The funding of higher education
Higher education in the UK is funded through a diverse range of sources. One of the main, albeit decreasing, ways is through the funding councils. In England, the Higher Education Funding Council for England (HEFCE) distributed £7.1 billion in 2007–08 and is responsible for 275 institutions. In Scotland, the Scottish Funding Council (SFC) is responsible for funding Scottish HEIs, The Higher Education Funding Council for Wales (HEFCW) is responsible for Welsh HEI funding and in Northern Ireland, the Department for Employment & Learning distributes funding to the NI HEIs.
Institutions also get significant funding for research through grants from the different research councils, the European Commission (through the Framework Programme and European Research Council), some charities (particularly in the field of medicine) and businesses (primarily through knowledge transfer). Universities also receive funding from other government departments (most significantly the Department for Health), alumni and student fees. Student fees vary, with some contributing only partially to the cost of the course, others the covering the full cost and others paying a ‘market price’.
The below diagram is a useful illustration of the income and expenditure of UK HEIs from the 2007/08 year:
There are different fees at the undergraduate, postgraduate, part-time and international student level, with international student fees making up on average about 9% of institutions’ funding. The government has a responsibility to ensure universities and colleges remain accountable and that funding is well spent. The Quality Assurance Agency (QAA) reviews the quality of academic teaching in higher education across the UK, and the Research Assessment Exercise (RAE) assesses each department’s research output. There are plans to replace the RAE after the 2008 cycle. Both are partially funded by the government through the funding councils and through the subscriptions of individual institutions.
Research Funding
The funding of research in the UK is carried out by research councils - government agencies responsible for co-ordinating and funding particular areas of research, including the arts, humanities, science and engineering.
Organisation
Research Councils UK (RCUK) is the collective body that speaks for and represents all of the different councils. Research councils are non-departmental government bodies incorporated by royal charter. They receive public funds from the Department of Innovation, Universities and Skills through the Office of Science and Innovation and have a combined annual budget of around £2.8 billion. Of this, over £1 billion is spent on research grants and training in UK higher education institutions, forming one element of the UK's dual support system of research funding.
The other, so-called “Quality Research” or “QR” funding for blue skies research is provided through block grants provided by the UK Funding Councils based on the results of the RAE. Research council grants currently support around 50,000 researchers through 18,000 grants and about 8,000 PhDs are awarded annually as a result of their funding. Research council funding is guided by the haldane principle which suggests that research funding decisions should be made independently from government.
Further Information
Higher Education Funding Council for England
Higher Education Funding Council for Wales
Scottish Further and Higher Education Funding Council
Department for Employment & Learning Northern Ireland
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