Submission from the Office of Science
The Committee has asked questions in respect
of EPSRC, ESRC, MRC and NERC (unless otherwise stated). Responses
are set out below.
A breakdown of the EYF stocks, including amounts
drawn down and carried forward in each year since 2000-01.
The attached table at Annex 1 shows the EYF
balances for the four Councils since 2000-01. The RAB regime commenced
in 2001-02, so the EYF amounts for 2000-01 were originally captured
on the basis of shadow RAB records and some EYF amounts were low
or zero. Until recently, there was not a formal distinction between
resource near-cash and resource non-cash in the EYF records but
we have included a breakdown wherever possible. The adjustment
to the previous year's outturn is the final post-audit adjustment
to what were provisional ie pre-audit figures. The adjustments
to cumulative outturn are, in effect, changes to the allocations
to Councils made as part of the SR2004 allocation process. The
annual totals show a trend of EYF balances building up but OST
and the Councils have recently been working at driving the balances
A note explaining the use being made of stocks
of End Year Flexibility brought forward from 2004-05. This should
include a breakdown of amounts drawn down so far in 2005-06, including
amounts both approved in the Winter Supplementary Estimate and
sought in the forthcoming Spring Supplementary Estimate.
The following table shows the EYF drawn in 2005-06,
and the breakdown by category.
|£,000||Resource Near cash
We are informed by the Councils that:
ESRC has drawn £2 million EYF to fund capital grantsthese
are on major surveys to create international datasets. Because
they have no available capital grant EYF balance brought forward,
the Council has drawn resource near-cash and is has vired the
requirement to the capital grants budget.
EPSRC did not draw down any EYF but did use the Supplementary
Estimate process to transfer £14.981 million from resource
near-cash to capital grants.
NERC has drawn £10.6 million resource non-cash EYF,
which is mainly for the Centre for Ecology and Hydrology (CEH)
restructuring and Halley V decommissioning but also for increased
depreciation, and £2.3m of core resource which is needed
to compensate for loss of income relating to the restructuring.
For MRC, £2.9 million of capital EYF is needed for construction
of the Laboratory for Molecular Biology and also for refurbishment
projects at the Animal Health Research Institute. £9.7 million
of resource EYF is needed for initiatives which had slipped from
previous years; £10.2 million of non-cash EYF is required
for MRC restructuring provisions and also for non-cash costs relating
to the additional capital mentioned above.
The latest DEL Outturn Statements, or similar management
information, for the nine months to the end of December 2005,
along with a note explaining a) any significant variances in actual
income or expenditure against the budgets and b) any anomalies
in spending patterns throughout the year which may influence the
The end-December 2005 monthly management returns for each
of the four Councils are attached at Annex 2. The expenditure
figures are shown net of income, as required by the budget framework.
(a) Commentaries on the variances between net expenditure
and budgets (including EYF drawn down) based on information from
each Council are as follows:
ESRC: Forecast outturn on resource is an overspend of £1.7
million and on capital, an underspend of £2.6 million. These
are relatively minor variations against budget.
EPSRC: Forecast outturn on resource is an underspend of £21.8
million; which has arisen as a result of the misinterpretation
of the original forecast in relation to drawdown of EYF (£21
million). On capital, a small overspend of £0.8 million is
forecast which will be resolved by virement from resource.
MRC: Forecast outturn on resource is an underspend of £11.1
million; this is due to downward revisions in Institutes forecasts
of spending on their research activities, and also a net £4
million reduction in Head Office and Corporate costs . On capital,
an underspend of £6.9 million is forecast is due to slippage
in project spend.
NERC: Forecast outturn on resource is an underspend of £8
million; this has arisen mainly because of slippage in collaborative
centre contracts and directed programmes (£12 million), offset
by increase spend on capital grants (£5 million). On capital,
an overspend of £0.8 million is forecast which will be resolved
by virement from resource.
For the purposes of these reports, all Council budgets are
flat profiled across the year ie equal amounts each month. But
in practice Councils spending varies month-by-month depending
on the precise timing of calls for proposals and decisions on
research grants. Several Councils, including MRC and NERC, forecast
higher levels of expenditure in the final quarter of the year
(January to March).
A note on the reasons why the MRC received a budget in excess
of its needs in respect of its non-cash resource budget.
Following the requirement for "shadow" accounting
within AME for non-cash in the SR2000 regime, MRC found that they
had over-estimated their requirements for the years of the SR2002
settlement. This resulted in the non-cash under-expenditure referred
to. This amounted to £6.8 million in 2003-04 and £15.7
million in 2004-05. This position is being corrected in the SR04
A note on any instances in other Research Councils when there
has been significant under-funding of, or over-provision for,
non-cash costs over the last three years.
Individual Council variances of £1 million or more are
NERC have non-cash EYF of £25.5 million brought forward
from 2004-05. This relates to provisions from the pre-RAB era
which have subsequently been unwound resulting in the re-crediting
of non-cash resource.
BBSRC overspent on non-cash in 2004-05 by £17.9 million,
mainly because of exceptional provisions required in that year.
CCLRC overspent on non-cash by £26.7 million in 2004-05
as a result of exceptional provisions for restructuring.
PPARC underspent on non-cash by £2.9 million in 2003-04
and by £2.5 million in 2004-05 in order to create an EYF
reserve for later restructuring.
EPSRC underspent on non-cash by £4.6 million in 2003-04
and by £4.3 million in 2004-05, in order to create an EYF
reserve for later spending.
A note comparing the budget allocated to MRC for non-cash
costs to non-cash outturn for the last three years.
The following table shows the relevant figures for 2003-04
and 2004-05. For 2002-03, non-cash was not a control total in
the then RAB regime.