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Some good budget-time reading? Try Vicky Olive’s HEPI report on University Cross-Subsidies

  • 29 October 2018
  • By Hugo Dale-Harris

We at HEPI are delighted that Vicky Olive’s report How much is too much? Cross-subsidies from teaching to research in British Universities has put her on the ‘Wonk to watch’ list at Wonkhe’s awards this year. It’s a piece well-armed with ‘killer facts’ with continuing relevance to policy debates.

The report highlights the extent of the underfunding of UK research – with a deficit of £3.3 billion (37% of UK research income) in 2014/15. This deficit is partly made up by cross-subsidies within universities, much of which comes from teaching income.

The heroes of this story are international students, who on average contribute £8,000 each to British research. With the UK continuing to run a less-than-wholly-welcoming migration policy towards international students, their role in subsidising UK research remains more relevant than ever. The UK, despite its historical advantages has not kept up with the international growth in international students; we have slipped down the pecking order since the report came out, with Australia apparently overtaking the UK to become the second most popular destination for international students.

It is worth having Vicky’s report in mind for today’s budget. Any announcement about research funding levels should be understood in the context of this report. Key points include:

  • a continued failure by government (and some other funders) to fund university research to anything like its full costs;
  • the importance of cross-subsidies from teaching to research that have kept UK research going so far; and
  • the need to plan ahead if we are to reach the Government’s own target for 3% of GDP spent on R&D.

Time for a re-read methinks.

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