My Lords, I was not a member of the Science and Technology Committee, but I read the report and the Government’s reply with great interest.
My first concern relates to the availability of public money for research. Cross-subsidising research budgets by individual universities could never be a long-term solution to pressure on those budgets. There is now, at least in theory, a welcome commitment by the Government to increase research funding to 2.4% of GDP by 2027. The problem is that if GDP declines, so does research funding. This is unwise, because if the economy is stalling, investment in research becomes increasingly important to drive future growth. The GDP figure to be used for 2027 should be the 2019-20 GDP figure—before the coronavirus pandemic began—plus annual inflation. That seems a reasonable way of approaching the problem and it would give universities greater clarity on future funding streams.
This takes me to Horizon funding. A no-deal Brexit will imperil our leadership status in global research because we will not be part of Horizon Europe, worth £85 billion in 2021-2027. I cannot understand why the Government have failed to show clearer leadership on this vital issue. Associate status is a weak position to be in, and to secure awards will require us to contribute to the pool anyway. We should note that in Horizon 2020’s proof of concept awards, UK applicants secured 13 awards, the largest number of grants. In the current Horizon round, the UK has secured a fifth of the awards.
This is clearly of enormous benefit to our spending on research, the research status of our universities and the geographical areas that they are in. The Government rightly are committed to a levelling-up agenda across the whole country. Many universities play a central role in their local and regional economies, notably in jobs, research and investment. The Government’s industrial strategy talked of the importance of place and it is important to remember that this relates directly to the levelling-up agenda. I do not argue that research money should be spread thinly, because investment must relate to specific sectors and to excellence, but it is the job of a Government to lead research capacity building across the whole country.
Last week, the annual world rankings of universities were published in Times Higher Education. They showed a drop in the positions of some UK universities. The comparative improvement of some non-UK universities is an obvious reason, but we should not underestimate the importance of investing to maintain our world rankings.
In the early summer, London Economics reported that the five north-east universities could lose £118 million as a result of a predicted downturn in student numbers, both domestic and overseas, caused by coronavirus. Things may yet turn out a bit less severe, but the importance of the local income generated from students should not be underestimated, and nor should Horizon income, which in my own city of Newcastle-upon-Tyne alone has generated some £90 million over the past seven years.
I look forward to hearing the Government’s proposals for solving the problems that the committee has so clearly identified.
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