The guidance to UKRI from DSIT on how Research England should operate lacks some (only some) of the warmth of the DfE ministerial letters that are sent to the Office for Students.

There isn’t as much as a hello before it’s into which programmes to fund, what Research England should continue to do, and the budget allocations are brief without much policy context.

The balance of dual support will remain the same for the next financial year. Almost every budget line will be maintained in cash terms, which of course means a real terms cut, except the Research Capital Investment Fund (RCIF) “reflecting the challenging capital funding landscape across UKRI.”

For those unfamiliar RCIF consists of two funding streams. The HEI Research Capital England, reducing from £120m to £92m, and the Higher Education Research Capital (HERC) England, reducing from £113m to £83m.

RCIF is formula based funding which can be used for “contributions to replace premises or infrastructure, improved use of space, and increased sharing and use of research equipment.” The funding shortfall is being made up by additional funding from UKRI which is much more limited in scope: only available for

support[ing] the maintenance, upgrade and upkeep of existing capital (buildings and estate) and not (sic) should not be used for new capital investments.

UKRI’s annual report speaks to aligning its work with the government’s missions for growth and the industrial strategy. It is understandable that universities would not seek to expand their premises in a time when they are short of cash but universities build the kind of infrastructure that spurs economic growth.

The guidance letter from DSIT feels only partially alert to the trade-offs it forces. On the one hand it is entirely possible to support local economic growth through maintaining the knowledge exchange funding, on the other this is made much harder by limiting new capital investment. The budget allocation is a reality of where the sector finds itself, an entirely sensible move by UKRI to bolster the sector’s finances, and a reflection of the confused policy landscape when it comes to universities and economic growth.

The industrial strategy talks of backing “transformative infrastructure” some of which includes spaces that will allow the UK to make the most of new technologies and high-growth spaces to make the most of the UK’s growth sectors. Some of these spaces are funded through the UK Research Partnership Investment Fund (UKRPIF).

The funding for UKRPIF is reprofiled next year to align with the capital needs of the programmes funded in round seven. This isn’t a cut but it does raise the question why the government isn’t asking UKRI, or more importantly providing the funding, to rapidly expand this kind of work. In an economy which will not grow without dramatic intervention it seems a wasted opportunity to not throw the kitchen sink at a fund like this.

It is a wasted opportunity because UKPRIF has demonstrably created jobs, spin-outs, and economic value. The fundamental problem is that the government can have as many ambitions as it wishes but if it does not allocate new capital funding the economy will not get bigger. If it funds the same things in the same way things are going to stay the same.

Part of the problem of course is the wider precarity of sector finances militate against economic growth through infrastructure investment. Buildings, after all, need someone to service them. The government can have a smaller higher education sector or a bigger economy. It cannot have both.

Aside from guidance on research funding DSIT did find time to make a statement on research assessment wherein they note:

Research England should continue, in partnership with the devolved funding bodies and the sector, to ensure that the next research assessment exercise incentivises high quality research, with positive economic and social impacts. It should provide clear accountability for public funding with bureaucracy kept to the necessary minimum.”

This could be reading too much into the letter but it is notable that the previous version of DSIT’s letter made a reference to People, Culture, and Environment, which this letter has not:

REF 2029 should encourage high quality research, with positive economic and social impacts. You should continue to engage with the sector on the forthcoming exercise. Clear accountability for public funding must be maintained with bureaucracy kept to the necessary minimum. We look forward to seeing the outcomes of the pilot People, Culture and Environment assessment in 2025

This year’s letter is focused on only two of the three elements of REF. It may be that a reference to PCE was left out entirely without thought but it seems a significant oversight when the sector is debating the future of the whole exercise. If an omission was intentional it could suggest changes on REF could be on the horizon.