The long-term resilience and financial sustainability of the research and innovation (R&I) system is critical to maintaining the UK’s global position and ensuring it delivers new ideas that lead to economic growth.
A sustainable system is one that meets today’s R&I needs without depleting its ability to meet them in the future. A resilient system also maintains the capability and flexibility needed to withstand shocks, achieve long-term goals and capture new opportunities.
Financial sustainability features strongly in our five-year strategy transforming tomorrow together. It is part of the resilience principle for change, which prioritises improving the financial sustainability of R&I in organisations across the UK.
Video credit: UKRI
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Working with partners in government and across the sector, we:
- build awareness of the complexity of the UK’s research system
- understand the different financial pressures it faces
- make robust, evidence-based policy recommendations to improve financial sustainability and system resilience
Our work
We work in collaboration with teams across:
- UK Research and Innovation (UKRI)
- Department for Science, Innovation and Technology
- Department for the Economy, Northern Ireland
- Medr, the Commission for Tertiary Education and Research, Wales
- Scottish Funding Council
- Office for Students
- National Academies, sector bodies and other funders
- UK universities, institutes and other research organisations
We use an evidence-based approach to assess the financial sustainability of R&I in the UK and share our findings with the sector, so that options to financial sustainability can be considered across the R&I system.
We work with stakeholders across the sector to understand what influences their decision making around research.
Key areas of our work include:
- understanding how funding flows through UK research-performing organisations
- understanding factors and behaviours that incentivise research financial sustainability
- assessing the resilience of critical national capability in the R&I system
- monitoring indicators of change across the sector
- exploring and addressing sustainability challenges
Read our blog about how UKRI can help create a more financially sustainable research system.
Financial sustainability of research in universities
Universities play a pivotal role in the UK R&I system through their teaching, research and knowledge exchange activities. However, they are facing a range of financial pressures which may require them to make difficult decisions about how much they can continue to support and invest in research activities.
We are working to better understand the costs of research and doctoral training, and what factors, incentives and behaviours affect cost recovery and financial sustainability. Insights from our work are supporting activity across UKRI to help improve financial sustainability and reduce bureaucracy. We are doing this by:
- ensuring we are more consistent and transparent around how we fund research and innovation, and where costs are paid at rates other than 80% of the full economic costs
- providing clearer guidance on how staff time, facilities and equipment should be costed for research grant applications, including equipment and capital cost thresholds
- improving guidance for applicants to reinforce that matched funding is not a standard requirement on research grant applications
- advising for assessors that recommendations for funding should not be based on levels of institutional additional matched funding
- considering how we can better support doctoral training and supervision to improve the financial sustainability and resilience of ensuring a talented R&I workforce
Our own data analysis shows a ‘sustainability gap’ across the university sector. The total amount of research income doesn’t cover the full economic costs of universities’ research activities. To manage this, universities use other income streams (such as tuition fees and commercial income) to subsidise their research activities.
See our Sankey diagrams which visualise the flow of funding in universities in 2022 to 2023.
Read our Research financial sustainability: issues paper and the associated Sankey diagrams for 2021 to 2022.
Our Sankey diagrams draw on data obtained through a method called Transparent Approach to Costing (TRAC), which is used by universities to understand the costs of their research and teaching and provides a consistent framework for:
- calculating the cost of teaching activities
- assessing the full economic cost of research projects
- reporting the costs of teaching, research and other activities to the relevant funding bodies
For more information see our TRAC explainer and the Office for Students latest TRAC data publications.
To support research organisations to improve their financial sustainability and resilience, we are also working to:
- provide clearer guidance on how to use TRAC for annual reporting and assurance
- seeking to understand the incentives in the R&I system that influence good practice
Sustainability of research in UKRI’s institutes
UKRI has a large portfolio of institutes, spanning the breadth of our scientific remit.
For more information see our explainer on how UKRI’s institutes support research and innovation.
We work in partnership to:
- show their importance to the R&I system
- raise the profile of the research they undertake
- build a robust evidence base from which to assess their financial sustainability
Oversight and governance
UKRI works with other regulators and funders in the higher education and R&I system to ensure that TRAC and other financial data are supporting organisations to monitor the financial sustainability of their research, teaching and other activities:
Working together ensures that analysis, advice or policy recommendations across these groups is complementary.
We draw on advice and guidance from networks of experts across the university sector, institute base and wider R&I landscape to receive timely intelligence on financial sustainability and respond to ongoing and emerging issues.
Ask a question about research financial sustainability
Email: researchsustainability@ukri.org
Last updated: 21 March 2025