Research assessment exercise funding should be replaced entirely by a system where project costs are paid in full by research councils and external funders, higher education and industry leaders have said.
Although such a move would not be possible in the short term, it should be carefully planned so as to bring about an end to the dual-support system for research "in the near future", says a paper from the Council for Industry and Higher Education.
Proposals to make research councils pay 60 to 70 per cent of full research costs, rather than the variable amounts now paid, should be only a step towards a system where they and all external funders pay the full costs of all research projects, says the CIHE's response to a government consultation on research sustainability and the RAE.
The move is needed to preserve enterprise, innovation and diversity in UK higher education, and to avoid perpetuating an RAE system that has become "a rather unwieldy creature" that threatens to become more bureaucratic under proposals in the Roberts review, the consultation paper says.
But the CIHE also warns that if the price of UK research increases by any significant amount, mobile investment in research and development "will continue to move offshore".
Moves towards more transparent methods of costing research should therefore not be taken unilaterally by the UK, but should wait for parallel progress to be made in Europe and the US, the council says.
"Without international agreementI UK higher education institutions will be at a price disadvantage compared with other HEIs; our competitors may have less incentive to follow the full-cost recovery proposals of the Office of Science and Technology," it says.
The CIHE says it not only supports proposals to allocate an additional £120 million a year to help higher education institutions recover more of the overhead costs of research, but it believes this should be supplemented by "a further substantial and ever-increasing amount" from the funding councils for the next three years.
But it adds that ways will also have to be found to ensure that there is pressure on institutions to contain their research overhead costs.
Otherwise they will become "cost-plus organisations with no incentive to contain their costs rather than just pass them on", it says.