Research Councils UK (RCUK) and Universities UK (UUK) today (24 June) announce
the outcomes of a review led by Sir William Wakeham to implement the recommendations
made by the Full Economic Costing (fEC) Review published in April 2009.
The report Financial Sustainability and Efficiency in Full Economic Costing
of Research in UK Higher Education Institutions confirms the importance of
higher education being transparent and effective in the use of public funds and
also recognises that the UK has a very successful HE sector across all key areas
The UK Higher Education sector is renowned for its strength in areas that include
research, teaching, and knowledge exchange. Evidence from UUK shows that the direct
contribution of HEIs to the UK economy is £59 billion, larger than that of the air
and space craft, agricultural and pharmaceutical industries. However, all sectors
in the UK are being affected by the current economic climate. To ensure the long-term
security of research in higher education, institutions must act now to create greater
Sir William Wakeham, Chair of the Task Group established to conduct the review,
said: “Research in the UK’s universities is undoubtedly a success story. In recent
years there has been an increased focus on securing this success in the long term
through moves to enhance the financial sustainability of the research base. However,
in the current economic climate we will see restrictions in public expenditure and
higher education in the UK will need to play its part in demonstrating greater efficiency.”
The aim of the Task Group was to establish a clearer picture of how HEIs are
using additional funding to support the financial sustainability of research. The
Group reviewed the background to the financial status of the UK HE sector, the visibility
provided by TRAC (Transparent Approach to Costing) and the role played by funding
research projects based on full economic costs.
Key recommendations made by the report include:
Reducing for each of the next three years an institution’s indirect cost
rate (in real terms) by an annual 5% efficiency factor. For an institution whose
rate is below the average (£38.7k in 2010-11), its indirect cost rate in real
terms should be reduced by an annual 2.5% efficiency factor.
The provision for indirect costs (in real terms) on grants awarded by the
Research Councils should be reduced by an annual 5% efficiency factor (2.5%
efficiency factor for those institutions whose indirect costs are below the
average indirect cost rate).
Institutions with 2010-11 indirect cost rates in excess of the upper quartile
level (£42.4k/FTE) should be required to agree plans with the Research Councils
to reduce their costs at a faster rate.
The assessment processes of the Research Councils should encourage more intensive
use of existing assets across the research base.
A full copy of the report including all recommendations can be found
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RCUK Press and Communications Manager
Tel: 01793 444592
Notes for editors
- Research Councils UK (RCUK) is the strategic partnership of the UK's
seven Research Councils. We invest annually around £3 billion in research. Our
focus is on excellence with impact. We nurture the highest quality research,
as judged by international peer review providing the UK with a competitive advantage.
Global research requires we sustain a diversity of funding approaches, fostering
international collaborations, and providing access to the best facilities and
infrastructure, and locating skilled researchers in stimulating environments.
Our research achieves impact – the demonstrable contribution to society and
the economy made by knowledge and skilled people. To deliver impact, researchers
and businesses need to engage and collaborate with the public, business, government
and charitable organisations.
The seven UK Research Councils are:
- Arts & Humanities Research Council (AHRC);
- Biotechnology & Biological Sciences Research Council (BBSRC);
- Economic & Social Research Council (ESRC);
- Engineering & Physical Sciences Research Council (EPSRC);
- Medical Research Council (MRC);
- Natural Environment Research Council (NERC);
- Science & Technology Facilities Council (STFC).
- Universities UK is the major representative body and membership organisation
for the higher education sector. It represents the UK's universities and some
higher education colleges. Its 133
members are the executive heads of these institutions. Universities UK works
closely with policy makers and key education stakeholders to advance the interests
of universities and to spread good practice throughout the higher education
sector. Founded in 1918 and formerly known as the Committee for Vice-Chancellors
and Principals (CVCP), Universities UK celebrated its 90th anniversary in 2008.