Universities warn of research funding crisis

Scottish universities have said that they are at a competitive disadvantage against their English counterparts thanks to SNP cuts to research funding.
Universities Scotland, the umbrella group for higher learning institutions, has long been warning that the sector’s finances are precarious and dependent on foreign students.
The group has now said that funding for research from the Scottish government has dropped by about 25 per cent in real terms during the past decade. It said that universities could no longer be sure that they could cross-subsidise their vital research and innovation (R&I) programmes with fees from foreign learners.
Graeme Dey, the SNP further and higher education minister, has warned that universities and colleges must prepare for fresh budget cuts.
In a formal submission to Holyrood’s finance committee, Universities Scotland said: “In order for Scottish universities to continue undertaking world-class R&I activities … they require sustainable, predictable funding from Scottish government to allow for strategic planning and investment in research staff, programmes and infrastructure over time.
“Overall, funding does not meet the full economic costs of research activity, with universities recovering on average 75 per cent of the costs of research undertaken, and significantly less for certain categories of research sponsorship.
“Universities subsidise research costs with other income-generating activities, such as international student fees. Recent falls in international student revenue have detrimentally impacted universities’ abilities to cross-subsidise research costs.”
Universities get research funding via assorted quangos from the Scottish and the UK governments. The Scottish Funding Council (SFC) provides the research excellence grant.
Universities Scotland said this had been reduced over the past decade by about 20 per cent when measured against GDP and by 29 per cent compared with the retail price index, one of the main measures of inflation.
The universities argue that their research excellence grants have failed to keep pace both with inflation and UK support for research. The budget in 2016-17 was just under £232 million, according to the SFC. In the present academic year it is £247 million, but to grow in line with the retail price index it would need to be more than £300 million.
Scottish institutions have experienced a fall in their share of UK research funding during the past decade, from 16 per cent to 13 per cent of the total. Universities Scotland has calculated that each percentage point lost equates to about £25 million.
The group said that research undertaken by Scottish universities created jobs, fuelled economic development, attracted foreign direct investment and helped tackle societal challenges.
Analysis by the London Economics consultancy in 2022 found an economic return of £8.1 million for every £1 million of public funds invested in university research.
Universities Scotland said that public funding for research encouraged private investment, which helped to create spinout businesses and generated high-value jobs.
In an interview with Scotland on Sunday, Dey said that he could not rule out a new squeeze on cash-strapped higher and further education institutions, but he insisted the SNP would never compromise on its commitment to free tuition for Scottish undergraduates.
Shona Robison, the SNP finance secretary, has warned that “exceptional measures”, including a freeze in recruitment in all but essential frontline posts, must be taken to fund pay demands from across the public sector.
Asked if further education cuts were on the way, Dey said: “I can’t sit here today and rule that out. I think it has been made perfectly clear over the last couple of days, much as we may wish it was otherwise, with the challenges that we face.”
A Scottish government spokesman said: “As the finance secretary has been clear, tough decisions are having to be made across government and the wider public sector to ensure that stretched resources are used economically, efficiently and effectively.
“The Scottish government has prioritised funding to continue to support high-quality research and innovation across Scotland, increasing the investment in higher education capital (which includes funding for research) to over £350 million this year.
“We have also taken other action to support Scotland’s universities, such as allocating £5.8 million of consequential funding arising from the Regional Innovation Fund in England to university research and innovation in Scotland.
“We are also investing money to support mission-based research through a series of Alliances for Research Challenges, which will tackle some of society’s biggest concerns.”