The long-term financial sustainability of the research and innovation (R&I) ecosystem is critical to maintaining the UK’s global position and ensuring it delivers new ideas that lead to economic growth.
A sustainable system meets today’s R&I needs without depleting its ability to meet them in the future; maintaining the agility, capability, and flexibility needed to withstand shocks, deliver long-term goals and capture new opportunities.
Financial sustainability features strongly in our five-year strategy transforming tomorrow together, as part of the resilience principle for change, which prioritises improving the financial sustainability of R&I in organisations across the UK.
Working closely with partners in government and across the sector, our work aims to:
- build awareness of the complexity of the UK’s research system
- understand the different financial pressures it faces
- make robust, evidence-based policy recommendations to improve financial sustainability
The research sustainability team works in collaboration with teams across:
- UK Research and Innovation (UKRI)
- Department for Science, Innovation and Technology
- Department for the Economy, Northern Ireland
- Higher Education Funding Council for Wales
- Scottish Funding Council
- Office for Students
- devolved funders
- UK universities, institutes and other research organisations
We identify, understand and build evidence around the financial sustainability of the UK research base and ensure financial sustainability is a key consideration across the breadth of the R&D landscape.
Key areas of our work include:
- understanding how funding flows through UK research-performing organisations
- monitoring indicators of change across the sector
- exploring and addressing sustainability challenges
Financial sustainability of research in universities
Universities play a pivotal role in the UK R&I system through their teaching, research and knowledge exchange activities. However, they are facing a range of financial pressures which may require them to make difficult decisions about how much they can continue to support and invest in research activities.
We commissioned research to explore changes to the costs of research over the past decade and to consider the ‘estimated unit cost of research activity’. The project, undertaken by know.consulting, used qualitative and quantitative data and showed that the average research council or UKRI grant increased in size from £480,000 to £730,000 between 2010 and 2019, with real terms increases across all cost categories.
Our own data analysis shows reveals a ‘sustainability gap’ across the university sector whereby the total amount of research income doesn’t cover the full economic costs of universities’ research activities. To manage this, universities use other income streams (such as tuition fees and commercial income) to cross-subsidise their research activities in line with their strategic missions.
This includes the data obtained through a method called Transparent Approach to Costing (TRAC), which is used by universities to understand the costs of their research and teaching and provides a consistent framework for:
- calculating the cost of teaching activities
- assessing the full economic cost of research projects
- reporting the costs of teaching, research and other activities to the relevant funding bodies
Using a systems thinking approach, UKRI has engaged with universities across the UK to understand what factors influence and incentivise their decision making around research, including the inter-relationship with teaching and other activities. Combined with other feedback from universities, this helps us to inform our policy thinking around long-term financial sustainability
Sustainability of research in UKRI’s institutes
UKRI has a large and growing portfolio of strategically important institutes, spanning the breadth of our scientific remit.
For more information see our explainer on how UKRI’s institutes support research and innovation.
We work in partnership to:
- demonstrate their importance to the R&I ecosystem
- raise the profile of the research they undertake
- build a robust evidence base from which to assess their financial sustainability
The Financial Sustainability of Research Group (FSRG) is a sector-wide group of experts who can provide independent, evidence-based advice on challenges to financial sustainability and discuss strategic policy issues, such as:
- the financial sustainability of research
- efficiency of funding flows
- the changing, diverse funding environment
FSRG meet three times a year and work closely with the Regulators and Funders Group and the TRAC Development Group to ensure that analysis, advice or policy recommendations across these groups is complementary.
- Professor Mark E. Smith (Chair), University of Southampton
- Harriet Barnes, Higher Education Funding Council for Wales
- Morag Campbell, Scottish Funding Council
- Erica Conway, University of Birmingham
- Neville Ford (Deputy Chair), University of Chester
- Paul Fox, independent
- Jackie Labbe, University of Gloucestershire
- Paul Murphy, Department for the Economy, Northern Ireland
- Margaret Monckton, University of Nottingham
- Bob Rabone, independent
- Sarah Randall-Paley, University of Lancaster
- Nolan Smith OBE, Office for Students
- Robert van de Noort, University of Reading
- Daniel Wake, Universities UK
For further information on the work UKRI are doing please contact the research sustainability team.
Last updated: 22 November 2023