Archive for the Finance Category

`Difficult to Defend’

Posted in Education, Finance with tags , , on February 26, 2011 by telescoper

My copy of the Times Higher arrived a little late this week, so I’ve only just seen the latest evidence that the Westminster government’s plans for English Higher Education are degenerating into farce.

For a start it seems that the government made a serious error in believing that the Office For Fair Access (known to its few friends as OFFA) actually doesn’t have the legal authority to impose fee levels on universities. The government had assumed that they would be able to prevent all universities charging the maximum £9K allowed under the new rules. But they can’t.

Since the increased tuition fee is being offset by cuts of up to 80% in teaching budgets it’s no surprise that universities want to maximise the income from fees. Oxford, Cambridge, Imperial College and UCL have all already indicated that they will go for the maximum, which isn’t surprising since these are among the leading universities in the country. It may be that some universities, perhaps from the ex-Poly sector, might try to go for the `pack ’em high and sell ’em cheap’ approach to undergraduate degrees, but a more challenging issue is what the middle-grade universities will do. Will they try to compete on price, or will they fear that charging less than £9K will get them branded as second-rate?

However, if all universities charge £9K – which has always seemed to me to be the most likely outcome – then this costs the government much more than it anticipated, because it has to provide a much higher amount in loans. David Willetts has argued that the £9K limit is `difficult to defend’, claiming that despite the cuts a fee of this size would lead to a 40% increase in teaching resource. This isn’t actually true because universities will have to devote a large slice of the fee income to supporting less-well-off students and they are also being hit by huge cuts in capital funding, which will have to be made up some way. Methinks Willett’s famous two brains might have got their wires crossed.

Whether the £9k level is defensible or not, the government appears powerless to stop universities charging it, so is threatening to penalise research grants or to cut the number of student places if too many try it. This looks like panic to me.

The current state of British Higher Education policy is difficult to defend in other ways too. In among the figures spun out by Willetts is one that reveals that 80% of UK students are in subjects outside the area of Science, Technology, Engineering and Mathematics (STEM), which attract a lower level of central funding than STEM disciplines. However, the differential is not as large as you might think: there’s only a factor two between the lowest band (D, including Sociology, Economics, Business Studies, Law and Education) and the STEM band B (including my own subject, Physics). The real difference in cost is much larger than that, and not just because science subjects need laboratories and the like.

To give an example, I was talking last week to a student from a Humanities department at a leading University (not my employer). Each week she gets 3 lectures and one two-hour seminar, usually run by a research student. That’s it for her contact with the department. In my School, a typical student can expect around 20 contact hours per week including lectures, exercise class, laboratory sessions, and a tutorial (usually in a group of four). The vast majority of these sessions are done by full-time academic staff, not PDRAs or PhD students, although we do employ such folks in laboratory sessions and for a very small number of lectures. It doesn’t take Albert Einstein to work out that 20 hours of staff time costs a lot more than 3, and that’s even before you include the cost of the laboratories and equipment needed to teach physics. In the current system, however, students pay the same fee for STEM and non-STEM subjects.

This situation not only works as a powerful disincentive for a university to invest in expensive subjects, such as physics, but also rips off arts students who are given very little teaching in return for their fee. It is fortunate for this country that scientists working in its universities show such dedication to teaching as well as research that they don’t try to do what our cousins in the arts do. I sense a growing consensus, however, that we’re being ripped off too.

I suppose it could be argued that the big cuts in teaching grant in England do something to redress this anomaly, as the central funding element for Arts & Humanities subjects is cut to zero in the new funding regime. On the other hand, however, if universities do charge £9K for all subjects then the differential between arts and sciences will turn out to be lower than 2:1, as the central funding element for STEM subjects is far less than £9K. On the other other hand, if STEM subjects were to charge a higher fee than the others then demand would probably collapse.

To get another angle on this argument, consider the comments made by senior members of the legal profession who are concerned about the drastic overproduction of law graduates. Only about half those doing the Bar Professional Training Course after a law degree stand any chance of getting a job as a lawyer in the UK. Contrast this with the situation in science subjects, where we don’t even produce enough graduates to ensure that schools have an adequate supply of science teachers. The system is completely out of balance.

I don’t see anything in the post-Browne era that will alter this ridiculous situation. STEM subjects will continue to be strangled and universities will continue to overproduce graduates in other areas. Somebody has to get a grip. I doubt the Westminster government is capable of doing this. It has already delayed its planned White Paper on Higher Education, providing yet another indication that it has completely lost the plot.

Or maybe it’s making a complete botch of the situation deliberately, as part of a cunning plan to encourage universities to go private?


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The Welsh University Challenge

Posted in Education, Finance with tags , , , on February 13, 2011 by telescoper

Last week I received an email from BBC Wales asking me to get in touch with one of their reporters. It turned out to be about a blog post I wrote some time ago concerning the recent decision by the Welsh Assembly Goverment to pay the fees of Welsh domiciled students wherever they go to study within the UK. The reporter had read my post and wanted to “pick my brains” for a story she was working on. I didn’t have time  last week as I was too busy, but I found out yesterday that the BBC had indeed run a story.

According to the BBC version, the policy of paying for Welsh students to go to English universities will cost the Welsh Assembly Government £51.7 million in 2015-6 although,  according to their projections, this will be more than offset by an expected £83.5 million coming from English students electing to study in Wales (who will have to pay their own fees).

The net cost of this policy will be about £97.6 million in the same year, allowing for the assumed net profit from English students, which will be met by cutting the core teaching grants to Welsh universities by about 35% – this is less than the cuts in England, but big cut nevertheless.

But these calculations depend on several assumptions. One is what level of fees are charged. If all English universities charge £9K (which is possible) then the outflow of cash related to Welsh students going to England increases. If Welsh university fees are capped at £6K (which also seems likely) then the cash inflow decreases. In fact, in this scenario the differential between  money in and money out completely disappears.

Moreover there is the question of how many students move in each direction. It’s possible that in the Age of Austerity more students will be forced to study near their family homes, which will also alter the balance. In addition, student places are being cut  in Wales while there is a possibility that the cap on numbers in English universities will soon be lifted. This raises the possibility that Welsh students may be forced to study in England anyway, as they might not be able find a place in Wales. We’re certainly not going to benefit much in the School of Physics & Astronomy at Cardiff University from the current boom in applications, as our numbers have been cut since last year despite applications going up by 50%…

On the other hand – and I’ve anecdotal evidence for this from talking to parents at UCAS admissions days – there seems also to be a feeling that the WAG’s commitment to students is serving to convince a number of English residents that the Welsh universities are in safer hands than those in England.

So, although I strongly support the WAG’s reasons for wanting to help Welsh students as much as possible there remains considerable uncertainty about how things will pan out over the next few years. It could get very grim if reality departs significantly from the projections.

One of the arguments put forward by Leighton Andrews (the Welsh Assembly Minister responsible for Universities in Wales) is that the policy of paying for Welsh students to go to England was in fact a commitment made the Labour-Plaid Cymru coalition that controls the Welsh Assembly. That’s fair enough,  but of course it makes one wonder what will happen if the balance changes with the Welsh Assembly Elections due in May 2011.

Only when we know the complexion of the new WAG will we learn whether it might revisit the policy. I’ve heard many arguments for and against, but it still strikes me as very strange to see the devolved administration spending so much of its hard-earned budget in England. That £50.7 million would go a long way if it were kept in Wales.

All things considered, however, despite all the difficulties I think the situation is much more positive for universities in Wales than in England.

Incidentally, another sensible idea being discussed by Leighton Andrews is that Welsh schools might be forced to ditch “soft” A-level subjects, such as (inevitably) Media Studies, in favour of “quality” ones (presumably including mathematics and physics). Perhaps he should do the same for Mickey Mouse degrees in Welsh universities too?

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Astronomy Grant History (via The e-Astronomer)

Posted in Finance, Science Politics with tags , , , on February 4, 2011 by telescoper

Interesting view of astronomy grant funding versus time from AGP Chair Andy Lawrence.

Before commenting, I’m first going to calculate the Fourier Transform of Andy’s graph and analyse it in reciprocal space.

Astronomy Grant History Time for me to break a rule. As many of you will know, I am currently chairperson of STFC’s Astronomy Grants Panel. I have steered clear of discussing AGP business on this blog, for obvious reasons. However, the current round is now complete, so I can relax that rule somewhat. I wrote a chairman’s report which went out yesterday on the astrocommunity email list. Paul Crowther has put it on his website, so you can read it if you haven’t already. T … Read More

via The e-Astronomer


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Astronomy Grants: Past, Present, and Future

Posted in Finance, Science Politics with tags , , , , on February 3, 2011 by telescoper

Just time to put my community service hat briefly in order draw the attention of all friendly astronomers to the report on the 2010 STFC Astronomy grant round that has been circulated by the AGP Chair, Andy Lawrence (aka the e-Astronomer).

There is a lot of important information in this report, not only about the statistics of the last round but also about the new grants system that will be in operation from this year onwards so you really should read it carefully, especially if you’re planning to submit a grant application in 2011.

The report has been circulated to the astrocommunity mailing list, so most of you out there will have seen it but for those of you who haven’t you can find it on Paul Crowther’s website here.

I haven’t got time today to add detailed comments of my own – it’s a UCAS day in Cardiff today (among other things) – but I may do so in future. However, please feel free to comment/react/moan but please remember not to shoot the messenger!


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EPSRC : a capital affair (via The e-Astronomer)

Posted in Finance, Science Politics with tags , , , on February 2, 2011 by telescoper

If you think the grass is greener on the EPSRC side of the fence than on the STFC one, then you should read this post by the genial e-Astronomer. Times are tough…

I just came back from an EPSRC roadshow presentation to our University. Interesting to compare this to the STFC one we got a week or so back. Possibly the most striking thing, given that EPSRC is the biggest research council (budget 760M), is that the attendance was smaller than for the STFC show, and there was a much larger fraction of finance and admin people as opposed to scientists. I think this shows that despite all the troubles of the last … Read More

via The e-Astronomer

Wales set for university mergers

Posted in Education, Finance with tags , , , , , , on December 22, 2010 by telescoper

Just another quick post to pass on the news just out that the Higher Education Funding Council for Wales (HEFCW) has announced that the number of universities in Wales must reduce by a half over the next two years.

I’ve argued already on this blog that there are too many small separate higher education institutions in Wales and that’s a view which is probably held by many across the sector. Mergers and/or closures have seemed to me to be inevitable for some time given the general climate of austerity and the consequent chill winds blowing through the groves of academe. According to HEFCW, the plan is that by 2013 no “region” of Wales will have any more than two universities although I’m not sure what counts as a region.

Until recently there were four different “universities” with campuses in Cardiff: Cardiff University (where I work); the University of Glamorgan (which has a presence in Cardiff, but which has its main campus in Pontypridd); the Royal Welsh College of Music and Drama (RWCMD); and the University of Wales Institute, Cardiff (UWIC).

In fact RWCMD was absorbed by the University of Glamorgan a short time ago, but still uses its old name as part of the merged institution.
Apparently one more merger will be necessary to satisfy HEFCW’s requirement, which I guess will involve UWIC also being absorbed by the University of Glamorgan. If that does happen, I hope HEFCW will keep a close eye on matters of governance. The UoG doesn’t seem to me to have a very strong track-record with respect to resafeguarding standards of academic practice.

Depending on how “region” is interpreted, there might even be pressure to include the University of Wales, Newport in an even bigger new South East Wales institution presumably headed by the University of Glamorgan.

Elsewhere in Wales the merger process is already underway. Last week, Swansea Metropolitan and the University of Wales Trinity St David announced plans to create a united institution. Going back one stage, the University of Wales Trinity St David was itself formed through the merger earlier this year of Wales’ oldest education institutions, Trinity University College, Carmarthen and the University of Wales Lampeter. Although these have merged it appears they will carry on using their existing names, which may cause some confusion but we’ll have to see how it goes.

It’s important to note that universities are officially independent bodies, so HEFCW (through which public funding is channeled to them) can’t really just tell them to merge. However, many of the smaller institutions are so dependent on state funding that they basically have to do what HEFCW tells them or face financial oblivion. Of course it will require Vice-chancellors to agree, and since presumably half of them will cease to be VCs, there will be some reluctance. Turkeys tend not to vote for Christmas. However, HEFCW has promised that “core funding will be deployed in ways which lend force to the achievement of that target”. In other words, they’ll be calling on the odd VC to make them an offer they can’t refuse…


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Why should Wales subsidise English universities?

Posted in Education, Finance, Politics with tags , , , , on December 5, 2010 by telescoper

As the argument about increased tuition fees for English universities  intensifies in the run-up to Thursday’s debate in the House of Commons,  the Welsh Assembly Government last week announced that fees for students in Wales would rise to a basic level of £6000 per year, with a possible increase to £9000 “in certain circumstances”.

I’m a bit surprised that the WAG made this announcement in advance of the vote in Westminster, as it seems to me to be by no means certain that England will introduce the post-Browne system that Wales is copying. If the increased fee measure for England doesn’t get through Parliament then Welsh universities will find themselves out on a limb.

More generally, I find it extremely disappointing that there seems to be absolutely no independent thinking going on in Wales about Higher Education funding. The responsibility for this is devolved to the WAG, but time and time again it simply copies what the English are doing. What’s the point of having devolution if you haven’t got politicians willing and able to be different from the Westminster crowd?

One thing that Welsh Assembly Minister Leighton Andrews did announce that isn’t the case in England is that students domiciled in Wales would be protected from any tuition fee rise by a new system of grants, meaning that the Welsh Assembly will pick up the tab for Welsh students. They will still have to pay the existing fee level of £3290 per annum, but the WAG will pay the extra (between about £3K and £6K). This is good news for the students of course, but the grants will be available to Welsh students not just for Welsh universities but wherever they choose to study. Since about 16,000 Welsh students are currently at university in England, this means that the WAG is handing over a great big chunk (at least 16,000 × £3000 = £48 million) of its hard-earned budget straight back to England. It’s a very strange thing to do when the WAG is constantly complaining that the Barnett formula doesn’t give them enough money in the first place.

What’s more, the Welsh Assembly grants for Welsh students will be paid for by top-slicing the teaching grants that HECFW makes to Welsh universities. So further funding cuts for universities in Wales are going to be imposed precisely in order to subsidise English universities. This is hardly in the spirit of devolution either!

English students wanting to study in Wales will have to pay full whack, but will be paying to attend universities whose overall level of state funding is even lower than in England (at least for STEM subjects whose subsidy is protected in England). Currently about 25,000 English students study in Wales compared with the 16,000 Welsh students who study in England. If the new measures go ahead I can see fewer English students coming to Wales, and more Welsh students going to England. This will have deeply damaging consequences for the Welsh Higher Education system.

It’s very surprising that the Welsh Nationalists, Plaid Cymru, who form part of the governing coalition in the Welsh Assembly, have gone along with this strange move. It’s good for Welsh students, but not good for Welsh universities. I would have thought that the best plan for Welsh students would be to keep up the bursaries but apply them only for study in Wales. That way both students and institutions will benefit and the Welsh Assembly’s budget will actually be spent in Wales, which is surely what is supposed to happen…

POSTCRIPT: Leighton Andrews’ speech to the Welsh Assembly can be seen here.


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A Sign of the Times

Posted in Education, Finance with tags , , on November 18, 2010 by telescoper

Given yesterday’s announcement of cuts to the Higher Education budget in Wales, and the likely outcome in terms of increased costs to students, this picture of a sign I found the other day at the entrance to Bute Park seems particularly apt…


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Engineering a Conflict

Posted in Finance, Politics, Science Politics with tags , , , on October 25, 2010 by telescoper

I don’t have time to post much today so I thought I’d just put up a quick item about something that the e-astronomer (aka Andy Lawrence) has already blogged about, and generated a considerable amount of discussion about so I’ll just chip in with my two-penny-worth.

Some time ago I posted an item explaining how, in the run-up to last week’s Comprehensive Spending Review, the Royal Academy of Engineering had argued, in a letter to the Department of Business, Innovation and Skills (BIS), that government research funding should be

… concentrated on activities from which a contribution to the economy, within the short to medium term, is foreseeable. I recognise that this calls for significant changes in practice but I see no alternative in the next decade. This may mean disinvesting in some areas in order properly to invest in others.

They went on to say that

BIS should also consider the productivity of investment by discipline and then sub-discipline. Once the cost of facilities is taken into account it is evident that ‘Physics and Maths’ receive several times more expenditure per research active academic compared to those in ‘Engineering and Technology’. This ratio becomes significantly more extreme if the comparison is made between particle physics researchers and those in engineering and technology. Much of particle physics work is carried out at CERN and other overseas facilities and therefore makes a lower contribution to the intellectual infrastructure of the UK compared to other disciplines. Additionally, although particle physics research is important it makes only a modest contribution to the most important challenges facing society today, as compared with engineering and technology where almost all the research is directly or indirectly relevant to wealth creation.

I had hoped that this unseemly attack on particle physics would have been seen for what it was and would have faded into the background, but a recent article by Colin Macilwain has brought it back into the spotlight. I quote

UK engineers have started a scrap that will grow uglier as the spending cuts begin.

I should add that MacIlwain isn’t particularly supportive of the engineers’ position, but he does make some interesting remarks on the comparitively low status held by engineers in the United Kingdom compared to other countries, a point alsotaken up on Andy Lawrence’s blog. In my opinion this bare-faced attempt to feather their own nest at the expense of fundamental physics isn’t likely to generate many new admirers. Neither is the fact – and this is a point I’ve tried to make before – that the engineers’ argument simply doesn’t hold any water in the first place.

The point they are trying to make is that research in engineering is more likely to lead to rapid commercial exploitation than research in particle physics. That may be true, but it’s not a good argument for the government to increase the amount of research funding. If engineering and applied science really is “near market” in the way that the RAEng asserts, then it shouldn’t need research grants, but should instead be supported by venture capital or direct investment from industry. The financial acumen likely to be available from such investors will be much for useful for the commercial exploitation of any inventions or discoveries than a government-run research council. To be fair, as MacIlwain’s article explains, a large fraction of engineering research (perhaps 75%) is funded by commerce and industry. Moreover some engineering research is also too speculative for the market to touch and therefore does merits state support. However, that part that needs state support needs it for precisely the same reason that particle physics does, i.e. that its potential is long-term rather than short term. This means that is in the same boat as fundamental physics and shouldn’t keep pretending that it isn’t. If engineering research needs government funding then ipso facto it’s not likely to generate profits in the short term.

I think scientists and engineers would all be better off if they worked together to emphasize the amazingly successful links between fundamental physics and technology, as demonstrated by, e.g., the Large Hadron Collider at CERN and the mutual interdependence of their disciplines.

United we stand, and all that…


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The Great Escape? Not yet.

Posted in Finance, Politics, Science Politics with tags , , , , , on October 20, 2010 by telescoper

I expected to wake up this morning with the blues all round my bed, about the results of the Comprehensive Spending Review about to be announced today, but news appearing in the Guardian and the BBC websites last night suggested that the UK Science budget may, repeat may, be spared the worst of the cuts.

This news has been greeted with euphoria in the science community, as we were expecting much worse than the settlement suggested by the news. The RCUK budget, it seems, will be fixed in cash terms around £3.5 billion per annum for four years, as will the approximately £1bn distributed for research through HEFCE’s QR mechanism. This translates into a real terms cut that depends on what figure you pick for inflation over this period. The Treasury suggests it will corresponding to a 10% reduction figured that way, but inflation has defied predictions and remained higher than expected over the past three years so things could be different. Also important to note is that this budget (amounting to around £4.6 billion) is to be ring-fenced within RCUK.

So why the apparent change of heart? Well, I don’t know for sure, but I think the Science is Vital campaign played a very big part in this. Huge congratulations are due to Jenny Rohn and the rest of the team for doing such a fantastic job. The Guardian makes this clear, stating that science is usually a non-issue for the Treasury, but this time it was

high on the political radar because strong representations have been made by the scientific community about what they have described as “long term and irreversible” damage to the UK economy if there are deep cuts to research funding.

That means everyone who wrote to their MP or lobbied or went on the demo really did make a difference. Give yourselves a collective pat on the back!

BUT (and it’s a very big BUT) we’re by no means out of the woods yet, at least not those of us who work in astronomy and particle physics. As the BBC article makes clear, the level cash settlement for RCUK comes with an instruction that “wealth creation” be prioritised. The budget for RCUK covers all the research councils, who will now have to make their pitch to RCUK for a share of the pie. It’s unlikely that it will be flat cash for everyone. There will be winners and losers, and there’s no prize for guessing who the likely losers are.

The performance of the STFC Executive during the last CSR should also be born in mind. STFC did very poorly then at a time when the overall funding allocation for science was relatively generous, and precipitated a financial crisis that STFC’s management still hasn’t properly come to grips with. The track-record doesn’t inspire me with confidence. Moreover, at a town meeting in London in December 2007 at which the Chief Executive of STFC presented a so-called delivery plan to deal with the crisis he led his organisation into, he confidently predicted a similarly poor settlement in the next CSR. Talk about a self-fulfilling prophecy. Let’s hope they get their act together better this time.

Taking all this together it remains by no means improbable that the STFC budget could be squeezed until the pips squeak in order to liberate funds to spend elsewhere within RCUK on things that look more likely to generate profits quickly. The nightmare scenario I mentioned a few days ago is still on the cards.

As we all know, STFC’s budget is dominated by large fixed items so its science programme is especially vulnerable. As the BBC puts it

So any cut in [STFC’s] budget will be greatly magnified and it is expected that it will have to withdraw from a major programme. Alternatively, it would have to cutback or close one of its research institutes.

We could have to wait until December to find out the STFC budget, so the anxiety is by no means over. However, the ring-fencing of RCUK’s budget within BIS may bring that forward a bit as it would appear to suggest one level of negotations could be skipped. We might learn our fate sooner than we thought.

Overall, this is a good result in the circumstances. Although it’s a sad state of affairs when a >10% real terms cut is presented as a success, it’s far less bad than many of us had expected. But I think STFC science remains in grave danger. It’s not an escape, just a stay of execution.

But there is one important lesson to be learned from this. When the STFC crisis broke three years ago, reaction amongst scientists was muted. Fearful of rocking the boat, we sat on our hands as the crisis worsened. I hope that the success of the Science is Vital campaign has convinced you that keeping quiet and not making a fuss is exactly the wrong thing to do.

If only we’d been braver three years ago.


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