Universities find out how much they’ve got to spend

Posted on February 2, 2011 by

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The Higher Education Funding Council for England (HEFCE – the non-departmental public body responsible for distributing public money for teaching and research to universities and colleges) has announced its provisional funding for Higher Education Institutions in England today. There are reductions to research funding and a considerable reduction in capital funding which are going to raise concerns over the impact across science. But there is a spot of very good news for medical research charities; the charity research support funding through which government partners charities to support the full costs of research in universities is being maintained in cash terms at £197.5 million. In 2009-10, medical research charities invested over £1 billion in medical research in the UK and a whopping 80% of this is spent in UK universities, so this fund is really important.

Background

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. On 20 December they published details of how this funding is going to be spent.

This detailed how much each research council will have to spend and priorities that should guide how they spend it. It also included a letter from BIS to the Higher Education Funding Council for England (HEFCE) telling it how much money it has to distribute across higher education institutions in England and detailing the priorities that should guide how it does this (More details on the themes that were outlined in my post on the 20th here).

For more background on why charity research support funding is so important, check out this charity/university joint statement which includes a detailed Q&A explaining how it works.

What does it say?

The headline announcement from HEFCE is here and the circular with all the details is here.

Because the academic year runs from 1 August to 31 July and the BIS grant announcement related to the financial year (1 April to 31 March) HEFCE have had to make some changes in the light of the BIS announcement to their budgets for the rest of 2010-11 as well as making provisional budgets for 2011-12.

What does this mean for 2010-11 research funding?

The 2010-11 research funding has been reduced by 1.7%, a reduction of £27.6 million. This means that the previously announced 2010-11 allocations of recurrent research funding (the stream from which charity support funding comes) are going to be reduced over the rest of the year. The exact size of this reduction will be confirmed in March and will be made by reducing HEFCE’s monthly grant payments to institutions between April and July 2011.

What about 2011-12?

The total recurrent research grant for 2011-12 is £1,558 million. As the 2010-11 spend has just been reduced by 27.6 million, this is a further reduction of £17.4 million. In total, £45 million less that HEFCE had been planning to spend on research prior to the spending review.

As a result, and following the themes set out in the letter from BIS just before Christmas, HEFCE are tweaking the system for how they will allocate this among institutions. They are effectively reducing the amount that goes to “less excellent” research to ensure that “more excellent” 3* and 4* research continues to be supported. This will have a big impact on institutions currently receiving funding for 2* research.

  1. There should be a reduction to the weighting in the mainstream QR grant that is given to activity rated 2* in the 2008 Research Assessment Exercise, sufficient to achieve:
    1. The full reduction of £45 million in 2011-12 through mainstream QR and its London weighting; and
    2. Redistribution of half of the remaining funding previously allocated through mainstream QR and London weighting on the basis of 2* activity, towards activity rated 3* and 4*.

    These decisions take account of the request in our grant letter that we should selectively fund on the basis of only internationally excellent and world-leading research. This means that we are maintaining the quality weightings for 4* and 3* quality research at 9 and 3 respectively (though increasing their average rate of funding) and that there is a consequent reduction in the weighting for 2* quality research from 1 to 0.294.

They are also maintaining protection for Science, Technology, Engineering and Mathematics (STEM) subjects:

We should continue to provide protection to STEM subjects within the mainstream QR method to ensure that they do not see a reduced share of the total compared to 2008-09.

And the Charity Research Support Fund?

Great news for charity research support funding; recognising the emphasis in BIS’s grant letter that institutions should be supported to leverage funding from external sources including charities, HEFCE are maintaining charity research support funding in cash terms, allocating £197.5 million in 2011-12. (in 2010-11 it was £198 million although the total spent may in practice be slightly lower if it is subject to the planned reductions in research funding for the last four months of 2010-11).

The other elements of research funding should be maintained in cash terms at the levels provided in October 2010. There is a review of the distribution of QR funding to support National Research Libraries, which the Board will consider at its next meeting in March, but otherwise we are not proposing changes to the funding methods for these other elements of research grant. These decisions take account of the request in our grant letter that we should protect funding leveraged from external sources. By protecting funding for the charity support and business research elements in the grant, we aim to encourage higher education institutions (HEIs) to continue to undertake research in partnership with those sectors.

Funding for the Higher Education Innovation Fund (HEIF), which is aims at supporting universities and business to work together is being maintained in cash terms at £150 million.

Capital funding

There is a considerable reduction in capital funding

  • £223 million for capital funding. This is a reduction of 58 per cent compared with the £532 million in 2010-11.

  • There is already considerable concern across the scientific community at the considerable cut to the council’s capital spending budgets; a cut which the Campaign for Science and Engineering estimates these will amount to a 35% compared with 2010-11 levels.

    Funding for teaching

  • £4,339 million for recurrent funding for teaching. This is a further reduction of £180 million (4 per cent) for 2011-12. Funding for widening participation and improving retention has been maintained at current levels.

    And 2012/13 and beyond?

  • The BIS grant letter provided indicative funding figures for 2012/13 which included further reductions in cash terms of £830 million to recurrent teaching grant. However, HEFCE highlighted that further reductions and changes might become necessary in the light of planned changes to fees etc. This will largely effect funding around teaching.

    In future, we expect that tuition fee income will become the major source of funding and therefore the route for supporting particular institutional developments. As a result, the funding environment for higher education from 2012-13 will be very different and all our approaches to funding will be subject to review. Institutions should not assume that past practices and commitments in relation to recurrent teaching, teaching capital and special funding will continue.

    There are big changes afoot in the funding of higher education, with the Government planning to publish a White Paper very soon setting out its future plans.

    What are people saying?

    Particularly on the science and research part of the HEFCE allocations, Alan Langlands, chief executive of HEFCE said:

    ‘We welcome the decision of Government to ring fence and maintain in cash terms the overall funding provided by BIS for science and research, including the funding for the Higher Education Innovation Fund, which supports the links between universities and business. In line with the Government’s priorities, we will distribute funding for research on a more selective basis and, following consultation, will allocate HEIF support to the most effective performers.

    David Willetts, Minister for Universities and Science, has responded, mainly focused on the impact on teaching and the ongoing changes for universities but mentioning the sustained ring-fence for science and research.

    This is undoubtedly a year of transition for universities. Higher Education, like other areas of public spending, has had to take its share of savings but we have asked HEFCE to protect the teaching funding budget as far as possible.

    Under the new HE reforms we are putting funding in the hands of students, instead of a centrally allocated grant. By 2014-15 we expect public support for universities to rise by 10%, as institutions that attract students through high quality courses are given the ability to thrive. It is essential that universities move quickly to prepare for the different environment in which they will operate in future years, striving to meet the aspirations of students for high quality teaching.

    As well as benefiting from investment in student support, the HE sector will continue to benefit from sustained ring-fenced investment in science and research.”

    What next?

    HEFCE will tell each institution what they have calculated they should be getting in 2011-12 on 14 March 2011 under embargo until 0001 on 17 March, when the full grant announcement will be published.

    HEFCE plan to consult institutions  later this year on the development of their research funding method, with particular reference to their support for the next generation of researchers.

    And we’re waiting for the government to publish their white paper on education.

    The impact of all these changes to the way research funding is distributed and the cuts that have been made are going to take time to come clear. The Campaign for Science and Engineering has blogged about some of the impacts we are already seeing Funding cuts – as the dust settles… And the Commons Science & Technology Committee are calling for information on the impact of the cuts. As the budgets bed in and we start to work out what they are going to mean in practice, the committee want to hear where the big problems are likely to be, the pressure points etc, so that they can identify areas which might need further examination after Easter. Check out my previous post for more background.

    Posted in: Policy