Home  FAQs  Research What is the rationale behind the change to current funding arrangement for the research portion of the Block Grant and how will this be implemented? Can institutions manage the change? The UGC considers that the current allocation of the research portion (at around $2.7 billion) of the Block Grant does not adequately capture vitality in the system, nor reflect the true costs of carrying out research won through the RGC. The UGC sees a need to progressively award 12.5% (or around $1.35 billion) of the total Block Grant on a more competitive basis over a period of nine years. This will be done by reference to the success of individual institutions in peer reviewed RGC funding schemes. In so doing, Hong Kong will become more in line with other jurisdictions doing excellent research. Institutions agreed that more competition would benefit our higher education sector, but were concerned about their ability to cope with the pace and the magnitude of this change. The UGC has decided to implement the following to address institutions' concerns: the magnitude involved is only 12.5% of the Block Grant spread over a period of nine years, and it will be tapered (i.e. smaller at the beginning). Broadly speaking, the maximum variable funding an institution's management needs to take account of in the first year is 1.3%, the second year 2.6% and the third year 3.9%, even if in the extreme case that the institution does not get any successful proposals in RGC; 12.5% of the Block Grant will continue to be distributed amongst the institutions with reference to the results of the Research Assessment Exercise; and the UGC will review the elements of the scheme, including the pace of change, before the end of the first triennium (i.e. 2015) so that appropriate adjustments can be considered in a timely manner.