Category: UKRI

  • The National Audit Office’s review of UKRI has lessons for the government

    The National Audit Office’s review of UKRI has lessons for the government

    It should come as little surprise – given the scale and complexity of the challenge – that the government sees investing in research and innovation (R&I), and the accompanying promise of new technologies and ideas, as key to achieving its complex policy goals of growing the economy, transitioning to clean power, and modernising the NHS.

    After all, history shows that state backing of R&I to overcome a range of problems – particularly in times of crisis – is hardly a novel idea. If the rapid technological advances witnessed in the 1940s to support the war effort are receding further into the past, then memories of the mass Covid-19 vaccine rollout at least remain fresh.

    With this in mind, the government’s commitment “to promote innovation and harness the full potential of the UK’s science base” through “protecting record funding for research and development” is merely the latest example of those in power acknowledging the vast capacity of R&I to transform society.

    This tradition at least partly explains the strong international reputation the UK has accumulated over the years in the field of R&I, with UK Research and Innovation (UKRI) – the country’s largest single public funder of R&I – at the forefront.

    In 2023–24, UKRI assessed 28,866 applications for competitive grant funding, ultimately spending £6 billion on R&I grants. Its recently approved projects have included funding for very early-stage research in microbial fuel cells and hydrogen purification, and the development of bone stem cell and biomaterial technology to reduce infection rates and the cost of hip repairs.

    In short, UKRI plays a critical role in the country’s R&I ecosystem, supporting cutting-edge work that feeds not only into the government’s environmental and health policy ambitions, but in other areas too.

    And by looking at the effectiveness of UKRI’s grant support, the National Audit Office (NAO) has identified some lessons for government that can serve a very useful, and much broader, purpose when it comes to tackling the major challenges facing the country.

    Lessons learned

    First is the importance of taking a planned and coordinated approach to R&I, which involves using good quality information on funding and knowing how to build a base to innovate in each research area. Government departments should be aware of other organisations with related objectives, determine whether they are also putting funds or resources into trying to innovate in that area, and identify potential linkages with their own workstreams.

    This “portfolio” approach to innovation is a key component in well-managed risk taking, which brings us to our second lesson: the need to establish a clear and effective risk appetite, and put in place the organisational cultures and processes that can support bold decision-making. Innovation – the act or process of doing something that has not been done before – goes hand-in-hand with risk. Embracing it requires the knowledge and the confidence in accepting that things may not turn out quite as intended, or may even fail together.

    The head of the NAO said as much in his recent address in Parliament, where he called on the government to unlock the vast opportunities for boosting productivity and strengthening resilience in the public sector by adopting a fast-learning approach when investing in innovation: in other words, learning quickly what works and what does not, so that failed projects can be promptly scrapped in favour of redirecting energy and resources to more promising ideas.

    Ultimately, a coherent, comprehensive and clearly communicated risk appetite can help organisations reap substantial rewards, more than offsetting the disappointment of unsuccessful ventures.

    Third is the caveat that while a clear plan, coordination and risk appetite can lead to successes, the full benefits of innovation cannot be realised without effective monitoring and evaluation. As well as evaluating programmes on a macro level, organisations should regularly draw together learning by theme (such as in a specific research area), with the support of strong data systems. Doing so can ensure that they effectively capture cumulative learning and develop a well-rounded understanding of which innovations are working well, which ones are not, and why.

    Across the whole of government

    Arguably the most important lesson of all, however, is remembering that these insights cut across the whole of government and need not be strictly applied to the domain of R&I. The projects funded by UKRI may be operating on the frontier of scientific and technological research, but this does not mean that what we learn about their approaches to innovation cannot be applied to other government contexts.

    If government is to achieve its long-term policy goals, it must do more to identify the public spaces where innovation is lacking, and take measures to reverse this trend. This includes breaking down the barriers that are preventing some organisations from adopting the right culture to allow innovation to flourish. It would do well to start with taking on board some of the lessons learned from UKRI’s approach.

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  • What’s driving low levels of full economic cost recovery in research?

    What’s driving low levels of full economic cost recovery in research?

    Media attention has emphasised that the financial issues facing universities continue to worsen. While research is a cornerstone and strength of the sector, it is often regarded as a cost, which leads to scrutiny as part of institutional savings targets. Despite calls to acknowledge the value of research, the focus understandably remains on research costs.

    The focus of universities on the volume and cost of unfunded research, or more accurately, internally funded research, is a question that must be addressed. Institutions are reflecting on and revising internal research allowances as part of their efforts to achieve a more sustainable financial position, as the cross-subsidy from international student fees is no longer as viable as it once was.

    The question of funded research, however, is a different matter. For quite some time, there have been questions about what constitutes the full economic cost (FEC) and how these costs are recovered when projects are funded. Both issues have once again come to the forefront in the current climate, especially as institutions are failing to recover the eligible costs of funded projects.

    As part of the Innovation & Research Caucus, an investment funded by UKRI, we have been investigating why the recovery of UKRI-funded research is often below the stated rates. To put it simply, if the official recovery rate is 80 per cent FEC, why is 80 per cent not being recovered on UKRI-funded projects?

    Understanding under-recovery

    We conducted a series of interviews with chief financial officers, pro vice chancellors for research, and directors of research services across mission groups, the Transparent Approach to Costing (TRAC) group, and various geographic regions. They identified several key reasons why universities are not recovering the funding to which they are entitled.

    Before exploring the causes of under-recovery on UKRI-funded projects, the project aimed to establish the extent to which TRAC data was curated and utilised. Notably, the study found that the data collected for TRAC does not exist within research organisations and would not otherwise be collected in this form if it were not for the TRAC reporting requirement.

    While scrutinising TRAC data was less of a priority when the financial situation was more stable, in many institutions, it is now of interest to the top table and serves as the basis for modelling, projections, and scenario planning. That said, such analysis did not always recognise TRAC’s limitations in terms of how it was compiled and, therefore, its comparability.

    In many of the research organisations consulted, the responsibilities for TRAC, project costing, and project delivery are distinct. Given the growing significance of TRAC data in influencing resource allocation and strategic decision-making, it is essential for research organisations to adopt a more integrated approach to compiling and utilising TRAC data to achieve improved outcomes.

    Drivers of under-recovery

    A wide range of factors explains why the cost recovered at the end of a funding grant is less than anticipated at the point of submission and award. Almost all respondents highlighted three factors as significant in low cost recovery:

    1. Equipment and facilities costs were consistently cited as a factor, including issues associated with allocating and costing overheads and estates. Several institutions highlighted the difficulty in realistically costing equipment and facilities shared between research projects or between research projects and teaching.
    1. Staff under-costing was frequently mentioned, as principal investigators (PIs) underestimated their own and their colleagues’ time commitment to projects. This ineffective practice was driven by a (mis)perception that lower costs will likely improve success rates – despite the emphasis being on value rather than cost within a specific funding envelope.
    2. Inflation has been identified as a factor affecting all cost elements – from staff costs related to pay settlements and promotions to the rising expenses associated with consumables, equipment, and energy. This reveals a growing gap in applications, delivery, and reporting.

    Beyond these top three, the report highlights the implications of the often “hidden” costs associated with supporting and administering UKRI grants, the perennial issues of match funding, and the often inevitable delays in starting and delivering projects – all of which add to the cost and increase the prospect of under-recovery.

    In addition, an array of other contributing factors were also raised. These included the impact of exchange rates, eligibility criteria, the capital intensity of projects, cost recovery for partners, recruitment challenges, lack of contingency, and no cost extensions. While not pinpointing the importance of a single factor, the interplay and cumulative effect were considered to result in under-recovery.

    Addressing under-recovery

    Universities bear the cost of under-recovery, but funders and universities can take several actions to improve under-recovery – some of which are low- or no-cost, could be implemented in the short term, and would make a real difference.

    Funders, such as UKRI, should provide clearer guidance for research organisations on how to cost facilities and equipment, as well as how to include these costs in research bids. Similarly, applicants and reviewers should receive clearer guidance regarding realistic expectations from PIs in leading projects, emphasising that value should be prioritised over cost. Another area that warrants clearer guidance is match funding, specifically for institutions regarding expectations and for reviewers on how match funding should be assessed. We are pleased to see that UKRI is already taking steps to address these points in its funding policies [editor’s note: this link will be live around 9am on Friday morning].

    In the medium term, research funders could also review their approaches to indexation, which could help mitigate the impact of inflation in driving under-recovery, although this is, of course, not without cost. Another area worth exploring by both research organisations and funders is the provision of shared infrastructures and assets, both within and across institutions – again, a longer-term project.

    We are already seeing institutions taking steps to manage and mitigate under-recovery, and there is scope to extend good practice. Perhaps the main challenge to improving cost recovery is better managing the link between project budgets – based on proposal costs – and project delivery costs. Ensuring a joined-up approach from project costing to reporting is important, but more important is developing a deeper understanding across these areas.

    A final point is the need to ensure that academics vying for funding really understand the new realities of cost and recovery. This has not always been the case, and arguably still is not the case. These skills – from clarifying the importance of realistic staff costs to accurately costing the use of facilities to effectively managing project budgets – will help close the cost recovery gap.

    The real FEC of research funding

    The current project has focused on under-recovery in project delivery. The next step is to understand the real cost to research organisations of UKRI grant funding.

    This means understanding the cost of developing, preparing and submitting a UKRI grant application – whether successful or not. It means understanding the costs associated with administering and reporting on a UKRI grant during and beyond the life of a project (think ResearchFish!).

    For more information, please get in touch – or watch this space for further findings.

    The Innovation & Research Caucus report, Understanding low levels of FEC cost recovery on UKRI grants, will be published on the UKRI site later today.

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  • Eight critical questions for the new chief executive of UKRI

    Eight critical questions for the new chief executive of UKRI

    The appointment of a new chief executive for UK Research and Innovation (UKRI) could not happen at a more crucial time.

    With public finances under strain, the case for public investment in R&D needs to be made cogently and needs to focus both on addressing the UK’s five government missions and on sustaining the fantastic research asset which the UK university sector represents. The list of issues for the new appointee will no doubt be lengthy, but we put forward the following as a possible shortlist of priorities.

    1. The interface (pipeline) between research councils and Innovate UK

    One of the main goals in establishing UKRI was to ensure a smooth pipeline from the research undertaken by the individual research councils to the industrial/end user base thereby bringing both economic and societal benefit. However, despite years of intent this pipeline seems as obstructed as ever. The fundamental question remains: to what extent is the role of Innovate UK to aid the transition of the outcomes resulting from research council funding versus simply supporting UK-based enterprises in their own research?

    Currently there are disconnects between the research priorities, often defined by government and implemented by the research councils, and the Innovate UK funding mechanism to ensure they are exploited. There are some exceptions here of course: the Creative Industries Clusters was a good example of a joint initiative between AHRC and Innovate UK which did integrate industry demand to local research strengths.

    A key priority for the new chief executive is to join up the pipeline more effectively across the whole range of industry sectors and ensure a very clear role for Innovate UK in partnership with the research councils and the subsequent interface to the National Wealth Fund or British Business Bank.

    2. Articulating and agreeing the balance between UKRI spend on government priorities and investment in the research base of the future

    As we have argued elsewhere on Wonkhe, the nation needs UKRI to fund both the research required by current government priorities relating to industrial strategies or societal challenges, and invest in the broader research base that, in the words of science minister Patrick Vallance, will feed the “goose that lays the golden egg” of our research base and the opportunities of tomorrow.

    Currently, this balance is, at best, hidden from view, suiting neither the needs of government nor the future aspirations of the sector. We urge UKRI to quantify this balance historically and to articulate a proposal to government for moving forward. We also require balance between the budget committed in the long-term to institutes, infrastructure, international subscriptions, and facilities vs. the shorter-term funding into the wider research and innovation community. Balancing these priorities requires a strengthening of the relationship, and open discussion, between UKRI, DSIT and wider government.

    3. Ensuring UKRI is relevant to the government’s regional economic development agenda

    As part of the government’s economic agenda, driving productivity growth in the tier-2 cities outside the South-East and the wealthier places in the UK is key to executing its growth mission. There is a clear tension here in UKRI acting as the key funding agency for public R&D spending driven solely by excellence, and a regional economic development mission, for which additional criteria apply. This tension must be addressed and not ignored.

    The creation of innovation accelerators in which additional funding was provided by government, but UKRI was involved in evaluating the merit of proposals, is a good example of how UKRI can drive change. As the government develops new levers to address and fund regional economic development, UKRI should play a key role in ensuring that this dovetails with the research and innovation base of the nation.

    4. Creating a highly skilled workforce

    As is becoming clear, the number of doctoral students supported by UKRI continues to fall – an issue highlighted, for example, by Cambridge vice chancellor Deborah Prentice in a recent Guardian interview. This is particularly clear in areas which have traditionally relied upon UKRI funding, such as the engineering and physical sciences. The corresponding research effort is in part bolstered by an increase in the number of fee-paying overseas students, but this does little to create the UK-based workforce industry needs.

    UKRI needs to prioritise funding and work with government to find new ways of addressing the skills the nation needs if we are to drive a productive knowledge-based economy. The skills required extend beyond doctoral degrees to include technical professionals and engineers.

    5. Sector confidence around REF as a rigorous, fair process, supportive of excellence

    The HE sector is in financial turmoil, manifested in the unprecedented number of UK higher education institutions currently implementing severance schemes. Ongoing uncertainties over the REF process, from the portability of outputs and the lack of an essential mechanism to ensure a diversity of authors (current proposals have no cap on the number of outputs that can be submitted from any one individual) to the absence of clarity on the people, culture and environment template’s support for excellence need resolution.

    This resolution is required, firstly so that research strategies institutions put in place prior to any census date have time to drive the changes required given that REF is meant to be formative as well as summative; and secondly so that institutions can efficiently deliver their REF returns to a standard and detail a government should expect to provide assurance over the future quality related (QR) spend.

    6. The importance and accountability of QR

    Virtually everyone in the sector embraces the notion that QR is central to the agility and sustainability of the UK research base. This certainty is matched with uncertainty within government as to the value for money this investment provides. If we are to maintain this level of trust in the sector’s ability to derive benefit from this investment, collectively we need to do a better job at showing how QR is central to the agility of our investment in the research outcomes of tomorrow and not simply a plugging of other, non-research related, financial holes. As both assessor and funder UKRI can lead and co-ordinate this response.

    7. Completion of the new funding service (the software needs to work!)

    The joint electronic submission system (Je-S) was outdated and potentially no longer supportable. Its back room equivalent, Siebel, even worse. Their replacement, the new funding service is an acceptable portal to applicants but seemingly still provides inadequate assurances for a system from which to make financial commitments. This shortcoming seems almost incomprehensible given it was an in-house development.

    Moving beyond the essential financial controls it seems to offer little by way of the AI assistance in the identification of reviewers that the software behind the submission systems for many of our research publications has offered for decades. Whether we lack the skills or investment to solve these issues is unclear, but the inefficiency of the current situation is wasteful of perhaps an even more precious resource, namely the time of UKRI staff to add human value to our research landscape. This seeming lack of skills and the systems we require is worrying too to the future REF exercise, even once the framework is known.

    8. Evidencing the effects of change

    Of course the world should and must move on. As a funder of research, it is appropriate that UKRI experiments with better ways of funding, becoming an expert in metascience. Changes inspired by ideology are fine, but it is essential that these changes are then assessed to see if the outcomes are those we desired.

    One example is the narrative CV, a well-meaning initiative to recognise a wider definition of excellence and an equality of opportunity. Is this what it achieved? Do we acknowledge the risks associated with AI or the unintended consequence of favouring the confident individual with English as their first language? While not advocating a return to the tradition of lists CV, we urge a formal reporting of outcomes achieved through the narrative CV using both quantitative and qualitative data and an evidenced based plan to move forward.

    Looking to the future

    We realise that criticism is easy and solutions are hard to find. So in case of doubt, we would like to finish with a call out to UKRI’s greatest resource, namely at all levels its committed and highly professional staff. We know at first hand the dedication of its workforce which is committed to fairly supporting the community, the research they do and the impact it creates.

    The role of chief executive of UKRI provides vital leadership not just to UKRI but to the sector as a whole, and the sector must unite to stand behind the new incumbent in solving the challenges that lie ahead.

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