The true cost of doing research in the UK

“[I]ndustry should not be expected to make up shortfalls in research funding by others such as Research Councils and the European Commission,” it says on the CBI’s Innovation, science and technology homepage. The CBI’s Inter-Company Academic Relations Group (ICARG) raises this grumble in its response to a recent joint Review of the Impact of Full Economic Costing on the UK Higher Education Sector (580KB PDF file) for Research Councils UK and Universities UK.

The contentious issue is the demand that whenever a company, or anyone outside the system, including research councils and government departments, pays academics to do research the customers should pay the “full economic costs,” mysteriously shortened to fEC in the report, “depending on the extent to which the research provided a public good,” as the announcement of the review put is. The idea behind fEC is that it should include the costs of the paperclips, office cleaners and so on that you need to maintain a lab as well as a share of capital costs.

The review has a more detailed definition of fEC:

“An institution is being managed on a sustainable basis if, taking one year with another, it is recovering its full economic costs across its activities as a whole, and is investing in its infrastructure (physical, human, and intellectual) at a rate adequate to maintain its future productive capacity appropriate to the needs of its strategic plan and students, sponsors and other customer requirements.”

The issue of fEC came up recently when talking to a researcher. Now a professor in London, the researcher had come from a university in another European country and still had a research group there. It turned out that the team in the “other country,” oh, alright, Belgium, costs less to run. So that is where the professor still does some of his work there.

While this is good for European togetherness, you have to wonder if it makes sense for universities in the UK to be subcontracting work in this way.

The CBI, naturally enough,  worries about the impact of fEC on businesses wanting to work with universities. In its submission  to UUK/RCUK (390KB PDF file) it writes that for many companies the move to fEC “has been to raise the cost of university research, and this has constrained growth or caused a decline in their research engagement with UK universities”.

The CBI fingers another hot topic for universities, what are they for? In recent years the government seems to have seen them as innovation machines, the front end of a chain that leads inexorably to new technologies. Stuff £X into the system and you will get £nX out as profits at the end of the chain, with, if all goes to plan, n being bigger than 1. The CBI reminds us that “the main objectives of government support for university-business interaction are improvement of the  knowledge base and increased economic impact”.

While the idea of “increased economic impact” may fall into what they call, in research circles, the “linear model” of innovation, “improvement of the  knowledge base” is another matter.

Recent governments have all encouraged industry and universities to work more closely together. The CBI fears that fEC works against that. It is concerned that “the transmission of higher costs to business funders of research as a  result of FEC has had a negative impact on the development and maintenance of business-university research relationships in the UK”.

So, while the review for UUK/RCUK is generally optimistic that fEC has done good things for universities, elsewhere there are concerns. The CBI sums up the issue in a sentence “The UK is now seen as the most expensive place in the world to fund a post-doctoral researcher.”

One problem seems to be in arriving at the numbers for fEC. The CBI complains that “the costs which some universities seek to attribute to a single researcher often bear little relationship to the value”.

The UUK/RCUK review issue seems to agree that universities need to be clearer on this, but it buries its take in jargon about things like “Trigger metrics”. The review also acknowledges that companies may not be happy about the current situation. “Research should be conducted to examine the degree to which UK industry is contracting  research overseas, and the degree to which research at UK universities is being contracted inward by overseas-based companies. This study would examine the reasons for these flows and for any trends that can be discerned in them.”

As we reported recently, RCUK is already looking at the relationship between universities and industry. Clearly they will want to include fEC when questioning the business community.

That survey might also throw in questions about another issue that the CBI has talked about recently, tax credits for R&D. The UK may demand that universities implement fEC, unlike universities in other countries, but some of those countries lack the tax credits that are available in the UK. This must complicate calculations about the relative costs of different countries for R&D, especially if businesses can set some of those bills for fEC against tax.