Select Committee on Science and Technology Eleventh Report

2 Background

Dual support system

4. Government funding for UK higher education research is channelled through a system of dual support. Project funding for scientific research comes from the Office of Science and Technology's Science Budget, through the six grant-awarding Research Councils. Their combined budget for 2003-04 was just under £1.9 billion, of which around 40% funds specific research projects within universities. Projects are also funded by other Government Departments, industry, charities and through the EU Framework Programmes.

The Funding Bodies

5. The second leg of the system - to provide core support for staff and most infrastructure and equipment - is provided by the Higher Education Funding Councils ("the Funding Bodies"), from the budgets of the Department for Education and Skills (DfES) and the devolved administrations. The Higher Education Funding Council for England (HEFCE) has a budget of £5,993 million for the 2004-05 academic year, with £3,826 million for teaching, £1,081 million for research, £486 million for special funding and £584 million for earmarked capital funding. The funds for research and teaching are distributed via a block grant, which an HEI is free to allocate as it wishes. The Funding Bodies' research funding has been intended to provide for the research infrastructure in HEIs, to cover a significant proportion of the indirect overhead costs of research and to contribute to the fixed costs of research (staff, equipment, libraries etc). Research Council funding has been intended to provide for direct project costs and to contribute to indirect project costs. Currently, the Research Councils will pay 46% of the direct staff costs funded on a research grant. The Government has recently announced that the Research Councils will move to a funding model in which they pay the full economic costs of the research they fund.[5]

The RAE

6. Most of HEFCE's research budget is allocated as quality-related research (QR) funding. Research quality is evaluated by the Research Assessment Exercise (RAE). The RAE was undertaken first in 1986, and subsequently in 1989, 1992, 1996 and 2001. It was changed substantially in 1992 with the creation of the new universities and the Higher Education Funding Councils (formed from the merger of the Polytechnics and Colleges Funding Council and the University Grants Committee). The RAE was introduced as mechanism to direct funding at the best researchers in a transparent manner. Previously, the University Grants Committee used subject-based committees as a mechanism for allocating research funds selectively.

7. In RAE 2001 the panels scored each departmental submission on a 7-point scale, the lowest being 1 and the highest 5* (see Table 1 below), based on the amount of research being conducted of a national or international standard. Table 1: The RAE ratings system

Rating	Description
5* (5 star)	Levels of international excellence in more than half of the research activity submitted and attainable levels of national excellence in the remainder.
5	Levels of international excellence in up to half of the research activity submitted and attainable levels of national excellence in virtually all of the remainder.
4	Levels of national excellence in virtually all of the research activity submitted, showing some evidence of international excellence.
3a	Levels of national excellence in over two-thirds of the research activity submitted, possibly showing evidence of international excellence.
3b	Levels of national excellence in more than half of the research activity submitted.
2	Levels of national excellence in up to half of the research activity submitted.
1	Levels of national excellence in virtually none of the research activity submitted.

8. There was no restriction on the proportion or number of academic staff submitted as research active, although these data were published. Submissions were designated A-F depending on the proportion of staff entered. A = 95-100% staff submitted; B = 80-94.9%; C = 60-79.9%; D = 40-59.9%; E = 20-39.9%; and F = below 20%.

The Committee's initial inquiry

9. Our initial inquiry, conducted in 2002 in the aftermath of the announcement of the results of RAE 2001, concluded that there had been a marked improvement in universities' research performance, although there had been some gamesmanship: some departments had been assessed on only a proportion of their researchers and had juggled researchers and departmental boundaries to optimise their returns. Despite this, we believed that the RAE had had positive effects: it had stimulated universities into managing their research and had ensured that funds were targeted at areas of research excellence. Nevertheless, we argued that the RAE in its present form had had its day. We proposed a funding model which combined an alternative method of allocating money to the top departments with a reformed RAE and a development fund for new or improving departments.

10. The Funding Bodies employ a funding formula to calculate the QR grant to universities. The increase in the number of departments ranked 5 and 5* meant that the budget for 2002-03 was insufficient to fund departments using the funding formulae that had been previously used. Most universities had anticipated that departments of a given grade would be funded at the same level as before, yet this was not possible within the budget provided. In England, the DfES provided an additional £30 million to fund the improvements but this was far short of the extra £206 million required to fund the new ratings on the existing basis. We argued that HEFCE should have anticipated the results of RAE 2001. It should either have ensured that it had sufficient funds to reward the improvement or at least warned universities that this was unlikely to be the case. We disagreed with its decision to target its limited budget on the highest-performing departments at the expense of those which were developing. We argued that this needed to be addressed in the 2002 Spending Review.

Sir Gareth Roberts's Review

11. Sir Gareth Roberts was invited to lead a review of research assessment in June 2002 to investigate different approaches to the definition and evaluation of research quality, drawing on the lessons both of the 2001 RAE and of other models of research assessment, and advise on the future of research quality evaluation. Sir Gareth's recommendations in his review reflected many of the Committee's concerns. The key features of his proposals were:

a)  A six year review, with mid-term "light touch" monitoring "to highlight significant changes in the volume of activity";

b)  A three-track assessment process;

c)  The introduction of a "quality profile" indicating the quantum of '"one star", "two star" and "three star" research in each submission to replace the existing seven-point scale; and

d)  Institutions would have to satisfy certain institutional competences to qualify for assessment, such as their staffing policy, treatment of young researchers and long-term financial planning.[6]

The Funding Bodies' Initial Statement

12. Sir Gareth's Report was issued for consultation in May 2003 with a deadline at the end of November 2003. The result was a Joint Initial Statement from the four Funding Bodies issued in February 2004. The main points announced in that document were:

a)  The next RAE will take place in 2008 with subsequent RAEs following on a six-year cycle;

b)  Eligible research outputs must be published between 1 January 2001 and 31 July 2007 with no more than four outputs for each named researcher;

c)  A single assessment method will be used for all participating HEIs rather than Sir Gareth's three-track approach. Assessment will be conducted by 15-20 main panels, and around 70 sub-panels. There will be no separate assessment of research competences or mid-point monitoring, as advocated by Sir Gareth's review. The assessment process will be designed to ensure that joint submissions are not discouraged. Due weight will be given to applied research assessed against appropriate criteria of excellence; and

d)  Results will be published as a continuously graded quality profile for each submission at the sub-panel level. Quality profiles will be criterion-referenced against clearly defined common standards.

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5   HM Treasury, Science & Innovation Investment Framework 2004 - 2014, July 2004. It is likely that the Research Councils fund will need to pay in excess of 60% of the direct staff costs in order to meet the full economic costs. Back

6   Review of research assessment, Report by Sir Gareth Roberts to the UK funding bodies, May 2003 Back

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Prepared 23 September 2004