Discrimination by UK Research Councils

How are UK Research Councils still allowed to discriminate against people on the basis of the country they received their university education?

Specifically, the research councils offer funding for people undergoing PhD study.  These awards are usually quite competitive but are the main basis for student funding in many fields, particularly in funding students of junior career staff who are not yet able to attract large multi-year grants that include postgraduate training.  The scholarship will pay the fees, research expenses and stipend of anyone registered for a PhD in a UK university, if - and only if - that person has been resident in the UK for the last three years prior to starting the studentship.

So, eligible candidates are:

• UK or EU citizens who do their undergraduate degree in the UK and move straight to a PhD 
• UK or EU citizens who work in the UK for three years before starting a PhD

Ineligible candidates are:

• UK or EU citizens who do their undergraduate degree in another country (unless they spend three subsequent years hanging around the UK)
• UK or EU citizens who do their undergraduate degree in the UK but then spend time studying, working or travelling in another country
• UK or EU citizens who do a Master's degree (MSc, MRes, etc.) in the UK that takes less than 3 years
• Anyone who's a non-EU citizen

In short, the net effect is that the vast majority of RCUK PhD funding goes to UK citizens who have just finished a degree in a UK university.  British funding for British students, in other words, regardless of this whole open-EU concept and the equation of degree standards across the EU under the Bologna process.  It's highly unusual, in psychology at least, for an RCUK scholarship to go to an EU candidate (where RCUK will pay fees but the stipend has to come from some other source), let alone an international candidate (where the stipend and the difference between EU and international fees - several thousand pounds per year - has to be sourced elsewhere).

Right now, I'm trying to recruit a candidate for a PhD project that will be funded by our faculty.  Most of the faculty funding comes from RCUK sources and thus is subject to all the above conditions, although some scholarships are available with fewer strings attached.  Most of the interest has come from EU countries and there are a couple of excellent candidates that stand head and shoulders above UK applicants, but I am having to fight tooth and nail to be allowed to consider these outstanding candidates.  Yes, our faculty likes to meddle in matters that are far outside their expertise.

 

It used to be worse.  Until a few years ago, being resident in the UK for the purposes of full-time education didn't count as "proper" residency.  It took a French student bringing RCUK to the European Court of Justice in order to get the discriminatory exception removed.  In my opinion, RCUK are still imposing discriminatory rules: anyone who receives their undergraduate degree outside the UK is ineligible for full PhD funding unless they spend three subsequent years living in the UK, whereas anyone who does their undergraduate degree in the UK is immediately eligible for full funding.

Will it take another case in front the European Court of Justice to sort this out?  Or will RCUK realise that maintaining a culturally homogenous postgraduate population in the UK is in nobody's best interest?