UK business schools’ reliance on int’l funds “concerning”

Published 12/04/2018

UK business schools are becoming increasingly reliant on international sources of income, which could pose significant problems once the UK leaves the EU, a new report by the Chartered Association of Business Schools has revealed. 

According to CABS’ annual report, over the six-year period of the analysis funding from UK sources for higher education business and management research declined by 25% in real terms [excluding inflation] with international sources increasingly plugging the gap.

Based on the latest HESA data, the report shows that the funding contribution from all UK sources has decreased from over three quarters (78%) in 2011/12 to two thirds (66%) in 2016/17.

“Nearly half of business schools expect to lose research funding from EU sources in the next 12 months”

Conversely, the funding contribution from EU sources has increased from 19% in 2011/12 to 27% in 2016/17.

Non-EU international sources were found have risen from 3%  to 7% over the same period.

In particular, UK central government bodies, which represented 27% of total funding in 2011/12 have declined to 21% in 2016/17.

By contrast, income from EU government bodies has increased from 17% in 2011/12 to almost a quarter (23%) in 2016/17.

In three of the last four years, business and management received more funding from EU government bodies than from the UK central government.

In 2016/17, the EU was only marginally behind the research councils as the largest contributor.

Research income for business and management from UK sources was revealed to be at £45.3m, £9m less than in 2011/12.

Allowing for inflation, the report calculated this is as a reduction of £15m in real terms for business schools.

“The UK Government has committed to replacing any lost research income for STEM research because of Brexit”

Meanwhile, income from EU and non-EU sources for business and management is £18.2m and £4.9m respectively, compared to £13.4m and £2m in 2011/12.

CABS chief executive Anne Kiem said the increasing reliance of the business and management sector on research funding from the EU is very concerning in light of Brexit.

“From our previous research, nearly half of business schools expect to lose research funding from EU sources in the next 12 months, and presently it is not clear how this funding gap will be filled once the UK leaves the EU.”

The report also revealed that from 2011 to 2017, total research income for HEIs overall increased by 30% from £4.5 billion to £5.9 billion.

During this period HEIs saw increases of 24% from UK central government, 28% from research councils and 23% from UK industry.

STEM subjects were revealed to have received an average increase in research funding from UK and international sources of 36% between 2011/12 and 2016/17, whereas business and management saw a fall of 1%.

“The UK Government has committed to replacing any lost research income for STEM research because of Brexit but has not made any such commitment for business and management,” added KIEM.

“It is vital for the UK’s economic productivity drive that an inter-disciplinary approach be taken wherever possible so that business and management can work with other fields to ensure that innovations developed through research result in commercially viable products and services.”

However, it’s not all bad news for UK business school, according to CABS. Since the decision to leave the EU, institutions have benefited from a drop in the pound. This means, comparatively, MBA courses are cheaper in the UK than Europe or the US, for applicants from other regions, such as the middle east.

Arguably as a result of this, master’s degree applications rose across the UK, though undergraduate applications from the EU did fall.

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