Evaluating the impact of quality-related (QR) funding and other determinants on higher education efficiency in England

Mainstream quality-related research (QR) funding in England distributes funds to higher education providers (HEPs) based on each HEPs’ research performance reported in the Research Excellence Framework (REF). The REF has, since its inception, seen two iterations – REF2014 and REF2021. The REF represents a clear example of quality of research output being linked to greater allocation of funding – which in turn is assumed to lead to further quality research output. Producing quality research is however challenging because academics face time and financial constraints; and HEPs must efficiently utilise the QR funding. However, there is no evidence on whether the QR funding allocation from the REF2014 results has been efficient in leading to quality research output in the REF2021. The focus of this paper is thus to assess whether the variation in QR funding allocation, based on the REF2014 outcomes, is associated with HEPs operating more efficiently (relative to other HEPs) in the production of quality research. We employ the network slacks-based measure (NSBM) model to measure the efficiency of England’s HE research performance based on the REF data. These NSBM efficiency scores are then regressed in the second stage to determine sources of efficiency. Our findings reveal that QR funding allocation contributes towards efficiency in research thus providing some confirmation of the success of the REF performance-based funding approach. Our findings also suggest that HEPs can be successful in attracting funds by considering increasing the number of Doctors of Philosophy (PhDs) by publication, using their knowledge and experience to improve on previous impact case studies, and developing research collaborations with other HEPs. Given that REF2029 is impending, these results are of immediate relevance in the context of future policy decisions based on the outcomes of that process.