Intermediaries in the university sector?

Here is a question for you: of the funds going into the university sector via the commonwealth ministries (DEST), how much actually ends up paying for research and teaching versus other uses of the money? Included in research/teaching here would also be the buildings and rooms in which the students get taught and all the preparation of the lecturers. Yet, any other uses of the money that do not themselves constitute teaching and research can be viewed as an ‘intermediary’ between the tax payers/students and the actual services being bought. So how much do the intermediaries siphon off?

The answer clearly cannot be 0% because one needs intermediaries in any market. Students have to be registered and kept informed. Researchers have to be found, hired, and then their work has to be disseminated. Someone has to look after the buildings and the grounds. The ministry needs to be run. Meetings need to be had. So one needs some intermediaries.

Still, it matters what the answer is. If a high percentage of funding ends up at the ‘coal face’ then clearly things are better than if it is a low percentage. The recent outcry here and in America over the increase in administrivia is all about the notion that too much of the funding goes to the intermediaries and not enough to those actually teaching and researching, meaning that students and the country get a bad deal.

As usual with these questions, you get my best guess answer on Monday. Who is game to give an informed or even uninformed guess? What would you think is reasonable?

Author: paulfrijters

Professor of Wellbeing and Economics at the London School of Economics, Centre for Economic Performance

6 thoughts on “Intermediaries in the university sector?”

  1. To be honest, you haven’t defined very good boundaries. What’s the coalface? Your office, the cleaners, the groundsmen, computers, building maintenance, student enrolments, student services, recruiting, uni marketing, etc. It seems like it’s all coalface, since if you take something away, you are providing a different ‘teaching and research’ commodity.

    I mean, what would you cut? A few lazy administrators? Would you give up air-conditioning? Marketing? Isn’t competition good? Maybe uni competition means that uni’s have to ‘fluff up’ their offerings with ‘soft’ services to attract students.

    My guess of your guess is between 30-50% getting ‘to the coalface’.


    1. Cam,

      ok, I will write you down for 40% going to coal-face!

      Of course, clear boundaries between the actual teaching service and the supporting environment are not so easy, as the post acknowledges. However, from the point of view of the government, things are not that murky: marketing and soft services are not what the government is paying for. It wants teaching and research out of this and wants to minimize the add-on costs.

      What you thus ask is rather a different question, which is ‘how many intermediaries do you really need to support teaching and research’? That question was more fully discussed on a previous post ( The resulting answer was ‘clearly a lot less than we have now’ The new question is in a sense more difficult to answer because the intermediaries will now include people outside of uni (the ministries, the consultancies, the accreditors) and will also include some percentage of those deemed academics or at least a percentage of their time.


  2. I’d be willing to take an uninformed guess at 70% going to sundry non-education/research expenses, based part on thin air and part on observations from within other organisations.


  3. Excellent! I think it will be closer to 50% than zero but without knowing more about your methodology I’m not putting confidence intervals on my estimate!


  4. Here is one report on teaching costs:

    But it does not really answer the question being asked. With digging around, we can sometimes get the amounts paid direct to departments out of teaching and research-sourced revenues, but that will not usually include things like the cost of building and operating infrastructure related to teaching and research.


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