Memorandum submitted by the

Department for Business, Innovation and Skills (FC 70)

 

 

1. This memorandum covers BIS responsibilities for spend in science and research including:

The Science and Research Budget, including for the Research Councils

HEFCE funding for research in Higher Education Institutions (HEIs) in England.

 

Introduction

 

2. The economic downturn has affected the world economy. Government, every sector and every household has had to face tough choices. As with every Government Department, BIS needs to make some savings to contribute to the unprecedented pressure on public finances.

 

3. The Government is maintaining its commitment to HEFCE research funding in 2010/11, given the vital importance of research to economic growth.

4. The Pre-Budget Report was not a spending review, but it does set out where efficiency savings will be needed by 2012-13. The savings will amount to 4 to 5 per cent (600m) of the total Government spend on higher education and science and research.

5. Decisions on precisely how savings will be achieved across HE teaching, HE research, student support and science and research budgets will not be made in advance of Lord Browne's Independent Review of HE Funding and Student Finance. This study will report by summer 2010.  

 

Objectives of Publicly- funded research

 

6. Research enables us to deepen our understanding of global issues, and this knowledge underpins a wide variety of economic outcomes. These include drivers of productivity and competitiveness including innovation and skills creation. A strong research base is crucial for our future economic prosperity and lies at the heart of many of those areas where we shall have a competitive advantage in the future - such as life sciences, advanced manufacturing & low carbon technologies. The Government seeks to secure from the research it funds the maximum benefit for society and the economy. It is committed to sustained investment in science and research - and will spend 6bn on science and research by 2010/11, a doubling in real terms since 1997.

 

7. In the 1990s there were serious problems with the research base - and higher education more generally - as a result of historic underinvestment. Since then investment in the research base has: reinvigorated the physical infrastructure (through Research Capital Investment Fund [RCIF]); created a critical mass of professional capacity in knowledge transfer (through Higher Education Innovation Fund [HEIF] and the Public Sector Research Establishment [PSRE] fund); and put research funding on a financially sustainable footing.

 

8. Despite growing international competition, the UK remains first or second in the world at research in most disciplines. The UK's research base is now second in the G8 for excellence and is the most productive country for research in the G8.[1]

9. Continued investment in recent years has allowed this modernised research base to create exciting new organisations and alliances such as the Office for Strategic Co-ordination of Health Research [Medical Research Council /Department of Health (MRC/DH) research coordination], the Energy Technologies Institute [a public-private partnership of up to 1billion][2]and cross-Research Council programmes on climate change, ageing and global security that deliver major benefits to the economy and society.

10. Investment in science has significantly strengthened our ability to innovate, and past investments in health, energy technologies, ICT, nano and biotechnology, materials and environmental science are now being commercialised. Our investment in science, technology and innovation is increasing our competitiveness. For example, the UK's excellent research base is a strong incentive for location of Foreign Direct Investment, for which the UK is the EU leader.[3] UKTI have used the strength of the research base to attract over 450 R&D investments to the UK between 2007 and 2009.[4]

 

11. Going forward, the drive toward ensuring that the UK exploits the benefits of the research that the taxpayer funds will continue. Public funding for research is governed by the principle of excellence. This means that the quality of the research, as judged by the research community, is the prime criterion for the allocation of funding.

 


The process for deciding how to allocate research spending

 

12. The process for deciding where to allocate research budgets is the same whatever the overall level of funding. Government sets high level objectives and creates incentives, informed by views from: business, charities, and co-funders of research; the Government's Chief Scientific Advisor and Chief Scientific Advisors' network; Government Departments and strategic challenges for the nation; and the research community and National Academies.

 

The Science and Research Budget

 

13. The allocation of the Science and Research budget is underpinned by a body of evidence including draft delivery plans from each Research Council. The BIS Director General of Science and Research (DGSR) has committed to Parliament that he will consult widely in the run up to the next Spending Review. The consultation will be wide-ranging and visible to ensure it is of high quality and has the confidence of the community. It will not be at the disciplinary level.

 

14. The DGSR has asked the following bodies to provide formal advice:

The Royal Society

The Royal Academy of Engineering

The British Academy

The Council for Science and Technology

The Chief Scientific Advisors' Committee

The Confederation of British Industry

 

15. The process of consultation will involve the following steps:

Early in the process, the DGSR will attend a Council meeting of each of the above bodies for a discussion around the core issues.

Each of the above bodies will publicly submit advice to the DGSR at two stages in the process:

o Before the departmental submission is sent to Treasury

o After the departmental allocation is received from Treasury but before the allocations to HEFCE and Research Councils are made.

 

16. At least twice during the process the DGSR will chair a meeting of the Chairs/Presidents of each of the above bodies to discuss the advice given in plenary. This process is already underway.

 

HE Research Funding

 

17. HEFCE Quality-related research (QR) funding for Higher Education Institutions in England is given as block grant to universities. Most is allocated by formula according to the excellence and volume of research submitted by departments in the Research Assessment Exercise (which will be succeeded by the Research Excellence Framework) with additional amounts for research degree supervision, London weighting and supporting research with charities and businesses.

 

18. Periodic assessment by expert panels identifies the proportion of departments' research activity meeting each of five quality levels: 4* - world-leading, 3* - internationally excellent, 2* - recognised internationally, 1* - recognised nationally, and unclassified. Funding is weighted by quality to provide greater funding for higher quality research, 1* and unclassified research attracts no funding. Following the RAE 2008, the Secretary of State asked HEFCE to maintain the proportion of QR allocated to STEM subjects, although there were larger increases in volume in some other subjects.

 

19. Full details of HEFCE's selective research funding system, the data which inform allocations and the allocations to institutions are publically available at: http://www.hefce.ac.uk/research/

 

20. In his letter of 22 December 2009 to Tim Melville-Ross, Chair of HEFCE, the Secretary of State said that: "Higher Ambitions made clear the Government's presumption in favour of more, rather than less, research concentration, especially in the high cost, scientific disciplines. I should be grateful for your views, in time to inform the 2010/11 allocations, on how to achieve this, alongside our commitment to supporting research excellence".

 

21. HEFCE allocations for the 2010/11 academic year are expected to be announced in March.

 

Departmental Funding

 

22. Other than the Department of Health (DH) ring-fenced budget (and the Science and Research Budget), public funds are generally not directly allocated to science and research as part of the spending review process. Spending by departments on science and research is a matter for individual departments and is driven by the policy and delivery requirements of those departments. However, in view of the importance of science and research to good policy making and delivery and reflecting the Government Chief Scientific Advisors (GCSA's) overall responsibility for advising the Prime Minister and Cabinet on the level and effectiveness of departmental investment in research and development, the Government has agreed that 'Departments should consult the GCSA and HM Treasury, in advance, of any potential cuts to research budgets or expenditure, including those that have implications for the funding of cross-cutting research'.

 

23. The Government refers the Committee to the letter of 27th January 2010 from Lord Drayson to Phil Willis, Chairman, Science and Technology Committee, on resources for science and research across government.

 

What evidence is there on the feasibility or effectiveness of assessing the economic impact of research?

 

24. A clear distinction should be drawn between economic impact assessments that are from a historical perspective and those that are forward looking. It would be difficult to try to predict the future economic impact of research as impacts can take many forms; there can be long time-lags between undertaking research and its eventual impact; and impacts may arise in unexpected ways. Assessing the economic impact of past investments in science and research can be challenging - some economic impacts are readily quantifiable, in terms of greater wealth, cheaper prices and more revenue; some are less easily quantifiable, such as effects on the environment, public health and quality of life - but significant work has been done to develop methodologies in this area.

 

25. The primary report that looks at the economic impact of the UK research base as a whole is produced annually by Government, and is structured around an Economic Impact Reporting Framework, which portrays the generation of economic impacts at the aggregate economy level[5]. The Research Councils and HEFCE have also been working in this area of assessing impact from a historical perspective for a number of years. Recently individual universities, mission groups, subject areas and researchers have started to proactively commission their own work. The Russell Group have evaluated the impact of research in their universities[6], the Wellcome Trust along with the Medical Research Council has assessed the economic benefits of medical research[7] and Oxford Economics have assessed the economic effects of fundamental physics.[8]

 

26. Research Councils have also recently introduced 'impact' sections on grant application forms. The Councils are asking grant applicants to consider the potential for future impact they do not ask academics to predict the impact of the work. The introduction of the impact section does not signal a change of policy in the type of research the Councils will fund. It will not disadvantage basic research - excellence will continue to be the primary funding criterion. The purpose of the impact section on the grant forms is to encourage academics to think early on about potential users of their research and how they can maximise the benefits of their discoveries.

 

QR Funding

 

27. The Higher Education Funding Council for England (HEFCE) issued a formal consultation on the Research Excellence Framework (REF) on behalf of the UK's funding bodies on 23 September 2009. This consultation closed on 16 December. The REF will be the new process for the periodic assessment of research in UK higher education institutions, enabling the selective allocation of QR funding. Through the REF, the UK funding bodies aim to develop and sustain a dynamic and internationally competitive research sector that makes a major contribution to economic prosperity, national wellbeing and the expansion and dissemination of knowledge.

 

28. The REF will build on the success of the RAE, which is recognised worldwide as an effective and authoritative system. It incorporates important new features, particularly in recognising the impact of research of all kinds, including impacts on the economy and society, public policy and services, and quality of life. While excellence remains the most important criterion in research funding, it is right to recognise and reward the contribution that researchers are making through the impact of their work, taking account of previous criticisms that research achievement was too narrowly defined under the old arrangements. The REF does not ask researchers to predict their impacts in advance: like the RAE it will assess achievements already made, rewarding departments with a track record of working to reap the benefits of excellent research of all kinds, including 'blue sky'.

 

29. To test and develop their proposals HEFCE is currently conducting a pilot impact assessment exercise involving 29 universities from across the UK, focussing on five broad subject areas. It will run until mid 2010. The final form of the REF will take into account over 500 responses to the consultation and the pilot impact assessment exercise.

 

30. HEFCE continue to build the evidence base on the impact of research, and recently published a review commissioned from RAND Europe of international approaches to evaluating the impact of research in order to identify relevant lessons from international practice. They also recently published "Securing world-class research in UK universities: Exploring the impact of block grant funding". Both reports and further details are available from HEFCE's web-site www.hefce.ac.uk.

 

Research Council Grants

 

31. The excellent research funded by the Research Councils has a huge impact on the wellbeing of the UK. The Research Councils have been working hard for a number of years to improve the way that they demonstrate the impact of the research they fund. Over the last 10 years they have produced more than 35 impact studies. These studies have reflected a range of methodologies from qualitative case studies and surveys to quantitative approaches. The UK uses a more comprehensive range of techniques to evaluate economic impact than any of our major competitors. Independent experts report that the UK is ahead of the US and Canada in assessing the economic benefits of research.[9]

 

32. As well as through creating new businesses, improving performance of existing business and attracting inward investment there are other important routes to economic impact: improving public services and the environment can have dramatic effects on the quality of life, while benefitting the economy. For example, research into cardiovascular disease carried out from 1975 to 1992 has since saved many lives and improved quality of life for hundreds of thousands of people. But according to a recent study, it also produces an economic return on investment of 40% per year each year in perpetuity.[10]

 

33. As noted above the introduction of impact plans on grant application forms by Research Councils is not designed to ask researchers to predict the outcomes of their research in advance. Impact plans aim to encourage and enable researchers to consider the potential impact and user communities of their research at the earliest opportunity, alongside research creativity and scientific discovery, and for Research Councils to support them in this endeavour. This is intended to enhance and enrich the research funded by the Councils, but does not signal a change in policy in the type of research they fund. The primary criterion within the peer review process across Research Councils Uk is excellent research. This has always been the case and remains unchanged.

 

Future steps on resource allocation

 

34. This Government is committed to our Higher Education sector and there has been a decade of sustained investment in the infrastructure; in supporting teaching and learning and the quality of the higher education experience and in support for science and research. Public funding has increased over the last decade so there are now more students at university and college than at any time in our history, with over 2 million students now studying. The Government is maintaining its commitment to HEFCE research funding in 2010/11, given the vital importance of research to economic growth.

 

35. This Government recognises that the Higher Education sector is a precious asset and a key engine of growth. Total output generated by the 169 UK Higher Education Institutes was estimated at 59 billion in 2007/08. HEIs create directly and indirectly around 670,000 jobs and create export earnings worth 5.3 billion.[11]

 

36. The Government's agenda for the sector over the past decade has been about far more than just increasing the quantum of public investment. The Government has created the climate to mature the relationship between universities and business, for example through supporting technology transfer, and the introduction of Foundation Degrees. The capacity has been built for universities to draw from non-state sources - from fees, from partnerships with industry, and from charitable donations; HEI income in 2007/8 totalled around 23.4bn per year.[12]

 

The implications and effects of the announced STFC budget cuts

 

37. STFC's budget has not been cut. In the CSR07 settlement STFC's budget was increased by 13.6% over the CSR period. This includes a Near Cash real terms increase averaging 2.6% p.a.

 

38. However, after the CSR07 allocations there was speculation about an alleged 80 million "hole" in STFC's budget. The 80 million figure that STFC used in public in early 2008 was derived from the gap between STFC's actual budget for the CSR period (2008/9 to 2010/11) and its plans, which it drew up before it received its budget from the Department. These plans never constituted an agreed set of activities or funding for them. The suggestion that 80 million was cut from its budget is simply wrong, though it is still repeated by some in the community.

 

39. The gap between STFC's aspirations for CSR2007 and the actual increase it received ,meant that STFC has found it difficult to get its expenditure on a sustainable trajectory. BIS has made available to the Council 40 million in loans over the past two years to assist it in achieving a sustainable trajectory, . In reaching the decisions announced on 16th December 2009 STFC needed to address a residual budgetary gap of around 40 million in 2010/11 arising from the historically high levels of expenditure and the need to pay back 20 million still due from the 40 million in loans.

 

40. In addition, BIS has provided STFC with 42 million to cover exchange rate pressures resulting from STFC's subscriptions to international organisations such as CERN. In addition, the other Research Councils provided 14m to STFC in 2010-11.

 

41. The process

 

42. STFC conducted a major, robust and transparent science prioritisation exercise, commencing in May 2009 and concluding in December 2009. The five-year 2.4 billion prioritised programme announced on 16th December 2009 was based on recommendations from the STFC Science Board and its advisory bodies, which comprise leading academics from across the disciplines supported by STFC. Other advisory bodies also provided input. The process ensured that the best science was given the highest priority. The announcement included the managed withdrawal from some projects.  The detail is contained in the STFC Media Release of 16th December at http://www.scitech.ac.uk/pmc/prel/stfc/CouncilNews161209.aspx

 

43. The next stage in the process will be to develop an implementation plan. The implementation stage will include discussion with relevant national and international stakeholders including universities, departments and project teams. This will include discussions with EPSRC and the University funding councils on the impact of these measures on physics departments in universities

 

The scope of the STFC review announced on 16 December and currently underway

 

44. The objectives of the Review are to identify, by end February 2010, means of:

 

       establishing better long term planning for the development and use of UK and international large facilities; and

       avoiding, as far as practicable, significant in year pressures on STFC due to uncontrolled external influences, and thereby, the risk that short-term changes may be needed to balance available budgets.

 

45. The Review will consider:

 

         how better to manage overseas programme costs;

         the improved management of the exchange rate risk;

         the current structure of the STFC grant portfolio;

         planning the use of facilities managed by STFC but available to researchers across several Research Councils;

 

46. The Review, undertaken with the close involvement of STFC, will engage key stakeholders from the STFC scientific community, the other Research Councils and their scientific communities, the relevant learned societies and the Treasury. The Review will also examine arrangements overseas for the funding and operation of large scientific facilities and for the equivalent of STFC research grants.

 

47. The Review will not consider the overall size of STFC's budgets, nor the funds allocated to particular activities within its portfolio.

 

Operation and definition of ring fences

 

48. The Government over the last 12 years has been consistent in its support for science and research. In the 10 year Science and Innovation Investment Framework 2004-2014 the Government set out its long-term policy for investment in science and research. The Government remains committed to the 10 year Framework and it is this commitment that has been vital for the growth of funding levels for science and research. How the commitment is translated into money is determined at each spending review.

 

49. The Science and Research Budget ring-fence and the HE research ring-fence both safeguard the implementation of the Government's commitment to research spending in the 10 Year Science and Innovation Investment Framework.

 

50. Ring fences are created (or confirmed) at the time of each spending review settlement. There are two relevant ring-fenced budgets for science and research within BIS both are of long-standing. These are (amounts are for 2010-11):

 

Science and Research Budget 3.9 billion

HE Research funding 1.9 billion

 

The Science and Research Budget

 

51. The Science and Research Budget is ring-fenced and has been for over 35 years. In view of the medium-term nature of research activities and commitments (research grants are typically for 3-5 years) it is important for Research Councils to have this certainty of funding. This enables effective planning of programmes and helps achieve better value for money.

 

52. As a separate Request for Resource, the Science and Research Budget can only fund activities which fall within the scope of the Request for Resource. The scope covers funding of "public good" research activities in the UK Research Base, which consists of (1) University research departments, and analogous bodies, (2) Research Institutes and facilities owned by Research Councils; and (3) the UK's involvement in international scientific organisations and facilities such as CERN and the European Space Agency.

 

53. The research funded from the Science and Research Budget covers all areas of research (for example from arts and humanities to particle physics) and helps generate the knowledge base which underpins a wide range of applications throughout the economy and the public service.

 

54. The Science and Research Budget does not fund industrial research and development. Support for business innovation including the funding of R&D is provided separately through the TSB.

 

55. Research Councils do however have a strong track record in collaborating with business, including funding academic research as part of a co-ordinated programme (for example with the TSB) involving complementary business research activities.

 

HE Research Funding

 

56. The HE Research funding ring-fence covers the Higher Education Funding Council for England (HEFCE) research budget. The ring-fence covers the block grant funding provided to English universities for Quality-related research (QR) funding of circa 1.5bn in 2010-2011. HEFCE also provides money for university research capital to maintain the physical infrastructure of universities circa 0.4bn in 2010-2011 through the Research Capital Investment Fund (RCIF). The devolved administrations provide similar funding within their own territories.

 

57. The HE Research Funding ring-fence is administrative which means that the funding cannot be used for any other purpose without Treasury approval. This is the standard form of ring fence used across Government; the separate Request for Resource provided for the particular circumstances of the Science and Research Budget is relatively rare.

 

Departmental Ring fences

 

58. The Department of Health (DH) has a ring-fenced Research Budget (currently just under 1bn rising to over 1bn in 2010/11).

 

59. Other than the DH ring-fenced budget (and the Science and Research Budget), public funds are generally not directly allocated to research and development as part of the spending review process. The allocation of funds to research is a matter for individual departments and is driven by the policy and delivery requirements of those departments. Further, how individual departments fund research and development in support of policy and delivery varies. Depending on what best meets their requirements, some departments choose to have central research budgets, others allocate money to research through specific policy programmes (in which case there will be no central research budget).

 

Implementation of the 10 Year Science and Innovation Investment Framework - is the Government meeting its objectives?

 

60. The Government considers that over the first five years sustained progress has been made on the main objectives of the ten year Science and Innovation Investment Framework (SIIF) and SIIF Next Steps. Headline progress against each of the main themes in the Framework is as follows:-

 

World class, financially sustainable research

 

61. The UK research base continues to perform strongly with clear evidence that recent investments in research infrastructure have paid off. The UK Research Base remains the most productive among the large economies of the G8; it leads on publications per pound of public money and citations per researcher, and attracts a share of 14.4% of highly cited papers ahead of all competitors except the USA. [13]

 

Knowledge transfer

 

62. Knowledge transfer activities are now firmly established across the university sector and within Research Councils. Knowledge Transfer income in HEIs has grown at annualised rate of 11%, doubling in real terms since 2001 to 2.8bn, whilst commercialisation income in PSREs grew 23% annually from 2003. The numbers of patents and spinouts generated by the UK Research Base fluctuate year on year but overall they remain at healthy levels ahead of other European Countries.[14]

 

Business investment

 

63. Although in cash terms private sector R&D is increasing, this growth has only matched the growth of the overall economy and as a result Business R&D as a percentage of GDP remains stable. Securing an increased percentage of GDP into Business R&D remains one of the toughest challenges. The UK's strengths in the services and creative industries - where innovation is less likely to be picked up in indicators such as R&D - mean that overall the UK's innovation performance is under-stated. R&D tax credits were extended further to SMEs in 2008.

 

64. More details on progress are available in the 2009 SIIF Annual Report http://www.dius.gov.uk/~/media/publications/A/annual-report-2009 .

 

65. SIIF Next Steps had a strong focus on increasing STEM participation at all levels. BIS and DCSF are working closely together to attract students to STEM subjects throughout the course of their education and careers. To this end, the Government announced a 140 million strategy in January 2008 to educate the next generation of scientists and mathematicians and to help recruit and train more science and mathematics teachers. The uptake of STEM subjects at GCSE and A level has been rising steadily since 2005, with recent growth in A Level Mathematics entries having been particularly strong (40.2% since 2005). 2009 saw a 5.3% increase in science A level entries overall relative to 2008. Entries for Mathematics were up by 12%, Physics by 3.8%, Chemistry by 2.3% and a small fall in Biology entries of -0.8%.

 

66. The Government is currently on course to achieve the 2014 targets in this area - indeed, the target for A level Maths has been revised upwards from 56,000 to 80,000, as the previous target had already been reached in 2008. This indicates that there is likely to be a strong future demand for science in Higher Education.

 

67. HEFCE run a 350 million support programme for Strategic and Vulnerable Subjects. STEM courses receive the most support for activities to increase demand under this programme. Additionally, HEFCE have also developed a 20 million national HE STEM programme to run from August 2009 to July 2012 to attract students to STEM subjects in HE. At undergraduate level during the period from 2004/05 to 2007/08, some key STEM subjects have seen increases considerably above the average for all subjects (including non-STEM). These include a rise of 18.2% for Physics, 14.0% for Mathematical Sciences, 15.4% for Chemistry, 9.6% for Biology and 4.3% for Engineering. When looking at all students currently registered on a STEM course (i.e. not just first years), we find that numbers are up by 3% at undergraduate level and 7% at postgraduate level in 2008/09, compared with the previous year.

 

68. STEM skills are an important component of the wider Science and Society agenda and are key to the work within BIS on the UK Science and Society strategy. This has key objectives to encourage greater awareness of science, technology, engineering and mathematics (STEM) careers, and to promote opportunities to engage with science and technology more generally. Independent expert groups on pre-19 science education and science for careers intend to publish their reports and action plans in spring 2010. Major Government programmes, including STEMNET, STEM Ambassadors, the STEM Programme (a joint BIS-DCSF activity), and the 'Science: [So what? So everything]' campaign continue to encourage young people to consider the relevance of STEM to their lives and career prospects. Over time, these initiatives will significantly improve the availability of skills in many specialist disciplines.

 

69. The Government recognises the many challenges that remain over the second half of the Framework - to raise levels of investment in R&D and to build on the recent encouraging rises in the take up of STEM subjects at all levels of the education system - but remains committed to its long term vision for science and innovation.

 


The Government announcement of 20 July 2009 for 10,000 higher education places for students in science, technology, engineering and mathematics courses

 

70. On 20 July 2009, the Secretary of State announced an increase in funds for student support to support 10,000 additional students in higher education. In response to the demand they had experienced, institutions indicated to Government that they were able to support additional students without compromising the quality of their offer. Government therefore provided financial support to enable an extra 10,000 full time undergraduate student places for 2009/10, in courses to support our New Industry, New Jobs agenda. Places in sectors such as digital industries, the low carbon economy and advanced manufacturing, together with business services that would lead the way in the recovery. No additional teaching grant accompanied these extra places.

71. A range of institutions bid for these places and HEFCE Circular 17 sets out the names and distribution of places for those who had successful bids. http://www.hefce.ac.uk/pubs/circlets/2009/cl17_09/

72. Data from UCAS for 2009 entry illustrated a welcome increase of around 8% in accepted applications for engineering and maths related studies in institutions across the UK.

 

Strategy for increasing uptake of STEM subjects amongst undergraduates

 

73. In Higher Ambitions, the Government set out its strategy for increasing the uptake of STEM subjects at undergraduate level, and for supporting universities in the modernisation of STEM programmes.

 

74. In doing so, it is looking to build on a track record of recent success. STEM subjects have become increasingly popular with students in recent years as the impact of long-term initiatives to stimulate interest in the sciences at school level begins to be felt.

 

75. There are three main elements to the Government's proposals for STEM studies at undergraduate level in Higher Ambitions. The first is to provide space for growth in STEM student numbers as demand increases, in a tighter fiscal climate over the next decade. Whilst block grant funding for universities will continue, this should be accompanied by public funding that is contestable, with universities being funded to provide the programmes that best meet the nation's high levels skills and knowledge requirements. Universities can only expect to grow via public funding routes if they can successfully compete for such contested funds. STEM subjects - together with other disciplines that will equip strategic sectors of the economy with the highly skilled individuals they need - will be a priority for such contested funding. This principle was followed when HEFCE were asked to allocate the additional 10,000 places announced in July 2009 to STEM and other priority disciplines. In addition, the Council have been asked to be proactive in supporting Strategically Important and Vulnerable Subjects (SIVS), monitoring the balance between supply and demand to maximise capacity to provide for qualified applicants.

 

76. The second element involves asking HEFCE to maintain a funding system which does not create disincentives for universities to offer STEM provision. In particular, as part of its review of the principles that should underpin the allocation of teaching grant, the Council is looking at the fee assumption that it makes, with a view to making it more equitable for subjects which attract higher rates of HEFCE funding. The Council will keep under review the accuracy of the subject weightings it uses to determine teaching grant. The recent efficiency savings announced for 2010-11 do not impact on HEFCE's subject weightings.

 

77. The third element concerns the continuing relevance of STEM programmes, through improving the dialogue between businesses and universities about labour market needs. This involves improving and bringing together in one place the information that is available for potential students about their courses, including teaching methods, contact time, facilities, and how the university will prepare them for a career after graduation.

 

78. It is absolutely clear that a high quality student experience with excellent teaching is vital. Both Government and HEFCE are striving to protect the funds to support teaching of STEM at universities. Of course, it is up to universities themselves how many students they recruit and whether they recruit to the maximum permitted levels. Systematic over recruitment will inevitably dilute the unit of funding.

 

 

 

Department for Business, Innovation and Skills

January 2010



[1] 'International Comparative Performance of the UK Research base' Evidence Ltd 2009

[2] Since 2007 EPSRC has played a key role in establishing the 1 billion Energy Technologies Institute and developing its research strategy.

[3] International Comparative Performance of the UK Research Base. Evidence Ltd 2009.

[4] The implications of R&D off-shoring on the innovation capacity of EU firms, Report by LTT for PRO INNO EUROPE (2007).

[5] Economic Impacts of Investment in Research & Innovation, DIUS (2008)

[6] The Impact of Research produced by Russell Group Universities, Russell Group (2009)

[7] Medical Research: What's it worth?, Health Economics Research Group at Brunel University, the Office of Health Economics and RAND Europe (2008)

[8] The economic impact of fundamental physics research on the UK economy, Oxford Economics (2009)

[9] Metrics for the Evaluation of Knowledge Transfer Activities at universities (Library House 2009)

[10] Medical Research: What's it worth?, health Economics Research Group at Brunel Universtiy, the Office of Health Economics and RAND Europe (2008)

[11] The Impact of Universities on the UK economy, Fourth Report (UniversitiesUK 2009)

[12] HESA Data 2009

[13] 2009 SIIF Annual Report http://www.dius.gov.uk/~/media/publications/A/annual-report-2009 .

[14] Ibid