Guidance

Explainer: dual support funding for research and innovation

From:
UKRI
Published:

How higher education providers receive funding from UKRI

UK universities can receive public funding for research and innovation broadly through a combination of:

  • project-specific grants
  • strategic institutional funding

These 2 complementary mechanisms make up what is known as the dual support system.

UKRI project-specific grants

Universities can apply to UKRI for project-specific grants via the discipline-focused research councils.

These grants are allocated competitively through an established process dependent on expert review. This funding:

  • supports world-class research ideas, teams and facilities
  • enables new researchers to become established
  • enables established researchers to build on their work or explore new directions
  • provides central facilities and access to international facilities
  • delivers research that is aligned to national priorities
  • builds collaboration between business-led research and the academic research-base, strengthening both
  • supports the commercialisation of innovative research and emerging technologies, as well as wider linkages beyond business

Additionally, universities may apply for some project-specific grants from Innovate UK to contribute to business focused innovation.

Project-specific grants awarded by the research councils cover up to 80% of the full costs of the research activity, with similar arrangements for Innovate UK grants. Universities can use their strategic institutional funding to support the remaining costs.

This approach links the 2 arms of dual support, preventing a transactional approach to project-specific grant funding.

Strategic institutional funding

This funding is allocated as block grant funding to institutions, rather than being made at an individual project level. The majority of this funding is delivered by formulaic allocation.

Universities receive block grants from 1 of the 4 UK higher education funding bodies. These are the Department for the Economy Northern Ireland, Higher Education Funding Council for Wales, Scottish Funding Council and Research England, which is part of UKRI and delivers this activity in England.

The strategic institutional block grant funding delivered by Research England for research and knowledge exchange is called quality-related research (QR) funding and the Higher Education Innovation Fund (HEIF) respectively.

This funding, which is allocated on the basis of data on research and knowledge exchange performance, can be used flexibly by universities in England for research and knowledge exchange activities that support their individual strategic interests.

QR funding is allocated to universities based on the quality, volume and relative cost of research in different subject areas to ensure we target funding where research quality is highest. Research quality is measured in a periodic exercise known as the Research Excellence Framework. QR can be used flexibly by universities to support their own research priorities and they are not expected to mirror our calculations in their own internal spending.

HEIF is allocated to universities using performance data from the UK wide HESA knowledge exchange survey (HEBCI survey) primarily using knowledge exchange income as a proxy for impact on the economy and society.

HEIF funds knowledge exchange activities of universities in line with government priorities and university knowledge exchange strategic objectives. It incentivises stronger linkages between university knowledge and business, public and third-sector organisations, community bodies and the wider public, with a view to external economic and social benefit.

There are equivalent funding approaches used by the higher education funding bodies for Scotland, Wales and Northern Ireland.

How universities spend their block grant funding

Universities can use their block grants flexibly and strategically, as they see fit, in keeping with their mission and objectives. The total amount of block grant funding is relatively stable year on year, allowing universities to establish longer term priorities and use their autonomy to create the conditions for excellent research and knowledge exchange activities.

This funding supports universities to remain globally competitive by:

  • identifying and pursuing new and emerging priorities and promising lines of research as they see fit
  • supporting the research environment and infrastructure for project-specific activities funded by the research councils and other funders
  • supporting innovation links including research funded by Innovate UK, local or external partners
  • growing and sustaining a diverse academic workforce
  • training the next generation of researchers and innovators, and allied professionals
  • investing in long-term approaches to capacity-building
  • maintaining investment in research to bridge funding gaps between project-specific grants
  • partnering with businesses, charities and other organisations
  • commercialising and exploiting research and other knowledge and expertise assets
  • leveraging additional research funding from other sources
  • aligning strategic interests with local and national priorities

Why it is necessary to provide both project-specific and strategic institutional funding

This system recognises the complementarity of the approaches to funding research.

Project-specific funding can be directed at national priorities and can respond to new ideas and opportunities identified by researchers across the research base. Block grant funding to institutions provides the stability and flexibility for higher education to create and sustain the conditions for excellent research activity and impactful innovation links through long-term, agile strategic investment.

Collectively, the 2 arms of the dual support system enable efficiency through:

  • cost-effective investment in research and knowledge exchange activities
  • sharing of equipment and allied professional services between projects
  • achieving critical mass in new areas of interest
  • building strong and responsive links to innovation
  • aligning long-term strategic decisions with local and national priorities
  • maintaining continuity in research areas in the face of unpredictable access to project-based funding

The 2 funding mechanisms enable universities to take a portfolio-based approach to risk management aligned to their strategy across:

  • the full range of academic disciplines and sectors
  • skills development investments
  • infrastructure investments
  • knowledge exchange investments

How investment is balanced between project-specific and strategic institutional funding

The Higher Education and Research Act 2017 sets out a commitment to maintain the balance of funding across the UK’s dual support system for universities, which has been in place for over a century.

UKRI is asked to advise The Department of Business, Energy and Industrial Strategy (BEIS) on the appropriate balance of funding, known as the dual support funding ratio. It bases its recommendation on evidence and analysis across all relevant funding streams. The level of project-specific to strategic institutional funding can vary year on year.

BEIS allocate the other nations’ governments their share of funding using the Barnett formula.

In the financial year 2021 to 2022, the ratio of Research England to research council funding was set at 64 pence to the pound. Specifically with respect to competitive project grant awards, £2.3 billion was awarded by research councils to English universities, while £2.1 billion was allocated by Research England.

Page viewed: 9:27 pm on 22 April 2024

This is the website for UKRI: our seven research councils, Research England and Innovate UK. Let us know if you have feedback or would like to help improve our online products and services.