Clear improvement?

September 26, 2003

Alison Goddard and Caroline Davis look at dual support reforms

Government plans to make universities responsible for recovering the full economic costs of research have come under fire from many disparate institutions.

While spending on science is one of Labour's successes, the dual-support system - whereby that money filters through to research councils to support specific projects - faces a crisis. The problem stems not from the research councils, but from a shortfall in funding council cash, which is supposed to cover staff and infrastructure costs.

The pressure group Save British Science points out that, while the research councils' overall budget has gone up 123 per cent in real terms since 1987, the funding councils' overall budget has risen by just 26 per cent. This means that, in 1986, every £1 of research council funding was met with £1. from the forerunners to the funding council. By next year, this figure will be 66p for each £1 of research council money.

Proposals for reform of the system were issued for consultation by the Office of Science and Technology in May. They outline how universities should recover the costs of research using a transparent approach to costing (Trac), a financial methodology the OST wants in place by next summer.

Although old and new universities welcome the reforms in principle, they question the possible consequences. Pressure groups and industry are also concerned.

The research elite are worried that blue-skies research will suffer as they are obliged to spend more of their funding council grants on specific projects. Sir Richard Sykes, rector of Imperial College London, said:

"Sustainability is the objective. The system should be so designed to deliver as near as possible the full economic costs of each project."

The elite are also concerned that charities will refuse to pay the full costs of research, arguing that it is the government's responsibility to pay for the running costs of universities.

Malcolm Grant, provost of University College London, said: "For UCL, the issue of overheads on charity funding could well result in a cut in the volume of research. The politics of it could mean that money that now comes from charities no longer does."

The Russell Group has written to science minister Lord Sainsbury about the tight timescale, a concern shared by the Confederation of British Industry.

The CBI has warned that this could result in companies withdrawing research from universities, either to do it in-house or overseas, because their budgets are fixed for long time periods ahead.

The Coalition of Modern Universities, which represents former polytechnics, has accused the government of hypocrisy. At present, research councils fund 46 per cent of overheads; from 2005, that figure will rise to between 60 and 70 per cent. Michael Driscoll, vice-chancellor of Middlesex University and chairman of the Coalition of Modern Universities, said: "After chastising universities for not recovering the full costs, the OST proposes a system where they don't pay the full costs - they pay up to 70 per cent.

Most universities would prefer to see... the research councils being in a position to cover the full economic costs of their research projects."

The OST has also recognised that the system could attract a new set of researchers, who previously would have been ineligible, to apply to the research councils. Researchers in fields such as the arts, social sciences and mathematics, whose main expense is the time of the investigator, might apply for funding. Since the aim is to fully fund existing research, this would not be welcome as the funding would be spread even thinner.

The deadline for comments on the proposals is September 30.



Research elite
Oxford University does well from the dual-support system. Last year, it brought in £220 million in research funding, with £49.2 million from research council grants, matched with £64.9 million of funding council quality-related cash.

The university has welcomed reform to the dual-support system and the introduction of Trac, but has two concerns - the timescale and the level of responsibility of other research funders.

Kevin Davis, head of management accounting on Oxford's transparency review team, said: "It's a move in the right direction. It's good that it has been recognised that there is a large element of subsidisation going on in the sector."

But he warned that having a robust new costing system in place by next autumn was virtually impossible. "We can't change the culture between now and autumn of all academics, principal investigators and departmental administrators to understand the difference this makes. Understanding it technically and then accepting it is a big educational barrier. It's just not going to happen. Oxford is a conservative place."

He said Oxford would have a system in place to enable full economic costing of grant applications, but added: "How good it is is another matter. If we move to price-based accountability, it becomes less of a burden. The longer we have, the more likely the solution is to be acceptable."

Oxford looked at three aspects of the Trac system as part of the pilot: its impact on the university's other internal systems, particularly information technology systems; how the new accounting system will affect its three-year-old resource allocation model for distributing internal funds; and how the proposals will affect non-research council funded research from charities, government departments and Europe.

Smaller player
The Institute of Biomedical and Biomolecular Research is the jewel in Portsmouth University's research crown.

The institute submitted more than 95 per cent of its staff to the 2001 research assessment exercise and in the 35-strong submission gained a grade 5.

However, the institute's success in attracting research grants from biomedical charities is proving a potential headache for university financial director Malcolm Ace.

He said: "The major problem is with charities, where there has been resistance to funding anything other than the direct costs. Charities are an enormous part of our research income and very much concentrated in the biomedical research area. The full ramifications of charging the full economic costs haven't been thought through."

Portsmouth gets £8.2 million a year in research funding. £3.6 million comes from the English funding council, with research councils, charities and the European Union giving some £1 million each. The other £1.5 million comes from industry and other public-sector and overseas sources.

As the university's research activity is relatively small scale compared with research-intensive institutions, Mr Ace's team is relatively upbeat about the workload and timescale for implementing Trac.

He said: "It is a very quick implementation but there's the benefit of extra funding. It means more paperwork but it also involves more paper money coming into the university."

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