Presenation at Auril conference 2007 by Alice Frost

1. KT / HEIF update
Alice Frost, HEFCE
Ashley Malster, DIUS

2. First up:
Hello from a brand new Department !

3. Organisation
• DIUS includes:
– From DTI
• Science and Innovation Group (with the Science
Budget)
• Technology Strategy Board
• Government Chief Scientific Advisor & his staff
• Design Council
• UK Intellectual Property Office (ex Patent Office)
– From DfES
• Higher Education Directorate
• Further Education and Skills from age 19 onwards
– From DCMS
• NESTA

4. DIUS Strategic Objectives
• Accelerate the commercial exploitation of creativity and
knowledge, through innovation and research, to create wealth,
grow the economy, build successful businesses and improve
quality of life.
• Improve the skills of the population throughout their working lives to
create a workforce capable of sustaining economic competitiveness,
and enable individuals to thrive in the global economy.
• Build social and community cohesion through improved social justice,
civic participation and economic opportunity by raising aspirations and
broadening participation, progression and achievement in learning and
skills.
• Pursue global excellence in research and knowledge, promote the
benefits of science in society, and deliver science, technology,
engineering and mathematics skills in line with employer demand.
• Strengthen the capacity, quality and reputation of the Further and
Higher Education systems and institutions to support national
economic and social needs.
• Encourage better use of science in Government, foster public service
innovation, and support other Government objectives which depend on
the DIUS expertise and remit.

5. England Only
Higher Education Policy
- Teaching
- Recurrent Research (QR)
- Widening Participation
- Knowledge Transfer
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UK - wide
Science and Innovation Policy
Research Council Funding
Technology Strategy Board

6. HEIF – the next funding round

7. What we could say a week ago..
HEIF outcome depends on:
- Sainsbury Review
- CSR Budget Allocations
But…
A week is a long time in Knowledge Transfer

8. Fundamental starting point:
Ten Year Science and Innovation Investment
Framework
“The Government confirms its support for the
Higher Education Innovation Fund (HEIF) as a
permanent third stream of funding for
universities in England to further build capacity
in the university sector for knowledge transfer “

9. Evolution
LAST TIME
• Major informal / formal consultation exercise
• Set in place a modular formula that could be
adjusted
NOW
• Very much building on previous formula
• Moving to 100% formulaic, as per Sainsbury
• Good news: predictability, flexibility, esteem

10. LAST TIME
previous announcements trailed that:
• that ‘capacity building’ component would reduce
over time, ‘performance’ component to increase
• 3rd component to be reviewed
POST-SAINSBURY
• adjustments consistent with this

11. But the big news from earlier this week:
Budget increases to £150m per year
• Delivering Lambert Review recommendation
• From a formulaic funding perspective: >80%
increase

12. A word about “business-facing”
• referred to in Sainsbury review
• phrase can be ambiguous
• all institutions should be more business-facing –
or should that be business-friendly?
• DIUS/HEFCE not intending to categorise /
pigeon-hole institutions
• formula doesn’t contain a binary variable
• thrust: benefits of HEIF spread-more widely, not
just to large research-led institutions

13. “We have devised and discussed with DIUS and HEFCE a formula that
gives less weight to the size of the university and more to income
received from SMEs. This should result in the large research
universities getting slightly more money in HEIF4, and many other
universities getting larger sums, with an incentive for all to do more
work with SMEs. We recommend that this formula be adopted for
HEIF4.”
Result:
• Benefit of HEIF spread more widely
• Funding increases for most institutions,
substantial increases for many

15. HEIF 4: The Sainsbury model
• Fully formulaic and gives continuity with the
formula developed in HEIF round 3
• Supporting a wide range of KT activity that
results in economic/social benefit
• Formula will be refined and simplified:
– higher weight to the pot reflecting performance (external
income)
– rather than separate third pot, a weighting for SME income
in performance pot
– pot calculated on academic staff numbers - potential and
capacity building - retained

16. HEIF 4: The Sainsbury model
• As with HEIF 3, the formula will include:
– a cap (absolute cap) on the maximum income that can be allocated
per HEI
– floor of the minimum allocation
– a limit on the minimum transition from last award
– but will additionally include for HEIF 4 a limit on the max increase
for an HEI in its allocation from its past award (a relative cap)
• Absolute cap to be raised from that set in HEIF 3 but by a
lower proportion than the increase in the overall HEIF
budget – achieve Sainsbury aim of spread funding to a
wider range of HEIs whilst sustaining important, built
capacity

17. Summary of Model
Formula Element HEIF3 HEIF4
Final year budget £110M (2007-08) £150M (2010-11)
Formula / competition Ratio 75% formula 100% formula
25% competition
Pot ratio (staff, income, non-financial) 45:45:10 40:60:0
Extra SME weighting in income pot n/a 2x
Minimum allocation £100k £100k
Max allocation (absolute cap)/ Maximum Absolute £1.5M To be determined in
increase from last award (relative Relative n/a context of total HEIF
cap) budget
Minimum transition from last award 75% 80%
(all figures per annum)

18. What happens next?
• Government announced HEIF rise to £150M in 2010-11
(totals for 2008-09 and 2009-10 tbc)
• HEFCE Board in November:
– Agree HEFCE (HE budget) element of funding
– Set absolute and relative caps in line with Sainsbury aims and
available funding
– Finalise data issues
– indication of (or indicative) allocations
– Format of strategies to release funds
– CKEs
• Notification to sector following HEFCE Board
• Aim to sign off by May

19. Some important messages
• Coming of age of third stream as permanent
allocation alongside T and R
• Reaching Lambert £150M
• Importance of KT in innovation, and public
support for knowledge base and KT
• More formula HEIF with reduction in burden
• Diverse contributions of HE (and FE) to meet
diverse demands
• SME agenda

20. HEIF Evaluation
HEFCE lead on evaluation, working closely with DIUS
Assisted by Advisory Panel: AURIL, UNICO, CIHE, HEI Head from
HEFCE Business & Community Committee
Headline requirement:
“to evaluate what has been achieved by HEFCE/OSI 3rd stream
funding to achieve culture change and embed capacity toward
optimising the direct and indirect economic impact of HEquot;
Focus is on HEROBAC and HEIF (all rounds), but also touches on
eg University Challenge / Science Enterprise Challenge
Two key aspects:
– internal: culture change within an institution
– external impact it has on organisations HEI works with
(likely to be more of former than latter)

21. HEIF Evaluation 2
Sizeable project so required full OJEC tender procedure (took 6+ months)
17 bids received; narrowed down to 5 for interview
Winners: Consortium of PACEC and Centre for Business Research
(Cambridge University)
Module 1: A top down ‘macro’ analysis of existing survey-based data (all
institutions)
Module 2: Case study research of individual HE institutions (~ 30
institutions)
NB: case study participants would receive free individual institutional
feedback as an incentive to participate
Timetable: Project start September 2007; Draft report April; Final report
June; Feedback/workshop July; Publish September 2008

22. HEFCE perspective on Sainsbury Report
Not just about the methodology for HEIF 4
• Business-related element in our QR research funding.
• Support to HEIs seeking to address the Cox Review on creativity and
innovation
• HEFCE strategic subjects advisory group looking at flows of STEM
personnel
• HEIF as an infrastructure grant to HEIs outside BSSP. HEFCE funds
not provided for business support; HEIs work positively with the
business support infrastructure (sector organisations like AURIL can
help with technical issues)
• TTOs still described as ‘patchy’. HEROBC/HEIF evaluation evidence
next year. Value of sector bodies, IKT etc, to help with development of
KT.

23. A final word from her: HEBCI
2003-04 2004-05 2005-06
Collaborative research income (£ million) 541 530 595
Consultancy income (£ million) 211 219 236
Equipment and facilities income (£ million) 80 76 89
Regeneration and development income
(£ million) 216 206 224
Disclosures 3,029 3,027 3,268
Spin-offs with some HEI ownership older than
3 years 521 592 669
Plus: longer term -- moving to HESA

24. A final word from him: “Streamlining University /
Business Collaborative Research Negotiations” Report
Independent report to Funders Forum – published August
CONCLUSION: “..while in the main the system is working well,
there are some important problems. Addressing these could
improve collaborative research negotiations, increasing the
number of successful deals and the speed with which they are
made.”
• Overemphasis on IP
Both universities and businesses guilty on occasions..
• Unclear messages
From Government and public funders – eg income generation vs
economic benefit
• Need for good practice in negotiating process
Sensible practice not always followed
(Available on DIUS website)

25. Alice Frost Ashley Malster
a.frost@hefce.ac.uk ashley.malster@dius.gsi.gov.uk
0117 931 7107 020 7215 3866