Select Committee on Innovation, Universities, Science and Skills Minutes of Evidence

Examination of Witnesses (Questions 76 - 79)



  Q76  Chairman: Could I welcome our second panel of the afternoon who have been sitting quietly, listening and observing. Professor Ian Diamond, the Chairman of Research Councils UK and Professor Keith Mason, Chief Executive of the Science and Technology Facilities Services, welcome to you both this afternoon. Could I start with an obvious question? Who is to blame for the STFC being £80 million in deficit?

  Professor Mason: Firstly, I do not think there is anybody to blame. It is not a blame situation. We have, as we all know in this room, a rather good settlement for science but it was only constant volume and in the current economic climate that is nevertheless a good outcome. You know that FEC was a big component of that and that puts real money into universities. When we consulted on this a number of years ago it was quite clear that the universities would prefer to put their programmes on a sustainable basis rather than to increase the volume. We all accept that as a good thing. The other aspect of course, is that DIUS made a decision to support medical research and we all know why and so MRC got a settlement which corresponded essentially to increased volume and that implies that every other research council has to have an increase which is less than that. In other words, we were not able to maintain volume and in most cases when you take FEC out we are pretty close to flat cash. That is certainly the case STFC; it is certainly the case for EPSRC. If you just do a simple mental calculation as to what flat cash actually means in the context of an inflationary scenario, if we take an inflation index of 2.5%—which is the usual number—then it is not hard to figure out that on a £400 million budget—which is what our near cash budget is—then the impact of inflation erosion over three years is £60 million, which is virtually the sort of numbers we are talking about in terms of the so called deficit. I have to say that to correct Tony's assertion that we are actually moving money from one place to the other. Basically what we are doing is filling in the hole created by inflation over a three year period and every other research council has that problem too. Essentially we have to be more efficient, to do more with less by that amount. You may recall when I appeared two years ago in front of your predecessor committee I said at the time in the context of PPARC that if we had another flat cash settlement we had no alternative but to reduce the breadth of programmes that we undertook. What we have now is exactly that situation.

  Q77  Chairman: I would agree with all that you have said so far, Keith, but why, given that scenario which you have predicted for two years, have you not then been in deep consultation with the very people that you have now suddenly sprung these cuts on?

  Professor Mason: I think there is perhaps the danger that it is a self-fulfilling prophecy to an extent but I would disagree that we had not been in consultation with people. The statement I made to you two years ago I have also made to the PPARC community in that context because I was CEO of PPARC at the time, and I made it in very strong terms. It is rather surprising when we get the settlement—which has been known since April—that people did not realise that a flat cash settlement of that sort would imply some programme cuts.

  Q78  Chairman: You have two committees set up with your new organisation at STFC and you are saying to the members of those committees that you cannot even speak to your community. That is not consultation, that is something we would find in Russia.

  Professor Mason: I disagree. Firstly I think we do consultation extremely well in STFC; I am very proud of the peer review system that we have set up, it is very effective, it does involve the community, it involves people who are able to look across the whole programme and I think it is a very good system. However, the period of time we are talking about is essentially a period where all the research councils are making bids to DIUS for funding and one of the reasons for so-called secrecy—or at least keeping this under wraps—is that it was a negotiating situation and I think to ensure a level playing field DIUS quite rightly insisted that these negotiations be taken under wraps because otherwise one would have had lobbying from all sorts of corners of the scientific community which would not have been necessarily helpful to a proper outcome.

  Q79  Chairman: The big issue here—you will pardon me if I and members of the Committee have got information from other sources which may be wrong—is that this is really a cock-up. In reality, if we take the Diamond Light Source, for instance, you have failed to calculate the costs of actually running that once it goes into full operation.

  Professor Mason: That is simply not true. The costs of running the Diamond Light Source were established when Diamond Light Source Ltd was established in 2003. They were correctly determined at that point and they have not changed so these numbers have been known for a long time.

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