Select Committee on Science and Technology Second Report


FUNDING RAE 2001

63. It falls to HEFCE to make the decisions on the funding based on the RAE. HEFCE's Board is largely comprised of representatives from the academic community along with others from industry and external organisations. Dr John Taylor, the Director General of the Research Councils, is a member and the Chief Executives of HEFCW, SHEFC and DELNI attend as observers. Its decisions are, however, constrained by the budget made available to it by DfES. The Department will also give broad guidance on how HEFCE spends its money. In its most recent grant letter to HEFCE, the DfES asked that it maintain its research funding in real terms until 2003-04.[110]

64. When they received the RAE results for 2001, the Funding Councils faced a dilemma. It was generally expected, not least by universities, that the results would be reflected in the budget allocations for 2002-03. But funding the new ratings on the existing basis would cost an extra £206 million, including £25 million for inflation,[111] and the overall budget for 2002-03 had been set in the Comprehensive Spending Review of 2000. DfES initially made it clear that HEFCE would have to operate within its budget. Immediately after the RAE results were published, HEFCE announced on 14 December 2001 that it would:

      (1)  use the results of the RAE 2001 as the basis for funding research in 2002-03 (despite media speculation to the contrary);

      (2)  maintain the unit of resource for 5* departments;

      (3)  provide some funding for 3-rated departments; and

      (4)  institute a system of safety nets and caps to moderate the outcomes of these decisions.[112]

65. In January 2002, the DfES announced that it would make available an extra £30 million for 2002-03 only. HEFCE announced on 23 January 2002 that:

      (1)  it would target the additional money at departments rated 5;

      (2)  it would provide only £20 million to 3a-rated departments and nothing for 3bs; and

      (3)  its priority would be to restore funding to 4 and 5 departments in 2003-04 if an increase in funding were secured in the Spending Review 2002.

Table 4 below shows the final allocations to each rating.
Table 4: Allocation of HEFCE's QR funds to different ratings

  
2001-02 (using RAE 1996)
2002-03 (using RAE 2001)
  
Funds (£m)
% of funds
% of staff
Number of depts
Funds (£m)
% of funds
% of staff
Number of depts
5*
188
24
10.8
170
321
38
18.7
326
5
248
32
20.0
403
378
45
36.0
755
4
208
27
27.6
671
122
15
24.8
690
3a
90
12
18.4
528
20
2
12.4
520
3b
33
4
10.9
422
0
0
5.5
279
2
0
0
9.0
464
0
0
2.4
140
1
0
0
3.4
236
0
0
0.2
18
  
767
100
100.0
2,894
841
100
100.0
2,728

  

66. Table 5 below shows the changes in funding weights to each grade. The multiplier used in column 3 is necessary to compare the 2001-02 and 2002-03 funding weights since funding for 3bs has been abandoned.

  

Table 5: Funding rates for different ratings employed by HEFCE

RAE
rating
Funding weights for:
Change in average unit of resource
  
2001-02
2001-02 divided by 1.5 for comparison with 2002-03
2002-03
  
5*
4.05
2.71
2.71
2.5%
5
3.375
2.26
1.89
-12.3%
4
2.25
1.50
1.00
-29.2%
3a
1.50
1.00
0.31
-67.2%
3b
1.00
0.67
0
100.0%
2
0
0
0
Not applicable
1
0
0
0
Not applicable

67. Although these funding decisions have increased the funding differentials between departments, the level of funding selectivity between universities has not changed significantly. In 1998-99 75% of the QR funding went to 26 institutions. In 2002-03 75% of funding will go to 24.[113] Universities were informed of their block grants for 2002-03 on 6 March 2002.

68. The Funding Councils in Scotland and Wales have made different decisions about the allocations based on RAE 2001. In Wales, the £60 million QR was allocated as follows: 3b (2%), 3a (8)%, 4 (32%), 5 (38%) and 5* (20%). SHEFC will spend its £132 million formula-based research grant by maintaining its funding to 5* rated departments in real terms (17% of the total). The Scottish Executive made available £10 million to fund 5-rated departments. The remainder will be used to fund 5s, 4s and 'rising' 3as using a 55% escalator system (a researcher in a 4-rated department would be allocated 55% more than his/her equivalent in a 3a). Table 6 below shows the different weightings applied in England, Scotland and Wales.[114] SHEFC will only fund 'rising' 3as.

Table 6: Funding weights employed in Scotland, Wales and England

Rating
SHEFC Weighting
HEFCW Weighting
HEFCE Weighting
5*
3.2
3.26
8.74
5
2.8
2.62
6.1
4
1.55
1.75
3.22
3a
1
1
1
3b
0
0.57
0
2
0
0
0
1
0
0
0




110   Ev 49, para 9 Back

111   Ev 125, para 9 Back

112   Ev 11, para 5 Back

113   Ev 125, para 8 Back

114   The allocations for Northen Ireland had not been established at the time of writing Back


 
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