Changes to Australian funding mechanisms will further impoverish basic research without doing anything to alleviate a mounting overheads bill, a critic has warned.

UNSW Sydney deputy vice-chancellor Nick Fisk said that proposed reforms to the research block grant (RBG) framework will ¡°rob Peter to pay Paul¡±, stripping money from the already depleted support structures for discovery research and using it to meet costs currently covered ¨C at least in part ¨C by industry.

The proposals, flagged in a February ¡°action plan¡±, would redistribute RBG allocations ¨C which help cover expenses such as laboratories, assistants, materials and PhD stipends ¨C to favour institutions with industry research contracts.

An April??outlines how this would be achieved. Currently, 47 per cent of RBG funding for overheads is allocated according to institutions¡¯ ¡°competitive¡± research income ¨C money from the Australian Research Council and similar bodies ¨C with the other 53 per cent reflecting ¡°engagement¡± funding from industry, philanthropy, non-profit organisations, international sources and some government contracts.

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The proposed arrangements would divide allocations equally between newly named categories of ¡°government¡± and ¡°industry¡± funding. But Professor Fisk said that this overlooked the overhead charges already attached to industry research contracts, which typically netted universities another 30 to 70 cents in the dollar.

He said UNSW had calculated that under the proposals, each dollar of industry research funding would attract 40 cents of RBG overhead funding ¨C up from 26 cents at present ¨C on top of the money billed directly from companies. Meanwhile, overhead funding for competitive grants would plunge from 37 to 24 cents in the dollar.

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This would leave universities¡¯ basic and applied research more stretched than ever. Professor Fisk said that indirect research costs typically totalled A$1.19 (67p) for every dollar of direct funding ¨C a ¡°yawning gap¡± that universities had primarily filled with money from the previously buoyant revenue source of international tuition fees.

He also warned of unintended consequences from the proposed ¡°industry¡± category, which includes income from non-industry sources such as philanthropy and foreign governments. Professor Fisk said genuine industry contributions only constituted about 45 per cent of this category. ¡°They¡¯re trying to increase collaboration between universities and industry, but they¡¯re primarily incentivising other types of collaboration,¡± he said.

¡°Industry research spending has been flat for a decade while spending by universities has doubled.¡±

Professor Fisk said the biggest problem was that the proposals overlooked the ¡°elephant in the room¡± ¨C the steady depletion of funding for research overheads. RBG funding over the past three years had increased about 1 per cent annually while national research spending had risen by an average of 9 per cent a year. ¡°More than 50 per cent of research is now internally funded by universities themselves,¡± he said.

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Professor Fisk said that while the proposals would benefit universities focused primarily on commercial research, UNSW stood to lose about A$6 million next year even under transitional arrangements designed to soften the impact on individual institutions.

¡°To have a successful research and development pipeline, you¡¯ve got to have things that emerge from basic research, which is often very unpredictable,¡± he said.

Submissions on the proposals are due by 31 May. A Department of Education, Skills and Employment spokesman said universities had been invited to ¡°suggest alternative solutions¡±.

Previous changes to the RBG formulae have already affected some institutions. The Australian National University said its RBG allocation this year had declined by A$11 million due to changes made in 2017.

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john.ross@timeshighereducation.com