The future is uncertain

The University of Leicester's main building boasts an impressive Victorian, ivy-clad façade. A flag flies above, and across the leafy campus students and academics stream into science buildings, humanities lectures, and language and computer labs. Outside the union, small groups cradle coffee cups in the autumn sunshine. It is a picture of everything a university should be, but one many see as under threat from Government research-funding policies.

Ministers want to concentrate such funding in the very best departments - those rated five and above in the Research Assessment Exercise (RAE) - leaving those rated four with dwindling resources. Leicester, with 13 at five or above but with 12 at four, straddles an emerging fault line that critics say may one day tear the sector apart, reinstating a binary division between research and teaching.

Professor Bob Burgess, the university's combative vice-chancellor must, with many of his peers, consider the implications of this new divide between departments rated five and those rated four. Asked point-blank, in his office overlooking the city, if he can guarantee the survival of all the departments at Leicester in the long term, he answers simply: "There will always be hard choices to make."

According to Universities UK, the sector's umbrella body, it is these hard choices that may seriously damage the research capacity of regional economies in England. A recent report commissioned by UUK highlighted Leicester's hinterland of the East Midlands as one of the regions most at risk from the Government's policies, as set out in the recent White Paper on higher education.

In many ways, Leicester is luckier than some. It has a small annual budget surplus, and is rated in newspaper league tables. But the need to protect its five-star departments, as well as rescuing the promising departments rated four and those that contain groups working at five-star level will present Professor Burgess and his successors with some agonising decisions about the university's long-term direction.

Having started out as a liberal arts college, Leicester has risen to stand as a multidisciplinary university in its own right. But can it afford to protect that breadth of study, scholarship and research; a spectrum that for many defines a true university? Will it, at best, emerge as a research-led science and technology institute? Or will the financial struggle drag down its five-star departments, destroying its core of internationally respected research?

The Higher Education Funding Council (Hefce) believes that the debate over research concentration has got out of hand. It suggests that vice-chancellors are overreacting to two separate announcements - the concentration of an extra £20m in so-called six-star departments (those that got five stars in 1996 and 2001), and the £20m less for departments rated four. "In 1996 we fully funded 23,000 staff in four, five, and five-star departments. In 2001, we fully funded 22,000 in five and five-star departments. People have just migrated up the scale," says Rama Thirunamachandran, Hefce's director of research and knowledge transfer.

But the point, which he acknowledges, is that every department rated four now presents the vice-chancellor with a strategic decision on future funding. Departments can no longer be viewed as self-financing units that can trundle on without affecting others. Either they must attract cross-subsidies, generate their own income, or face an uncertain future.

Professor Bob Brammar, the pro-vice- chancellor in charge of research at Leicester, says that funding for some departments rated four has fallen by 50 per cent in 2003-4 compared with 2001-2. "You can get by for a year or two, but it starts to eat away and it is not just a matter of morale," he says. "People don't want to work in a department with a four."

And the departments rated four can damage the departments that score five. Leicester has a cluster of internationally rated departments in biochemistry, biology, genetics, physics, maths and applied maths. But this community needs to interact with chemistry - which got a four. "In chemistry we want to raise our game," says Professor Brammar. The problem is that the RAE runs until 2007-8, and new funding will not appear until 2008-2009 at the earliest.

The tactics that Leicester is considering will no doubt be closely monitored by others facing similar, or more acute problems. "You have to look at cross-subsidies and also at other ways of getting income streams within the university," says Professor Burgess. For example, of Leicester's 16,000 students, 6,000 are involved in distance learning. Overseas students bring full fees into the university coffers.

Professor Burgess is also spending time reminding all staff that they can contribute to protecting Leicester's teaching and research reputation. University premises are now commercially exploited for every penny they can contribute. Each summer the campus becomes a "vast hotel", says Professor Burgess, and he praises the catering staff for increasing turnover by 80 per cent since 1999. Commercial spin-outs from Leicester - which was a slow starter in this area - are also picking up.

The Government sees a much simpler way of cutting costs in some university departments - by withdrawing from research and making them virtually teaching only. But Professor Burgess is a fully-paid up member of the club that will fight to keep the research-teaching link at the heart of the university ideal. "That really will not do. I don't think you can have a university distanced from its research base," he says.

Then there is collaboration. Leicester is a member of a club of 10 higher-education institutions in the East Midlands. Professor Burgess says that talks have gone on about working together. The Government would like some universities to consider pooling graduate schools, allowing them to float above undergraduate programmes. It also wants to see universities that are geographical neighbours looking at rationalising the subjects they offer.

Finally, Professor Burgess faces the possibility that he may have to close a department. Recently there was a confidential proposal to do this. He recalls, with some pride, that some of the loudest voices against were in the sciences. The idea has been shelved, for now. One department, mass communications, has lost its separate departmental status.

"We are continuously monitoring performance," he says. "We have to ask tough questions every year." And they are not just tough questions for the university. The local economy in the East Midlands is intimately linked to the 10 higher education institutions that are embedded within it. Leicester has the second highest student population, relative to total population, in England after Manchester.

But Leicester's private-sector customers tend to be in the multinational community. Most of the links between local industry - largely in the textile and hosiery business, that was once known as the "knicker trade" - are fostered by De Montfort University. Leicester's real impact on the local economy is through the delivery of Government public policy - especially in health and education. "Leicester was one of the worst NHS systems in the country in 1973," says Professor Bryan Williams, at the university's department of cardiovascular sciences.

The university medical school, working in close partnership with the University of Leicester Hospitals Trust, has helped to transform health care in the city. Cardiovascular research is rated at five-star and the department has an international reputation. Disastrously, however, the wider department within which it was submitted for the RAE got a four.

"The RAE offers us the logic of the madhouse," says Professor Williams, clearly exasperated by the prospect of more than five years of trimmed funding. "The pressures on medical schools in the RAE are huge," he says.

They need to offer a broad-based curriculum to students and are unable - unlike many academic departments - to narrow their field of study to win a top rating. Professor Williams's financial problems are not helped by the fact that the university "top-slices" the medical school's income, which flows to the university as part of the block grant. Ironically,cash is being diverted to help departments rated four aspire to the status of those with a five-star, while the medical school suffers.

More fundamentally, Professor Williams takes issue with the Government push to concentrate research funding, especially in science. He can see the point of so-called "coalescence" - for example, in a project such as the human genome - but questions why concentration should result in a handful of centres getting all the big prizes, rather than spreading the centres of investment across a wider range of institutions.

"To apply that to every aspect of research risks the danger of blighting the kind of free spirit that has given us great developments in science," he says, pointing to the career of Professor Sir Alec Jeffreys, a Leicester academic who pioneered genetic fingerprinting. "That's a five-star department - but it wasn't when he made the discovery. There are big fish in small ponds and they sometimes work better than big ponds."

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