Data: Low university cost recovery on research persists
The Office for Students has published Transparent Approach to Costing (TRAC) data for 2024–25, on behalf of UKRI and other UK higher education funding bodies in the devolved nations.
The data is intended to show to what extent the higher education sector is able to cover the full costs of different forms of activity – and the Office for Students notes that the year’s figures continue the trend of “full economic costs significantly exceeding income,” with this state of affairs nowhere more pronounced than in university research.
The figures are not released at the institutional-level, but rather provide the data for TRAC peer groups: six different categories of university classified by research intensity and several other metrics (a full list is available here).
The chart below shows the breakdown in median cost recovery across headline areas of activity including publicly-funded teaching, non-publicly funded teaching (such as international student fees), and research. The more research-intensive universities in peer groups A and B on average generated a greater margin on international student teaching, but saw a slightly larger deficit associated with the teaching of home students than some other peer groups.
University research, it can be observed, came nowhere close to covering its full economic costs (and therefore in the main continues to be heavily cross-subsidised by international fees).
The Office for Students’ accompanying report describes the situation in England and Northern Ireland as follows:
“Research activity continued to show a substantial deficit in 2024–25 of £5,489 million, an increase of £61 million from 2023–24, and follows increasing deficits in prior years. The full economic cost recovery rate showed a small improvement to 66.6 per cent compared with 65.8 per cent of full economic costs for 2023–24 (for the same population of institutions), but remains notably lower than in 2010–11 when the recovery rate for research peaked at 77.8 per cent.”
TRAC data also allows us to see the differing rates of median cost recovery across different sources of research funding, again by peer group. Postgraduate research and charity-funded research were generally areas with worse recovery of costs, though there is variation across university type:
Funding council-funded research saw an average cost recovery in the region of 70 per cent across the UK sector as a whole. UKRI recently set out a position statement on the accurate costing of research projects, as part of wider commitments to improve cost recovery.
The overall picture which TRAC presents is similar to that of 2023–24, though methodological changes affect comparability. It is also important to note that TRAC seeks to establish the “full, sustainable cost” associated with university operations via the insertion of a margin for sustainability and investment (MSI) to reflect longer-term costs beyond in-year spending (further reading here).