The research assessment exercises covering universities in the United Kingdom aim to produce quality ratings as a basis for the allocation of much of the research funding from central government. For each subject area a panel drawn from higher education and research users awards a grade to each university department. Each subject is allocated a predetermined share of the total research fund. The sum each university then receives is determined by the number of active research workers and the grades awarded. The first research assessment exercises were carried out in 1986 and 1989. By the time of the 1992 exercise the number of universities in the United Kingdom had increased dramatically with the conferment of university status on all the former polytechnics and a small number of other institutions. This paper describes the way in which quality was assessed and the results of the 1992 exercise together with the changes made for the next exercise taking place in March 1996. The research assessment exercises have required the new universities (principally the former polytechnics) to compete on an equal footing with the established universities for research funding and thus for their staff to engage more fully in research. The result is a major change in the environment, particularly in the new universities. This paper offers a preliminary examination of the attempts by universities to this change with the consequential effect upon the labour market.