Funding of Research in UK Higher Education

Research is a key part of the mission of many universities in the UK. Funding to undertake research is obtained from a number of sources. Some of this funding is provided to support specific projects with a clear objective. Other elements of funding are to support research infrastructure and ‘blue sky’ research.

Where does the money come from?

Public Funding of Research

The UK government funds research in universities through what is known as the ‘dual support’ mechanism. This comprises an annual grant from the funding councils to support the research infrastructure and specific project grants from the research councils to fund particular pieces of research.

The annual grant from the funding councils is conditional on the institution’s research being of a minimum quality. The Higher Education Funding Council for England (HEFCE) do not stipulate how the grant for research should be used within each institution. The value of the annual grant awarded increases, the higher the quality of research is assessed to be (see How HEFCE calculates grants).

There are seven research councils that provide funds for research:

The research councils fund specific projects that may typically last for three years. Grants from research councils are normally bid for on a competitive basis. The funding awarded depends on the estimated cost of undertaking the project. Universities have to calculate the full economic cost (FEC) of the proposed project. If the application is successful, the research councils fund 80% of the full economic cost. Funding can only be used for that project.

Government departments, non-departmental government bodies, local authorities and the NHS also fund research in universities. This is often by way of a research contract under which the sponsoring body obtains rights to use the results of the research. The funding of these projects varies according to circumstances, although government departments have been instructed to fund non-competitive contract research projects at 100% of FEC.

Non-public Funding of Research

As well as funding from the public sector a large amount of funding for research comes from non-public organisations. These include charities, the European Commission and industrial and commercial organisations in the UK and overseas. This is mostly in the form of grants and contracts for specific research projects. Some sponsors apply their own rules as to the level of funding that they will provide, others negotiate the funding on a contract by contract basis. Many charities will only fund the direct or additional costs of the research.

However, there are elements of the HEFCE grant for research which are determined by the amount of funding from UK charities and from UK business (see How HEFCE Calculates Grants for Research and Teaching).

The European Commission funds most of its research through its Framework Programme which has specific rules about which elements of cost can be funded.  A modified version of FEC can be used to apply for funding under the Framework Programme.