How much do the research councils and HEFCE have to spend on research next year?

Posted on December 20, 2010 by

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Back in October’s spending review, the government announced that science and research funding would have a ring-fenced budget of £4.6 billion per annum. Today they published details of how this funding is going to be spent. This includes details of how much each research council will have to spend and priorities that should guide how they spend it, and also how much money the Higher Education Funding Council for England (HEFCE) has to distribute across higher education institutions in England. They have also published a statement defining the Haldane principle –  a longstanding principle that government allocates money to the experts and allows them to decide what research should be funded –  and how they have applied this principle in making these decisions.

There is no detail – and we would not normally expect any at this stage – on the charity research support fund but both documents emphasise “protecting funding leveraged from external sources such as the charitable and business sectors.” which suggests government support for this funding stream. We will have to wait ’til next year for more detail.

What’s out today?

The annual grant letter from the Department for Business, Innovation and Skills (BIS) to the Higher Education Funding Council for England (HEFCE) confirming what HEFCE’s budgets will be for 2011-12 and setting out some objectives for how they should spend them.

The Allocation of Science and Research Funding – 2011/12 to 2014/15 which tells us how much money each of the research councils, national academies and other science and research programmes funded by BIS such as “Science & Society” have been allocated.

Written ministerial statement here.

Allocations here.

A statement on the Haldane Principle – following a short government review  stating how it is understood and applied by government at Annex A, page 57 (background in previous post here)

What’s interesting for medical research and charities?

The Allocation of Science and Research Funding covers the whole £4.6 billion ring-fenced science and research budget that was announced in the spending review – this includes research councils and higher education research funding.

The allocations give the numbers and some details of the direction government wants research funding to take – a lot of ideas that have been discussed before:

  • promoting impact through excellent research
  • supporting the growth agenda
  • further concentrating resources on research centres of proven excellence and with the critical mass and multi-disciplinary capacity
  • supporting outstanding researchers to define their own areas of work
  • developing cross-council research programmes and supporting greater collaboration
  • Funding two projects – one of which is the UK Centre for Medical Research and Innovation (UKCMRI) which was allocated £220 million from the Department of Health in October’s spending review. The project site received planning permission last week. (the other is Diamond Phase III. There is also funding for the new UK Space Agency)
  • Focus on making efficiency savings – implementing the efficiencies identified by The Wakeham Review of Financial Sustainability and Efficiency in full Economic costing of research UK HEIs the research councils, universities and other institutions will be expected to make annual efficiency savings (see table on page 16). All efficiency savings made will be reinvested in science and research within the ringfence.
  • There will be further reform of research funding. HEFCE will reform their funding Quality-related research (QR) funding to focus on internationally excellent research. Valuably for medical research charities, there is a sentence recognising the value of government partnering charitable funding through the Charity Research Support Fund (which is a stream of QR funding); “…while maintaining support for institutions leveraging funding from external sources.” (page 16)

Specifically on Medical Research and UKCMRI it says:

Medical Research and UKCMRI

The Medical Research Council resource funding has been set in order to maintain its expenditure in real terms over the period of the Spending Review. This is to complement the real terms increase in the Department of Health’s research budget, within which additional funding will be made available to support the translation of research into practical applications, including the development of new medicines and therapies. The Office for Strategic Coordination of Health Research (OSCHR) will continue to play an important role in oversight of the coordination of funding for translational medical research, in order to maximise the impact of funding streams and minimise gaps in translational research.

The Department of Health will provide £220 million of capital funding in the 4 years to 2014-15 as part of the Spending Review settlement so that the UK Centre for Medical Research and Innovation (UKCMRI) can proceed swiftly. UKCMRI will be one of the most significant developments in UK biomedical science for a generation. Its goal will be to understand the biology underlying human health, and thereby finding ways to prevent and treat the most significant diseases affecting people today.

The detail of the allocations to each of the research councils is given in a table on page 17. The administration budgets for the research councils are not covered by these allocations; BIS is aiming to make real terms reductions in administrative budgets by 2014-15.

The MRC budgets are rising slightly – by about 5% – over the next four years while the other research councils face small decreases.

On Quality-related Research (QR) funding distributed by HEFCE (the stream which Charity Research Support Funding comes from), Joe Clift at BHF has done a quick back of the envelope calculation looking at these numbers and the proposed reinvestment of efficiency savings which suggests that in cash terms (not taking into account inflation) with the savings reinvested into QR, this would be a 3.3% cut for 2011/12, but bring the total up to £6520m for the period up to 2015, a 0.7% rise.

The annual grant letter from David Willetts and Vince Cable in BIS to the Higher Education Funding Council for England (HEFCE)

  • Gives HEFCE its budgets for 2011-12 and outlines the priorities it should follow when spending them.
  • It also gives indicative funding totals for 2012-13 and the main budget aggregates for the remaining years of the Spending Review. This includes confirmed allocations for science and research funding for four years (the rest of the spending review period).

The letter covers the process of change to new arrrangements for university funding, changes to tuition fees, making efficiencies, managing expenditure etc but particularly on research funding:

the sentence on “protecting funding leveraged from external sources such as the charitable and business sector” in point 10 suggests support from government for the Charity Research support funding stream through which government partners charitable funders to support research in universities.

Research and Economic Growth

9) Our world class science and research base is inherently valuable, as well as being crucial in supporting the economy to recover from the downturn. The UK research base has excellent capabilities in higher education institutions with the critical mass to compete globally and the expertise to work closely with business, charities and public services. Your research funding is particularly significant in sustaining capability in the arts and humanities and in social science, which currently amounts to around a third of total mainstream QR research funding. The ring fenced settlement for Science and Research resource means that we can continue to support those subjects throughout the four years of the spending review period. Funding allocations for HEFCE for research, knowledge exchange and research capital for the period 2011-2015 are set out in the Annex. This funding over four years will enable you to deliver our agenda for research and economic growth. Research capital is not ring fenced. Research capital allocations are indicative for 2012-13 onwards.

10) You should take forward funding both for research and for support for the next generation of researchers, by selectively funding on the basis of only internationally excellent research, and protecting funding leveraged from external sources such as the charitable and business sectors. You should work with Research Councils and the National Academies to address collectively issues such as health of disciplines and research careers.

11) It continues to be important that universities and business work more closely together. We welcome the Council’s commitment to HEIF which we would expect to continue at current levels. This means that the total funding of HEIF will continue at £150 million per year over the four years of the spending review period including £113 million per year specifically included from within the Science and Research budget. This will allow you to take forward reforms of HEIF rapidly, based on the current formulaic approach, which will provide greater incentives to HEIs to increase interaction with business and other users, through a focus on performance (moving away from capacity); and will also incentivise the highest performing institutions further and ensure that only the most effective performers are supported, through introducing a minimum qualifying level of external income necessary to gain an allocation. The Government is also committed to provide incentives which enhance the economic and social impact of research. The progress that you have made with developing the Research Excellence Framework is most welcome. You should continue to implement the REF over the next four years to recognise impact only from excellent research. You should work with the Research Councils to ensure that the overall impact agenda is delivered coherently.

HEFCE is expected to make savings on Quality Related (QR) research funding each year which will be reinvested within QR:

23) On research, you should deliver efficiency savings from Quality Related (QR) recurrent research funding of £16 million in 2011-12, £45 million in 2012-13, £73 million in 2013-14 and £104 million in 2014-15 to be reinvested within QR. You should work with the Research Councils to ensure that institutions take forward actions recommended by the Wakeham review to reduce indirect costs associated with research and related postgraduate training. In achieving these efficiencies you should incentivise HEIs to collaborate for example through greater sharing of research equipment and infrastructure.

And, as the size of the science and research budget is now set for the next four years, looking at how it will be reactive to any other pressures that may arise over those four years:

27) The whole of the ring-fenced science and research resource funding has now been allocated by Ministers for the 4 years of the SR10 period. We will continue to look to you, together with the Research Councils and the UK Space Agency, to work co-operatively with BIS to manage any pressures within the Science and Research budget which might arise where it is neither appropriate nor reasonable to expect the pressure to be contained within the allocation of an individual partner organisation. We would expect such situations to be exceptional but they could, for example, arise in relation to the uncovered exposure to currency movements.

The detail of the allocations is given at the annex at the end of the letter.

What now?

It will take a while to unravel what this will all mean in practice, where the impacts will be felt. Where will efficiencies be made? what impact will they have? Will some budgets suffer at the expense of others? Research funds/Capital funds?

We will need to wait for HEFCE to publish their provisional budget allocations – usually about February/March time – to find out the detail on how they will distribute their money among higher education institutes, particularly how they decide to allocate Quality-Related Research (QR) funding and how much of this will be allocated to Charity Research Support Funding through which the government partners charity funders to support the full costs of research in universities. More about the process, what to expect next and importance to charity funders of medical research here. Concern over the future of the fund is quite vocal – last week several hundred researchers wrote to The Times emphasising its importance.

For a bit more analysis check out Campaign for Science and Engineering and a post by Bob Ward on the S Word. There’s also some reaction from medical research charities including BHF.

Posted in: Policy