Inside Story

The hidden transformation of university research

The government’s latest funding plan will reshape higher education

David Peetz 26 June 2020 1271 words

In with the old, out with the new: education minister Dan Tehan. Lukas Coch/AAP Image

Research funding is a very odd aspect of university finances, but it is going to drive the biggest changes in their operations over the next couple of decades.

It is odd because the dollars are seen as an output rather than an input. This shocked me when I moved from the public sector into academia, because I had been taught that it was how well you used money that mattered. It was a means to an end.

In the university system, what matters is how much you get. The money is the end. It’s a philosophy embraced by the system’s public service overseers, and it has strange results. It increases concentration in the university sector rather than reducing it. And it leads to a loss of research expertise, because people who are very capable of doing research end up not doing it.

If they get through parliament, the government’s newly announced fee arrangements will entrench that process and drive those big changes in universities.

How will those fee arrangements entrench that process? It all goes back to the fact that the government plans to reduce rather than increase the resources universities receive for teaching. The increase in average student fees is nowhere near enough to offset the overall cut in government spending.

This is no accident. The government is not just trying to save money. It claims its reforms will end the “subsidisation” of research with teaching income (or, in poli-speak, “better align funding with costs… by removing the implicit unfunded research aspect of the CGS”).

In fact, it’s not really subsidisation. It’s just that universities finance a lot of their research from the surplus they make on their general function of teaching students. The end of that surplus means the end of general research funding.

To offset this loss of income, the government will be forced to offer universities a new research package. It will no doubt promote this as a brand new and very expensive initiative, but that will only be a cover for the fact that it has reduced research funding by cutting the “implicit unfunded research aspect of the CGS.”

Replacing one source of research funding with another may not seem like a big deal. But it has very different implications for different universities.

Universities fund nearly twice as much of their research from their general funds than from the main alternative, competitive or formula-based grants provided by the Commonwealth.

The thing is, those formulas presently strongly favour the old universities — the ones established between the 1850s and the 1950s that are now part of the self-styled elite Group of Eight. While these old, elite universities account for only 25 per cent of undergraduate students, they receive 67 per cent of Commonwealth specific research funding.

For most other universities, research funding from specific Commonwealth programs is barely a quarter of what they can allocate from general funding.

Commonwealth research funding comes in two ways: as competitive grants (you write an application and have, say, a one-in-five chance of succeeding) or as formula-based allocations. But those formulas are mostly tied to the research income a university receives as grants or from consultancies and the like (along with a bit tied to the number of its PhD graduates). That’s because income is seen as the indicator of performance. It reinforces itself.

This means that removing the “implicit unfunded research aspect of the CGS” would have a large impact. In a nutshell, the proposed shift from general research funding to competitive and formula-based research funding would severely affect the newer universities (that is, those less than half a century old) and benefit the old elite universities.

The newer ones are those that have served the lower-middle-class and working-class students who have entered the university system over the past half century. Some of these students were the first in their families to go into higher education.

These universities would still be able to finance some research using their surpluses from teaching international students (who pay higher fees than domestic students). They would still win an occasional competitive grant and get a bit of formula-based funding. But it would add up to considerably less than their present research funding.

The government wouldn’t need (or likely intend) to replace the lost general research funding with an equivalent amount of grant- and formula-based funding. It would just need to do enough to make the old, elite universities better off. Maybe spending half the money presently taken up by the “implicit unfunded research aspect of the CGS” would do the job.

The government would get away with this because the old, elite universities are well coordinated but the newer ones aren’t.

To appreciate the low level of coordination among the universities as a whole, just consider their failure to enact the Jobs Protection Framework negotiated by their representatives with the National Tertiary Education Union. Within a fortnight of the framework being agreed, almost half the universities had walked away from it, and it had collapsed.

By contrast, the old, elite universities are united under the Group of Eight banner and know where their interests lie. They have already met the minister and pushed their support for research funding “focused on excellence,” meaning some version of a formula that privileges their own research.

So it is little surprise that, after the government announced its package of cuts, the chief executive of the Group of Eight commented that its members recognised “the need to embrace a level of pragmatism for the long-term national good. This is one such moment in time.” It isn’t clear that the old, elite universities are well-liked in Canberra at the moment. But they are effective operators.

Central to the entrenchment of the old, elite universities will be the use of what should be — and in other sectors would be — an input measure as a measure of actual performance. It justifies the concentration of additional resources in those organisations.

Whatever the government’s motivation is, it is not about directing students towards the jobs of the future. Perhaps the long game is to return to some aspects of a pre-1960s model, in which those well-established institutions acted as the mechanism by which the elite reproduced itself.

The rationale for the Group of Eight’s long game will be that Australia needs a small number of world-class universities that can compete with Harvard or Oxford to give Australia its place in the sun. The other institutions can fend for themselves. National Party pressure could well see some resources redirected towards saving some regional universities from insolvency, though this would be no help to universities in cities like Geelong, Newcastle and Wollongong.

If this major reorganisation of funding takes place, starting with last Friday’s announcement of changes to fees and funding, it is likely that the university sector — its institutions, research, fields and staff — will look very different in a decade or three.

Most urban universities outside the old elite might eventually either become teaching-only institutions for most practical purposes, building research from international student income, or cease to exist as independent entities, taken over by older, well-resourced universities.

Research will likely be done with fewer resources, in aggregate, covering issues less at the whim of individual academics and more at the whim of those in charge of funding.

The loss of resources is likely to be particularly acute in humanities, business and other areas of the social sciences, as grant programs tend to give these areas less money anyway.

And the staff in those organisations may get something other than what they had bargained for. •