7 A new framework for university research

7.1 The proposals for reform outlined in this paper encompass:

• establishment of a single flexible national competitive grant programme;
• establishment of a new institutional block funding programme allocated under a formula which supports institutional diversity;
• provision of support for postgraduate research training in the form of portable research scholarships;
• the funding of research infrastructure as a component of research grants;
• improved accountability processes; and
• an enhanced Australian Research Council.

The balance between competitive and other programmes

7.2 In establishing the new funding structure, the existing balance of funding between competitive peer-reviewed programmes and other funding for research and research training will be maintained. The revised programme structure provides a transparent attribution of funds to function and clear delineation of administrative responsibilities. The current programme structure is described at Attachment A. The mapping of existing programmes to the proposed programme structure is at Attachment B.

The National Competitive Grant Programme

7.3 The National Competitive Grant Programme will provide grants to individuals, teams and institutions for investigator and institution initiated proposals through an open national competitive process. It will subsume all those programmes currently referred to the Australian Research Council with the exception of the Small Grants Scheme, Australian Postgraduate Awards and International Postgraduate Research Scholarships Scheme. Added to this pool will be the proportion of RIBG funding associated with Australian Research Council competitive programmes and a small amount of funding to be transferred from the research training component to support additional postdoctoral fellowships and prestigious research training awards, to be known as Prime Minister's Scholarships.

7.4 The National Competitive Grant Programme will comprise two elements:

• The Discovery element will provide funding to individuals and teams to undertake research projects and programmes of undoubted excellence. Individuals and teams will apply for funds. Applications will be assessed by domestic and international academic experts and key users of research.
• The Linkage element will provide support for the development of research ventures involving national and international collaboration between institutions and/or collaboration between institutions and other parties, such as industry partners and the CSIRO. Funding will primarily be of a seeding nature. The programme will also support strategic investment in the collaborative use of infrastructure. Funding will be competitively allocated. Proposals will be initiated by individual investigators and institutions.

7.5 The balance of funding between the Discovery and Linkage elements of the National Competitive Grant Programme will be flexible. The Minister will approve the annual balance of funding between elements having received the Australian Research Council's recommendation.

7.6 Peer review will form the basis of decisions in the competitive programme in both the Discovery and Linkage elements. The process will be expanded to involve user assessment of potential short-term and longer-term benefits to national economic growth, as well as social and cultural development.

7.7 The Australian Research Council will manage all aspects of the National Competitive Grant Programme, including the related processing activity currently undertaken by the Department of Education, Training and Youth Affairs. Decisions on the allocation of funds will be made by the Minister upon consideration of the advice of the Australian Research Council.

Access of the Institute of Advanced Studies to the National Competitive Grant Programme

7.8 The Institute of Advanced Studies at The Australian National University is the one fully block-funded university within the Australian university system. With the exception of Australian Postgraduate Awards and the Research Infrastructure Equipment and Facilities Programme, the Institute of Advanced Studies does not currently have access to other research funding programmes managed by the Australian Research Council or the Department of Education, Training and Youth Affairs.

7.9 The changes to research funding arrangements proposed above offer an opportunity to assess the appropriateness of current arrangements: in particular, whether the Institute of Advanced Studies and its researchers should have access to competitive funds for research, and, if so, on what terms.

7.10 The Department of Education, Training and Youth Affairs and the Australian Research Council will pursue these matters with The Australian National University to determine its interest in gaining access to competitive granting arrangements, and the terms on which such access would be made available.

The Institutional Grant Scheme

7.11 The Institutional Grant Scheme will provide block funding to institutions to support flexibility and quality of research and research training in each institution.

7.12 The Institutional Grant Scheme will include all funding from the current Research Quantum and the Small Grants Scheme. As a transitional measure, some funding will be transferred from the research training component of operating grant (see point 7.19) to provide infrastructure support to research students.

7.13 Allocation of block research funds will be formula-based. The formula used will include two components: share of research student places (60 per cent), and share of total research-related income earned by universities from all sources (40 per cent), including income from research-related activities leading to innovation. The exact balance between elements of the formula is an issue which will be taken up with the sector as part of the consultation process following release of this paper. There will be no guaranteed minimum level of funding for institutions.

7.14 In order to equalise the incentives for institutions to seek competitive funds or research funding from private sources, research-related income will not be weighted differently according to source.

7.15 The existence of a transparent and auditable definition of research-related income is essential for the acceptance and operation of the allocative arrangements for the Institutional Grant Scheme. Definitions and specifications will also need to be developed for consultancies contributing to the national innovation system. The Department will work together with institutions and the Australian Research Council in the process of defining eligible income for the purposes of the formula.

7.16 All institutions undertaking research and research training, including Bond University and University of Notre Dame Australia, will be eligible to receive block funding on the condition that they furnish an acceptable Research and Research Training Management Plan and are listed on the register of bodies for the Australian Qualifications Framework.

The Australian Postgraduate Research Student Scheme

7.17 The Australian Postgraduate Research Student Scheme will provide portable scholarships representing the Commonwealth's direct subsidy for research training to students. In addition, there will be a number of stipends available to support the living costs of some research students.

7.18 Scholarships will be tenurable for a period of up to two years in the case of masters studies and up to 3.5 years in the case of studies leading to the award of a doctorate. The scholarships will be HECS-exempt and not subject to further tuition fees set by the university. Scholarships would be held by students until they complete their course, until the value of the scholarship is fully expended or until they discontinue their studies. In the event of a student changing institution, the funding associated with that student will transfer to the receiving institution. To minimise scope for unproductive competition for students, funding will not be able to be transferred between institutions until a student has completed a study load of one EFTSU.

7.19 At least initially, scholarships will have a single value. Institutions will be compensated for the different infrastructure support costs of students in laboratory and non-laboratory based disciplines through the Institutional Grant Scheme. As a consequence, some funds will be transferred from the operating grant to the block grant scheme by the time of full implementation. The Department will undertake a series of cost studies to identify the relative costs of research training in different disciplines in consultation with the sector. The appropriateness of a single value scholarship will be reviewed in the light of the findings.

7.20 The allocation of scholarships to institutions will be based on a formula which includes:

• share of research scholarships awarded the previous year;
• share of total research-related income from all sources; and
• share of Commonwealth-funded or fee-paying research degree completions.

7.21 The Department of Education, Training and Youth Affairs will consult institutions on the composition of the allocative formula for scholarships and the weights to be attributed to items. All institutions eligible for the Institutional Grant Scheme and offering research training will be eligible to receive funding in respect of research students.

7.22 Funding for the scholarships will be drawn from the component of operating grant currently supporting research training and the Australian Postgraduate Awards Scheme. The Australian Postgraduate Research Student Scheme will include funding for International Postgraduate Research Scholarships, the management of which will be devolved to institutions. A small amount of funding (approximately $8 million) will be transferred from the current research training component to the National Competitive Grant Programme to support additional:

• postdoctoral research positions, and fellowships for distinguished researchers; and
• scholarships for outstanding honours graduates undertaking doctoral studies, to be known as Prime Minister's Scholarships.

Funding for research infrastructure

7.23 Funding available under the RIBG programme will be transferred to granting agencies with the expectation that those infrastructure overheads formerly funded through RIBG will be covered by grants.

Research and Research Training Management Plans

7.24 Institutions participating in the Institutional Grant Scheme and teaching publicly funded research students will be expected to submit Research and Research Training Management Plans to the Commonwealth on an annual basis as part of the profiles documentation. The preparation of such plans will represent a minimum requirement for gaining access to funding through the Institutional Grant Scheme and the Australian Postgraduate Research Student Scheme.

7.25 Discussion of institutional research strategies and performance will be a standing agenda item in profiles discussions with institutions. Comparable arrangements would be made with other providers.

7.26 Research and Research Training Management Plans will be expected to form strategic documents which describe an institution's approach to the planning and management of its research and research training activity and its assessment of its research and research training performance.

7. 27 Issues of key importance include:

• institutional priorities for research and research training and the strategies in place to realise their goals;
• the processes by which resources are allocated in line with priorities;
• policies regarding the management of intellectual property;
• incentive and reward structures and employment conditions for staff which support priorities;
• pricing policies for research; and
• the performance measures by which the institution wishes to be judged and its performance against these measures.

7.28 While there will be no prescribed model for Research and Research Training Management Plans, at a minimum they will be expected to:

• demonstrate links to an institution's strategic plan and distinctive mission statement;
• provide auditable performance indicators which allow for institutions to compare themselves with the higher education research and research training system as a whole;
• allow for self-assessment against these indicators, demonstrating how well an institution has met its strategic objectives;
• demonstrate that there are clear quality assurance mechanisms in place; and
• be both concise and publishable either in hard copy and/or on the Internet.

7.29 Research and Research Training Management Plans will need to demonstrate how an institution's research and research training management links to its strategic plan and mission statement. Institutions would, for example, be expected to specify attributes expected of postgraduates, areas of research specialisation and concentration, and key aspects of research training environments.

7.30 Research and Research Training Management Plans will be public documents to inform student choice and to ensure a transparent method of measuring accountability for public funds.

Supporting institutions to strengthen their regional links

7.31 In recognising that the arrangements proposed in this paper will impact on institutions in different ways, consideration will need to be given to a structural adjustment package. Such consideration would need to recognise the substantial contributions institutions make to the economic development needs and viability of regional communities, beyond that of being simply employers and local purchasers.

7.32 Institutions will need to be more assertive in the way they involve themselves with the economics of the region in which they are located, and contribute more to their own and to national objectives through their teaching, research, leadership, information and networking. They can create and foster an entrepreneurial culture within their regions, and act as powerhouses for further enterprise development in those regions. This will provide the right environment for institutions to commercialise their research activities and foster spin-off companies, further supporting their regions. Encouraging this strategy would be the objective of any structural assistance package.

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