Universities that are struggling to cover the costs of research because of the Covid-19 pandemic will be allowed to apply for government loans this autumn.
The Department of Business, Energy and Industrial Strategy (BEIS) has published details of a university research support package, which includes two new “significant” funds to support research-intensive universities affected by the financial fallout of coronavirus.
According to Universities UK (UUK), the sector risks losing £6.9 billion in international student tuition fees.
From this autumn, UK universities will be eligible to apply for long-term, low-interest loans from the Treasury.
Loans will cover up to 80% of any income lost by a downturn in international student recruitment, up to the value of non-publicly funded research activity in the university. Not all universities will be able to take advantage of the the loan scheme and it will be determined by the amount of non-publicly funded research they do.
The loans will be supplemented by a small number of government grants, the balance of which will be at least 75:25 in favour of loans.
The cap on loans means this scheme will work favourably for large, research-intensive providers that undertake a lot of STEM research, rather than humanities-focused institutions, who drum up less charity- and industry-funded research.
BEIS has also announced a £280-million fund to pay for costed grant extensions, which will offer universities immediate support with researchers salaries and laboratory costs. UK Research and Innovation (UKRI) and the National Academies will distribute the grants, which will be calculated based on the value of UKRI grants providers hold that finish between 1 April 2020 and 31 March 2021.
The packages announced today are aimed at research-intensive universities and follow months of lobbying from UUK and the research community.
The Department for Education (DfE) has signalled that it will shortly publish a Restructuring Regime which will look to support teaching-intensive institutions. The two schemes will work in tandem, so universities will not be able to draw from both funds equally.
According to the government website, if a provider receives funding through the Research Stabilisation Package, “it would be taken into consideration of eligibility for support through DfE’s Restructuring Regime”.
The government has not announced the details of how universities can apply for the loans. BEIS said the “generic deal” will likely expect universities to repay the funds over 10 years with low interest. Universities will need to demonstrate how they use the loan and in return for the financial lifeline will be expected to cut costs.
The UK has not decided if it wants to be involved with the European Union’s Horizon programmes post-2020. The government told universities that if the UK opts out it will provide funding “to mitigate against any loss” incurred.
Science Minister Amanda Solloway said: “This package will protect thousands of highly skilled jobs and ensure the UK’s research community continue their vital work to solve some of the most pressing challenges facing our society today, like tackling climate change, unlocking medical discovery and unleashing game-changing new technologies.”
BEIS minister Ms Solloway is currently co-chairing the Ministerial University Research and Knowledge Exchange Sustainability Taskforce with her colleague in the DfE, universities minister Michelle Donelan.
UUK wrote to the government in April to lobby for an increase in funding for universities. The letter called on the government to provide the full economic cost of research through government grants and increase QR funding by 100% for 2020/21. The government has instead offered loans to the HE sector. The response from UUK to the government’s plan was reserved.
“This is a timely and welcome acknowledgement from the UK government of the importance of protecting and supporting research activities and talent as universities weather the financial storm created by the Covid-19 pandemic,” said Alistair Jarvis, UUK’s chief executive and a member of the joint DfE and BEIS Ministerial Taskforce.
“University research and innovation will play a key role in driving economic and social recovery and benefitting communities and places across the UK. We are committed to working with government on the fuller details of this package of loans and grants to ensure that they provide accessible support for university research and innovation across all four nations of the UK.”
“This is step one though, and we look forward to continuing work with Government on its roadmap to deliver a science superpower future. Key to that will be moving towards a more sustainable operating model for research backed up with wider measures to boost collaborative research in the UK and with partners across the globe
– Dr Tim Bradshaw, the Russell Group
Dr Tim Bradshaw, chief executive of the Russell Group, said: “Providing costed grant extensions through UKRI and the National Academies is a positive step towards protecting that national asset and the workforce at its heart, who will play a huge part in driving the post-Covid19 economic renewal across every nation and region of the UK.
“The ability to access additional loans and grants should provide help where this is needed most and act as a bridge to a more sustainable future for research. However, we need to understand more about the detailed rules that will apply.”
The Russell Group said despite the loans, “universities have to make a lot of difficult decisions on what to prioritise given the scale of financial impacts faced due to Covid-19”.
Dr Bradshaw added, however, that the announcement amounted to “step one” and government would need to do more “to deliver a science superpower future”.
“Key to that will be moving towards a more sustainable operating model for research, backed up with wider measures to boost collaborative research in the UK and with partners across the globe,” he said.
UCU general secretary Jo Grady said: “This latest announcement from the government fails to put students and staff at the centre of its recovery plans. While there is some new money in the form of a grant to research-intensive universities, the rest of the package consists of loans and repackaged existing spending commitments.”
Nick Hillman, director of the Higher Education Policy Institute (Hepi), said: “My overwhelming response is positive. Universities have been wanting a package of support like this to stabilise what they do since the crisis began. My hope is it will instil confidence and allow institutions to plan ahead more sensibly by protecting the vital research that we need now as much as ever before.
“There are lots of outstanding questions, such as how to apply for the loan, what the terms are and when the money will arrive. Individual institutions that I have spoken to are also struggling to work out exactly what the complicated details are likely to mean for them specifically.
“There are some interesting features, like the split in support for universities between the DfE and BEIS. But, above all, it looks like we now have a sensible package for research-heavy institutions from which to start the detailed conversations.”
The announcement follows the commitment by the government at this year’s budget to increase public investment in research and development to £22 billion each year by the end of this parliament in 2024/25. university research support package