UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1011-i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

SCIENCE AND TECHNOLOGY COMMITTEE

 

 

CHANGES TO CHEMISTRY PROVISION AT THE UNIVERSITY OF SUSSEX

 

 

Monday 27 March 2006

PROFESSOR ALASDAIR SMITH, DR GERRY LAWLESS and MR STEVE EGAN

Evidence heard in Public Questions 1 - 112

 

 

USE OF THE TRANSCRIPT

1.	This is an uncorrected and unpublished transcript of evidence taken in public and reported to the House
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Oral Evidence

Taken before the Science and Technology Committee

on Monday 27 March 2006

Members present

Mr Phil Willis, in the Chair

Adam Afriyie

Dr Evan Harris

Dr Brian Iddon

Dr Desmond Turner

________________

 

Examination of Witnesses

 

Witnesses: Professor Alasdair Smith, Vice-Chancellor, and Dr Gerry Lawless, Head of Chemistry Department, University of Sussex; Mr Steve Egan, Acting Chief Executive, Higher Education Funding Council for England, gave evidence.

Chairman: Could I welcome our three witnesses today: Professor Alasdair Smith, vice-chancellor at Sussex, Dr Gerry Lawless, the head of chemistry, and Mr Steve Egan, the acting chief executive of HEFCE. May I also welcome so many people into the public gallery. It is lovely to see you coming to watch the machinery of a select committee. You are very welcome indeed to this session. Before we start, a couple of my colleagues wish to declare an interest and I invite them to do so now.

Dr Iddon: I have a registered interest in that I am a Fellow of the Royal Society of Chemistry and I have an unregistered interest in that I am a Member of the Association of University Teachers.

Dr Turner: It is a totally non-pecuniary interest. The University of Sussex is my local university and I used to work in the department many years ago.

Q1 Chairman: This is a serious issue looking at the changes to chemistry provision in Sussex University. The reason the select committee is very anxious to have an evidence session is that the last committee did a major report about strategic science in UK universities. It is important that, having done that piece of work and made recommendations to the government which were by and large accepted apart from the major recommendations of the Hubbard spoke model and indeed some of the regional structures which were put in - I am not criticising that; I am just making an observation - we continue to keep an eye on the terms of strategic science and particularly capacity in terms of UK science, again particularly in the stem subjects. We are anxious to look at the process for closures to make sure that the closures can be examined, justified and verified in scientific terms. Our remit is not to get involved in the machinations of a individual university or the decisions of HEFCE; it is to look at that process to make sure it means what the government is trying to do. That is the background. Professor Smith, where did the proposals to close chemistry at Sussex come from? Who was involved in developing them and when were they first proposed? Was it your idea?

Professor Smith: Yes, I accept responsibility for it. The process was that we were entering a new phase in strategic planning of provision at the university. We had at the meetings of the senate and council at the end of December wide ranging, strategic discussions about the strategy of the university. From January onwards, initially in my executive team of half a dozen or so, in my senior team, we spent three days looking in great detail at all the areas of university provision, deciding at this crucial point in time as we come up towards the next research assessment exercise, to the new fee regime in 2006, to the introduction of full economic costing of research, which were the areas of the university's activity that we should give the highest priority to in making academic investment and therefore which were areas that we needed to cut back on to create room for investing in strong areas. The senate and council of the university endorsed two key issues. As a university we strive for excellence in research and in teaching and, in order to build excellence, we need to invest in strength.

Q2 Chairman: In terms of consultation, you wrote this paper in December and took it to the senate in December?

Professor Smith: Yes. The paper was a general strategy paper.

Q3 Chairman: How much consultation was there with the department of chemistry? Any?

Professor Smith: There was a very limited amount of consultation with the department of chemistry until we went public with the proposals at the very beginning of March. Obviously there was very full consultation with the Dean of the School of Life Sciences from early on, but it was at quite a late stage that people like Gerry, the head of the department, were brought into the discussion. Frankly, part of the reason why that first stage of the consultation had to be conducted among a relatively small number of people is we know from past experience - and it has been confirmed - that once a discussion about the future of chemistry anywhere goes beyond a small number of people it hits the press and we needed to control very carefully the early stage of discussion so that we could have sensible discussions in private before the discussion went public.

Q4 Chairman: The Dean of the School of Life Sciences is fully involved in the discussions but the head of the department that the threat of closure hangs over is not consulted at that time?

Professor Smith: He is not consulted in the first stage of the discussion.

Q5 Chairman: Is this not a fait accompli?

Professor Smith: No, it is not a fait accompli now. It is still a proposal and when we put the initial proposal to senate some ten days ago, on the advice of the Dean, the senate unanimously agreed that we needed an extended period in which we would look at the options. The proposal that went to the senate was not a closure proposal; it was a proposal to focus the work of the department in one area of chemistry. It had been presented in the media of course as a closure, but that was not and never has been the intention.

Q6 Chairman: You make the point and your written evidence to us suggests that the department of chemistry has been in decline for some time. The conclusion I have come to - tell me if I am wrong - is that what we have here is a self-fulfilling prophecy. You have concerns about the department of chemistry; no investment is made in it. You have then announced that it is going to close and the inevitability of its closure or restructuring, whichever way you want to describe it, is just an inevitable conclusion of the actions of the university over a period of time. Is that fair or unfair?

Professor Smith: I think that is unfair. Over the last two years, the department has lost a number of key, senior staff.

Q7 Chairman: What did you do to replace them? Why did you not go out and get others?

Professor Smith: I did not go out to get others because it is very hard, looking across the full range of provision in the institution, to justify replacing staff in a department that is recruiting 20 undergraduate students a year when I have a department of English that is recruiting 300 students a year, and where the students and their parents are complaining about staff/student ratios of 25:1 or 30:1. One has to make these choices. One cannot replace every post that becomes vacant or decide that in every department where faculty leaves it must be replaced.

Q8 Chairman: What we cannot understand as a Committee - I think I speak for the whole Committee here - is that this was a five star department at the last RAE.

Professor Smith: Five.

Q9 Chairman: My apologies. It was a five department, which is pretty good. How, in such a short space of time has it gone from that, to you having no confidence in it to expand and therefore to be able to create a better base on which to move forward?

Professor Smith: At the last RAE it was a relatively small five rated department. The loss of six key people has had a huge impact on the strength of the department in that period of time.

Q10 Chairman: Were you not confident of recruiting people of equal quality or did you just not want to?

Professor Smith: It is not a question of recruiting faculty of quality. We have in that period recruited junior faculty of very high quality, who are doing extremely well, but they are junior faculty. It is very difficult to justify the kind of investment that would be required to restore the department to the position that it was in six or seven years ago on the back of the kind of student recruitment that we have had in the last three or four years.

Q11 Chairman: Dr Lawless, I would like to know how much warning you were given of the proposed changes to the provision and when you were first notified of it. How much have you been involved? The main question I would like to ask you before that is why have you allowed the department to decline so badly?

Dr Lawless: I have been head of department for two years and during those two years I have repeatedly asked for posts to be filled.

Q12 Chairman: It was a rhetorical question.

Dr Lawless: To represent the department as it stands now, we have six scientists who are on the short list of the Royal Society. Three of those are in chemistry across the entire university. This is not a department that is withering. It is a department that is under-resourced.

Q13 Chairman: We will come back to resourcing. Could you answer the first part of my question? When were you first notified and how have you been involved in the consultations?

Dr Lawless: My first knowledge that this process was underway was when the Dean invited me to his office but, under the constraints of secrecy, asked me if I would enter discussions without having any expertise from the chemical biologists in my department. I thought it was unwise to discuss the future of a chemical biology department without having any external input from chemical biologists.

Q14 Chairman: When was that?

Dr Lawless: It was four weeks before the announcement was made.

Q15 Chairman: As short as that? Either with yourself or your predecessor, when some of the leading figures left, could you tell me where they went? Did they retire? Did they go to other departments? What efforts did the university make to replace them?

Dr Lawless: There were nine members of faculty who retired. A further six left to go to other universities, Nottingham, Sheffield and Durham.

Q16 Chairman: What effort was made to replace them?

Dr Lawless: They were replaced by a younger faculty, although the RAE income was there to support the additional nine retirees.

Q17 Chairman: In your view, the university could have gone out to recruit in the market place senior faculty members?

Dr Lawless: Given the international standing of the chemistry department of Sussex, it would have been easier than in some other departments which we are trying to recruit into at the moment.

Q18 Dr Turner: I should have said I was a member of Sussex Court. Is it not a fact that the manner in which this proposal has emerged has been so damaging to the department that, if senate and council were to decide that the refocusing option is not a runner, it would be that much more difficult and need that much more investment to put chemistry back together again, would it not?

Professor Smith: Yes. One would speculate about those hypotheticals but it certainly is the case that having this kind of discussion taking place in the kind of publicity that we have had over the last two weeks does tend to have effects which will be harder to roll back from. I hope it does not close our options, because all options are still open, as I said at the meeting in the University of Cork last week. Chemistry is not well served by the Royal Society of Chemistry in this respect. When we went public within the institution with our proposals, ready to have an open discussion with the chemists and the chemical biologists and everyone else, we had statements ready for the press if they were needed but we did not go out and seek publicity. The afternoon of the day that the initial proposal went through our Strategy Resources Committee the Royal Society of Chemistry put out a press release, which frankly I found extraordinary, saying it had heard rumours that Sussex was thinking of closing its chemistry department.

Q19 Dr Turner: You had not told them so it was a rumour for them, was it not?

Professor Smith: I did not succeed in getting hold of the Royal Society of Chemistry that afternoon. Frankly, I think they would have gone off with a press release anyway. That is one of the things that makes this kind of discussion difficult, particularly in the area of chemistry, but any discussion of the chemistry provision leads to this huge wave of publicity and I think it is unfortunate.

Q20 Dr Turner: You do not seriously think that you could have carried out this process without attracting public attention?

Professor Smith: There are other areas, other than chemistry and the sciences, where there are significant changes in student demand. Foreign languages are one. We, like many other institutions, have had significant changes in our foreign language provision. At the last RAE, we submitted four separate foreign language departments. These departments do not exist any more. We have been through a process of reshaping provision in modern languages at Sussex to deal with a very sad decline in demand, another national problem just like the decline in demand for some of the sciences. We were able to have that discussion in a civilised fashion within the institution, looking at all the options, not having the glare of publicity. I think it is a better decision making process and the Royal Society of Chemistry should reflect on that.

Q21 Chairman: It is their fault?

Professor Smith: No.

Q22 Chairman: I find it unbelievable that you could blame the Royal Society of Chemistry for a set of proposals when you did not even have the courtesy to speak to your head of chemistry.

Professor Smith: I was not blaming them for the proposals. I was saying that they create a climate of publicity which puts constraints on institutions that are trying to plan for the future.

Q23 Dr Turner: You put the proposals to the senate meeting on the 17^th, one week after that, and the senate deferred. What were the key concerns that the senate had in coming to that judgment?

Professor Smith: The key concern was that our proposal to reshape chemistry was to focus chemistry on the area of chemical biology, the biological end of chemistry. The concern which was expressed, particularly by the Dean of Life Sciences, was that it may not be easy to focus the activity of the chemistry department on one area like that. Chemical biology is a set of applications of chemistry and to do chemical biology you need support from other areas, not just organic chemistry.

Q24 Dr Turner: It is not viable on its own?

Professor Smith: That is right. The Dean advised that the initial proposal that we were working with required further discussion and required us to look at other options for focusing the chemistry department. We happily as an institution are now proceeding to look at a wider range of options. I think that is a perfectly healthy way to proceed. Having started down one road, the discussion having opened up among the institution and the full range of life scientists having got involved in it, their advice was we need to look at this further and we are doing that.

Q25 Dr Turner: Why did the Dean of Life Sciences retract his initial proposal? Was it because of the reaction? Had he had second thoughts of his own? Did the wave of shock and horror that went through the British scientific community, when it was suggested that the chemistry at Sussex of all places should close, concentrate his mind and your mind?

Professor Smith: It was the response from the chemistry department and others that said, from an academic perspective, this proposal may not be a sensible way to refocus chemistry. We need to give that further consideration. Most of the external response from the scientific community and elsewhere was to a perceived closure decision, but we were not proposing closure. A lot of the external view was based on a misapprehension of what we were trying to do. What influenced the Dean and influenced me in believing that we needed a further period of consideration was that the initial proposal for a refocusing of chemistry needed further study.

Dr Turner: Gerry, what is your take?

Chairman: What will this entail? What is going to happen?

Q26 Dr Turner: I am coming to that.

Dr Lawless: We did seek a lot of external reports on the proposed refocusing, not simply the closure of chemistry. Without exception, they all thought this was a crazy idea, absolute madness to propose that you could have a department of chemical biology in the absence of a chemistry programme.

Q27 Dr Turner: Can we look at the options that are being studied? Can you set them out for us, please, Alasdair?

Professor Smith: The options that are now being looked at fall under three broad headings. One would be to maintain a broad based chemistry department. Given that university policy is one of achieving excellence in research and teaching, that would have to be a broad based chemistry department that had the prospect of developing back to the absolutely first rate chemistry department. The second option would be closure. By "closure" I mean closure. That is, accepting that the chemical biology department would not work. The third option is to look at some intermediate option where chemistry at Sussex is refocused, concentrates on the relationship between chemistry and the other biomedical, biological sciences and where a smaller scale of operation can operate with excellence in teaching and research and recruit an adequate number of students to make it viable. In broad terms, those are the three options.

Q28 Dr Turner: Why did you only consider those options at this stage rather than from the very beginning?

Professor Smith: We did consider all three options from the very beginning. My belief, in making the initial proposals that we made, was and is that the level of investment required to sustain a broad based chemistry department in Sussex, to restore chemistry at Sussex to excellence in a broad based department covering all the major branches of chemistry, given the scale of the faculty losses that we had suffered in recent years, would be a very large investment indeed with no assurance that it would pay off in research assessment terms in two years' time. That would be a very risky option and one that would denude the rest of the university of much needed investment. The other option, if I can go to the other extreme, the closure option, I did not put forward because I am very strongly committed to the future of science at Sussex and Sussex remaining a strong science based university. I am very impressed, as everyone is, by the quite extraordinary quality of the work that has been done in chemistry at Sussex in the past. I was therefore and remain desperately keen to find a way of retaining chemistry at Sussex and not going for closure.

Q29 Dr Turner: That is very encouraging. Gerry, can you give us your take on the options and their achievability?

Dr Lawless: I was presented with five options on Friday. Things change quickly in the world of academia. It is possible to almost immediately generate five posts in chemistry without any additional expense on behalf of the university. We are also seeking in the next six weeks some imaginative solutions to having entrepreneurial investment in posts in chemistry. If we had been allowed during the last six months to make some of these proposals, we could have come up with a very financially viable plan to save chemistry at Sussex, but we were not given the opportunity. I also think it is very possible to use the media to turn this around and, by making some very senior appointments in chemistry at no expense to the university, to confirm that chemistry is alive and well and has a future in Sussex, simply because we have had so much media attention.

Q30 Dr Turner: You think it is possible, even in the context in which the department has been seriously damaged by the process?

Dr Lawless: Absolutely, provided we make a strong commitment to chemistry in the future.

Q31 Dr Turner: Can we take it that chemical biology, as such, is off the agenda now?

Professor Smith: As such it is off the agenda. There is no difference between Gerry and me as far as three to five options. I was, with apologies, over-simplifying somewhat by running together various middle options. The original chemical biology proposal is off the agenda because it clearly did not commend the support of the faculty of life sciences, but a more general option of looking for a future of chemistry where it focuses on the relationship between chemistry and the biological sciences is very much still on the agenda.

Q32 Dr Turner: Can you tell me whether the concerns surrounding chemistry which will have sent shock waves through other scientific disciplines as well make the future of physics doubtful at Sussex as well? What implications does it have for the whole structure of science at Sussex, because after all chemistry is integral to the teaching of medicine, biochemistry and biology. Need I go on? What are the wider implications, even on the campus, and for the future viability of science at Sussex?

Professor Smith: I have emphasised all along that this proposal to restructure and rescale chemistry is part of a wider university plan which involves making positive investment in other areas of science. We are not proposing to reduce the number of students taking the sciences at Sussex. We are proposing to make substantial investments in the research capacity in other science areas. I am doing my best to get that message across. As it happens, at lunch time today, I was meeting a visiting panel from PPARC who were looking at the renewal of a major rolling grant in physics and naturally they wanted to talk to me about the proposals that we were making about chemistry. I was able to reassure them that it is not part of a plan to run down the overall science effort at Sussex and I think the PPARC panel went away reassured about the broad policy of Sussex towards science.

Q33 Dr Turner: Physics is safe?

Professor Smith: I am afraid nothing is safe.

Q34 Chairman: Nothing is safe in Sussex?

Professor Smith: Nothing is safe anywhere. Universities have to look at the provision for student demand. I am very happy with the progress that physics has made in recruiting students and with the strength of physics at Sussex, but it would be a mistake for any vice-chancellor to say of any subject that it is safe. One has very strong commitments to the maintenance of a broad academic base. I have always made it clear that my vision of Sussex is that it is a university which remains strong in the sciences as well as arts. I have put a huge amount of effort in the eight years of being vice-chancellor to doing the very best a university can for physics, chemistry and other subjects that face difficult student recruitment decisions.

Q35 Dr Harris: You said that no department can be described as safe. Is the corollary of that that all departments are potentially vulnerable, in a sense?

Professor Smith: Yes, but please do not read anything into that.

Q36 Dr Harris: Are you saying that in any university it is fair to say that, at least in science because of the issues there, a whole load of departments might be considered not safe in that sense?

Professor Smith: Yes, but please do not read anything into that other than a most banal observation. Sussex is extraordinarily strong in English, another five rated, big department that currently recruits 300 well qualified students a year. Is the future of English at Sussex safe? Of course it is safe as long as it remains a five rated department recruiting 300 students a year, but if students wishing to study English decide that Sussex is no longer the place for them the future of English at Sussex will no longer be safe.

Q37 Chairman: Would you not concede that, to be taken seriously as a university that is serious about science, the idea that you can do that without a major chemistry department is laughable?

Professor Smith: No.

Q38 Chairman: You think the two things are compatible? You can talk about a major science facility at a British university without chemistry?

Professor Smith: Yes. I would prefer Sussex to have a chemistry department but I do not accept the position that a serious science university must have a chemistry department.

Q39 Chairman: Do you, Dr Lawless?

Dr Lawless: I completely reject that. If we consider the other sciences, physics is probably not as directly involved with chemistry but consider biochemistry, for example. People who are applying to study a degree in biochemistry want a first class degree delivered to them. That must involve some chemistry. If we consider the premed programme, a very lucrative programme at Sussex, 60 per cent of that programme is delivered by chemistry. We also have a programme that we deliver with the TTA, a teacher enhancement programme. We train almost 20 chemistry teachers a year. We could not deliver that without chemistry.

Q40 Chairman: We need another 3,500 of them?

Dr Lawless: If we are successful in a five year roll out of that programme we will deliver almost 300 of them. You are going to get rid of a chemistry department that may deliver 300 chemistry teachers.

Q41 Dr Turner: I take it from the tenor of your remarks, Alasdair, that as far as departments are concerned there is no difference between English, media studies, a science department. They are all the same if they cannot pay their way. Is that a fair thing to say?

Professor Smith: No. I think it is not a fair thing to say. There are some areas of activity that universities make very special efforts to maintain because they see them as very desirable to having a balanced academic portfolio. If universities wish to manage themselves o purely market criteria and simply follow where the student market goes, we would all specialise much more than we do. There are many institutions that could fill up virtually all of their places with students doing business and management studies or creative writing or whatever. We do not do that because we have a view of the kind of institution we want to be. We cannot fulfil that vision completely independently of the world in which we live and decide this is what a university is and this is what a university is going to be. It is much more sensible to have a view of the kind that says Sussex wants to be a university that is strong in a wide range of disciplines covering the arts and sciences and work within that framework, rather than say that means we must have disciplines X, Y, Z, A, B and C.

Q42 Dr Turner: Immediately you went public I understand that the academic registrar wrote to all the student applicants who had accepted places. Am I right that even at this early stage 33 applicants had accepted offers and they were qualified with at least three straight A levels? We are talking well qualified students. What response did you get when you wrote to them? Are they going to consider coming under these circumstances?

Professor Smith: It was very important for us to write to applicants because we knew it was very likely that stories about chemistry in Sussex would appear in the newspapers over the weekend, as indeed they did. We felt it essential to get in touch with them in advance of that happening. I think there were 35 applicants sitting on unconfirmed offers. Sitting on accepted offers I think it was more like ten. We got in touch with them then and we are now continuing to keep in touch with them, to keep them informed about the fact that there is a discussion going on about the future of chemistry at Sussex because that would be germane to their decisions. Since all the options are open, we are doing our best and the chemistry department is doing its best to keep these applicants warned as well as well informed. I am not going to pretend to the Committee that everything is done perfectly. In this kind of situation you do lots of things that n retrospect you could have done better. I think we were absolutely right to get in touch with the applicants on the Friday afternoon when the initial proposal was announced. It would probably have been better had we got the chemistry department involved in that communication rather than it going from the academic registrar of the university, but I know the academic registry are now working with the chemistry department in the continuing communication with these prospective students.

Q43 Dr Turner: Have you noticed any effect on applicants for, say, biochemistry who this affects almost equally?

Professor Smith: It does not affect applicants for biochemistry almost equally. We have not noticed a significant effect. No doubt other people have had information from other sources but we do not have any indications currently of significant adverse effect on other applicants. There was a higher education fair on the Sussex campus, although not geared to Sussex University, at the end of last week. My colleagues who were involved in the fair said the interest in attending Sussex was running at something like twice the level that we have seen at previous events of that kind in previous years. In previous years, applications for Sussex have been very strong. I think there were four questions from the many, many hundreds of students there about chemistry.

Q44 Chairman: They would not be going, would they, if they thought the chemistry department was closed? What on earth would they go for?

Professor Smith: This was a higher education fair for students in Sussex schools and colleges interested in higher education.

Q45 Chairman: They are hardly likely to go asking about chemistry when they know from radio, television and the newspapers that it is closing.

Professor Smith: A prospective student interested in Sussex and coming up to the Sussex stand might well, whatever the subject, say, "What is all this I hear about chemistry in Sussex?" We had very little sense of that.

Dr Turner: I was going to ask about the Royal Society but it is obvious they have got under Alasdair's skin already anyway.

Chairman: I do not think there is any point in pursuing the Royal Society.

Q46 Dr Iddon: I want to bring Steve Egan in because I want to deal with the relationships between the Higher Education Institutes and HEFCE, if I may. I would like to ask Professor Smith first at what point did he contact HEFCE when he was thinking about the closure or changing the shape of the chemistry department at Sussex.

Professor Smith: I have the letter somewhere in my files but it was at the end of February when we got in touch with HEFCE.

Q47 Chairman: This year?

Professor Smith: Yes.

Q48 Dr Iddon: That was before the department were informed or even the Dean?

Professor Smith: No. It was long after the Dean had been involved in the discussions.

Q49 Dr Iddon: What kind of response did you get from HEFCE?

Professor Smith: We got a very rapid response from HEFCE and we got into telephone discussion. There was a meeting with the regional consultant within a very few days to look at the issue of how HEFCE would respond if Sussex withdrew from teaching a chemistry degree in 2007. I need to remind the Committee that the proposal being put to the senate was a proposal to stop teaching chemistry at Sussex from 2007 onwards.

Q50 Dr Iddon: Mr Egan, did you feel that the approach by Sussex was early enough for you to be able to enter into constructive discussions with the university and the department?

Mr Egan: We would like to have been involved earlier and I made that point to Alasdair. Having been involved, we were keen to ensure that the interests of the students, current and prospective, were being catered for in the proposals and we did that. We wanted to consider, if the proposals were to go ahead, what we would need to do in order to do what we can to protect the supply of chemistry in the south east region in a similar way we did with the Exeter closure.

Q51 Dr Iddon: This Committee and a lot of other organisations, professional or otherwise, have been very concerned about the loss of the science based in the way that we are discussing this afternoon. As you know, the Secretary of State for Education, who was at the time the right honourable Member for Norwich South, asked HEFCE to try and protect vulnerable and strategic subjects in the universities. Is this the first time that you have been approached for help with a strategic science subject in a higher education institution?

Mr Egan: Since the Exeter closure, this is the first time that an institution has come to us. We have taken proactive measures which I can go through if you wish to engage institutions to collaborate more with each other so that they determine options before issues get to this point. For instance, we have a feasibility study in the south east region concerning physics and how physics providers in the south east region can work together. We have a similar arrangement developing in the east and west Midlands for physics and we are having discussions through regional associations at all regions across all strategic and vulnerable subjects as to how we can develop consensus around what can be done and how collaboration can improve and protect the supply. Here is another range of measures we are taking, but we will be producing a report at the end of June that says exactly what we have done since we have provided the advice to the Secretary of State and the Secretary of State said, "Yes, go ahead and do this."

Q52 Dr Iddon: HEFCE in the past has taken the attitude that universities themselves as independent organisations must determine their own future. Obviously, the Secretary of State intervened, as I just mentioned. Do I detect therefore that HEFCE is changing its strategy with respect to vulnerable and strategic subjects? Have you a strategy now?

Mr Egan: We do have a strategy. It is in our strategic plan that is going to be published in the next week or so. We have a plan against which that strategy shall be achieved and we will be reporting against that plan in June. That will be a public document which we would be very happy for the Committee to see and examine. We still respect the autonomy of institutions and the way that they exercise that autonomy. We believe that to be an important part in what Sir Gareth Roberts called a healthy and vibrant higher education sector. However, he also identified that there are times when there are supply or demand side issues that demand intervention, in particular on stem subjects. We have developed a series of interventions that allow us to deal with demand side issues or, in this particular case, supply side issues. There is quite a list of those and I would be happy to go into those if you wish.

Q53 Dr Iddon: As everyone in this room knows, I am sure the government is heading towards a 50 per cent participation rate in higher and further education. This Committee is very concerned that in all areas of the country we have a department which students can attend without being involved in too much travel. In other words, it would be preferable if they lived at home. We are also getting very worried about the strategic provision of chemistry in the south and south east of England. One of the Ministers in the DFES has made the point that students who would attend locally to Sussex could go to Reading. Reading is a tremendous distance away. Are you trying to preserve, as one of the funding organisations on departments like chemistry at Sussex, the geographical proximity so that students can study from home?

Mr Egan: There is only so much we can do on geographical proximity because we are not a planning body; we are a funding body. We can attempt to get institutions to work together as we are doing with physics, to enable provision to continue in places that do not have provision at the moment. We are working with the Open University to ensure that there is distance learning provision available for students in various places. We are developing life-long learning networks connecting further education colleges with higher education institutions so that students both have access to education and in particular access to progression routes into education. I do not think it is possible to provide every individual in this country with easy access to chemistry provision.

Q54 Dr Iddon: Would you look again at the proposal in one of our recent reports on strategic science provision, the hub and spoke model that this Committee proposed?

Mr Egan: The answer Sir Howard gave this Committee still stands. That is one of recognising the importance of the collaborative ethos that you propose, emphasising that we will pursue that. We have tried to do that already in physics. We will try to do that in other subjects.

Q55 Chairman: That does not square with me with the remit of HEFCE, in terms of trying to preserve stem subjects. Sir Howard was quite keen about that. He did talk to us about a collaborative model but if a university does not even tell you that its chemistry is in difficulty until it rings you up to say, "I want to close this department" how on earth is that back seat driving, as Sir Howard once described it? Is it now out of the car or are you out of the car? I know he is out of the car.

Mr Egan: I have said that we were disappointed with the fact that the university did not tell us ahead of the one week notice that we had. We will be asking Universities UK, who provide advice to institutions, to reiterate that advice, that we would require earlier notification. In our assessment of individual institutions over strategic planning processes, our assessment is better. We are privy to what is going on in the institutions and we take account of the turn of events in this particular case.

Dr Iddon: You are one arm of the dual funding mechanism. Is there going to be in future a strategic approach to university which would involved yourselves, universities, the government and the research councils as the other major arm of dual funding provision, because it seems to me at the moment as if we are adopting an approach of letting the market take its course, laissez faire, if you like, which is very detrimental to the science base in this country. We have a Chancellor of the Exchequer standing up in Parliament quite regularly, including last week, saying, "I am putting more money into science. Science and innovation are the future for this country" and yet the dual funding mechanisms of the universities do not seem to be cooperating with one another to protect the science base.

Q56 Chairman: Is it just the market? We just have the market now and that is it?

Mr Egan: We do have a market but we are making interventions to try to address the very serious issues which this Committee is concerned with. We are making interventions in the demand and the supply side and we are working with the research councils to ensure that there is capacity in order to carry out the research and produce the postgruaduates that this country needs. That is a joint scheme between ourselves and the research councils based on an analysis of the situation which we both agree on, so we are intervening. Yes, there is a market. There always will be a market but that is not enough.

Chairman: You can only intervene if somebody tells you something needs intervening on. You have no mechanism for doing that. We are very frustrated.

Q57 Dr Iddon: Do you have adequate intelligence together with the research councils about the strengths of all the departments you are funding in the universities? Do you do some horizon scanning to see where and which departments might be under such pressure that they may be announcing closures?

Mr Egan: We do not do analysis of the sort which says which are the likely departments to close. We do have regular meetings with universities and talk these subjects through and we expect a response on those lines. In this case, we did not receive that and that is something we need to look at to strengthen that process. I accept that criticism. There is analysis on a forward looking basis that we carried out with the research councils, for instance, looking at the age profile and demographics of academic staff within each of the discipline areas, saying, "What will happen if nothing happens to improve that?" We have a look at the trends in demand for particular subjects and say, "What will happen if we do not do anything to alter that?" Then we take action accordingly. We do not take action on our own. We work with partners. We have worked with the Chemistry Learned Society, the Institute of Physics and others so that we can develop schemes, for instance, that make interventions on the demand side.

Dr Lawless: I would like to present some intelligence on the market. I am a chemist and I have studied our market very well in the last two years. The market is for hard core chemistry programmes. We have slashed the number of degrees we provide to a fraction of what we provided - almost four - and we have seen a sustained increase despite the slashing of these programmes. Applications for chemistry have increased 45 per cent since 2003, 27 per cent and 40 per cent. Our market share of the national applications for chemistry has increased from 1.2 to 1.4 to now 1.8 per cent. Overall, our university only has a market share of 0.8 per cent. We are attracting high quality chemists to Sussex. It is not a question of supply; it is a question of demand now.

Q58 Dr Harris: On the issue of the market, you only intervene, I am told, in cases of gross market failure.

Mr Egan: Yes.

Q59 Dr Harris: Gross market failure sounds like something that is gross rather than something that is just a failure. You said you would intervene in the market. I am suggesting you should have made it clear that you only intervene in "cases of gross market failure". Is that a very high threshold?

Mr Egan: It is, because we believe that the higher education sector has performed well overall and that intervention carries risks as well as potential benefits.

Q60 Dr Harris: One chemistry department is never going to be a gross market failure, is it?

Mr Egan: I agree with you and that is the point that I was about to make. Gross can sound like acute - i.e., a chemistry department closing - and that is the only time we get involved. That is not the case. What we have established here, prompted by this Committee and others as well as by the analysis we have carried out, is that there is a problem with chemistry. There was a 20 per cent decline in student numbers and that needed attention and intervention. That is the kind of gross problem that I would refer to.

Q61 Dr Harris: You say you have a role as a broker to facilitate the provision of strategically important and vulnerable subjects. In fact, you say "only as a broker". How would you judge failure in that role?

Mr Egan: We would judge failure if the trends that we see in terms of the amount of graduates coming out of the system nationally rather than from the individual institution, or within a system within a region, were not to respond to the interventions that we made. In other words, if there was a continued decline in chemistry graduates or stem graduates, we would say that part of that responsibility must rest with us. That is not all down to us. That is our objective, to put right some of the problems we see at the moment in the stem subjects.

Q62 Dr Harris: You must recognise there is a problem therefore and that the closure of another department which is not big enough to be a gross market failure in itself is, three or four years later, going to have an impact on the metric you have chosen as your measure of failure. I am wondering whether your judgment of criteria for failure and your very high threshold for doing anything substantive other than informing the decline, if you like, with information is a mismatch.

Mr Egan: It is true that a closure of a department will reduce the supply of chemistry graduates as it did in Exeter. We can take mitigating actions to deal with that, as we did in Exeter, to ensure that the provision on the teaching side is maintained. We can work with the research councils as we are doing to make sure that the provision on the research side is maintained. Every time a chemistry department is closed that makes it more difficult for us. By working at the demand side, we are effecting basic economics that will influence institutions' decision making as to whether or not to close the department. We are expecting those initiatives to come through as well.

Q63 Dr Harris: Do you know of any other closures in the pipeline?

Mr Egan: No.

Q64 Dr Harris: Are you planning to get involved in the Dean of Life Sciences review?

Mr Egan: No.

Q65 Dr Harris: You do not see yourself as having a role to play in this particular decision?

Mr Egan: The decision as to whether to close the department, to continue the department or to follow any of the other options is a matter for the institution itself. We are interested in ensuring that, whatever path it does follow, the interests of the students are maintained and that whatever action we need to take to ensure that the totality of provision of chemistry, particularly in the south east but also nationally, is maintained both in teaching and research.

Q66 Chairman: The closure of Exeter, Kings, Queen Mary's and Swansea and now Sussex does not come into your gross category in terms of four or five chemistry departments?

Mr Egan: I am not saying that that is not ----

Q67 Chairman: I just wonder at what point you will become seriously concerned about chemistry in the UK.

Mr Egan: We are seriously concerned now, which is why we are taking the actions that we are taking. The individual institutions are autonomous bodies that have the right to decide for themselves what subjects they provide and whether or not to continue, expand or close any of those subjects.

Q68 Dr Turner: If an institution asked you for help, in the case of Sussex - I have no idea what the university asked you for a week before the proposed decision was announced - to keep a department going through a difficult time, what would you do and what were you asked? What do you offer to do?

Mr Egan: We would have a discussion with the institution and find out exactly what that meant and what help we may or may not be able to provide.

Q69 Dr Turner: What sort of help can you provide? I am finding it very difficult to pin you down, if you do not mind me saying so.

Mr Egan: The help we could provide is to say, "If you want to work in collaboration with another institution to ensure that you have a viable chemistry department" we may be able to broker that kind of arrangement.

Q70 Chairman: They do not need you for that. They can do that themselves. Loads of departments work together internationally.

Mr Egan: That is true.

Q71 Dr Iddon: Can I ask if you are aware of this report from the Royal Society of Chemistry which is now in the public domain? It has examined eight chemistry departments across Britain from a leading international five star department down to the lower RAE ratings. I do not want to précis this report but I will. What this report tells me is that, taking all the funding mechanisms that are in place to fund chemistry departments, particularly the dual funding mechanism, there probably is not a single chemistry department in Britain, certainly of these eight according to this report, that can paint a black line instead of a red line. In other words, sciences - it is not just chemistry in my opinion - and engineering with the very expensive workshops and laboratory facilities are not properly funded by the government through the dual support mechanisms. Are you aware of this report?

Mr Egan: Yes, I have seen that report. The teaching provision within institutions across a number of subjects is under-funded, using full economic costing. There is an issue which the government has addressed through substantial investments on the research side, making research sustainable and there have been many improvements there. For instance, the amount of money that has gone into chemistry on research since 2002 has gone from 39 million to 51 million, a substantial increase. There have been increases in the unit of funding, the absolute amounts that we have provided for chemistry, and of course there are increases due to the introduction of tuition fees along the way. We will be introducing, with the agreement of the sector now, the track methodology to understand better the full economic costs, not just of chemistry but of all subjects, and that will give us all a much clearer view of what amount of funding is required in order to ensure that the individual subjects are sustainable into the future because, of course, people can make do and mend from one year to another but that will be at the expense of infrastructure.

Dr Iddon: Full economic costing is okay and I fully support the exercise you have gone through. It has highlighted the under-funding of science and engineering in Britain, but the problem is that if we are to exert full economic funding on industry they are probably going to go to Germany or any other country for the research because they are not prepared to provide the full economic funding, at least to small and medium enterprises. They cannot provide the full economic funding and there lies a major difficulty for science and engineering in Britain, in my opinion.

Q72 Chairman: Professor Smith and Dr Lawless, could you comment as well?

Professor Smith: On the specific issue of full economic costing of commercial research?

Dr Iddon: This reveals a major problem now for British science and engineering.

Q73 Chairman: In higher education.

Professor Smith: There is a major problem of the under-funding of teaching and research across the whole spectrum of higher education. On the specific issue of the full economic costing of commercial research contracts, yes, it is an issue but it is not the policy under full economic costing that every commercial contract has to be priced at full economic costing. What universities are expected to do is to understand what the full economic costs are and then to do business in the market place in the light of knowledge of the full economic costs. That means that a university would be unwise to undertake a vast amount of commercial contract work at less than full economic costing because then one is making a loss, but there may be strategic relationships or contract work that has academic spin-off effects or other situations where a university makes a decision that the market will not bear a price that covers full economic cost but it is nevertheless right for that business to go ahead.

Q74 Dr Turner: I would like to ask Alasdair and Gerry for their view on the thought that, while we agree it is clear that financial problems motivated these proposals, are these financial problems at the university specific to chemistry or are they the result of haemorrhaging of funds in other directions that give rise to red line problems in universities' accounts? Can you throw any light on that aspect?

Professor Smith: The proposals for chemistry are not driven by the overall financial position of the university. The overall financial position of the university is difficult at the moment. There is no secret about that, but we are planning to make, notwithstanding the financial constraints, a substantial investment in building up academic excellence in both research and teaching across a number of areas of the university's provision. The judgments about which areas to invest in are driven by academic judgments of which areas have the strongest potential to grow their strength in research and teaching. These options about chemistry are not driven by considerations of the overall financial position of the institution; they are driven by a sensible strategic policy of investing selectively in the strength.

Q75 Dr Harris: There is a question about the financial situation of chemistry at Sussex. Is it the case, as has been said, that the QR funding, for example, going to chemistry has been used effectively to subsidise other parts of the university, including very closely related to chemistry perhaps, which means that has put chemistry at a disadvantage compared to what they would otherwise have had it had the full share of the QR funding under the RAE that it had attracted? Dr Lawless?

Dr Lawless: Yes, that is certainly the case. This is not a financially driven proposal. Of the five departments of life science, we have one of the smallest deficits, circa 80K. The others deficits range from 120K to 300K. It is not a financially driven proposal. Alasdair is 100 per cent correct.

Q76 Dr Iddon: Is your department getting all the QR funding that it would get as a five rated department from the RAE? Yes or no?

Dr Lawless: Not at the moment.

Q77 Dr Iddon: Do you know how much you are missing of that?

Dr Lawless: Approximately 700K.

Q78 Dr Turner: That is quite a large slice. That would pay for a lot of faculty.

Dr Lawless: Indeed.

Q79 Dr Harris: You do not think it would make a difference to the proposal because you are saying it is not a financially driven proposal.

Dr Lawless: Not at all.

Q80 Dr Harris: Whether or not you had the 700 would not, you say, make any difference. Is that what you are telling us?

Dr Lawless: No. The proposal is to invest in other areas of the university.

Q81 Dr Harris: The 700,000 that you are not getting of the QR funding that you have attracted, which is going to other areas, however legitimate, if you were getting that, it would not affect the judgment that the university has made in respect of this proposal because it is not about the financial viability of chemistry.

Dr Lawless: That is correct.

Professor Smith: I do not accept that interpretation. We have looked at the funding of all of our departments in a new resource allocation mechanism that is fully transparent. When in that model chemistry is attributed with the full QR funding of 1.4 million that it currently gets on the back of the 2001 RAE, and when it pays its share of various central costs, chemistry roughly speaking is in a small deficit or a small surplus, depending on how one attributes some issues. It is absolutely not a financial problem as far as the current year is concerned. When all of the QR funding for chemistry is attributed to chemistry, chemistry on its current faculty is more or less at financial equilibrium. The real issue about QR funding is that, as I am sure you know, QR funding is related to the volume of faculty submitted in the last RAE. The number of chemistry faculty at Sussex is now approximately half of what it was in 2001 and therefore, if there were no change in the funding per unit of quality and if Sussex chemistry in 2008 were judged to be of roughly the same level of quality as it was in 2001, on volume alone, half of that QR grant would go. A major consideration for the university in thinking forward, as I am sure you agree universities ought to do in planning for the future, is that chemistry at the moment is roughly speaking in financial balance but after the 2008 RAE it will lose three quarters of a million pounds of its current income.

Q82 Dr Iddon: That is where we get the figure of 800,000 from. Do you want to respond, Dr Lawless?

Dr Lawless: If that sum had been available since the last RAE and had been invested in chemistry, we would have been able to make those appointments and we would have the volume factor that I was worried about losing in the next RAE.

Q83 Dr Iddon: Does the fact that the RAE is going to be slimmed down and therefore the metrics will presumably be altered, because they are going to be measuring the same metrics on a different approach which we heard last week, make any difference to your planning for the next RAE. Is that a factor you will bear in mind?

Professor Smith: It is. However, looking at some of the key metrics in relation to chemistry at Sussex the metrics would not encourage one to think that switching from the existing RAE to a new metrics based system would favour this. I believe a switch from a QR system based on RAE to a QR system based on metrics is likely to be systematically unfavourable to institutions like Sussex. That is, relatively small, research based universities.

Q84 Dr Iddon: Mr Egan, does it concern you that the QR funding that is identified with a department has systematically over the years, as Dr Lawless says, been used to support other areas causing, as he would see it, the risk to the department that leads to the potential vulnerability of this department? Are you relaxed about that?

Mr Egan: The money that we give to institutions for research is a block grant with teaching. It is for institutions to determine how they stand and allocate that money. In certain circumstances, it would be entirely appropriate for institutions to invest in one area and disinvest in another. Otherwise, you have an ossified system that is not dynamic that responds to the needs of its stakeholders. We believe that the institution is in the best place to make those judgments rather than us in the centre. Our approach is that institutions should make those decisions.

Q85 Dr Iddon: I am flabbergasted. Are you telling us that the department works its guts out for five, six or seven years to get itself in a five star or five position, to get itself the funding to be financially viable and then that funding can be awarded by a vice-chancellor or a senate to another department and let that vital department collapse? That is what I am hearing.

Mr Egan: Yes.

Professor Smith: I do not think it would be sensible for the Committee to go down this route under a misapprehension. I simply do not accept what Gerry said, that in the past the QR grant was somehow being filched to support other activity. If I can repeat what I said about the current allocation of resources, when we transparently allocated to chemistry all of its QR and all of its income from teaching, subtracting its share of central costs and so on, at the moment chemistry is roughly speaking in balance. Two years ago we had many more faculty, more or less the same number of students and the same QR grant. A little bit of simple arithmetic will establish that we had a much larger salary bill and larger research income. Research income, as this Committee well knows, does not pay the full costs of the research activity. We can be confident that if we work back a fully transparent budgetary model from this year, where chemistry is covering its costs, roughly speaking, to previous years we would find that in previous years chemistry had been in deficit, even allowing for the full QR grant being attributed to it. I do not accept that the QR grant has been taken away from chemistry.

Q86 Dr Turner: What about the income from IP and other sources? What is that income stream that is generated by the chemistry department for Sussex and how much of that does the department see? As far as I can tell from the accounts, it is 108,000.

Professor Smith: The IP income earned by the chemistry department is fully attributed to the chemistry department in our resource allocation system.

Dr Turner: I am told it is rather more than 108,000.

Q87 Dr Iddon: We are getting conflicting evidence on this. I am picking up vibrations from members of that department e-mailing me that the whole of the intellectual property earnings for the department, which I gather is probably the largest, if not the largest, IP income for University of Sussex, is not being credited to the department. We need to know as a Committee whether this is true or not.

Professor Smith: The table I have in front of me showing the detailed, full economic financial statements for chemistry for 2005/6 attributes £50,000 of income from intellectual property exploitation to the chemistry figures so they are included.

Q88 Dr Turner: What is the total figure that comes to the whole institution from IP that has been generated by the department? Gerry, do you know that figure?

Dr Lawless: Approximately, for one grant alone, half a million. The amount allocated to the chemistry department last year was 4K rather than 50K.

Dr Iddon: I wonder if we could sort this out because I have conflicting evidence here. I have heard that there is considerable intellectual property going into the university as a result of patents or whatever that chemistry has generated and that it is not feeding its way into the department. It is being used elsewhere in the university. That is what we are picking up. We need to be sure about that.

Q89 Chairman: Could you write to us on this?

Professor Smith: I would be very happy to do that.

Chairman: We are in a confusing situation and we need to have the answers. We will write to you with the questions.

Dr Turner: It would help if we had audited accounts.

Chairman: We will write to you with the information that we want.

Q90 Adam Afriyie: What evidence do you have that chemical biology will be more popular with students than chemistry?

Professor Smith: We do not expect that chemical biology will be more popular with students than chemistry. The proposal to focus chemistry onto areas of chemistry related to the biological sciences was a proposal driven by a belief that the university, for the reasons I have already talked about, was not in a position where the industry could support a full, across the board chemistry department. This seemed to be the strongest area in which to build research strength with a reduced student load. We never imagined that a chemical biology department would recruit students at the same rate that the chemistry department did.

Q91 Adam Afriyie: Is that your view?

Dr Lawless: Yes. We had approximately 350 applicants for chemistry and 15 for chemical biology .

Q92 Adam Afriyie: That is a major reduction in demand.

Dr Lawless: Five per cent.

Q93 Adam Afriyie: What is the evidence that employers are demanding graduates in chemical biology as opposed to chemistry?

Professor Smith: We have to wait and see because the direction in which Sussex has been looking in relation to the future of chemistry is a direction that other institutions have also been looking at. Faced with declining demand for chemistry degrees and difficulty in keeping a full scale chemistry department going, different institutions have looked at different options. We do not yet have a very clear picture of how successful these options are. In the discussion at Sussex over the last few weeks, there have been some things said about the direction in which Exeter has gone, focusing its remaining chemistry on areas related to biology. Some people say that has not worked; some people say it has. Kings College is also looking at going in that direction. It is a relatively new direction for institutions. I think it would be very helpful - Des noticed I got perhaps a bit over excited about the Royal Society of Chemistry earlier on in the discussion - if the Royal Society of Chemistry possibly supported by HEFCE or other otherwise, would ask on behalf of the wider academic community some hard questions about the future shape of chemistry. Is it really the case that if a university wants to maintain chemistry in the future it has to be in the traditional mode of having physical organic/inorganic chemistry; or whether there are ways of making more focused chemistry departments work by focusing in particular area. The relationships between chemistry and biology are perhaps one of the most encouraging ways of going forward now.

Q94 Adam Afriyie: In a way, you are taking a bit of a punt here. If that is the case, fewer students and uncertainty about the demand in this area, what risk assessments have you carried out not just for the course in its own right or the department in its own right but, if this department fails - and there are some big risks here - what would be the impact on the rest of the university?

Professor Smith: The risks are manageable. We are looking here at a relatively small part of the university's provision. All the activities of a higher education institution are at risk. Student demand goes up and down. Research grant income goes up and down. RAE results are unpredictable. Some of them turn out better, some of them worse, than you expected. The scale of risks that would be associated with making a reduced chemistry operation focused on biological, biomedical science is containable within a reasonable university.

Q95 Adam Afriyie: Chemical biology is an interdisciplinary subject. How can you have an interdisciplinary subject if you do not have the core foundation of chemistry or biology underpinning it?

Dr Lawless: It is absolutely impossible. There is not a single example of such a department that merely delivers chemical biology. We have had numerous meetings with the RSC as the head of chemistry, with UK groups and pharmaceutical groups, and there is a clear message out there. What they require are chemists, chemists with maybe an interest in chemical biology. In designing the chemical biology programme which I did, we had 75 per cent of those courses delivered by chemists. The other 25 per cent were by biochemists or chemical biologists. That is the market Chemical biology is chemistry but with an interest in biology or an application for biological problems.

Q96 Adam Afriyie: Judging from some of the comments that you have made, would you favour a complete closure of the chemistry department rather than this alternative? If closure of the chemistry department is on the cards, would you favour complete closure and not bother to open up this biological chemistry option?

Dr Lawless: No. I hope that within the next six weeks we will be able to come up with a very financially viable plan that allows a vibrant, young, forward looking chemistry department to exist at Sussex, because without it I fear that the university as a whole will suffer.

Q97 Adam Afriyie: You are hopeful?

Dr Lawless: I am very hopeful.

Q98 Adam Afriyie: Professor Smith, are you hopeful that you will have a vibrant chemistry department?

Professor Smith: I am always optimistic. If that were the outcome of the discussions over the next six weeks, I would be delighted.

Q99 Adam Afriyie: What role does HEFCE play in these discussions? Are they instrumental in whether or not chemistry survives?

Professor Smith: No. This is an issue we have to sort out for ourselves. HEFCE are very helpful in dealing with the cross-institutional issues when one looks at closure or major changes of programmes but institutions have to take the lead themselves in looking at making the kind of provision they want to have viable. If I can backtrack one step and draw attention to what I see as quite an important difference between chemistry and some other sciences, which is quite relevant to this discussion, lots of sciences are under pressure. You asked earlier about physics. Physics in Sussex has very successfully reshaped itself. It did so primarily when five years ago it was faced with declining student numbers. It reshaped itself by completely withdrawing from some areas of physics. Sussex does not do any solid state physics or any material science. Physics in Sussex concentrates on astronomy, particle physics and atomic physics. The physics community is happy with that. It will look at the Sussex operation and say that it is specialising at the high brow end of physics; it is really good at it and that is fine. At least the initial response from the chemistry community to a proposal to focus chemistry in one particular area of specialism within chemistry is to hold up its hands in horror and say, "That is impossible." Chemical biology requires to be supported by the rest. If that is objectively the case, then it is objectively the case, but it does imply it seems to me that managing chemistry is inherently more difficult than managing the other sciences. The other sciences seem to be more flexible. Issues of critical mass are less pressing. The traditional view of chemistry is, because we need the full range of chemistry in a functioning chemistry department and each of them needs to operate at a level of critical mass, a good chemistry department must therefore be a reasonably big department. That poses real challenges to institutions that are not recruiting enough students to support a big department. It is a more difficult problem than exists in physics. It would be quite good for the chemistry community to reflect on those issues and look hard at the question whether it is possible to look for the kind of flexible approach to excellence in teaching and research that has been achieved in other subjects.

Q100 Chairman: Surely if the academic leading this change - in this case it was the Dean of Life Sciences - says about the plans they are intellectually unviable and unworkable, you would simply drop it, would you not?

Professor Smith: No. We look at alternatives. The original plan for a department of chemical biology ----

Q101 Chairman: That is now dropped?

Professor Smith: Yes, but we are still looking for other flexible solutions which would include solutions in which a reduced size of chemistry department focused on a more limited range of areas of chemistry.

Dr Iddon: I do not think you can directly compare chemistry with physics. We would support physics as well on this Committee. The fact is that chemistry, like engineering in a way, requires a lot of expensive space for its undergraduate and postgraduate laboratories. You mentioned astronomy and particle physics carried out at your university. Many of those physicists carrying out that kind of research go externally to do their work, to SERN or CCLRC facilities.

Chairman: I do not want to get into particle physics. It is bad enough with chemistry.

Q102 Dr Harris: The main point is that you are graduating students in physics, not astronomy, not astronomical physics, but physics. Gordon Brown has just announced that he wants 3,000 more science teachers. Presumably on the basis of what HEFCE's policy is, you are going to have to write to him and say, "You are not going to get that because the market is not interested." He can say what he likes. If the market is not interested in turning out science graduates, it is mere sloganising and aspiration, is it not?

Mr Egan: No. I have said that we will intervene in order to correct the market so that it can deliver what is required when we are able to do so. It is not always in our gift to do that. We have a series of joint schemes with the research councils to increase the supply of ----

Q103 Dr Harris: I understand that but I think you misunderstand my question. Your idea of the market is what the student demand is to study and what the sector supplies in terms of places. I hesitate to say it but I take perhaps a similar view to Gordon Brown. We should be looking at what the policy objective is in terms of the output for the UK, given that this is almost all taxpayer funded, and therefore the market - if you want to call it the market - is supposed to work to deliver that policy of stem graduates, not have a match of whatever students want being matched. You are more prepared, it seems to me, under the current policy - maybe the letter you get from the Secretary of State for Education tells you this and not your own view - to see policy failure than market failure.

Mr Egan: No, that is not the case. Where the market does not deliver the policy objective, I am suggesting that we would intervene in order for that policy objective to be achieved. In many cases the market is efficient and does deliver the policy objectives but in these cases, in the stem subjects, it does not.

Q104 Dr Harris: I have not seen a policy objective for media study student output. It may be that is what the market produces but I have not seen - and I do look at government policy - anything on psychology and media studies. I have seen year after year a decline in chemistry graduates for years and years. If you are now redefining that as failure as far as you are concerned, what have HEFCE been doing? I put it to you that you have only seen it in terms of matching student demand to places and you are not looking at what you should be looking at. Maybe your sponsoring department is not looking at it.

Mr Egan: I think we are looking at it in those policy terms. We are taking a number of initiatives in order to achieve those policy objectives. We are very pleased with the announcements that Gordon Brown made about the interventions in schools. That will have an important knock-on effect to higher education and will enable a throughput of students that will then take up postgraduate work and help with the academic supply of staff in stem subjects.

Q105 Dr Harris: There are some students who are not that well off and do not want to get into as big a debt as they might under current policies. They might want to live near their university. If they live near the University of Sussex, if these schemes work, they will say, "Great. I am going to study chemistry and I am going to study at my home university. Oops, no. I cannot." Are not all your grand schemes to encourage student demand, if this department closes, shutting the stable door after the horse has died?

Mr Egan: If Sussex University closes its chemistry course, the availability of chemistry in that locality is reduced. What we need to do is to find other methods of individuals being able to pursue a chemistry career should they wish to do so. The options open to us are limited because we are not a planning body; we are a funding body. We cannot force any institution to teach a subject that it does not wish to.

Q106 Chairman: In 2004, the Secretary of State was quite clear that he was concerned about the closure of departments of strategic importance, particularly in the stem subjects. He made that absolutely clear. I think he asked HEFCE to do something about it. What you have said to us today is that you have no powers to do anything to intervene at all. You just allow the market to take place. If a university asks for help you will give it, but you have no way of diagnosing what is going on within the whole system. When the Chancellor of the Exchequer says he wants 3,500 more science teachers, it is purely at the whim of the market as to whether that is going to happen. Sussex can close its chemistry department and we will lose the ability to train future chemistry teachers to graduate level. You seem to be totally powerless to do anything about that. Is that yes or no?

Mr Egan: It is not a simple yes or no. We cannot force institutions to teach subjects that they are not willing to teach.

Q107 Chairman: You have not done anything.

Mr Egan: We have taken a wide range of measures in order to mitigate the effects of the market that are not producing the policy objectives that this country needs.

Q108 Chairman: Do you need more powers?

Mr Egan: If we had more powers, we would be able to intervene.

Q109 Chairman: Would you like more powers? We will give you the job if you answer this right.

Mr Egan: In certain circumstances, yes, we would.

Professor Smith: The issue is not about whether HEFCE have the right powers but about the kind of policy intervention needed in order to address the fundamental issue we are looking at here, which is not about whether one particular department in one particular location should be opened or closed. It is an issue about the demand for places in the subject. There are a wide range of policies which the government has adopted in recent years, for example, in relation to attracting students into teaching, that are the right kind of policies because they are policies to attract students into these subjects and into teaching these subjects. I thought it emerged rather clearly from your previous analysis of these issue that that is the kind of policy intervention that we want to have, policy intervention that encourages more students to come into these subjects. That is where we want to focus rather than focusing on whether HEFCE should or should not intervene in the supply of provision. It is student demand, not provision of supply, that is the real issue.

Dr Lawless: I would like to reassure Dr Harris that applications for media studies are down ten per cent this year. Applications for psychology ----

Q110 Dr Harris: I am not going to cheer because the media are present.

Dr Lawless: Applications for psychology are down six per cent, whereas applications for chemistry are up six per cent.

Q111 Dr Turner: I did trace almost a hint of optimism a little while ago. Gerry, what sort of size do you think the chemistry department can be reconstituted to, albeit with a few biological tinges, which will not stretch the university's own finances? What size would that department be? Can I ask Alasdair to tell us whether he is not determined - perhaps he is determined - to downsize chemistry and whether he would be prepared to back such a proposition if it emerges, bearing in mind that if it is going to work it has to have long term commitment from the university?

Dr Lawless: A department comprising 23-25 academics would be viable financially. You are absolutely right. Without commitment on the part of the university to long term sustainability, we would be wondering from one year to the next whether we were the next to shut this year, the following year and the year after. Yes, there would have to be some commitment on the part of Alasdair to something long term, provided it was a financially robust plan. We are not asking for charity here. We are saying, "We will present you with a financially viable plan for chemistry. Will you accept it?"

Professor Smith: Des, you are not going to expect me to accept a plan I have not seen yet?

Q112 Dr Turner: Assuming it is a financially viable plan.

Professor Smith: It would have to be compared with proposals from other parts of the university for investment. A plan to invest ten additional posts now into chemistry to take it from its current size to the size that Gerry would like to see in one step would be most unlikely to be feasible because it would deprive us of the opportunity of making significant investments in other areas of provision within the sciences. If the plan that comes forward is a more phased plan that gets there eventually, then yes, we could look at it.

Dr Lawless: I was not proposing any disinvestment in other departments at all. I was proposing that the income for these posts would be sought outside the normal university.

Chairman: On that note of relative harmony where this plan will emerge in the next few weeks for all and sundry to look at, could I thank you enormously, Mr Egan, Dr Lawless and Professor Smith, for what has been an interesting and enlightening session. I hope you have enjoyed it as much as the Committee has. Thank you for being so honest and for keeping your temper whilst the questioning has been going on.