The UK continues as a global leader in research and innovation and our universities are uniquely strong contributors, among which are the highest performing in the world. We have some of the highest-intensity innovation ecosystems in the world, with universities as the core driver. As a country, our invention record is well recognised. The UK, with its powerful life sciences effort, delivered one of the first UK COVID-19 vaccines, saving millions of lives around the world and only possible because of long-standing investment in research that became serendipitously essential. In cities across the UK, universities act as pillar institutions with positive and reinforcing effects on their local economies. We have a rich network of specialist institutions that excel in music, the arts, medicine and life sciences. Our universities continue to deliver discoveries, technologies, creative insights, talent for our industries and public services and so much more. Many have the scale and reach to deliver across the full span of research and innovation to enterprise and commercialisation.
A unique feature, and underpinning this extraordinary record, is our dual support funding system. That system balances competitive grant funding from UKRI Research Councils, charities, business, and others with long-term stable underpinning funds to enable universities to pursue ambitious and necessary strategies, develop research strengths, foster talent, pivot towards new fields, collaborate and maintain research infrastructure.
However, the sector faces unprecedented challenges. Erosion of the value of student fees and the growing costs of delivering education, disruptions to anticipated income from international student fees, a slow erosion of the value of QR, rising costs of research and a mismatch between this and cost recovery from grants has created a perfect storm and unsustainable operating models for most institutions. The additional £5bn a year in funding from universities’ own surpluses towards research and innovation is no longer guaranteed. The sector has and continues to evolve in response to a changing landscape, but consideration is needed about how best to support the sector to change.
Research England’s role is to support a healthy, dynamic, diverse, and inclusive, research and innovation system in universities in England6. We work by facilitating and incentivising system coherence, acting as both champion and challenger. In partnership we aim to create and sustain the conditions for the system to continue delivering excellence and leverage resources far beyond funding provided by government. We are working to enhance the data and evidence to support our role as expert, evidence-based funder and on the outcomes that the funding delivers. In fulfilling this role and against the current context, Research England has two initiatives that we will be taking forward in the coming weeks.
Our ongoing programme to review the principles underpinning our funding and mechanisms by which we allocate research funds to institutions has reached a point where we are seeking to increase the visibility and transparency of how these funds are deployed by institutions. We are developing an approach, designed to be light touch and low burden that asks universities to report back on their use of strategic institutional research funding. We will begin testing the approach with a selection of institutions in the coming months and, subject to the outcomes of this initial engagement, aim to roll out a pilot with institutions in the 2025/26 academic year. We will be communicating to institutions directly about the pilot in the early Autumn. In the second phase of this work, we intend to work with institutions to develop a forward-looking strategic element that will give insight into plans and then how decisions are made about the deployment of funding. For the programme, we are also reviewing the effectiveness of the different unhypothecated and ring-fenced research funds provided to institutions. When fully implemented, the information we will acquire will enable Research England greater visibility of the role of institutions and the contribution of our formula-based research funding (including QR) to the research and innovation system while also contributing to efforts to have more systematic and timely data.
A second strand of work is our programme to monitor the implications for the sustainability of research in universities against the current financial context. We are seeking to better understand how challenges are impacting universities’ ability to deliver research and innovation and maintain research capabilities, capacity, and facilities and, in turn, further strengthen assurance with more robust data. In partnership with the Department for Innovation Science and Technology, we have commissioned the Innovation Research Caucus with OMB Research Ltd to undertake a survey into how institutions are responding to current pressures with respect to research and innovation. The survey will provide important data that can support advice to government and others on the extent of universities’ financial challenges, how these issues are being managed, and how this impacts their investment and planning in the research and innovation space. The approach is to provide insights that are currently not available at an aggregate level or in a timely way through national data sets. Additionally, Research England will be asking institutions to report on material changes they are making to research and innovation capabilities and capacity or in relation to wider changes in institutional form or organisation when these may affect the basis on which our funding is awarded.
We continue to see our role as facilitator, enabler and partner and believe we have a strong reputation for having timely and robust insights into the conditions underpinning our great research and innovation system. These two programmes of work are being taken forward in support of universities and, against the current backdrop, will strengthen Research England’s fundamental role in the research and innovation system. We look forward to working in close partnership with universities as we take these critical work programmes forward.