago on this blog, when former Welsh Education Minister Leighton Andrews announced that students domiciled in Wales would be protected from then (then) impending tuition fee rises by a new system of grants. In effect the Welsh Assembly Government would pick up the tab for Welsh students; they would still have to pay the existing fee level of £3290 per annum, but the WAG would pay the extra £6K. I wrote in May 2010:

This is good news for the students of course, but the grants will be available to Welsh students not just for Welsh universities but wherever they choose to study. Since about 16,000 Welsh students are currently at university in England, this means that the WAG is handing over a great big chunk (at least 16,000 × £3000 = £48 million) of its hard-earned budget straight back to England. It’s a very strange thing to do when the WAG is constantly complaining that the Barnett formula doesn’t give them enough money in the first place.

What’s more, the Welsh Assembly grants for Welsh students will be paid for by top-slicing the teaching grants that HECFW makes to Welsh universities. So further funding cuts for universities in Wales are going to be imposed precisely in order to subsidise English universities. This is hardly in the spirit of devolution either!

English students wanting to study in Wales will have to pay full whack, but will be paying to attend universities whose overall level of state funding is even lower than in England (at least for STEM subjects whose subsidy is protected in England). Currently about 25,000 English students study in Wales compared with the 16,000 Welsh students who study in England. If the new measures go ahead I can see fewer English students coming to Wales, and more Welsh students going to England. This will have deeply damaging consequences for the Welsh Higher Education system.

It’s very surprising that the Welsh Nationalists, Plaid Cymru, who form part of the governing coalition in the Welsh Assembly, have gone along with this strange move. It’s good for Welsh students, but not good for Welsh universities. I would have thought that the best plan for Welsh students would be to keep up the bursaries but apply them only for study in Wales. That way both students and institutions will benefit and the Welsh Assembly’s budget will actually be spent in Wales, which is surely what is supposed to happen…

Well, the changes did go ahead, and now the consequences are becoming clearer. The Chief Executive of Welsh university funding agency HEFCW, Dr David Blaney, is quoted as saying

“…in England, English students have to get a loan, so the top universities there have £9,000 coming from each student and also funding from the funding council.

In Wales, a lot of the funding council funding is now spent on the tuition fee grant and that means there’s less money available to invest in the Welsh sector than is the case in England,” he told BBC Wales in an exclusive interview.”

This also mirrors a concern I’ve also discussed in a blog post, which is that the Welsh Government policy might actually increase the number of Welsh students deciding to study in England, while also decreasing the number of other students deciding to study in Wales. Why would this happen? Well, it’s because, at least in STEM subjects, the tuition fee paid in England attracts additional central funding from HEFCE. This additional resource is nowhere near as much as it should be, but is still better than in Wales. Indeed it was precisely by cutting the central teaching grant that the Welsh Government was able to fund its bursaries in the first place. So why should an English student decide to forego additional government support by choosing to study in Wales, and why should a Welsh student decide to do likewise by not going to England?

I really hope the Welsh Government decides to change its policy, though whether an imminent General Election makes that more or less likely is hard to say.

That Was The REF That Was..

Posted in Finance, Science Politics with tags , , , , , , on December 18, 2014 by telescoper

I feel obliged to comment on the results of the 2014 Research Excellence Framework (REF) that were announced today. Actually, I knew about them yesterday but the news was under embargo until one minute past midnight by which time I was tucked up in bed.

The results for the two Units of Assessment relevant to the School of Mathematical and Physical Sciences are available online here for Mathematical Sciences and here for Physics and Astronomy.

To give some background: the overall REF score for a Department is obtained by adding three different components: outputs (quality of research papers); impact (referrring to the impact beyond academia); and environment (which measures such things as grant income, numbers of PhD students and general infrastructure). These are weighted at 65%, 20% and 15% respectively.

Scores are assigned to these categories, e.g. for submitted outputs (usually four per staff member) on a scale of 4* (world-leading), 3* (internationally excellent), 2* (internationally recognised), 1* (nationally recognised) and unclassified and impact on a scale 4* (outstanding), 3* (very considerable), 2* (considerable), 1* (recognised but modest) and unclassified. Impact cases had to be submitted based on the number of staff submitted: two up to 15 staff, three between 15 and 25 and increasing in a like manner with increasing numbers.

The REF will control the allocation of funding in a manner yet to be decided in detail, but it is generally thought that anything scoring 2* or less will attract no funding (so the phrase “internationally recognised” really means “worthless” in the REF, as does “considerable” when applied to impact). It is also thought likely that funding will be heavily weighted towards 4* , perhaps with a ratio of 9:1 between 4* and 3*.

We knew that this REF would be difficult for the School and our fears were born out for both the Department of Mathematics or the Department of Physics and Astronomy because both departments grew considerably (by about 50%) during the course of 2013, largely in response to increased student numbers. New staff can bring outputs from elsewhere, but not impact. The research underpinning the impact has to have been done by staff working in the institution in question. And therein lies the rub for Sussex…

To take the Department of Physics and Astronomy, as an example, last year we increased staff numbers from about 23 to about 38. But the 15 new staff members could not bring any impact with them. Lacking sufficient impact cases to submit more, we were obliged to restrict our submission to fewer than 25. To make matters worse our impact cases were not graded very highly, with only 13.3% of the submission graded 4* and 13.4% graded 3*.

The outputs from Physics & Astronomy at Sussex were very good, with 93% graded 3* or 4*. That’s a higher fraction than Oxford, Cambridge, Imperial College and UCL in fact, and with a Grade Point Average of 3.10. Most other departments also submitted very good outputs – not surprisingly because the UK is actually pretty good at Physics – so the output scores are very highly bunched and a small difference in GPA means a large number of places in the rankings. The impact scores, however, have a much wider dispersion, with the result that despite the relatively small percentage contribution they have a large effect on overall rankings. As a consequence, overall, Sussex Physics & Astronomy slipped down from 14th in the RAE to 34th place in the REF (based on a Grade Point Average). Disappointing to say the least, but we’re not the only fallers. In the 2008 RAE the top-rated physics department was Lancaster; this time round they are 27th.

I now find myself in a situation eerily reminiscent of that I found myself facing in Cardiff after the 2008 Research Assessment Exercise, the forerunner of the REF. Having been through that experience I’m a hardened to disappointments and at least can take heart from Cardiff’s performance this time round. Spirits were very low there after the RAE, but a thorough post-mortem, astute investment in new research areas, and determined preparations for this REF have paid dividends: they have climbed to 6th place this time round. That gives me the chance not only to congratulate my former colleagues there for their excellent result but also to use them as an example for what we at Sussex have to do for next time. An even more remarkable success story is Strathclyde, 34th in the last RAE and now top of the REF table. Congratulations to them too!

Fortunately our strategy is already in hand. The new staff have already started working towards the next REF (widely thought to be likely to happen in 2020) and we are about to start a brand new research activity in experimental physics next year. We will be in a much better position to generate research impact as we diversify our portfolio so that it is not as strongly dominated by “blue skies” research, such as particle physics and astronomy, for which it is much harder to demonstrate economic impact.

I was fully aware of the challenges facing Physics & Astronomy at Sussex when I moved here in February 2013, but with the REF submission made later the same year there was little I could do to alter the situation. Fortunately the University of Sussex management realises that we have to play a long game in Physics and has been very supportive of our continued strategic growth. The result of the 2014 REF result is a setback but it does demonstrate that the stategy we have already embarked upon is the right one.

Roll on 2020!

STFC Consolidated Grants Review

Posted in Finance, Science Politics with tags , , , , , , , , on October 28, 2014 by telescoper

It’s been quite a while since I last put my community service hat on while writing a blog post, but here’s an opportunity. Last week the Science and Technology Facilities Council (STFC) published a Review of the Implementation of Consolidated Grants, which can be found in its entirety here (PDF). I encourage all concerned to read it.

Once upon a time I served on the Astronomy Grants Panel whose job it was to make recommendations on funding for Astronomy through the Consolidated Grant Scheme, though this review covers the implementation across the entire STFC remit, including Nuclear Physics, Particle Physics (Theory), Particle Physics (Experiment) and Astronomy (which includes solar-terrestrial physics and space science). It’s quite interesting to see differences in how the scheme has been implemented across these various disciplines, but I’ll just include here a couple of comments on the Astronomy side of things.

First, here is a table showing the number of academic staff for whom support was requested over the three years for which the consolidated grant system has been in existence (2011, 2012 and 2013 for rounds 1, 2 and 3 respectively).  You can see that the overall success rate was slightly better in round 3, possibly due to applicants learning more about the process over the cycle, but otherwise the outcomes seem reasonably consistent:

STFC_Con1

The last three rows of this table  on the other hand show quite clearly the impact of the “flat cash” settlement for STFC science funding on Postdoctoral Research Assistant (PDRA) support:
STFC_Con

Constant cash means ongoing cuts in real terms; there were 11.6% fewer Astronomy PDRAs supported in 2013 than in 2011. Job prospects for the next generation of astronomers continue to dwindle…

Any other comments, either on these tables or on the report as a whole, are welcome through the comments box.

 

Higher Education Funding: A Modest Proposal

Posted in Education, Finance, Politics with tags , , , , , on August 8, 2014 by telescoper

With next year’s general election already looming there are signs that the higher education funding system is likely to be a hot topic. The Conservatives, for example, are reportedly considering removing the cap on tuition fees (currently set at £9K per annum) while Labour is talking about reducing the figure to £6K. Labour’s idea is likely to prove popular among potential students, it will result in a reduction of fee income to English universities of a third, potentially leading to wholesale redundancies and closures unless it is offset by an increased contribution from the taxpayer to offset this cut. Responsibility for higher education funding in Wales, Scotland and Northern Ireland is devolved, so Westminster policy does not apply directly there although the knock-on effect of changes in England would be considerable given the number of students who choose to study away from home.

The backdrop to these suggested policy changes is the obvious fact that the current system is unsustainable. Although there has not been a marked reduction in numbers of students applying to university since the introduction of tuition fees, it has become increasingly clear that the system of loans and deferred fees is actually costing the Exchequer more in terms of short-term borrowing than the old system. Moreover, there is a growing realization that the fraction of this cost that will actually be recouped in future is going to be much smaller than its advocates would like to admit. Recent estimates, likely to be revised upwards, suggest that 45% of student loans will never be repaid.

On top of this there is the problem that the so-called “elite” universities have not succeeded in “widening participation” (as the phrase goes). Oxford and Cambridge both continue to take about 40% of their pupils from private schools; many other institutions. My own institution, the University of Sussex, takes about 86% of its intake from state schools, which is about the average across the sector.

Although only a small fraction of pupils (about 7%) attend (private) independent schools, about 65% of those go on to University; only 24% from the state sector do. In my opinion, not all universities take widening participation seriously but even if they do (like we do at Sussex) it is difficult for higher education institutions to repair the divisions that arise much earlier in the education system.

The average fee per term for a day pupil at a private school in the UK is about £3400; this rises to about £7800 per term for boarding schools. Since there are three school terms per year this means that the average cost per year for day pupils is £10,200, well above the £9000 per year maximum fee for university tuition. That says a lot for how poorly funded UK universities really are, even with increased tuition fees, especially in STEM subjects which require expensive laboratories and other facilities. Moreover, private school fees are payable upfront while tuition fees for students in higher education are funded by heavily subsidized loans which do not need to be repaid until the student is earning more than a certain minimum salary (currently £21K pa).

When funding is tight it is particularly important that it should be targetted where it is needed most. For me that means to encourage more students from state schools to go to university. The principle I’d adopt here (and indeed in many other contexts) is encapsulated in the phrase “to each according to their need, from each according to their ability”.

Parents who have decided to send their offspring to private schools have, in my view, already demonstrated that they can afford to contribute to their education at a level considerably higher than the current tuition fee for university students. In such cases there is no need for a means test to determine whether they need support from the taxpayer; they have already done that calculation for themselves.

My proposal, therefore, is that students whose parents have decided to take their children out of the state school system should be deemed to be ineligible for state support for higher education. They should therefore pay the full fees upfront. I think there’s a case even for making such students pay for the full cost of their education which is not the £9K fee payable by Home/EU but the much higher fee charged to students from outside the EU, which is currently £17K at the University of Sussex. The money saved in this way should be used to provide better fee waivers and and maintenance grants for students from the state school system (on a means-tested basis). This could be accomplished by, e.g., a system of vouchers available to students from state schools in England; the rest of the UK could adopt a similar system if they wish. This would also be a step towards reducing the incentive for families to increase social divisions by taking their children out of the state system.

As well as driving greater equality and stimulating social mobility, my suggestion would also correct a number of anomalies in the existing system. One is that students attending English universities who went to Schools elsewhere in Europe (including Wales, Scotland and Northern Ireland) are entitled to the same financial support as English students. However, most students from outside the UK will return home after graduation and there is no effective means of making them pay back their fees and loans because these are currently recovered through the UK tax system. In effect, therefore, the taxpayer is providing free higher education for these students and it is one of the reason why the default rate on student loans is likely to be very high. In my proposal this loophole would be sealed; unless a student went to an English state school they would not have the means to access HEFCE support.

I have heard it said that this idea would remove choice. I don’t agree. Parents will still have the choice of sending their sons and daughters to private school if they wish. What it will do is remove part of the incentive for them to do that.

Across the UK over 80% of university students are from state schools, so the measure I suggest will not on its own solve the University funding crisis. On the other hand, I think it would at least be fairer than the current system. On the other hand, I’m not sure fairness counts for very much these days…

Changing the framework for industrial policy

Posted in Finance, Science Politics with tags , , , on June 11, 2014 by telescoper

Here’s another one of the showcases of research from Sussex University. This one features Professor Mariana Mazzucato who debunks the myth of the state as a bureaucratic nanny that stifles creativity in industry, and instead recognizes the vital role of state-led investment in driving innovation and shaping and creating new markets from the internet to biotech to clean tech.

For what it’s worth this gives me an excuse to a view that I’ve expressed before that “commercially useful” research should not be funded by the taxpayer through research grants. If it’s going to pay off in the short term it should be funded by private investors or venture capitalists of some sort. Dragon’s Den, even. When the public purse is so heavily constrained, it should only be asked to fund those things that can’t in practice be funded any other way. That means long-term, speculative, curiosity driven research. You know, things like science…

This is pretty much the opposite of what the Treasury thinks. It wants to concentrate public funds in projects that can demonstrate immediate commercial potential. Taxpayer’s money used in this way ends up in the pockets of entrepreneurs if the research succeeds and, if it doesn’t, the grant will have been wasted if the research does not have any long-term fundamental significance. My proposal, therefore, is to phase out research grants for groups that want to concentrate on commercially motivated research and replace them with research loans. If the claims they make to secure the advance are justified they should have no problem repaying it from the profits they make from patent income or other forms of exploitation. If not, then they will have to pay back the loan from their own funds (as well as being exposed as bullshit merchants). In the current economic situation the loans could be made at very low interest rates and still save a huge amount of the current research budget for higher education. Indeed after a few years – suggest the loans should be repayable in 3-5 years, it would be self-financing. I think a large fraction of research in the Applied Sciences and Engineering should be funded in this way.

The money saved by replacing grants to commercially driven research groups with loans could be re-invested in those areas where public investment is really needed, such as pure science and medicine. Here grants are needed because the motivation for the research is different. Much of it does, in fact, lead to commercial spin-offs, but that is accidental and likely to appear only in the very long term. The real motivation of doing this kind of research is to enrich the knowledge base of the UK and the world in general. In other words, it’s for the public good. Remember that?

If it’s fair to ask students to contribute to their teaching, it’s fair to ask commercial companies to pay for the research that they exploit. Just as student grants should be re-introduced for certain disciplines, so should research loans be introduced for others. You know it makes sense.

However, if you want to tell me why it doesn’t, via the comments box, please feel free!

Your Chance to Influence UK Government Investment in Science

Posted in Education, Finance, Politics, Science Politics with tags , , , , on May 4, 2014 by telescoper

A recent piece of bloggery by esteemed Professor Jon Butterworth 0f the Grauniad reminded me that an important government consultation has just opened. In fact it opened on 25th April, but I neglected to post about it then as I was on my Easter break. I’m now passing it on to you via this blog, by way of a sort of community service.

Anyway, the consultation, which is being adminstered through the Department of Business Innovation and Skills, can be found here; there’s a large (110 page) document as well as information on how to respond. Basically about £5.8 billion in capital expenditure has been set aside for science research, and the government is asking how it should be divvied up. Such funds could be used to build big ticket items such as new telescopes, particle accelerators, lasers or other infrastructure including new laboratory buildings. It has to be capital, though, which means it can’t be used on staffing for such facilities that are funded. You might argue that this is a weakness (because ultimately science is done by people not by facilities) but, on the other hand if the government stumps up additional money for capital that might free up funds for more people to be employed.

Anyway, do read the consultation document and submit your responses. You could do a lot worse than reading Jon Butterworth’s commentary on it too. The deadline is some way off, July 4th to be exact, but this is very important so you should all get your thinking caps on right away.

One thing I’ll be including in my response concerns funding for university laboratories. The funding body responsible for English universities, the Higher Education Funding Council for England (HEFCE), is currently underfunding STEM subjects across the country. I’ve blogged about this before so I won’t repeat the argument in detail, but severe reductions in the unit of resource applied to laboratory-based subjects have meant that the new tuition fee regime does not provide anything like sufficient income to cover the costs of, say, physics undergraduate teaching. All students pay a flat-rate fee of £9K across all disciplines (including arts, humanities and science subjects) but science subjects only get £1.4K per student on top of this. The withdrawal of capital allowances has also made it very difficult for universities to invest in teaching laboratory space.

The cost of educating a physics student is actually about twice that of educating a student of, say, English, so this differential acts as a deterrent for universities to expand  STEM disciplines. Shortage of teaching laboratory space is a major factor limiting the intake of students in these areas, whereas other disciplines are able to grow without restriction.

So my vote will go for a sizeable chunk of the £5.8 billion capital  to be allocated to improving, refurbishing, expanding and building new teaching laboratories across all STEM disciplines to train the next generation of scientists and engineers that will be vital to sustain the UK’s economic recovery.

I’d be interested in people’s views about other aspects of the consultation (e.g. what big new facilities should be prioritized). Please therefore feel free to use the comment box, but not as a substitute for participating in the actual consultation.

Over to you!

 

A Note to the Physics REF Panel

Posted in Education, Finance, Science Politics with tags , , , on April 23, 2014 by telescoper

I’ve just been skimming through an interesting report about the strength of UK physics research. One of the conclusions of said document is that UK physics research is the best in the world in terms of quality.

I couldn’t resist a brief post to point this out to any members of the Physics panel involved in the 2014 Research Excellence Framework. My motivation for doing this is that the Physics panel of the 2008 Research Assessment Exercise evidently came to the conclusion that UK physics research wasn’t very good at all, awarding a very much lower fraction of 4* (world-leading) grades than many other disciplines, including chemistry. I’ve never understood why the Panel arrived at such a low opinion of its own discipline, but there you go..

Physics departments across the country have fought very hard to recover from the financial and reputational damage inflicted by the 2008 RAE panel’s judgement. Let’s just hope there isn’t another unwarranted slap in the face in store when the 2014 results are announced later this year…

 

UPDATE: I’m grateful to Paul Crowther for pointing out a surprising fact based on a talk given by the Chairman of the Physics RAE Panel in 2008, Sir John Pendry. Here are the slides in full, but the pertinent fact is the distribution of 4*, 3* and 2* grades across disciplines shown in this table:

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You can see that they are in fact broadly, similar across disciplines. However, what is clear is that the highest scoring departments in Chemistry did much better than the highest-scoring in Physics; for example top of the table for Physics was Lancaster with 25% of its outputs graded 4* while top in Chemistry was Cambridge with 40%. Is it really justifiable that the top physics departments were so much worse than the top chemistry departments? Suspicion remains that the Physics scores were downgraded systematically to produce the uncannily similar profiles shown in the table. Since all the RAE documents have been shredded, we’ll never know whether that happened or not…

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