Examination of Witnesses (Questions 100
MONDAY 21 JANUARY 2008
Q100 Dr Turner:
On the face of it the 17.4% headline increase for the research
councils is very good news, but we have actually got a PR disaster
in practice. How do you think we got here?
Professor Diamond: Let me start
by saying very clearly that I think it is good news in the context
of this spending review. It is an affirmation of the Government's
support for science and, within that, a clear view that science
can help to provide not only the brilliant science that we do
but also economic impact and the quality of life improvements
for the people of this country and indeed other countries. In
saying that there is then a decision as to how that should be
allocated and clearly some decisions were originally made around
the funding for transformational medicine which were supported
and secondly full economic costing was, in this spending review,
fully involved in all the funding decisions. I think we have to
go back to 2003 when the original consultation around full economic
costing came in and at that time all senior managers in the university
community, properly consulted, said they would prefer to have
sustainability of funding through full economic costing than an
increase in volume. I think it would be unrealistic to have expected
that this spending review would have resulted in anything other,
particularly as after full economic costing it was flat cash,
than a reduction in volume. I have to say that across all research
councils there is a degree of reprioritisation taking place and
difficult decisions are being made. That there has been what you
have described as a PR disaster I think is unfortunate.
Q101 Dr Turner:
I have the suspicion that the 17.4%, although looking quite an
impressive figure, is not that impressive because inflation for
scientific research is not the same as inflation in the normal
Professor Diamond: We would agree
with that entirely.
Q102 Dr Turner:
It is in fact significantly higher. Is that a factor which is
adequately factored into these sorts of calculations?
Professor Diamond: It is a factor
which we have to take within the research council community as
an important issue when we are allocating our resources to our
different funding areas. That is why across all research councils
you will see reductions in success rates and reductions in volume.
Having said that, more real money will be going into the universities
for research because of full economic costing and the universities
will have real increases in funds so long as they are successful
in the competitions that take place. It is then for the universities
to make strategic decisions on how this extra money, over and
above inflation, is funded.
Q103 Dr Turner:
The implication of what you have just said is that unfortunately
we are going to see a diminution in the volume of projects that
get funded and in fact we are starting to creep back towards the
situation which most of us came into this place where a depressingly
small percentage of alpha-plus projects in 1997 were getting funding.
Professor Diamond: I have to agree.
I am absolutely clear in my mind that in every research council
over the next few years there will be some of the most depressing
letters that research council personnel have to write and that
is, "I am terribly sorry, because of the budget we cannot
fund this alpha-plus rated project". That is an incredibly
difficult letter to write. You cannot explain why this grant was
not funded, it is simply that a decision has had to be made that
this falls slightly below the line. That means that world-class
science will not take place. I have to agree with that, but at
the same time extra money will be in the universities and the
universities will have the opportunities to provide some kind
of flexibility which may allowbut that will be for them
to decidesome research to take place.
Q104 Dr Turner:
It is a message which needs to be sent back to government, is
it not, that if government policy, ie to grow and enhance British
science, is actually going to mean anything it is actually going
to cost more than the Treasury has put in so far.
Professor Diamond: In welcoming
the amount of money that has come, I have no doubt in my mind
that higher percentages would have resulted in very much more
world-class science taking place. There is absolutely no doubt
at all in my mind that all councils could very wisely spend more
funds on truly world-class science. World-class is very much overused,
but really cutting edge science. I am using science here right
the way across arts and humanities, right the way through the
Q105 Mr Boswell:
Is the logic of what you have just said that as we have started
with what might be called a quite serious apparent situation in
STFCalthough you have explained the reasons for thatwe
can look forward to similar situations arising in other research
councils, possibly on a predicted, possibly on an apparently somewhat
random basis as they restructure their affairs to meet the new
situation over the next year or two. Is this just the first of
Professor Diamond: Each council
has its own strategy and each council broadly has a flat cash
after full economic costing settlement. That means that each council
will need to be very careful about how it manages its affairs.
I suspect there will be reductions in success rates across the
board. The way in which that impacts on different councils and
therefore on different individual disciplines may work in different
ways so that for councils which have one responsive mode it would
not impact on an individual discipline but on those at the margin,
whereas those with specific areasfor example in STFCit
is perhaps a little more visible on a particular discipline.
Q106 Dr Turner:
Can you tell us something about the process of negotiating this
research settlement? Were the heads of research councils involved
in negotiating this? How did it evolve?
Professor Diamond: Late in 2006
each council was invited to set out priorities in the broadest
sense for the then Office of Science and Innovation. These were
discussed in a set of bilaterals in late 2006 and early 2007.
In May or June of 2007 each research council received a formal
letter with a template for a draft delivery plan and as part of
that each council was invited by DIUS (or it may still have been
DTI) to provide four scenarios, each of them after full economic
costing: one, how you would manage a 5% cut after full economic
costing; secondly, how you would manage flat cash; thirdly, what
you would do with an increase of 5%; fourthly, what you would
do with an increase of 10%. Each council provided those scenarios
by early July. The allocations were then announced, as you know,
in October and we were invited by the end of October to submit
the final draft delivery plan on the basis of those allocations.
Q107 Dr Turner:
So those of you like Keith, who have to take some fairly tough
cuts, were invited to help construct their own decimation, as
Professor Diamond: We were all
invited to provide a strategic plan effectively of how we would
manage various scenarios of budget over the spending review period
and that required some deep thought and some consultation within
Q108 Dr Turner:
Keith's council is going to be immediately hit by the loss of
protection against currency movements, over and above the pain
that Swindon Town is already suffering, especially the pound against
the euro, that is going to cost heavily. How did this come about?
Who negotiated that?
Professor Diamond: I think you
would have to ask Keith about that particular issue.
Professor Mason: Let me just describe
the previous situation and the current situation. The previous
situation was that the liability for exchange rate fluctuations,
GPD variations fell on essentially the science vote in total so
it was essentially top sliced at the RCUK level. Essentially AHRC
would suffer if the subscriptions were to change. In the current
round it was argued that it was more appropriate to put that risk
onto the user councils, that is STFC and NERC, so we now have
a situation where we are liable for the first £6 million
of any variation and beyond £6 million there is negotiation
at the next spending review basically to undertake how that is
split more widely, with a wider base. Our risk is capped but it
is at the £6 million level and it does contribute some £10
million over the three years to the so-called £80 million
that we are talking about. In other words, we have to allow for
that risk; we have to allow a contingency for that risk. The previous
arrangement was that that risk was carried by all the research
councils collectively. This does lead to some non sequiturs as
I think I have described in one of my previous appearances in
front of your predecessor committee. We are in the situation,
as I think one of the earlier witnesses said, that if the economy
of the country does really well we can actually do less science
which does not feel right to me. There is no easy answer; it has
to be borne at some level and it is a question of whether you
see these subscriptions as something that benefits the physics
community or something that benefits the nation and I can argue
the case as you wish.
Q109 Dr Iddon:
There is something in this debate I do not quite understand. We
have all supported full economic costings as being part of research
grants; there is no argument about that. You are having to find
the money to do that and it is causing pain, we can all see that.
However, somebody was supplying the money to carry out that research
at universities before. It may not have been as much money as
you are now providing through full economic costs but the universities
were actually supporting research. Where has that money gone that
was supporting research previously? Has it been transferred to
the science budgets? That is an argument I do not understand.
Professor Diamond: The money that
was in the universities or the fact that the universities were
Q110 Dr Iddon:
Professor Diamond: You would need
to ask the vice chancellors that. The one or two that I have asked
have said they were running at a loss and managing at best they
could. Now they are able to fund research as it should be funded.
The one thing I can say to you is that the research councils are,
as we have said over the last couple of years that we would always
do, just about to start a review of full economic costing, its
process and what it is being spent on. That report will report
round about September or October 2008 and I would be delighted
to send you a copy as soon as it is finalised. We are all very
comfortable that the process is working but I think that will
enable us to answer that question of exactly what the funds are
being spent on now.
Q111 Dr Iddon:
Vice chancellors are always maintaining that teaching was subsiding
research. We would expect to see the teaching budgets increase
significantly this year if that is the argument the VCs have used
in the past.
Professor Diamond: I think you
would have to ask the vice chancellors that question.
Q112 Dr Turner:
The Royal Society has suggested an independent group of experts
to advise the Director General of Science and Innovation on science
budgets. Do you support that suggestion?
Professor Diamond: As I understand
it that is a return to the position in the late 1980s and early
1990s. I have to say that my own sense is that this allocation
has been undertaken extremely professionally and that the research
councils were given the opportunity to present the case not only
for the individual councils' science but also Research Councils
UK presented a draft delivery plan, although there was a budget
and the idea there being to highlight the cross-council priorities
that were seen, for example, around some of the real cross-council
programmes in energy and environment for example. The process
was done incredibly professionally and used the budget in a reasonable
way. Whether one would have got a different answer had there been
a group of wise people advising the Director General, I am not
able to say.
Professor Mason: Let me just add
to that that in my view I do not see evidence that the outcome
would have been any different.
Q113 Dr Turner:
Finally, the Wakeham Review. We know its terms of reference and
it is entirely possible that it will come up with some conclusions
that will have funding implications but for the next three years
you do not have any available. How do you see yourselves responding
to the physics review?
Professor Diamond: I think it
is worth saying that no sooner has one spending review finished
than the next one starts. Certainly the Wakeham Review will report
as we are in the thrust of preparing the case for the next spending
review and it will have an opportunity to feed into that case.
The second thing I would say is that we will wait and see what
the Wakeham says before answering firmly that question. I think
it has an interesting and exciting set of terms of reference to
enable us properly to look across the entire spectrum of what
is physics research and how it contributes right across the five
research councils which currently provide funding in physics.
Q114 Dr Gibson:
Why has it not happened before the Wakeham Review? None of this
is new really. Physics has been having trouble for years, getting
students at one time when you gave students new programmes and
so on. Why are they putting it in now? Is it just a smokescreen
for the real problems?
Professor Diamond: RCUK, as I
am sure you will have seen from our Health of Disciplines Annual
Report, has looked very carefully at the health of all disciplines,
particularly looking at the demography of the academic community.
Why do you need to do it again then?
Professor Diamond: What we have
not done until now is to have a really in-depth scientific cross-council
review of the science and the medium term needs. I think it is
important that this is now done across a range of areas because
of the real importance of inter-disciplinarity and the need, if
we are to accept inter-disciplinarity as being absolutely cutting-edge
but applied across two or more disciplines, to ensure that we
have a place to do that while maintaining the core discipline
itself. Physics is a really important example that there is a
really good reason for doing that and then to follow it with others.
Could you make this absolutely clear to Des and Ian's point, that
the Wakeham Review will have no effect whatsoever on the current
plans in the Delivery Plan proposed by STFC? It is totally detached
from it; this is looking at something else.
Professor Diamond: It is not the
intention that this will impact on the budget of STFC in this
So waiting for it to be concluded and delaying these cuts until
that point is not an option.
Professor Mason: No, it is not
It is not an option at all; it is just a smokescreen in that sense.
Professor Mason: The Wakeham Review
is, as Ian says, a valuable exercise but it was never intended
to address the current situation.
Q119 Dr Gibson:
What do you think the Wakeham Review will find out that we have
not known for ages? We know how important physics is. You were
having trouble getting students; we managed to get round that
and the student numbers are increasing, thank goodness. Physics
is interacting with other subjects which it was not doing at some
point in its evolution. Molecular biology evolved from physics;
there is a huge great record there and I think that has been recognised.
What I do not understand is what more is there to find out?
Professor Diamond: I think you
have just summed it up beautifully and perhaps your knowledge
of the base is so great that we should invite you to be a member
of the committee. It is important that we continue always to look
at where disciplines are going and where the priorities are laying
and physics, it seems to RCUK, is an area which not only has been
through some difficulties but which is evolving extremely quickly,
it is one of the most exciting areas of science. I think you need
to look across the piece because there are five research councils
funding physics and if you look at the funding of physics between
the spending review of 2000 and the spending review of 2007 then
you will see a 70% increase, broadly, in the funding of physics.
I think we have to be absolutely clear that full economic costing
does mean that more money across the entire research council base
will be going into physics.
Chairman: Of course the whole of the
RC humanities research programme goes into grants which are affected
significantly by full economic cost. The same applies to BBSRC;
the same applies to every one of the other research councils.
This is the only one that is suddenly praying in aid of full economic
cost, which it has known about now for the last three years in
terms of preparing for, to actually say that this is the big problem.