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September 29, 2010

The effects of cutting QR in England by 15 per cent

Cuts of 15 per cent in the research funded by the Higher Education Funding Council for England could redraw the map of research in England, with dozens of universities, hundreds of departments and tens of thousands of researchers potentially losing all their funding.

UPDATE. You can view the full institution-by-institution spreadsheet of losers cited by the Times yesterday and Guardian today here.

Research Benchmarks has looked at three scenarios for implementing cuts of 15 per cent in HEFCE’s £1.6 billion QR budget. The powerful impact on many different kinds of institutions in all three shows there is no easy option for cuts as ministers finalise their plans.

The three scenarios have been inspired by the different emphasis placed on cuts by Vince Cable, David Willetts and Universities UK.

Cable’s approach shares the pain most widely, but there would still be medical schools losing around 30 per cent of their income, and the top end of the Russell Group would be badly hit. Imperial College London for example would lose 10 per cent of its income.

Willetts’ approach has been to emphasise the need to shore up strong departments. That approach leads to a massive loss of diversity in the system with over 40 institutions and 20,000 researchers being excluded from funding altogether.

UUK has suggested introducing some kind of threshold into the funding formula used to allocate QR. That approach could exclude over 800 departments from funding, and cost leading lights such as Liverpool and Cranfield almost 30 per cent of their income.

The modelling shows that whatever course ministers ultimately choose, cuts of this magnitude will lead to a historic re-drawing of the research map in England’s universities.

 

Inspired by Vince Cable

In his big speech on science earlier this month, Cable hinted at withdrawing funding from the 45 per cent of research rated 2* or below in the 2008 Research Assessment Exercise. Unfortunately, that only accounts for about 10 per cent of Mainstream QR. To get to 15 per cent, you also have to start cutting into funding for 3* research.

This approach is the most consistent with previous policy at HEFCE and could be presented as a straightforward tightening of the screw of concentration in tough times. Only 30-odd departments lose funding altogether. Of the options, it spreads the pain most widely. But it comes with significant downsides:

  • Big research-intensive universities are hit hard. Liverpool and Newcastle both lose more than 15 per cent.
  • Cambridge, Oxford and Imperial all lose about 10 per cent.
  • Losses of 20 - 70 per cent for new universities
  • Some medical schools hit hard - eg St Georges in London loses 28 per cent.
  • Many weaker departments see most of their researchers excluded from funding and their grant reduced by around 40 per cent.
  • Some physics departments lose a quarter of their funding.

 

Inspired by David Willetts

 [This is the scenario that generates the spreadsheet mentioned above]

David Willetts has spoken of the need to support excellent departments. This approach can be put into effect by restricting funding to those departments with the largest power - a combination of quality and volume. (To be precise, quality as measured in the RAE 2008 and adjusted according to HEFCE’s current [9 3 1 0 0] formula and multiplied by the number of staff submitted).

This protects departments that are both big and good, maintaining critical mass across the system but at the expense of smaller, sometimes higher quality departments. This keeps the cuts in all the Golden Triangle institutions to no more than 5 per cent. But because big departments take most of the money anyway, the consequence of this policy would be a massive decrease in the diversity of the system:

  • 1021 departments lose all funding, more than half the total of 1844.
  • These departments contain over 20,000 researchers, many of whom will likely be driven out of research altogether.
  • More than 40 institutions lose all funding.
  • The likes of Liverpool, Newcastle and Sheffield no better off than they were in the Vince Cable scenario.

Inspired by UUK

Universities UK has introduced the idea of limiting funding to universities that cross a threshold of quality. We looked at one way of putting this into practice in Research Fortnight recently. Another way is simply to restrict funding to those departments with the highest quality, based on the 2008 RAE results and the [9 3 1 0 0] weightings in use by HEFCE currently.

This again prioritises excellence with the Golden Triangle doing well. Some small, highly focused and high-quality universities such as Durham and York escape with cuts of only 2 per cent. But there are costs. A large department may have a low percentage of 4* work but still have many more 4* researchers than a small department with a higher quality score. In this scenario, the big department can lose all its money. The consequences are again dramatic:

  • 820 departments lose all funding
  • Close to 20,000 researchers affected
  • 32 institutions lose all funding
  • Nottingham and Newcastle lose 15 per cent
  • Liverpool and Cranfield lose almost 30 per cent.

It seems clear that in many of the possible scenarios, some universities will lose out purely because of the strategy they adopted in 2008 for including or excluding staff from assessment in the RAE - something they were promised at the time would not affect funding.

 

Comment

Cuts of 15 per cent in research budgets have been in focus since an authoritative leak in the Financial Times at the start of last week. But it is one thing to look at cuts of 15 per cent in the abstract. It’s quite another to face up to what they would really mean in practice. The numbers in these scenarios show that there are no easy options when the cuts reach this scale, and should make sobre reading for vice-chancellors around the country.

The Golden Triangle are widely seen as big enough and brilliant enough to hold their own in any system. But successive leaders at HEFCE have been anxious to maintain capability in the middle ranks of the Russell Group, at places like Nottingham and Liverpool. That objective took a big knock with the 2008 RAE results. With new universities eating into the QR cake, the likes of Liverpool and Newcastle were squeezed. This modelling shows that there is no obvious way to avoid squeezing them further with cuts of this magnitude.

It is the Vince Cable inspired scenario that’s worst for the Russell Group. But if ministers try and protect the Russell Group with one of the other scenarios, then the effect is devastation everywhere else.

It would be a striking way for the Conservatives to book-end 13 years of Labour power. Since Margeret Thatcher dissolved the binary line between universities and polytechnics in 1992, we have gradually increased the research capability of what were the polytechnics. Now, in one swoop, much of that could be obliterated.

If so, we could be reverting to a 1950s sort of system where to get on in research you had to be talent-spotted by someone at an elite university. Maybe that’s not a bad idea. But with the change being so sudden, a lot of talented people recognised by the 2008 RAE may find themselves in the wrong place at the wrong time, with no obvious way out.

Cuts of this magnitude will be handled by different universities in different ways. In the less research-intensive places, departments stripped of QR funding may well turn their back on research. Wealthier, more prestigious universities may well calculate that they can shore up losses in their research income with increased student fees. For them the worry is that uncertainty may eat up their surpluses before the new system of fees is bedded down in a stable market.

It’s clear that almost any conceivable scenario involves large transfers of money to the South and East of England from the rest of the country - the reverse of high-profile coalition promises.

In any case, bad as they may be, all three scenarios are, in my book, better than the Russell Group’s preferred Option 4 - limiting QR to the top 30 or so universities. At least these scenarios all leave some dynamism, some competition in the system.

 

Modelling notes

The modelling has been done by looking at the allocation of Mainstream QR and assuming that any changes here are reflected in the allocation of other parts of QR.

The Vince Cable scenario can be calculated by using the weightings [9 2.64 0 0 0] instead of [9 3 1 0 0] to calculate the allocations to departments.

In other two scenarios it is a case of ranking departments appropriately and then drawing a line at the bottom of the list to be funded.

More detailed tables (and explanation) are available to customers of our Research Benchmarks service. These show definitve lists of winning and losing universities and departments. We also have tables for other levels of cuts, eg 10 per cent or 20 per cent. Email Benchmarks@ResearchResearch.com for details.

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Comments

Research in the UK is a success story, widely recognised as second only to that in the USA, but will it retain its position when the funding reductions in the 2010 Spending Review take effect? In recent weeks several have pointed out the vulnerability of the UK research base: Steve Smith’s warning that a large cut would relegate the UK higher education to the second division for a generation needs to be taken seriously. The threat, moreover, is not only the health of UK research. There is a bigger danger of damage across the board – a generation-long demotion not only of research, but also of research-engaged teaching, the sector’s contribution to business and the economy, and its overseas reputation and earnings.

If cuts are inevitable, how should they be made? A vital principle must be that excellence is supported wherever it lies – vital because the alternative is that some of the very best work will be sacrificed in favour of work that is less good: the strongest work should be defined at individual level not at the level of the institution. This principle has been supported by UUK and others, and in speeches earlier this month both Steve Smith, President of UUK and David Willetts, Minister for Universities and Science accepted the point – implicit in this principle – that the pain would be felt across the sector.

The problem is that the existing level of concentration means that only small amounts are available from savings in the lowest-rated work. Of current quality-related research block grant funding (QR) in England, not counting London weighting, 51% funds 4* (world leading) research, 38% funds 3* (internationally excellent) work, and 11% funds 2* (internationally recognised) work. So there is not enough funding in 2% to meet a cut greater than 11% – though even this would have significant impact because of the size of the 2* tail across the sector: if 2* funding were removed, at least one – possibly more – large research-intensive institution would find less than half of its staff funded through QR.

There are two corollaries here: first, that solutions must be sought elsewhere, and second that real and painful losses ensue if significant reductions are made. Previous adjustments to selectivity and concentration have not faced this issue – or, put another way, there is not the luxury of reducing funding for only that research which is ‘merely’ internationally recognised.

This realisation has tempted some into thinking about thresholds. William Cullerne Browne in Research Fortnight earlier this month looked at the effects of volume (numbers of researchers) and quality thresholds (minimum % of 4*), all of which have significant implications (see table).

There is little evidence that a specific threshold of critical mass exists. But the main issue is that thresholds fundamentally breach the principle that excellence is funded wherever it lies. If the quantity of 4* work (or 4* and 3*) work is an entry qualification for funding, not just a driver in allocating funding, 4* work in units under the threshold will be sacrificed in favour of lower quality work at 3* or 2* elsewhere. Use volume as a threshold then the same applies, and in addition it will be game over for research in the Arts and Humanities and other disciplines organised in small units.

Most important is that these will not be marginal effects, if cuts are, as many anticipate, in the order of 25%. A combined quality and volume threshold which favoured submissions with both over others, and looked to save 25%, could extinguish real stars, leave well over half of departments submitting to the 2008 RAE unfunded, close over half the research in some research-intensives, and in some disciplines (including some medical disciplines) remove funding from up to 80% of the departments submitted to RAE2008.

It does not of course stop there. Most far-reaching for the global reputation of the sector will be the impacts on business and the economy and overseas educational provision, and on teaching. It will not be ‘mediocre’ provision (if indeed that exists) that will be hit, but high-reputation, high-performing disciplines in good universities.

So what is the solution? There is a need to support the strongest research – but strongest needs to be defined not at the level of the institution but at the level of the researcher. Not funding 2* work, and reducing 3* funding by a third could achieve a 25% reduction. Greater selectivity could be introduced through a premium – which is where a threshold could more safely be used – for, e.g., submissions with high relative concentrations of 4* work.

At the same time, there the level of research required to sustain research-engaged teaching – delivered by those creating knowledge rather than professional learning facilitators – is arguably a cost of teaching. If this is right, universities may price it into the graduate contribution, or government could reflect this in the balance between in teaching and research funding reductions.

Research funding is not just about money, it is also about the capacity of institutions to drive economic growth, and the global reputation of the UK higher education sector. We need to wake up to the collateral damage that a big cut in research would cause. Excluding whole institutions from research funding will vitiate their contribution to the economy and the provision of higher-level skills. It will negate their ability to work with business and drive wealth-creation through their interactions with business; it will hit disproportionately the sector’s contribution to overseas trade. Although half of a total of £1bn in QR goes to ten universities, those institutions are responsible for only a quarter of the sector’s £1.7bn of overseas earnings, and only 21.5% of its £277m earned from business and consultancy contracts.

While the strongest work needs to be supported – as we all claim within our own institutions – a definition of strength that lays waste most of the farm is not one which is workable. We need a genuine definition of strength, based on the assessment of excellence wherever it lies.

I am also perturbed by the way the huge differences are being elided between RAE quality and other strengths, such as work with industry. It's a simple way of rationing, but - as you say - at what cost?

An initial reaction so please correct me if I am wrong. The cuts are to be made over the lifetime of the current parliament I believe - so even the worst case scenario of 25% cuts equates to approx 5% per annum over a 5-year period. Certainly none of this is ideal seeing as other countries area increasing their investment but surely 5% can be found from, and I loathe the term, efficiency savings. There must be some 'fat' that can be cut across the board?

Oli, I think a lot of people will instinctively reason like you. Certainly, the Treasury does. But there are good reasons to think you are wrong.

There's plenty of evidence that the UK system is already very efficient, more efficient than other countries. Metrics of efficiency, eg citations per researcher, consistently put the UK at the top. Things like the Research Assessment Exercie have been deliberately designed to incentivise good performance and make UK science more efficient. So I think it's a bit like taking one player away from the Man Utd XI. Surely there must be some fat in the team. But in fact does it become more efficient? No, it just becomes weaker.

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