Posted 03/06/2022 by Tim Brennan and Dr Hazel Ferguson
The Australian Research Council (ARC) is one of the longest-established parts of the Australian Government’s funding system for universities. Recently, however, the independence of the ARC’s decision-making process has been questioned by some in the research community. The issue has been considered by a Senate committee, and concerns have been raised by the Group of Eight (Go8) universities (that received around two-thirds of ARC grant funding in 2020), and a leading international scientific journal, Nature.
This FlagPost explores the role of the ARC and recent changes to its remit, as well as explaining the legislative basis for, and limitations on, its status as an independent body.
Role of the ARC
The ARC is a Commonwealth entity established as an independent body under section 5 of the Australian Research Council Act 2001 (ARC Act). Under sections 6 and 33B, it is responsible for:
- making recommendations to the Minister regarding which National Competitive Grants Program (NCGP) funding proposals should be approved
- administering the research funding programs
- providing advice to the Minister on research matters
- undertaking any other functions conferred on the Chief Executive Officer (CEO) by legislation.
The ARC administers funding for fundamental and applied research in all fields through the NCGP, other than most medical research, which is administered through the National Health and Medical Research Council. In addition, it is responsible for Australia’s two national research assessment exercises: Excellence in Research for Australia (ERA) and Engagement and Impact (EI).
The NCGP consists of two programs: Discovery, which funds basic or fundamental research, and Linkage, which funds applied research undertaken in partnership between researchers and at least one partner from industry and community organisations. The total amount of funding that the ARC can distribute through the NCGP is limited by the funding cap specified in Part 7 of the ARC Act, which is typically amended annually (page 5).
The ARC’s independence
The ARC is described as an ‘independent body’. This arises from 2 features of the ARC Act:
- its establishment by paragraph 5(3)(a) as a listed entity under the Public Governance, Performance and Accountability Act 2013 (PGPA Act), which allows it to function independently of other Commonwealth bodies
- its direct relationship to the Minister in relation to its core functions under section 33B (especially the provision of funding recommendations and advice about research directly to the Minister, rather than through the Secretary of the department with responsibility for university research funding).
However, this does not mean the ARC is not subject to policies of the Australian Government. The ARC Act provides the Minister with a range of powers. This includes the power to appoint the CEO or Acting CEO (sections 34 and 35), direct the CEO about their functions (section 33C), establish designated committees to assist the CEO (Part 4), approve funding rules for the NCGP (section 60), make determinations about dividing funding caps between different research programs (section 50), and approve proposals for expenditure on research programs (section 51).
Assessment of grant applications
The ARC assesses all grant applications and must make recommendations to the Minister regarding which projects should be approved (section 52), which the Minister may then approve (section 51).
The ARC determines which projects will be recommended for funding through a peer-review assessment process undertaken with the assistance of the College of Experts, which comprises Australian experts of international standing drawn from academia, industry and public sector research organisations. The application process is highly competitive, with 18.9% of NCGP applications receiving funding in 2021.
Ministers have generally approved funding for all the projects recommended by the ARC, however, there have been cases where Ministers have chosen not to approve individual applications. Questions put to the ARC at Senate Estimates, as well as the monthly publication of the ARC’s grant recommendations required following a Senate motion on 27 February 2020, revealed several instances where Ministers rejected recommended projects, but it is unknown whether this represents all cases where this occurred. The publicly known occurrences of Ministers rejecting recommended projects are:
Known rejected proposals have mostly come from the humanities and social sciences, exceptions are the science and technology proposals in 2020 that were reportedly rejected on national security grounds.
Recent reforms
In 2018, a National Interest Test (NIT) was added to the grant application process. Each project must submit an NIT statement explaining the project’s societal benefits beyond the academic community. NIT statements are separately assessed by the ARC CEO prior to projects being recommended to the Minister.
On 6 December 2021, as part of its broader university research commercialisation agenda, the Acting Minister Stuart Robert, sent a new Letter of Expectation to the ARC CEO. The letter outlined the actions that the Minister expected the ARC to implement by the end of 2022. These included a greater focus on commercial outcomes in ERA assessments of research quality, and an increased role for industry representatives in the College of Experts, NIT assessments, and the provision of strategic advice to the CEO. The letter stated the ARC should ensure at least 70% of Linkage grants recommended by the ARC are aligned with the Government’s National Manufacturing Priorities.
Concluding comments
Although recent reforms, and the rejection of recommended applications by Ministers, are consistent with the ARC’s independence under its Act, there is increasing concern in the research community about this issue. The vice-chancellor of the Australian National University, Professor Brian Schmidt, stated that it was ‘completely inappropriate for grants to be removed by politicians, unless the grant rules were not followed.’ Similar concerns were raised in a joint statement issued by the Presidents of Australia’s 5 Learned Academies and an open letter from 63 ARC Laureate Fellows advocating for a return to its core mission of funding research ‘without political interference’.
In response to concerns, the Coalition Government argued in February 2022 (pages 71–73) that Ministers have a responsibility to represent the interests of the public by ensuring grants represent value for money and expenditure is prioritised in the national interest. In March 2022, the Senate Education and Employment Legislation Committee considered a Bill to remove the Minister’s power to reject funding for projects recommended by the ARC. The majority report of the Committee argued that requiring the Minister to approve projects recommended by the ARC would ‘essentially override the basic principle of responsible government’ (page 28).
The Committee recommended that the Bill not be passed, and that an independent review of the ARC be commissioned ‘including its governance and research funding processes’ (page 29). Other research stakeholders, including the Go8 and the Australian Academy of Science, have also recently called for a review of the grant funding system.