I mentioned previously that we live in turbulent higher education policy times down here in Australia. Another eddy in the airstream of university navigation was set in motion by Christopher Pyne, the former education and training minister, back in July 2015.

The minister set a very pragmatic cat among some sacred cow-shaped pigeons. The cat took the form of Ian Watt, former secretary of the Department of the Prime Minister and Cabinet, who, ably assisted by an expert group, drawn marvellously politically correctly from across all the major interest groups of our local university sector, set about a review of research policy and funding arrangements. The review was intended to:

-????????? develop options to strengthen Australia¡¯s research system

-????????? encourage greater collaboration between universities and other research end users

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-????????? make Australia¡¯s high-quality research translate into economic and social benefits for the nation.?

So far, so easy-peasy. Watt and his group consulted widely, asked very intelligent questions and performed deep analyses of the ¡°as is¡± alongside imaginings of what ¡°could be¡±. They asked the question ¡°why?¡± a lot, which is always a good sign.

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And in November 2015, they published their report. Unfortunately for them, in September we had undergone our change in prime minister and the subsequent reallocation of ministerial seats, which saw Pyne move into the innovation portfolio and Simon Birmingham into higher education. The publication of their report also exactly coincided with the release of the 2015 Excellence in Research in Australia results, which, understandably, captured the imagination of the sector considerably, as those who did very well (as the University of South Australia did) lauded and trumpeted a job very well done by the Australian Research Council; and league tables and brag points were crafted with glee. In fact, the Watt review publication, given its import and potential impact, didn¡¯t receive very much cover at all.

This is surprising when you consider that Watt and his team had done a very thorough, very measured piece of work and arrived at recommendations that, if implemented in full, will have significant impact on the behaviour of the Australian higher education sector. It¡¯s long been held that if you want to move cats, you first move the cat food; in this instance, that is exactly what the Watt review recommends: simplification of the research block grants and the provision of greater encouragement of engagement and innovation in research and research training; and sensible recommendations for a nation busily building its innovation ecosystem.

To put this in context, the research block grants in Australia are worth A$1.8 billion (?927 million) per annum. Hitherto, they¡¯ve been by a voodoo-like combination of six schemes, whose drivers interlink and cross over like a spaghetti junction of generations of successive policy intent, which is really what they had become: convoluted and counterintuitive. Watt¡¯s recommendation has pared this back to two programmes: research support, to support the indirect costs of research; and research training, to provide stipends and support higher degree by research studies (master¡¯s and PhDs to you and me). I will at this point state, hand on heart, that the rationale for the retention of a fund for research training under the umbrella of a research block grant still eludes me, but some things endure or are too hard to unpick and place back into a properly run competitive grant scheme setting that would further simplify the block grant to the job of supporting the indirect costs of research, which can be calculated.

However, we are, proverbially, where we are, and it¡¯s underneath the hood where the Watt review has its real power. Part B of the recommendations, the ¡°provision of greater encouragement¡± part, is where it gets interesting. Collapsing the labyrinthine to the simple is an application of common sense, which is very welcome. The new location of the cat food? Well, that is something quite different.

From 2017, Australia¡¯s block grant system will take out some ¡°classical¡± input drivers: while the formula that determined your institutional share of research support used to have a publication volume driver in it, this is now gone. Additionally, whereas the weighting of research income used to explicitly favour dollars that had been secured through category one competitive grant processes, that weighting has now been significantly reduced, to place equal emphasis on research income secured from industry and end users. The former, for me, is sensible as it removes an inherent double-count in the old system. Now, your publication output as a scholar will only be assessed by peers in determining the outcomes of competitive grant processes or by industry or end user funders who will use your publications to determine if your track record warrants their funding you. And your success in securing funding ¨C in both government competitive grants and end user funding ¨C will determine the research support block grant that flows to your institution.

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Put it another way ¨C the utility of your publications in securing research funding, rather than the volume of your outputs in general, will precipitate the funding you receive in support of the indirect costs of that research, with the kicker that you won¡¯t be penalised for drawing from only one well ¨C competitive or end user-filled ¨C but you will be rewarded where you draw from both. In this model, indirect costs are linked to competitive research funding success of all hues, not just to the publication of papers. That¡¯s a pretty big shift.

On the training end of the spectrum, again, simplification is the order of the day, with three schemes collapsing to one and drivers that are again, outcome-linked. This time, it¡¯s not the number of students you¡¯ve got, it¡¯s the completion rate among those students: their success is your success. And again, the driver relating to funding of research for these students is equally weighted between category one grant income and end user-sourced funding. Publications are not considered.

These are big shifts in funding policy. But they are pragmatic, they are well thought through, and they have been clearly telegraphed to the sector. The devil of course will be in the detail of implementation, but already we are planning a transition phase from the old to the new, where major impacts can be smoothed without crippling existing research activities.

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There¡¯s the small detail that needs to be landed as to whether ¡°funding¡± means an absolute dollar value of cash (and hence volume) or whether it means the proportion of research funds from various sources (competitive and end user) as a percentage of total turnover; because, as we know, cats can be picky, and some cats have more cash (and indeed access to more sources of cash, particularly cats with medical schools, the number of which is strictly controlled in Australia).

Such choices around implementation could have very different and perhaps unintended consequences. I¡¯ve no doubt (read ¨C I hope) that greater minds are hard at work modelling the new future of block grant distributions to ensure that innovation and engagement in research are appropriately supported through the new system while quality will always determine who gets funded in the first place.

What¡¯s very interesting about Watt is that the recommendations therein are timely, sensible and defensible ¨C and that¡¯s a good start. Who knows who is looking at the model and thinking about how it could play in other jurisdictions? If the international adoption of the demand-driven system and income-contingent loans are anything to go by, these types of innovation could be coming your way.

David Lloyd is vice-chancellor of the University of South Australia.

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