Universities

Lord Krebs Excerpts

Thursday 14th November 2024 Lords Chamber

[Lord Krebs (CB)]

My Lords, I too thank the noble Baroness, Lady Warwick of Undercliffe, for securing this important and timely debate, and for her excellent introduction to the topic. I declare my interest as an emeritus professor of biology at Oxford University and as the cofounder and chairman of a university spinout company providing software to the financial services industry.

I wish to speak about research in our universities. As has often been repeated, we have a number of truly world-class research universities in this country. Only the US has universities of comparable stature. There may be many reasons for that, but one point to note is that the institutional structure of research in the UK is more similar to that of the US than, for instance, that of France and Germany, where research institutes take a bigger share of the research landscape.

When the late Lord May of Oxford was government chief scientist, he analysed the relative performance of the UK in science and showed convincingly that we outperform most other countries in scientific quality and output per pound. He speculated that one of the reasons might be that we invest in research in universities as opposed to separate research institutes. As Gordon Moore, the creator of Moore’s law and the former CEO of Intel, put it: invest in research in universities and you get three bangs per buck—research, innovation and education—but invest in institutes and you get only two.

I shall make one simple point about investment in research in our universities: the quality of research in our top universities today is a reflection of investment made decades ago—not last year, not in the last five years, but probably during at least the last 30 years. You cannot simply turn research on and off; it is a long-term venture and therefore deserves a long-term strategy. That is true whether you are talking about the basic discoveries of pure research or their translation into outcomes that save lives, save the environment and are a source of prosperity. It took Dorothy Hodgkin, Britain’s only female Nobel laureate, 35 years of research at Oxford University to elucidate the structure of insulin. The Oxford malaria vaccine was the result of 20 years of research effort.

If we look to the future, we see that the system that has brought us success in the past is under serious threat. In 2022-23 there was an estimated £5.3 billion deficit in university research funding. As the noble Baroness, Lady Warwick of Undercliffe, has said, research in universities really is reliant on cross-subsidies from other activities, and that is not really sustainable.

There are two main reasons for the deficit. First, research is not funded at full economic cost. The estimate in the blueprint report is that about 69% of FEC is recovered by universities. Secondly, as has been mentioned, the QR funding stream is not sufficient to fill that gap; it has declined by 15% over the past decade. Across the university sector, the cross-subsidy for research from overseas students and from other activities accounts for over one-third of research income, compared with only one-sixth of research income from UKRI, the major government funding agency. Paradoxically, the more successful a university is in securing research funding, the bigger the gap that has to be filled. Last year Oxford University secured £789 million of research income, the highest of any university, but that poses a massive financial problem for the university in cross-subsidising that income from other sources.

The truth is that we are not investing enough public money in research. Our public investment in R&D is 0.5% of GDP, which places us 27th out of 36 OECD nations—less than the OECD average of 0.6% and substantially less than countries such as South Korea, Germany and the United States, which invest between 0.66% and 0.99% of GDP.

It may be several decades before we see the full effect of the squeeze on university research, and by the time it becomes acute it will be too late. However, there are already warning signs. Between 2016 and 2020 there was a 17% drop in the UK’s share of highly cited papers, one of the key metrics of our performance. If our research quality and output drops, so will our future economic performance. Wealth creation in the future will depend on brain, not brawn. Crucially, it is likely to come from unexpected discoveries motivated by pure curiosity.

I end with three questions. First, does the Minister agree that we need to take a long-term view of research in our universities, with a long-term commitment? Secondly, does she agree that our public spend on research is too low? If we are not prepared to create more jam, should we try to spread the jam less thinly? Thirdly, does she have a view on what proportion of publicly funded research in universities should be ring-fenced for pure curiosity-driven research, which is likely to be, in unexpected ways, the source of future prosperity?