Just because the UK could have a different approach to research funding doesn’t mean it should

The way the UK chooses to fund research is not inevitable nor is it wholly designed.

The mixture of funding excellence through REF assessment and subsequently QR funding (and a bit of HEIF), and the project based grant funding which emerges from the research councils is a mixture of choice, compromise, historical quirk, and legacy of numerous government policy interventions over decades. Then sitting as an important but separate part of this mix is funding from industry, charities, civic bodies, and a range of other partners.

This dual funding system has a number of advantages. As the case has been made for well over a decade this system looks both forward and back. In theory, QR is a reward for the performance of a provider over time. Project funding is a reward for providers into the future on the basis of what they can deliver. This binary is crude and ultimately any investment in past performance is an investment into future capabilities but the broad point is it incentivises research outputs in multiple ways at multiple levels.

The other big advantage is that it provides a middle point between academic autonomy and government control. REF rewards excellence wherever and in whatever it may be found. Universities can then spend QR as they choose, albeit they are often forced to choose to use it to prop up basic research costs, which means that they have autonomy to pursue distinct research interests. Project funding through research councils then gives a degree of control to align research with national priorities.

The underpinning rationale is that this method is the best of both worlds. A new report by PWC commissioned by the Russell Group looks at some international comparators and tests this assumption.

The weaknesses within the UK’s system are well established. Full economic cost of research is declining which makes it expensive. REF is bureaucratic and it’s not clear how QR is spent. And there is little focus on capacity building while inflation erodes the value of everything in any case. However, no one system anywhere is perfect.

The report looks at four comparator countries. The first is Canada where 90 per cent of funding is allocated through projects. Amongst many strengths this system promotes alignment between projects and provincial priorities, and it encourages capacity building in smaller institutions. Predictably for this kind of approach there is a high administrative cost and concerns about fragmentation and stability.

Up next is Germany where funding is driven by states most of whom use block funding (some variations of QR). The benefit of a regionally focussed system is that it allows focus on regional priorities and Germany is particularly good at coordinating regional and local priorities. One of the weaknesses is that this reduces the level of government influence on research priorities. This system is unlike the Netherlands who use a dual-funding model which brings the benefits of the UK’s system with a predictability of funding and a control around missions, but does leave some gaps in the regional network.

And the final comparator is South Korea which makes extensive use of project funding to support coordination of priorities while leveraging private funds. The weakness of this system is that while it is dynamic it brings instability, uncertainty, and a reliance on the private sector at the expense of fundamental research.

Across all of these countries a key lesson is that there is no one perfect research system. Tilt the scale toward project funding and the kind of free thinking, autonomous, interesting research can be crowded out along with the private sector. Tilt it too much toward QR funding and research councils and the government have too few levers to pull in aligning the work of universities with national priorities.

On the basis of this paper the Russell Group has made four key policy recommendations. These are to drive performance through “performance-based block grant funding.” The research suggests that mechanisms like QR incentivise the pursuit of R&D strengths, opposed to “broad brush” research activity, which means funding is used most impactful and efficiently allocated toward existing research strengths.

The second is to incentivise industry collaborations. Germany is particularly successful at this through a range of funded national frameworks for university-industry collaboration. The third is to ensure fundamental research continues to be properly funded to ensure the UK maintains its competitive advantage in research. And the final recommendation, comforting to anyone undertaking research, is to reduce the bureaucracy within the system.

This report is fascinating in its own terms in providing a glimpse of the world but it is equally interesting for a debate it opens. There is one view of the UK’s research ecosystem that if taken together, the Nurse review, the review of research bureaucracy, the ongoing debate on the REF, the financial sustainability of the system, and the umpteen policy ideas and strategies that have been launched, are launching, or failed to launch, then there must be something fundamentally broken with the UK’s current research system.

This report opens up the idea that it’s not that the system is broken but that it’s producing the effects it was designed to do which has some winners and losers. This view is that the challenge is not to revolutionise the system but to tweak, fund, and realign priorities, by learning from comparable systems.