The value of university led R&D to the UK research system

The role of university R&D in the research and innovation landscape

Universities play a pivotal role in the research and innovation landscape through their teaching, research and knowledge exchange activities. In towns and cities across the UK, these institutions are the hub of local partnerships that are driving cutting-edge research.

A thriving research system generates significant benefits for the UK, driving economic growth and societal advancements. Investing in university-led R&D activities delivers proven returns on public funds: every £1 allocated in England through the Higher Education Innovation Fund (HEIF) resulted in around £10 of value, and every £1 of public funding invested in Russell Group university research was found to generate more than £8.50 for the UK economy. Beyond the economic benefits they bring, the breakthroughs that university research develop also improve the lives and livelihoods of people across the country, for example through increased efficiency of public services (e.g. transport networks and wastewater treatment), the impact of the internet on productivity and connectivity, and the development of life-saving vaccine technology.

The impacts of financial pressures facing universities

There has recently been a renewed focus on the long-standing financial pressures facing universities. When it comes to funding university R&D, UKRI commit to providing 80% of the Full Economic Cost (FEC) of their research grants, with the remaining funds needing to be sourced elsewhere within university budgets. However, this commitment is not being met, and UK universities are facing growing subsidy costs.

As a result, cross-subsidy of research from teaching budgets is common, especially from international student fees. Shortfalls in funds for teaching provision would likely affect the amount of money available for research, and these shortfalls are exacerbated by the recent changes to immigration rules making foreign students less likely to come to the UK. The combined effect of these changes and the recent uncertainty over the future of the Graduate Visa Route may serve as a deterrent to international students studying at UK universities, an issue that CaSE has recently highlighted and will continue to raise.

Financial difficulties for universities could have knock on impacts for the financial sustainability of the wider R&D sector. This in turn could reduce the quantity and variety of research conducted in the UK, as well as hinder the flow of new ideas and innovation into the system by restricting the number of postgraduate researchers a university can support. Therefore, the long-term financial sustainability of the research system is vital to ensure it continues to contribute to economic growth and improving the lives and livelihoods of people across the UK.