London, 11 Apr 2005
The Government has placed graduates in science, technology, engineering and mathematics (STEM) subjects at the heart of its political and economic agendas. STEM graduates are needed to drive innovation, research and development, to support the financial services industry, to underpin policy-making, and to teach and inspire future generations of scientists. Yet the number of students choosing to take a STEM subject at undergraduate level has been in decline for several years. One of the most worrying symptoms of this decline is the recent closure of a number of important university departments, particularly in chemistry, mathematics, physics and engineering. Such closures have compounded the problem of declining student numbers. If they continue unchecked, the system may find it difficult to cater for the future increases in uptake that are so fundamental to the realisation of the Government's ambitions.
In the past, the problem of falling numbers of STEM graduates has been addressed through interventions to secure the supply of university places. However, these measures tend to be short term in impact and have only had the effect of patching up a system that continues to allow deterioration. Only by addressing the root cause of the decline in student numbers can further departmental closures be prevented. This means inspiring pupils in schools to study science— by employing teachers who can teach creatively and enthusiastically; by changing the curricula to make them more relevant to pupils; and by increasing the proportion of school science that is practically-based. These measures will not create a transformation overnight, but without them nothing will change. As an interim measure we have recommended that the Government provide bursaries for students to study STEM subjects at undergraduate level.
The problems experienced by university STEM departments of low and declining demand from students have been compounded by the funding arrangements for research and teaching. Both the Higher Education Funding Council for England (HEFCE) and the Research Councils fund research on the basis of excellence. The result of these policies in combination is the concentration of research in a small number of departments. Whilst this may be necessary to ensure the international research standing of the best-performing departments, it has left those departments that have not been similarly well rewarded struggling to cope. This financial problem has been compounded by the high cost of teaching STEM disciplines, a cost that is not adequately recognised in the teaching funding formula used by HEFCE. We have recommended that the teaching funding weightings be changed to reflect the costs of teaching STEM subjects, as revealed by using the new TRAC methodology. Teaching funding should be sufficient to meet the costs of teaching without cross-subsidy from funding intended for research.
In 2008, the research funding formula employed by HEFCE will change. This should go some way to reducing the steep funding differential between the departments which are deemed to have the best research performance (graded 5 or 5*), and the departments that are deemed not to have performed so well (graded 4 or below). Nonetheless, the new arrangements will not relieve the immediate plight of most struggling departments. Nor will they change the fact that there are too many departments competing for limited funds. Assuming that the Government is unlikely to increase the total money in the system in the short term, no amount of tinkering with the funding allocations will ensure that all departments can become financially sustainable on the basis of their research income. Furthermore, we may jeopardise those departments that are currently our strongest assets.
The solution that the Committee proposes is radical. Instead of allowing 130 universities to compete on the same basis for research and teaching funding, to the benefit of a small proportion but the detriment of many, the Government should seek to encourage a system in which each institution can play to its strengths. We recommend that a "hub and spokes" model is employed, to be coordinated on a regional basis by a new Regional Affairs Committee, located within HEFCE and including representatives from each of the Regional Development Agencies. This new Committee would ensure that each region had at least one major "research hub" in each of the core disciplines. Departments would be awarded this status on merit through open competition. Other departments would be free to determine their own focus on the basis of their strengths, whether it be on research, teaching or knowledge transfer, and could bid for funds accordingly. The work of teaching students would be shared out within each region between research and teaching departments, as appropriate. Instead of all competing for the same limited number of prizes, institutions would collaborate and pool their strengths to provide the best possible experience for all their students. The Government is currently passively pursuing a policy of research concentration that will call the financial viability of some universities into question. A far better policy would be a one of actively encouraging diversity within the university sector, and providing the means for this to happen.
The short term approach to university funding has led to a worrying decline in the number of students graduating with STEM degrees and a number of departmental closures. Unless some important long term measures are taken to ensure the sustainability of the sector, the Government may find that it does not have enough STEM graduates to meet its economic goals.