Chapter 2: strengthening australian higher education
2.3 the relationship between funding and performance
Government funding is provided to English universities in a manner similar to Australia, so the Panel was able to develop a limited but useful comparison of selected English and Australian universities (Figure 2.3). The Higher Education Funding Council for England (HEFCE) provides teaching funding on the basis of student load and research funding according to a performance-driven formula. The highest ranked English universities receive similar base funding for teaching as lower ranked English universities and Australian universities. The difference in the English examples is presumably due to differences in the disciplinary mix of students or the London loading in the case of University College London (UCL).
There are, however, large differences in research funding with the totals for teaching and research for the University of Cambridge and UCL being comparable with that of the similarly ranked University of Michigan, Ann Arbor.
Funding levels for teaching in English universities may change significantly following confirmation by the English Government of changes to funding arrangements for the 2012–13 academic year (Department for Business, Innovation and Skills 2011). The Office of Fair Access in England (2011) suggests that when fee waivers are included, the estimated average student contribution will be £8,161 ($US 12,700 using PPP). The English Government estimates that base funding for teaching and research will increase on average by nearly 10 per cent by 2014–15 (Department for Business, Innovation and Skills 2011, p. 16) but the impact of recent policy changes on individual universities is not clear.
From this analysis, it would appear that measures of overall university excellence, such as those captured by the Times Higher Education World University Rankings (Figure 2.3) are correlated with the level of research funding received by selected institutions within jurisdictions. It is also apparent that the high funding levels received by the more highly ranked US and British public research universities are related to levels of research funding above those for the highest ranked Australian universities. The high levels of research funding provided to high-ranking universities in England and United States may result from either selectively favourable appropriations or performance-based allocation of funding earmarked for research.5
Given that a relatively high level of research expenditure is usually associated with a university attaining a better position in international rankings, the position of Australian universities in the international rankings is likely to be influenced more by their level of research expenditure than their level of base funding for teaching and learning. Nevertheless, teaching reputation is a feature of the Times Higher Education World University Rankings (15 per cent) and the QS World University Rankings includes a dimension for ‘faculty–student ratios’ (20 per cent).
5 The Panel notes that it is not possible to determine precisely the sources of research funding received by universities overseas to make a comparison with Australia’s system of specific research funding received by public universities through Government block and competitive research funding schemes.
Figure 2.3: Teaching and research funding per full-time equivalent student for selected English and
Australian universities, 2009
US dollar s PPP 0 5,000 10,000 15,000 20,000 25,000 30,000Cambridge (6) University College London (17)
Melbourne (37) Sydney (58) Bristol (66) Queensland (74) East Anglia (145) Exeter (156) South Australia (-) Teaching Research
Note: British pounds and Australian dollars are converted to US dollars using OECD PPPs for 2009. Times Higher
Education World University Rankings 2011 are shown in parentheses for each university. This annual ranking of the top 200 universities uses 13 indicators grouped under five categories: teaching (30 per cent); research (30 per cent); citations (30 per cent); international outlook (7.5 per cent); and industry income (2.5 per cent). Per capita funding levels are HEFCE teaching and research funding levels for 2009–10 divided by total UK and EU resident student full-time equivalent (excluding HDR student load) (for English universities); and base funding (CGS and HECS–HELP) and research block grants (for Australian universities).
Source: Secretariat, using Higher Education Statistics Agency and HEFCE funding data for English universities (2009) and DEEWR administrative data for Australian universities (2010).
As it stands, individual Australian universities perform well in the international league rankings. Four of Australia’s universities were ranked in the top 100 in the world in the 2011 Times Higher Education World University Rankings. This was the fourth highest of any country (Table 2.3). Gibbs (2010, p. 14) points out that international educational performance is more dependent on which activities institutions spend their money on than the comparative level of funding they receive. Hence, if the purpose of increasing funding was to improve Australia’s international rankings then research funding would need to rise. Alternatively, if the objective was to increase the funding per student in OECD comparisons, base funding would need to rise. However, neither increase in spending would guarantee an increase in teaching quality.
Table 2.3: National performance: Times Higher Education World University Rankings 2011, top
eight countries within the top 100 ranked universities
country number of universities in top 100 Highest ranked university (rank)
United States 51 California Institute of Technology (1)
United Kingdom 12 University of Oxford (4)
Canada 5 University of Toronto (19)
Australia 4 University of Melbourne (37)
Switzerland 3 Swiss Federal Institute of Technology, Zürich (15)
Germany 3 Ludwig-Maximilians-Universität, München (45)
China 2 Peking University (49)
France 2 Ecole Normale Supérieure (59)
Source: Times Higher Education Supplement 2011.
The most recent of the major international rankings, the QS World University Rankings 2011–12,6
ranked all of the Group of Eight universities7 in its top 100. Australia’s comparative performance is
shown in Table 2.4.
Table 2.4: National performance: QS World University Rankings 2011–12, top six countries
country number of universities in top 100 Highest ranked university (rank)
United States 29 Harvard University (2)
United Kingdom 18 University of Cambridge (1)
Australia 8 Australian National University (26)
Japan 6 University of Tokyo (25)
Canada 4 McGill University (17)
Germany 4 Ruprecht-Karls-Universität Heidelberg (53)
Source: Quacquarelli Symonds (QS) Limited 2011.
In the more strongly research-oriented Shanghai Jiao Tong (SJT) Academic Ranking of World
Universities 2011, Australia also performed well. Its comparative performance is shown in Table 2.5. Unlike the QS World University Rankings and the Times Higher Education Supplement’s World University Rankings, the SJT Academic Ranking does not include teaching reputation as an indicator.
6 Quacquarelli Symonds (QS) Limited, founded in 1990, specialises in international education and assisting students who study abroad. The QS World University Rankings evaluate over 700 universities and ranks the top 400 according to six key indicators: academic reputation (40 per cent); citations per faculty (20 per cent); faculty–student ratio (20 per cent); employer reputation (10 per cent); proportion of international students (5 per cent); and proportion of international faculty (5 per cent).
7 The Group of Eight universities are: Monash University, The Australian National University, The University of Adelaide, The University of Melbourne, The University of Queensland, The University of Sydney, The University of Western Australia and the University of New South Wales.
Table 2.5: National performance: SJT Academic Ranking of World Universities 2011, top
seven countries
country number of universities in top 100 Highest ranked university (rank)
United States 53 Harvard University (1)
United Kingdom 10 University of Cambridge (5)
Germany 6 Technical University Munich (47)
Japan 5 University of Tokyo (21)
Switzerland 4 Swiss Federal Institute of Technology, Zürich (23)
Canada 4 University of Toronto (26)
Australia 4 The University of Melbourne (60)
Source: Shanghai Jiao Tong Academic Ranking of World Universities 2011.
While research performance is clearly a dominant factor in international rankings, there are other dimensions in which one can measure the performance of the Australian higher education system in an international context. For example, a comparison of university systems in 17 OECD countries conducted by the Brussels-based think tank, the Lisbon Council, ranked Australia’s university system as the best (Ederer, Schuller and Willms 2008). The Lisbon Council ranked national systems using a range of metrics (inclusiveness, access, effectiveness, attractiveness, age range, responsiveness) rather than the research and other excellence metrics that dominate international league rankings.