No matter how tight the specification, tender, or competition, university research is by its very nature unpredictable.
Sometimes that unpredictability means things get funded that go nowhere. Sometimes unpredictability means that researchers will discover, invent, or otherwise push forward human knowledge in unexpected and wonderful ways.
Waste
From this perspective waste is a welcome and inevitable part of the research system as the way to discover what does work is by discovering what doesn’t. The second order challenge is that this system is expensive. The current research deficit for universities, the gap between the cost of doing research and how much funding universities get to do it, is £5.3bn. This deficit is funded by other income making activities like recruiting international students.
The section of UUK’s blueprint that covers research and innovation asks a simple question on whether the UK can maintain its international strengths in research while maintaining a research system that is increasingly not funded by research income. Their answer is a resounding no.
However, the challenge that UUK faces is that it isn’t credible to ask the government to prop up £5.3bn of research activity through research funding. This would be the equivalent of making QR funding in the region of 3.5x larger. Simultaneously, UUK cannot feasibly, or politically, suggest mass efficiencies in university research spending as there is no clear or shared view where waste emerges beyond a vague sense that universities could do fewer projects funded better.
Inevitably, this means that UUK’s diagnosis of the research funding problem is sharp but they astutely avoid suggestions for wholescale reform of the research ecosystem. This is a proposal of more funding, new funding mechanisms, and some trade-offs to crowd in more government and private funding.
TRACing research costs
UUK’s view is that there are serious weaknesses with the way research is funded which emerge from a series of perverse incentives. Firstly, because research is nominally only funded at 80 per cent of its costs (in reality it is much lower) more research can happen in the places that can afford to absorb the largest losses not necessarily the places with the most interesting or even most fundable research.
The growing research deficit is compounded by the fact that the overall quantum of GDP spending on research lags behind the likes of Germany, Japan, and the US, and far behind world leader Israel. If research is expensive to carry out for universities, and if the UK is directly funding less research than its competitors, it is inevitable that the UK will lose its competitive advantage over time. Given that funding for research also impacts the retention and training of researchers it also becomes increasingly difficult to attract talent.
Good risks and bad risks
Financial tightening also encourages risk averse behaviour. The kinds of blue-sky, it might not work but it’s interesting, and ultimately groundbreaking work, is inevitably clouded in uncertainty with a long time horizon to realise any benefit. Arguably, one of the reasons that ARIA has enjoyed early attention is because it fills a gap in the market for fully funded, long-term, and risky research. The current macro-financial environment is simply not amenable to these kinds of projects within universities.
In public management terms this is a classic principal-agent problem. The principal, government and funders, need to put in place an appropriate set of incentives to allow its agents, universities, to do things it believes contribute to the advancement of human knowledge. The actual incentive is for universities to fund the most economically viable work and bid for projects where they have the greatest chance of success. This is not always the same as funding the most groundbreaking research.
Money is the currently single biggest incentive funders have. If money is tight the solution is either to get more of it or to create a different set of incentives. UUK recommends doing both.
New solutions to old problems
UUK’s primary ask is that there should be a real terms increase in QR funding, while universities should seek greater costs recovery for research. UUK acknowledge this may well lead to fewer better funded projects but this could be partially offset by increasing the amount of funding overall. In particular, UUK is careful to acknowledge that a “critical mass” of research specialisms, a hint toward the efficiency made by universities being more distinctive in their research portfolios, should not prevent interdisciplinary work. UUK is laying down a careful marker that a trade-off for future funding could be fewer better funded projects with universities having potentially narrower research portfolios.
The challenge is that even with significant efficiencies the amount of funding required to move universities on to a sustainable footing using UUK’s own analyses would be huge. UUK isn’t asking for government to eliminate the research deficit but clearly universities are going to either have to increase income, retain more income, or reduce costs to make research sustainable even with an increase in funding. This leads to a much harder question of whether universities are doing too much research, or the right kinds of research, in the eyes of funders, policymakers, and governments. There is no consensus on whether there is too much or too little research. UUK smartly sidesteps this issue and instead gently encourages universities to think about their cost recovery.
A clearer trade off for more funding is the alignment between university research and government activity in the shape of a Missions Innovation Fund modelled on the Industrial Strategy Challenge Fund. This would cover cutting-edge R&D; knowledge-sharing; and the adoption and diffusion of existing technologies. It would be developed between businesses, universities, and UKRI, and support activity which aligns to the government’s key missions. In line with UUK’s further calls for universities to attract more funding and for government to free up more capital for spin-outs it’s a neat set of trade offs which simultaneously help the financial sustainability of the sector and meets government priorities.
Good policy careful politics
Ultimately, research sustainability is about the sustainability of the sector. The data presented by UUK suggests that the UK is at a risk of losing ground to international competitors on the volume and citations of research. This is only one measure of competitiveness but it is an important one in positioning the output of the UK. Research becomes more sustainable as the sector does and therefore the research deficit is ultimately a challenge of university sustainability.
The calls in this section are astute not because they suggest upending the current system, they are much more about the sustainability of research rather than assessing whether the whole system works, but because they invite government, universities, and policymakers, to consider the trade-offs they would be willing to make to secure a more sustainable research ecosystem.
It may not be that less research takes place overall but one conclusion from this section could be that a system where there is a greater mix of funding, more cost-recovery from business, more directed funding aligned to government missions, and crucially more focus from universities on better funded fewer research areas, could lead to a more sustainable system overall.
How much of the ‘deficit’ is made worse by the accounting of TRAC though? UUK say that they make a ‘loss’ on UKRI research grants as only receive 80% of FEC and claim much less, but the reality of course is that these grants (unlike say Leverhulme) are massively inflated by the opaque overheads that are added on (estates and indirect costs). I’m currently working on a bid with three investigators with very modest buyout and one post-doc that already comes to £500k, half of which is absorbed by overheads. In effect these are hidden subsidies via the backdoor. Rather than this hidden subsidy it would be better to fund uni research infrastructure directly, or provide a 20% fixed contribution to admin costs and overheads like the ERC.
Indeed. The estates and professional services do not magically increase on successful research grant capture. Those costs are pretty fixed in. Research staff, equipment, and logistics is what should be funded. Hiring a postdoc doesn’t build a new office. The money will just be absorbed into operational funding.
I know of a few institutions that give the overheads straight back to the department to spend on other activities. This really highlights that this money is not necessary.
Thank you. If research ‘costs’ are accounted for in this way, then the costs of research will never be recovered and we might as well pack up and go home! A more sensible discussion would take factor in that the ‘deficit’ is in many ways a trick of accounting. I find it very frustrating that this point is rarely acknowledged by sector leaders or others talking about HE policy.