Reduced grants a possibility

Low inflation leads councils to consider reclaiming money from existing grants. Zoë Corbyn reports

August 13, 2009

Millions of pounds could be wiped off the collective value of research council grants that have already been awarded to academics.

The UK's seven research councils may claw back money promised to grant holders in light of falling inflation.

Awards from the councils, which spend about £3 billion on research each year, normally have a sum added at the outset to take account of inflation.

This is calculated by taking the Government's published "gross domestic product deflator" figures in the year of the award and applying them to its remaining time span.

New grants awarded in the 2008-09 financial year, for example, were increased to a cash limit calculated using an annual inflation rate of 2.7 per cent.

For the 2009-10 financial year, the inflation rate on new awards is 1.5 per cent to reflect the current figure.

But Times Higher Education has learnt that Research Councils UK has sought legal advice on whether it can retrospectively apply today's indexation rates to ongoing grants.

For example, grants awarded in 2008-09 augmented by the 2.7 per cent rate would be recalculated using lower inflation figures for subsequent years.

It is understood that the legal advice states that it is possible to introduce the amendment from April 2010 if the terms and conditions of grants are adjusted now.

In March, the Government told the councils that they needed to deliver £106 million in savings from within the science budget.

They have never before applied indexation rates retrospectively, but if the policy is adopted, it is understood that it would apply to all grants, including studentships.

In a statement, RCUK says: "The inflation rate applied to new grants will continue to be reviewed annually ... (But) in light of recent significant falls in inflation, RCUK is now exploring whether these changes should also be applied to existing grants."

It states that a review will clarify "the position concerning changes to existing grants" and explore "the financial implications for both the councils and the research base of such a move". A final decision will be announced this autumn.

RCUK gave no indication of the total savings the changes could deliver.

Researchers and administrators expressed concern about the move.

"It is disappointing that RCUK should consider shaving off small sums that may compromise carefully costed grants that are the bedrock of UK scientific advances," said John Wood, a Biotechnology and Biological Sciences Research Council grant holder and professor of molecular neurobiology at University College London.

John Green, chief co-ordinating officer at Imperial College London, said that the inflation rates used by the research councils had never matched real inflation or national pay awards, which made a "mockery" of what they were trying to do now.

"If this is applied retrospectively, one has already budgeted on a research grant, one has already got the staff in place," he said.

"We have come into a world of full economic costing but are slipping back from whence we came at every other opportunity ... it is an incredible own goal."

Ian Diamond, chair of RCUK, said the councils wanted to ensure that their investments "represent the best value for money for the taxpayer". He said that all savings made as a result of changes to the inflation rate were "reinvested in research".

A spokeswoman for Universities UK said the sector had to be able to plan "on the basis of reasonable assumptions about levels of income from the research councils", and expressed concern that the change of policy could be "destabilising".

She said: "We must remember that indexation is usually below pay awards and other cost pressures within the system."

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