DfES - The Future of Higher Education

Research lays the long-term foundations for innovation, which is central to improved growth, productivity and quality of life. This applies not only to scientific and technical knowledge. Research in the social sciences, and in the arts and humanities can also benefit the economy - for example, in tourism, social and economic trends, design, law, and the performing arts - not to speak of enriching our culture more widely. In addition, the strong research base in the UK helps us to take advantage of research conducted elsewhere. It provides the expertise to keep up with international developments, and the clout to join international partnerships. But competition is fierce. The USA, Japan, Canada, and other nations are significantly increasing their investment in research. To maintain our position and build on our generous Spending Review settlement, we need to think carefully about how research is organised and funded.

. The recent spending review will increase expenditure on science and research in 2005-06 by £1.25 billion a year compared to 2002-03 - around 30 per cent in real terms.

. We want to think carefully about the way research funding is managed and distributed, so that it works in the most effective way. To do this, we will take three important steps:

- We propose to encourage the formation of consortia, provide extra funding for research in larger, better managed research units, and develop criteria to judge the strength of collaborative work.

- As part of this process, we will invest even more in our very best research institutions, enabling them to compete effectively with the world's best universities.

- And we will also make sure that the very best individual departments are not neglected, by making a clearer distinction between the strong and the strongest.

. It is important that new research areas and centres can emerge and flourish. We will support emerging and improving research and make sure that the system does not ossify.

. We will invest in developing and rewarding talented researchers. There will be rigorous new standards for government-funded research postgraduate places, and good researchers will be rewarded, through the extra investment in research in general, money earmarked for pay, and more time to concentrate on research.

. We will create a UK wide Arts and Humanities Research Council, to put the organisation of funding for the arts and humanities on the same footing as funding for science and technology.

. Our proposals build on the Government's strategy for science, engineering and technology, "Investing in Innovation", published in July 2002.

2.1 Chapter 1 sets out our record of quality and productivity in research, and the central role that our universities play in it. But as more countries seek to emulate this performance and increase their investment in research, the competition intensifies. We cannot stand still if we are to sustain the excellence and international standing of research in our universities. That is why, last July, the Government published its strategy for the UK science base, 'Investing in Innovation'.19 Building on the increased funding for research in science and technology since 1998, part of which has begun the long overdue restoration of the research infrastructure, there will be a further increase of £1.25 billion by 2005-06 compared to 2002-03, around 30 per cent in real terms. But to maintain and strengthen our position in the face of increasing global competition, we also need to review how research is organised to ensure the increased funding supports our most talented researchers and our most effective research institutions and departments.

2.2 Core public funding for higher education research is provided through the 'dual support system' - one stream via HEFCE to support the underpinning research capability of institutions, which is distributed selectively according to the quality of research as measured by the Research Assessment Exercise (RAE). The other stream flows via the research councils and the Arts and Humanities Research Board to support specific research projects.

2.3 The Government's increased level of investment in research was announced last July in the document 'Investing in Innovation'. Box A below gives the main points.

. A £244 million increase, compared with plans for 2002-03, in the money available to the Higher Education Funding Council for England for the research component of university block grants.

. A substantial and dedicated stream of capital for universities, worth £500 million per year by 2004-05, to develop their science research infrastructure and to allow them to plan for their future with certainty.

. Universities to put in place systems to ensure and demonstrate that their research is financially sustainable.

. an extra £120 million for the research councils from 2005-06 to enable them to make a more realistic contribution to the full costs of the research that they sponsor in universities.

. Increased basic research through sustained real annual growth of 5 per cent in funding for research council programmes and equipment.

. An additional £50 million per year by 2005-06 to support collaborative research and development on key emerging and pervasive technologies such as nanotechnology, which looks at developing microscopically small objects, using individual atoms and molecules.

. Steps to improve the pay and training of scientific postgraduate researchers, and to enhance technology, mathematics and science education in schools, colleges and universities.

. Expansion of the Higher Education Innovation Fund, with funding to stimulate enterprise from research across the regions, to £90 million per year by 2005-06.

2.4 By historic standards, these are very significant investments, particularly when put alongside earlier schemes to renew the research infrastructure. This extra money will ensure that research projects are fully funded, so that universities do not have to cross-subsidise research from teaching, or scrimp on investment in infrastructure. The funding will also ensure that the current poor state of the research infrastructure in universities can be brought up to standard - because in many subjects good research increasingly depends on high-quality facilities and equipment. In return, universities will need to demonstrate that they are operating sustainable research businesses through recovering the full economic costs of research. Other research funders will also need to play their part.

2.5 This increase in resources for research has been widely welcomed. The challenge now is to make best use of the money by making sure that research funding is allocated, organised and managed effectively. Recurrent funding for research is already distributed selectively, based on the outcome of the RAE, which judges the quality of research in departments. Details of the RAE are given in Box B, below.

2.6 The selectivity of research funding is illustrated by looking at RAE ratings, which mean that about 75 per cent of HEFCE research funding goes to the top 25 institutions, and research council grant funding follows a similar pattern. This means that some institutions have a high concentration of top quality research. But at the same time there is also a wide spread of individual departments in other universities undertaking high quality research - beyond the top 25, a further 52 institutions have at least one department rated 5 or 5* in the 2001 RAE, and departments rated 4 are yet more widespread. The issue is how best to balance four issues:

. protecting relatively isolated pockets of high-quality research in institutions which are not themselves research intensive;

. steering non-research-intensive institutions towards other parts of their mission, and rewarding them properly for it, so that the RAE can be focused on the best research .

The Research Assessment Exercise (RAE) was introduced in 1986 as a way of selectively funding research according to defined quality standards. The RAE took place every four or five years through a process of peer review by panels of experts - both academics and users of research such as business people. The most recent RAE took place in 2001.

Institutions were able to submit their research in up to 69 different subject areas and each submission was awarded a quality rating according to a standard scale.

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

The rating, together with the volume of research associated with it, is an important variable in the formula used by HEFCE and the other higher education funding bodies to determine the funding allocations to institutions.

In 2002 the higher education funding bodies announced a wide ranging review of research assessment, chaired by Sir Gareth Roberts. This review will report later in 2003 and is likely to lead to a revised system of research assessment based on expert review and featuring research centres and partnerships of international standing.

2.7 We believe that the time has come to look carefully at the relationship between research and teaching. In reality, the connection between an institution's research activities and its teaching is indirect, and there is ample evidence of the highest quality teaching being achieved in circumstances which are not research-intensive. The scale and location of research activity has to be justified and decided on its own merits. We are also determined to promote other sources of recognition, achievement and prestige besides eminence in research, both within and between institutions, as set out elsewhere in this paper.

2.8 The Government intends to improve the position of research further by focusing resources more effectively on the best research performers, and by providing appropriate incentives for university researchers to collaborate among institutions and across traditional disciplines. Concentration brings real benefits, including better infrastructure (funding excellent equipment and good libraries), better opportunities for interdisciplinary research, and the benefits for both staff and students which flow from discussing their research and collaborating in projects. Modern research is less amenable to the 'lone scholar' model - for example, one study found that by 1994, 88 per cent of all UK HEI papers involved two or more authors and 55 per cent involved two or more institutions.20 Furthermore, larger groups of researchers in a subject, or in related subjects, perform particularly well - at least in the natural and social sciences.21 Greater concentration of resources also makes it easier to develop research only posts and to offer better pay to attract excellent researchers. As Chapter 1 points out, international comparisons - not only with the USA, but also with emerging competitors like China and India - suggest that we should be thinking hard about funding our research in larger, more concentrated units.

2.9 Collaboration is a way of life for many researchers. They see the benefits which flow from economies of scale and scope in terms of facilities, and from the sharing of knowledge and the more effective generation of new ideas. And, crucially, they know it allows excellent researchers, wherever they may be, to participate in the best research across the sector. Well‑conceived collaborations:

. will provide a higher proportion of unallocated funding which can be used to support speculative research, before it is ready for research council or other support. This unallocated funding would no longer have to be found at the expense of other activities as it is now in some non-research-intensive institutions;

. share expertise for managing intellectual property and making the best use of patents (for example); and

. can ensure that good quality research in isolated pockets finds secure funding.

2.10 Some of these points are equally valid for the arts and humanities as for science and technology.

2.11 Collaboration should be encouraged, and in a way which reinforces the benefits which it brings when it is done well. But it cannot be imposed top-down. So we do not have a blueprint for particular sorts of collaboration - we want to encourage them to grow organically over time.

2.12 We therefore intend to reward research that is more concentrated and better-managed, without being directive about the precise shape and formation of those collaborations, and without cutting off funding from others in the sector. The collaborations could take many forms, including:

. graduate schools to give high quality research training, and where 'Investing in Innovation' has already recommended HEFCE funding for research students should be dependent on meeting a set of strict quality criteria;

. within large cities or other areas collaborative units for example between departments in research-intensive and less research-intensive universities, possibly linked to collaborations in teaching and knowledge transfer as well;

. within regions, formal research partnerships where there is added value by combining strengths (see Box C below);

. in certain areas, and where this is appropriate, forming powerful clusters of research between universities, government laboratories, research council laboratories or units, and units funded by charities.

2.13 In each case the central issue will be whether the arrangements add value in terms of improving the quality of research or graduate training. Where institutions already have great individual strength and depth in research across the board, there is no merit in forcing collaboration or cooperation just for the sake of it. Nevertheless, this approach would reward research concentration and synergy, and encourage appropriate collaboration between institutions. We know that these issues are being examined by Sir Gareth Roberts as part of his review of research assessment, and we envisage these arrangements, or similar ones, folding into his proposals in the longer term. But we ought to begin to capture the benefits earlier. To do this, we propose to ask HEFCE, in consultation with Office for Science and Technology (OST), to provide funding which will incentivise the formation of productive collaborations through initial pump-priming.

Box C: The White Rose Consortium

The White Rose Consortium is an association of the three major research universities in Yorkshire - Leeds, Sheffield and York, and has a large critical mass of research, teaching, and enterprise facilities. It has developed a number of collaborative projects, including a Bioscience partnership which has been highly successful in realising the economic benefits of university research. The partnership has created 21 spin-out companies, signed 14 technology licences and filed more than 40 patents in areas such as healthcare, bioinformatics and plant sciences.

2.14 HEFCE (together with the equivalent bodies in the devolved administrations) is undertaking a review of research assessment which will investigate different approaches to the definition and evaluation of research quality, drawing on the lessons of both the recent RAE and other models of research assessment. The review is now under way, and has consulted widely within the sector and with other stakeholders. The responses show overwhelming support for the continued use of expert review and considerable support for reducing the numbers of units of assessment. The need to recognise multi-disciplinary research activity and collaborative research fully has also been endorsed. The revised research assessment exercise to be introduced, probably in 2008-09, is therefore likely to grade broader subject groupings than before and also recognise centres of excellence. Such indicators will enable the community to identify and designate leading research institutions. The report on the Review of Research Assessment will be submitted to the UK funding councils in April 2003.

2.15 We welcome these likely outcomes. However, a further Research Assessment Exercise is not due until 2008, and we believe that there is a case for more discrimination between the best before then. In the last RAE, 55 per cent of research active staff were in departments rated 5 or 5*. We will ask HEFCE, using the results of the latest Research Assessment Exercise, along with international peer review of additional material, to identify the very best of the 5* departments which have a critical mass of researchers - a "6*" - and will provide additional resources to give them an uplift in funding over the next three years. At subject as well as at institutional level, it is critical that we focus our resources on the strongest, who bring us the best returns.

2.16 Once the review is complete, HEFCE will need to do further work to design a funding system which fits effectively with this new system of assessment. We must be sure that the new system can be fully funded from within the resources available. And in all this, HEFCE will want to consider how to put these principles into practice while keeping bureaucracy to a minimum.

2.17 The best universities contain a critical mass of research groups which can compete globally in a wide range of disciplines. But - as noted above - the increasing competition from overseas means we cannot assume they will remain at the cutting edge. We need to consider what else needs to be done if we are to continue to retain our leading position. The increase in research funding overall, the designation and reward for a new category of research departments, and our extra support for larger units will certainly help our leading research institutions to recruit and retain the staff they need.

2.18 However, increased funding on its own is not enough to ensure these institutions can stay at the cutting edge. They also need the leadership, governance and management to put in place outstanding research planning, sound policies with respect to intellectual property, and a willingness to collaborate with others, and to help exploit the knowledge they generate. The Lambert Review of links between higher education and business will ask business for its views on the present governance, management and leadership arrangements and their effectiveness in supporting good research and knowledge transfer and providing relevant skills for the economy.

2.19 Where they have these arrangements in place in addition to the critical mass of excellent research, we will allocate additional capital funding to allow them additional flexibility to achieve their institutional goals for research. This will mean that as a nation we continue to reap the social and economic benefits of being at the forefront of the world in science and technology. Our best research will be explicitly recognised, as well as properly funded. There will be regular reassessments so that as strong new institutions and consortia develop they can also be recognised as leading institutions; and so that institutions which cannot maintain their leading status are not sustained on the basis of reputation alone.

2.20 Though it is right to focus resources on the best, we must also make sure that the allocation of funding overall encourages and rewards promising departments with comparatively low research ratings, particularly for work in new research areas, so that they have the resources to develop and improve.

2.21 In order to do this, we will ask HEFCE to look at how funding for departments with lower ratings under the existing system can be related to potential to progress further, and linked to good planning for future improvement. This needs to go alongside the identification and funding of emerging and potentially important areas of research in order to build capacity in disciplines that are strategically important. We are asking HEFCE to take the first steps in 2003.

2.22 Research in the arts and humanities is of vital importance to our university system and its international standing. At present, research in the arts and humanities is funded by the Arts and Humanities Research Board (AHRB) (as well as through HEFCE), rather than by a research council. In September 2001, the Government and devolved administrations launched a review of arts and humanities funding. The aim of the review was to enhance provision of arts and humanities research, and to ensure that there are no artificial barriers to interdisciplinary work between the arts and sciences, as well as to make sure that the arts and humanities are properly resourced and supported.

2.23 This review concluded that the AHRB should take on the status of a fully fledged research council funded by the Office of Science and Technology in the same way as the other research councils. This recommendation will be put into action as the legislative timetable allows, with the aim of achieving a fully functioning, statutory research council by 2005. We expect the benefits to include stronger links between researchers in different disciplines, more participation by the arts and humanities in national and international programmes, and reduced bureaucracy for institutions as AHRC systems are aligned with those of the other research councils.

2.24 The Government last year asked Sir Gareth Roberts to undertake a review of the supply of people with science, technology, engineering and mathematics skills. The report of Sir Gareth's work, 'SET for success',22 was published in April 2002. And the Government responded to Sir Gareth's report as part of the science strategy set out in 'Investing in Innovation'.

2.25 Sir Gareth's report emphasised the need for high-calibre PhD students - the academic or business researchers of tomorrow, and a key ingredient in our universities' future success. In order to attract the best students into postgraduate study, the Government has announced substantial increases in the stipend for research council funded PhD students - from the 2003-04 minimum of £9,000 to a £12,000 minimum by 2005-06, with more in shortage subjects to raise the average still higher.

2.26 The training of PhD students also merits close attention. The Roberts Review looked at the need for high standards of PhD work, adequate supervision of students, and training in transferable skills. As set out in 'Investing in Innovation', we will ask HEFCE to set high minimum standards for the training of PhD students which must be met before higher education institutions can draw down funding for PhD places, though they could still fund PhD places from their own resources if they wished to do so. This may lead to larger graduate schools in fewer HEIs, as some institutions decide not to offer PhD places, and others are in a position to play to their strengths in PhD training by expanding their postgraduate provision. In time, this might play into a model where postgraduate degree awarding powers are restricted to successful research consortia.

2.27 Ensuring that pay rates and facilities for research leaders in the UK are competitive is essential. Institutions have specific additional support to attract and retain researchers of outstanding achievement and potential, through the Wolfson - OST Research Merit Awards. To secure the brightest and the best, universities must be able to pay the market rate, and we are making sure that they have the resources to do so, both through our overall funding proposals, and through our propositions on the concentration of research. Chapter 4 gives more details of our proposals on pay.

2.28 We will encourage institutions to establish more research-only posts, something which
can help to attract and retain talented researchers. Good progress has been made here, and 4.1 per cent of UK lecturers were employed in research-only posts in 2000-01, compared to only 3.2 per cent in 1995-96. However, we still believe that more could be done to free up our best researchers, and as investment in research improves, we hope that this will become easier for those institutions wishing to concentrate on research.

2.29 But whilst research is led by outstanding researchers, their work depends in large measure on the efforts of others: academics, research students, and other research staff. Both the Roberts Report, and the more recent report by the House of Commons Science and Technology Committee on short-term research contracts in science and engineering, highlighted the need to do more to promote the recruitment, retention, training and career progression of junior researchers. Their knowledge and skills are vital to successful research programmes. In taking forward the recommendations in 'Investing in Innovation', the Office of Science and Technology and the Department for Education and Skills are also taking some specific steps to improve research careers and the rewards of research. These include:

. Providing funding to increase the average research council postdoctoral salary by around £4,000 by 2005-06;

. Improving the training available to research council funded postdoctoral researchers as well as to PhD students; and

. Creating 1,000 new academic fellowships over five years to provide more stable and attractive routes into academia.

2.30 It is for institutions to ensure that they recruit and retain the research staff they need, but we have made clear to HEFCE that support for junior research staff will be expected to feature in institutions' human resources strategies - including effective training and scope for career development. We will also take steps to ensure that mechanisms for funding and quality assessment do not inadvertently reinforce particular models for managing research staff. We expect the review of research assessment to consider the impact of its proposals on the work and career development of junior researchers.

2.31 New regulations to prevent the less favourable treatment of fixed-term employees came into force last year. These will help to improve conditions for contract research staff and will limit the use of successive short-term contracts, a particular problem for some researchers. The Government expects that a combination of this and the increased research funding announced in the spending review will enable institutions more flexibility to provide continuing employment for their staff.

2.32 To complement our proposals for identifying and funding promising or emerging areas of research, we will also introduce a Promising Researcher Fellowship Scheme which will provide funding for a talented researcher in a non-research-intensive department (scoring 4 or below in the RAE) to spend 6 months researching in a high-scoring department. The awards would be made to an individual, could be taken up in the researcher's own research cluster or elsewhere, and would be worth up to £50,000 for six months, including funding to replace the Fellow's teaching. We expect to provide funding to 100 people a year by 2004.

2.33 Taken together with the exceptionally generous funding settlement for research, these proposals will reinforce the position of our leading institutions so that they can continue to compete on the world stage; they will lay the foundations for greater collaboration between universities in the interests of all; and they will encourage research departments which are improving and well managed to raise their sights still further. This provides the basis for this country to remain a world leader.

* Estimates of the amount of the Office of Science and Technology's UK wide funding that is likely to go to HE institutions in England. These estimates are forward projections based on spending in previous years by OST and the OST Research Councils.

20 Collaborative Approaches to Research, Smith D. and Katz J.S. (2000). ....return

21 The Role of Selectivity and the Characteristics of Excellence, HE Policy Unit, University of Leeds (2000). ....return