Will simplify basic funding for research institutes

The basic funding system for Norwegian research institutions was recently evaluated by DAMVAD Norway at the request of the Ministry of Education and Research. The consulting firm concluded that while the funding system has functioned well overall, it would benefit greatly from being revamped.

“The basic funding system introduced in 2009 has helped to strengthen the independent research institute sector as a supplier of high-quality research. Nevertheless, the evaluation report identifies a number of areas that need improvement. The Research Council agrees with many of the recommendations, and proposes in addition that the system should give more weight to the institutes’ role as suppliers of commissioned research activity,” says Anders Hanneborg, Executive Director of the Division for Science at the Research Council.

The Research Council has submitted a letter to the Ministry of Education and Research outlining its recommended changes to the basic funding system for independent research institutes.

“The Research Council recommends that more weight is given to the institutes’ role as suppliers of commissioned research,” says Anders Hanneborg, Executive Director of the Division for Science at the Research Council. (Photo: Sverre Jarild) Divergent views on strategic institute programmes

Fifty-one research institutes currently receive basic funding via the Research Council.

Basic funding is comprised of two components: a basic allocation and strategic institute programmes. At present, the strategic institute scheme has only been introduced for the environmental institutes. As the scheme generates little added value, the evaluation report recommends that it should be terminated.

The report points out that knowledge development in thematically-oriented priority research fields can be promoted in other ways, for example under programmes at the Research Council and via commissioned research.

Although the Research Council agrees with this argument, it would still like to allow the individual sectoral ministries to assess whether they wish to continue using strategic institute programmes. The Council also recommends applying the scheme more specifically in national priority areas and as a supplement to the Council’s programmes.

Should increase the performance-based portion

The basic allocation is comprised of two parts: a fixed amount and an amount determined by performance.

The proportion to be based on performance is determined each year in the national fiscal budget. This figure varies for the various institute groups. The Research Council recommends increasing the proportion of performance-based funding to strengthen incentives within the basic funding system. The Council proposes to make 10 per cent of the basic funding performance-based for all of the institute groups.

Fewer indicators

The evaluation report states that although the economic incentives in the present system are weak, they have led to changes.

The performance-based portion is currently calculated on the basis of the following six indicators: scholarly publication, completed doctoral degrees, part-time positions at universities and university colleges, income from research commissioned at the national level, income from the Research Council of Norway, and income from international sources.

The Research Council supports the evaluation report’s recommendation of continuing to use the indicators for scholarly publication and doctoral degrees. The Council further supports the proposed discontinuation of the indicator for part-time positions for purposes of simplification. In addition, the Council agrees that the indicator for international income should be kept as well.
However, the Council is against the proposal to eliminate the indicator for income from the Research Council.

This is expressed by the Council in the following statement: “Income from the Research Council is an important indicator of whether the institutes’ research activity is in keeping with the Council’s and the authorities’ strategic and research policy priorities. Competition for Research Council funding is fierce. Therefore the amount of allocations received from the Council is an indication of the level of quality and relevance of the research carried out.”

Greater weight on commissioned research

The formula for calculating the institutes’ basic funding includes a relevance component. In the bigger picture the effect of this component is marginal.
According to the evaluation report, the relevance component functions in practice as a double reward, and there are relatively large administrative costs linked to its use. Nevertheless, the Research Council believes that the component is important in principle and argues in favour of keeping it, albeit in an adjusted, simplified form.

In the view of the Council, the relevance component should be calculated solely on the institutes’ income from commissioned activities. This would send a clear signal that commissioned research for the private and public sectors is a priority task for independent research institutes.

“The Research Council agrees that the basic allocation should continue to be criteria-based. In time basic funding should be provided to the independent research institutes on the basis of the individual institute’s ability to deliver in relation to the various criteria. A relevance component calculated on the income from commissioned research would be a step forward in this regard,” says Mr Hanneborg.

Minimum requirements for new research institutes

The evaluation of the basic funding system also points to the need to adjust the criteria that research institutes must satisfy to be included in the scheme.

The evaluation report recommends defining minimum requirements for qualifying for a basic allocation; for example, an institute must have a minimum of 15 researcher full-time equivalents. Research institutes encompassed by the scheme should be reviewed every three years to determine whether the institutes are still qualified for basic funding.

The Research Council is positive to drawing up a minimum set of requirements that the institutes have to fulfil. At the same time, the Council emphasises that new institutes can only be incorporated into the scheme on the basis of research-policy based considerations. An essential prerequisite must be that funding is available for a basic allocation.