Select Committee on Science and Technology Written Evidence


Submission from the Office of Science and Innovation


  The Committee has raised two questions about the Winter Supplementary Estimate:

(1)   RfR2 subhead O shows a £30 million (6%) increase in funding for the Medical Research Council. The Committee would like to receive further information on how this increase in funding will be used to help meet the overarching objective of creating a "more strategic approach to health research" stated in the Cooksey Review and in the Chancellor's Pre-Budget Report.

(2)   RfR2 subhead N shows a £12.763 million (2%) increase in funding for the Engineering and Physical Sciences Research Council (EPSRC). How will the additional funding be utilised by the EPSRC?

  The £30 million funding for MRC and £10 million of the funding for EPSRC both relate to return part of the £115 million Science Budget loan made to RfR1 from RfR2 in the Winter Supplementary Estimate 2006. DTI's Estimate Memorandum dated 10 February 2006 explained this budgetary loan and OST provided a further note to the Committee dated 17 February 2006. All the funding is being utilised to fund the on-going programmes of the two research councils. None of it relates to the Cooksey Review (which is not expected to impact on funding until 2008-09 at the earliest).

  The original loan involved the drawdown of near-cash resource EYF from the Science Budget. £40 million of the loan is being repaid in 2006-07 in the form of capital. This switch from near-cash to capital could be accommodated within the Science Budget because the delivery plans for both MRC and EPSRC were showing that, within their existing allocations, they were expecting a higher level of capital expenditure which would otherwise have required them to vire from near-cash resource to capital.

  The loan repayment of £40 million capital is recorded in the Winter Supplementary Estimate as a (temporary) increase in the Science Budget for 2006-07. It is shown as allocated to MRC (£30 million) and EPSRC (£10 million). It is not an increase in the overall level of funding provided to MRC and EPSRC but, in effect, represents a drawdown of EYF by those two Councils. The near-cash EYF balances of MRC and EPSRC are reduced by £30 million and £10 million respectively.

  The other funding for EPSRC—£2.763 million—represents a technical transfer from RfR1 in respect of payments made by EPSRC in funding fusion research activities in the Culham Laboratory. The payments are in respect of certain of the staff who are members of the AEA pension scheme. Following a recent assessment of the pension fund, under the Treasury "SCAPE" (Superannuation Contributions Adjusted for Past Experience) methodology, AEA were required to make an additional payment in respect of their current employees. The funding for this increase was provided to RfR1. The £2.763 million is to enable EPSRC to pay its share of the additional funding.

January 2007

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