UK re­search takes £8K from each for­eign stu­dent

Hepi re­port calls for chan­cel­lor to tackle re­search un­der­fund­ing. Si­mon Baker re­ports

THE (Times Higher Education) - - FRONT PAGE - Si­mon.baker@timeshigh­ere­d­u­ca­tion.com

Re­search is so un­der­funded in the UK that over­seas stu­dents are in ef­fect sub­si­dis­ing it through their fees to the tune of £8,000 each, ac­cord­ing to a Higher Ed­u­ca­tion Pol­icy In­sti­tute re­port.

The eye-catch­ing find­ing is from a re­port that shines fresh light on the sur­pluses from stu­dent fees that are used to fund re­search at UK uni­ver­si­ties, in­clud­ing pre­vi­ously un­pub­lished data about vary­ing lev­els of cross-sub­sidy at dif­fer­ent uni­ver­si­ties.

The study says that, de­spite at­tempts over sev­eral years to deal with the fact that re­search is not fully funded by grants from pub­lic fun­ders and char­i­ties, the losses be­ing made by re­search seem to be get­ting worse.

As a re­sult, the re­port calls for ur­gent ac­tion in the gov­ern­ment’s au­tumn Bud­get on 22 Novem­ber to close the es­ti­mated £3.3 bil­lion deficit in re­search fund­ing, which it says means that £1 in ev­ery £7 spent on re­search comes from sur­pluses made from teach­ing.

The re­port – How much is too much? Cross-sub­si­dies from teach­ing to re­search in Bri­tish uni­ver­si­ties – high­lights data al­ready in the pub­lic do­main from the UK’s Trans­par­ent Ap­proach to Cost­ing ini­tia­tive. This shows that teach­ing UK and Euro­pean stu­dents gen­er­ates a small sur­plus of about £200 mil­lion across the sec­tor (although this masks large cross-sub­si­dies from some sub­jects to oth­ers).

How­ever, the teach­ing of over­seas stu­dents is the main source of cross­sub­sidy for re­search, of­fer­ing a sur­plus of roughly £1.8 bil­lion. The study cal­cu­lates that £3,800 of the av­er­age an­nual tu­ition fee paid by in­ter­na­tional stu­dents goes to fund­ing re­search, which is more than £8,000 over the course of an av­er­age de­gree.

The re­port also con­tains new fig­ures from three un­named re­search­in­ten­sive uni­ver­si­ties show­ing how over­seas stu­dents at some in­stitu- tions are prop­ping up re­search ac­tiv­ity by an even greater amount.

At one of the uni­ver­si­ties, less than half the full costs of re­search are re­cov­ered, while two of the three in­sti­tu­tions make a re­turn on over­seas stu­dents that is al­most dou­ble the cost of teach­ing them (see graphs above).

Vicky Olive, a post­grad­u­ate eco­nomics stu­dent at the Univer­sity of Ox­ford, who com­piled the re­port, said that she thought in­ter­na­tional stu­dents would be sur­prised by the find­ings.

“In­ter­na­tional stu­dents know that they pay above cost price to study in the UK, but not what their fees pay for,” she said.

“Most would be shocked to find out how much goes to­wards fund­ing re­search, although stu­dents pre­fer that their money funds re­search rather than bu­reau­cracy within their univer­sity.”

She added that key to the de­bate was more trans­parency on cross­sub­si­dies as stu­dents may not be “averse” to a pro­por­tion of fees go­ing to­wards re­search “so long as it filters through to teach­ing qual­ity”.

Hepi di­rec­tor Nick Hill­man said that while some cross-sub­si­dies were “in­evitable, even de­sir­able” in UK higher ed­u­ca­tion, the trans­fer from

teach­ing to re­search “looks less sus­tain­able than it did”, es­pe­cially given the height­ened fo­cus on tu­ition fees and whether they should be low­ered for do­mes­tic stu­dents.

The re­port also con­tains an anal­y­sis of which fund­ing sources are bet­ter at cov­er­ing the full costs of re­search, which in­clude not only the “di­rectly in­curred” costs such as staff and equip­ment used specif­i­cally for a project, but also the cost of shared equip­ment and staff and even less tan­gi­ble el­e­ments such as the use of li­brary and ad­min­is­tra­tive ser­vices.

The anal­y­sis high­lights how re­search coun­cils and other gov­ern­ment fun­ders con­trib­ute on av­er­age more than 70 per cent of the full costs of re­search, but for Euro­pean Union fund­ing this fig­ure falls to 65 per cent and for fund­ing from char­i­ties just 60 per cent.

It says that, for the gov­ern­ment to meet its tar­get of in­creas­ing spend­ing on re­search de­vel­op­ment in the UK to 3 per cent of GDP, £6.3 bil­lion a year ex­tra would be needed. The re­port calls for the gov­ern­ment to an­nounce an ex­tra £1 bil­lion for re­search in this month’s bud­get and for sup­port to ease the deficit on char­ity fund­ing.

In a fore­word to the re­port, David Coombe, di­rec­tor of re­search at the Lon­don School of Eco­nomics, calls for fun­ders to meet the full cost of re­search and says that the trend for matched-fund­ing schemes was ex­ac­er­bat­ing the is­sue.

“The prob­lem is not only in the vol­ume of fund­ing; it is the prac­tice of re­search fun­ders to de­mand more than they are will­ing to pay for,” he writes.

“In­sti­tu­tions have no real choice but to ac­cept the terms of­fered. Few can turn down grants which serve their mis­sions and en­hance their rep­u­ta­tions. But as ev­ery [univer­sity] fi­nance di­rec­tor knows, with each grant comes yet fur­ther strain on al­ready-stretched in­sti­tu­tional re­search in­fra­struc­ture.”

Phil McNaull, di­rec­tor of fi­nance at the Univer­sity of Ed­in­burgh and chair of the Bri­tish Uni­ver­si­ties Fi­nance Di­rec­tors Group, said the gov­ern­ment “must ac­cept” that if it could not meet the full cost of re­search through grants, in­sti­tu­tions should be able to cross-sub­sidise from teach­ing or other sources.

“The gov­ern­ment could help by recog­nis­ing the im­por­tant con­tri­bu­tion from over­seas fees to the port­fo­lio of funds re­quired to sup­port re­search ac­tiv­ity in uni­ver­si­ties.

“Prac­ti­cal steps could in­clude re­mov­ing over­seas stu­dents from net im­mi­gra­tion tar­gets and scal­ing back ef­forts to break up the cross-fund­ing ac­tiv­i­ties of uni­ver­si­ties through se­lec­tive fo­cus on tu­ition fees.”

Jo John­son, the UK’s min­is­ter for uni­ver­si­ties and sci­ence, loves the fig­ure of £4.7 bil­lion. It’s like a tech­ni­color dream­coat to him, and he pa­rades it when­ever he can, ad­mir­ing the way that it shim­mers in front of cov­etous fel­low min­is­ters. He’d bet­ter watch his back.

The sum of £4.7 bil­lion is, of course, the amount of ad­di­tional fund­ing that the gov­ern­ment has com­mit­ted to spend on R&D up to 2020-21, billed by John­son at a re­cent con­fer­ence as “the sin­gle big­gest in­crease in R&D ex­pen­di­ture in nearly 40 years. We really recog­nise that our eco­nomic fu­ture has to have sci­ence and in­no­va­tion at its ab­so­lute core. And we’re match­ing our rhetoric with re­sources.”

Well, up to a point. In its lat­est re­port, the Higher Ed­u­ca­tion Pol­icy In­sti­tute re­veals the dirty se­cret at the heart of pub­licly funded re­search in the UK: it is des­per­ately un­der­funded and is be­ing cross-sub­sidised un­sus­tain­ably by stu­dent fees – par­tic­u­larly in­ter­na­tional fees.

The is­sue of un­der­fund­ing has long been recog­nised. In 2005 the then Labour gov­ern­ment moved to rec­tify this, in­tro­duc­ing “Trans­par­ent Ap­proach to Cost­ing” to more clearly iden­tify the true costs of un­der­tak­ing re­search. It sub­se­quently in­structed the re­search coun­cils to fund 80 per cent of the over­all full eco­nomic costs of projects.

Five years later, the Wake­ham Re­view tried to fill the gap by en­cour­ag­ing the “ef­fi­cient” use of re­sources, in­clud­ing the shar­ing of as­sets. This was partly suc­cess­ful, but 2015’s Di­a­mond Re­view still con­tained warn­ings of a loom­ing need for cross-sub­sidy.

The Hepi re­port con­firms the bad news, stat­ing that, on av­er­age in 2014-15, re­search coun­cils and in­dus­try were funded at just 72 per cent of full eco­nomic cost. As a re­sult, the re­search “deficit” rose from £1.8 bil­lion in 2010-11 to £3.3 bil­lion in 2014-15. Teach­ing, on the other hand, made a £1.3 bil­lion sur­plus, and, as the Di­a­mond re­port pre­dicted, this went to­wards fund­ing 13 per cent of all univer­sity re­search. Put an­other way, £1 in ev­ery £7 spent on re­search came from sur­pluses on teach­ing.

The re­port points a fin­ger at re­search fun­ders’ re­cent shift to­wards “chal­len­geled” ap­proaches. The Global Chal­lenges Re­search Fund is a good ex­am­ple, seek­ing match-fund­ing from uni­ver­si­ties that can’t even re­cover the full cost of their own re­search, let alone of­fer a sub­sidy to what is in ef­fect the UK’s de­vel­op­ment bud­get.

Such strains come at a time when most uni­ver­si­ties can ill af­ford to bear them. The in­tro­duc­tion of the teach­ing ex­cel­lence frame­work has ap­plied ad­di­tional pres­sure to demon­strate the value of teach­ing, and to show ex­actly where stu­dents’ fees are go­ing. Although most in­sti­tu­tions claim that their teach­ing is in­formed by re­search, many stu­dents would be unim­pressed at hav­ing to bor­row money to sub­sidise it.

While a wel­come con­tri­bu­tion, Tech­ni­color John­son’s £4.7 bil­lion is still too lit­tle. It equates to £2 bil­lion a year; if the re­search deficit is

£3.3 bil­lion a year and ris­ing, there is still a £1.3 bil­lion hole in the bud­get.

In ad­di­tion, much of the ex­tra fund­ing will come through the in­dus­trial strat­egy, which also de­mands match­fund­ing. How­ever, as the Hepi re­port notes, in­sti­tu­tions have lit­tle choice but to ac­cept the terms of­fered. All are scrab­bling to in­crease their re­search in­come even if it ul­ti­mately re­sults in a loss, par­tic­u­larly as re­search out­put af­fects their po­si­tion in rank­ings and the re­search ex­cel­lence frame­work. Yet the strain is show­ing: the re­cent El­se­vier re­port for the gov­ern­ment on the com­par­a­tive per­for­mance of the UK re­search base notes that there is cause for con­cern on sev­eral fronts.

The au­thors of the Hepi re­port hope that it will con­vince the gov­ern­ment, ahead of the next spend­ing re­view, to in­crease un­al­lo­cated block fund­ing for re­search. It’s a clar­ion call to pro­tect the unique po­si­tion of R&D within the UK econ­omy.

How­ever, at a time when the pub­lic purse is be­ing squeezed by the twin de­mands of aus­ter­ity and Brexit, and when uni­ver­si­ties are per­ceived as be­ing out of line with the pub­lic mood, it will be hard for the gov­ern­ment to stay strong on its prin­ci­ples. Let’s hope that Joseph is lis­ten­ing and not dream­ing – and that he still has the ear of the pharaoh.

The dirty se­cret at the heart of UK re­search: it’s des­per­ately un­der­funded and is be­ing cross­sub­sidised by stu­dent fees

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