Archive for Spending Review

University Research Funding: Will the Axe Fall on QR?

Posted in Finance, Politics, Science Politics with tags , , , on June 25, 2013 by telescoper

As we tremble in anticipation of this week’s Spending Review, which will determine the budgets for Science and Higher Education in 2015/16, there’s fairly strong evidence that Chancellor of the Exchequer George Osborne is looking to save about £11.5 billion of public spending. Given that funding for some Whitehall departments is ring-fenced there is considerable speculation that the axe will fall heavily on the Department for Business, Innovation and Skills (BIS), which seems likely to have to make over £1 billion of savings.

But where will these savings in the BIS budget be made? The government has made noises that it will protect science funding (at least in cash terms) so big cuts in the larger research council budgets appear unlikely. However, Treasury officials have been rumoured as thinking that the Universities are now “awash with money” and should therefore be cut. On the other hand, incoming for University teaching now largely comes from fees so there’s very little of the HEFCE teaching budget to cut further.

Now here’s the rub. The part of HEFCE’s budget that deals with research amounts to about £1.6 billion per year. This, the so-called `QR’ funding, is currently being distributed to Higher Education Institutions according to the outcome of the 2008 Research Assessment Exercise (RAE). This year we
are preparing submissions to a new system called the Research Excellence Framework (REF), which was always intended to be used to distribute QR funding from 2015/16 onwards. But what if the government decides that the only way to balance the books is to remove the QR funding stream entirely?

The 2012 funding letter from HEFCE states explains that it is distributing

£1,558 million for research. The ring-fenced settlement for science and research means that we will be able to maintain overall funding, in cash terms, until 2014-15.

But this does not include the period covered by the spending review, so it’s perfectly possible that the “ring fence” could be removed, or at least re-interpreted as a result of this spending review.

The government could argue that QR and Research Council grant income correlate so well that there’s no need to continue with the current dual funding system, by which the Research Councils provide grants for specific projects and programmes and the higher education funding bodies provide block grant funding to universities via the QR line. It could also argue that the high fees being charged mean that Universities will be able to cope with these cuts without undue hardship. There is a precedent in Wales, where HEFCW will not be awarding any QR funding after the 2013 REF, so why shouldn’t England do the same? They could also get away with the argument that this money isn’t part of the ring fence mentioned above.

The only problem is that so many institutions have spent so much time on preparations for the REF that cancelling the funding associated with it will mean all that effort is wasted. Indeed, the only remaining justification (if it can be called that) for Universities participating in the REF is for position in various league tables, which is rather a lot of expense for something of extremely debatable value.

Anyway, if I were a gambling man (which I am, actually) I don’t think I’d be betting against this outcome. Predictions are very difficult, especially about the future, but this one is mine. And I hope it’s proved wrong…