Examination of Witnesses (Questions 76
- 79)
MONDAY 21 JANUARY 2008
PROFESSOR IAN
DIAMOND AND
PROFESSOR KEITH
MASON
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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