Select Committee on Innovation, Universities and Skills Minutes of Evidence


Examination of Witnesses (Questions 80-99)

SIR LESZEK BORYSIEWICZ, DR MARK WALPORT, PROFESSOR MALCOLM GRANT, AND MRS LYNN ROBB

17 DECEMBER 2007

  Q80  Graham Stringer: So you are in discussions with DIUS and the Treasury about the overall project?

  Sir Leszek Borysiewicz: Yes.

  Q81  Graham Stringer: Can you tell us what stage those discussions are at?

  Sir Leszek Borysiewicz: They are preliminary discussions at the present time.

  Q82  Graham Stringer: You said it was only an initial estimate, the £500 million, which does not include the land costs. The nature of these projects is that they tend to inflate. How confident are you that you are even in the right ball park with that £500 million?

  Sir Leszek Borysiewicz: We have sought external advice in relationship to that, and obviously that advice is commercial at the present time, but we are reasonably confident that those figures are robust at this stage in discussion, although I do very much take your view that one has to be very careful because of the way in which inflation will eat into this. What is very critical on this pathway is obviously to make sure that we can stick to a very rigorous timetable in relation to the scrutiny so that we do not allow for slippage and therefore the additional cost that inflation would incur.

  Q83  Graham Stringer: Have you appointed a design team or project management team yet?

  Sir Leszek Borysiewicz: At this point, no, we have not.

  Dr Walport: There is an OJEU procurement going on. I am not sure what OJEU stands for.

  Professor Grant: Official Journal of the European Union.

  Q84  Dr Gibson: Have you a fancy architect in mind? That will cost you a bob or two.

  Dr Walport: I think we will have a good architect but we have not decided yet.

  Sir Leszek Borysiewicz: What is really important is to make sure that we can establish the science that needs to be there so that when we draw up a reasonable brief the designers and architects can work to a brief which has taken into account the scientific utility of this particular site. That is the key thing for us at this point to establish.

  Q85  Graham Stringer: So when do you expect to appoint project managers and design teams?

  Sir Leszek Borysiewicz: That is why we are at the present time looking in a timetable which I would expect to be completed during the first half of next year.

  Q86  Chairman: I would like to come in on two points of clarification. First of all, it seems to me that in terms of the build-up of the resource there are a number of unknowns. The money from Wellcome is known, the money from Cancer Research UK is known, I presume that the university is putting some money in, which we have not mentioned yet, but that is known.

  Professor Grant: I did mention it, Chairman. We are proposing to put in up to £46 million.

  Q87  Chairman: That is £46 million so that is known. The two bits that are the big unknowns that Graham Stringer has referred to are, first of all the money from the Large Facilities Capital Fund, and you say you have not even begun negotiations with the Treasury, or indeed with the Large Facilities Capital Fund over that, and the second bit, which you have not mentioned, is the money which the MRC has in its own accounts, which I understand is over some £200 million. Is that money still there?

  Sir Leszek Borysiewicz: We do not have £200 million at the present time.

  Q88  Chairman: What have you got?

  Sir Leszek Borysiewicz: At the present time the amount that we have in reserve is £106 million. It is going to be declared in our accounts which I understand are going to be laid before the House tomorrow.

  Q89  Chairman: What has happened to the rest?

  Sir Leszek Borysiewicz: There has been a change in the rules that are being applied to our reserve at the present time. What has happened is that Treasury are now considering the monies that we had set aside for this as part of the normal departmental allocation and is therefore moving some of this to a Treasury fund. That way £92 million is being moved.

  Q90  Chairman: So £92 million is being taken out of the savings that MRC have been making in order to bolster up Treasury funds elsewhere? Is that true?

  Sir Leszek Borysiewicz: Treasury is taking—

  Q91  Chairman: Is that a fact?

  Sir Leszek Borysiewicz: That is a fact in the way in which you put it. What is happening is that Treasury believe that there is a set of rules that they wish to apply to this money. Those rules were extant beforehand but they had not applied them up until this point. They have now changed their view and wish to apply them to the monies that have been saved.

  Q92  Dr Gibson: Why have they suddenly enlightened us with this discovery?

  Sir Leszek Borysiewicz: If I may be so bold, probably you should require that to be answered by Treasury rather than myself.

  Q93  Chairman: The point I am trying to get, which is very important indeed, is that this Committee has been told over a number of occasions is the bedrock on which the MRC is able to put roughly £250-£300 million into a major project and you are saying that a third of that has just been taken away?

  Sir Leszek Borysiewicz: Yes. It is closer to a half.

  Q94  Dr Turner: That merely adds to the uncertainty around the financial package. Given the way the costs inflated on the NTH proposal, they reached a limit of £360 million before it fell, there is another factor which I hope you have taken into account in your costs which has not been present in the past, and that is that you will be doing this work, if it happens, at a time when the building industry in this country is having an Olympic boom which will obviously make it more difficult to get hold of the best contractors and will also increase prices. Have you factored that into your plans?

  Sir Leszek Borysiewicz: That has been factored in at the standard rates that one would apply.

  Q95  Dr Turner: Is there a standard rate for the Olympics?

  Sir Leszek Borysiewicz: There is an anticipated rate, I think would probably be a better way of looking at it, because it is almost impossible to say how big that boom is likely to be, but it is usually factored in at about 8-12 per cent..

  Q96  Dr Blackman-Woods: My first question is to Mrs Robb. What has been the reaction of the staff in the London laboratories to the news of the new location?

  Mrs Robb: Our staff have been incredibly positive. They do see that this is a really good time for us to get involved in a venture such as this and see the opportunity of (a) a new world-class facility and (b) a step change in the size of the institute and the work that they will be doing and all the collaboration and additional work that that brings for them, so our institute are very strongly behind this and are very interested in it.

  Q97  Dr Blackman-Woods: Do you know what you are going to do with the vacated labs?

  Mrs Robb: We are looking at how we can dispose of that site because, obviously, that is going to form part of our funds to finance the build, so we will be vacating the central London site as well.

  Q98  Dr Blackman-Woods: Sir Leszek, how were your staff at NIMR consulted on the development of the whole new vision for their future?

  Sir Leszek Borysiewicz: I have met with the staff on two occasions since taking up my position, the last time last week as soon as the announcements were made. It was the earliest possible time I could have met with them. My overall sense is that there is some excitement about the vision. I think there is apprehension, with the history that NIMR has been put through, so there is considerable apprehension by staff. I believe that it is going to be up to us to ensure that we can convince them that this can go ahead and that the science is not going to be impacted on adversely, but I do believe that we can bring the staff with us once they can recognise that this vision can become a reality.

  Q99  Dr Blackman-Woods: What is the balance, do you think, at the moment between excitement about the future and anxiety?

  Sir Leszek Borysiewicz: I have not done a straw poll of the staff. I would love to know, but, as in all these projects, there is a diversity of opinion and both sets of opinions have been expressed to me.


 
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