Examination of Witnesses (Questions 220
- 239)
WEDNESDAY 20 FEBRUARY 2008
IAN PEARSON
MP AND PROFESSOR
SIR KEITH
O'NIONS
Q220 Dr Gibson:
Can I come in briefly just to try and get some excitement into
the proceedings; this is a bit boring! What has the STFC done
in terms of initiatives and new things? What ideas has it got?
Something that is challenging and helpful to the nation; what
is it doing? It is getting attacked a little but what is it doing
really?
Ian Pearson: There are lots of
very positive things but I think the hugely exciting thing will
be the Large Hadron Collider coming on-stream in in July. That
is a huge bit of kit.
Professor Sir Keith O'Nions: £700
million UK investment.
Q221 Dr Gibson:
So when will we see the result? Will you be around?
Ian Pearson: It will be starting
its full operation in July this year, is my understanding.
Professor Sir Keith O'Nions: For
a bit of excitement, it is the biggest international physics experiment
ever; and the questions that are addressed, if you are interested
in fundamental particle physics and cosmology, are amongst the
profound questions in field theory that exist, so boy is that
exciting!
Chairman: Right, we have had our bit
of excitement, we cannot cope with any more.
Dr Turner: The answer is 42!
Q222 Dr Blackman-Woods:
Sorry to bring you back to the mundane but I think this issue
of consultation is quite important. How do you account for the
fact that so many people in the physics community feel that they
were not consulted at all about these cuts or the priorities,
if you are saying that the process was fine and was the same as
every other research council?
Professor Sir Keith O'Nions: From
where we sit—and that is having personally sat through all
the meetings on delivery plans and PowerPoint presentations and
we have people attending councils of STFC—although we do
not participate in this—we understand that the Science Advisory
Council at each stage has been involved, and the normal process
with councils and the preparation of their strategic plans is
to be feeding information into this. Whether or not we decide
to have a closer look at that as we learn the lessons from this,
I think is a separate issue, but answering your point, as we were
going along, were there massive alarm bells that this council
was completely out of order and out of line? I do not think there
were, but that does not mean to say we are not obviously going
to think quite carefully and see what lessons can be learned from
this. I think the rest of that question will have to be addressed
to STFC, frankly.
Q223 Dr Blackman-Woods:
Do you intend to look at all at the structure of the STFC Board?
It is constructed in a slightly different way from some of the
other research councils. It has got ten members, three of them
are executive members of the STFC, so there is quite a small representation
from the wider academic community compared to some of the other
research councils. Is that the sort of thing that you might consider
looking at?
Professor Sir Keith O'Nions: Obviously
we looked at the Board quite closely and discussed it at length
with Keith Mason when he set it up. The structure that he set
up was a rational structure. The sub-board committees and the
Independent Advisory Board seemed absolutely right. I believe
an announcement was made on Monday and Keith Mason is making very
significant structural changes in his management of the STFC.
Of course we will take a close interest in that and, as I say,
there are lessons to be learned here in slower time. I think when
you talk to Keith Mason you will discover that he really is responding
and getting a grip on some of these issues.
Chairman: You will be delighted to know
that we are going to move off STFC for a short time and I am going
to bring in Gordon Marsden.
Q224 Mr Marsden:
Thank you Chairman. Whether the delight will been unmeasured remains
to be seen! Can I ask specifically about the situation with the
funding award to the Arts and Humanities Research Council resulting
from the overall settlement. Our information tells us that out
of the seven research councils, AHRC received the smallest increase,
and that was a 12.4% increase, and its share of the science budget
fell from 2.8% in 2007-08 to 2.6% in 2010-11. The implications
of that, at least initially, are quite severe: they are cutting
the post-grad awards from 1,500 to 1,000 in 2008 and over the
whole period the fall in awards amounts to a reduction of 19%.
I just wonder what sort of message you think that is sending out
to the arts and humanities in terms of the overall budget and
particularly in terms of inter-disciplinary co-operation?
Ian Pearson: I will start on this
and then Keith may want to say a few words. You are right to say
that the Arts and Humanities Research Council received an increase
in funding, in actual fact £26.3 million more over the CSR
period. I would also point out that the Arts and Humanities Research
Council did well in the last Spending Review where its budget
increased by 20.5% over the previous three years of SR04. The
situation, as Keith outlined earlier, is that AHRC will have received
its full economic costing increase and then its budget is probably
minus 1%, so it is somewhat of a surprise to me to learn that
it is planning to see such a major reduction in the first year
in terms of its number of research grants. I will want to enquire
why that is the case. When you look at the numbers with the budget
going up maybe not as much as it would have liked of course, as
with the other research councils, but still a rising budget, you
would not necessarily expect to see such a significant reduction.
Q225 Chairman:
What will you do about it if in fact that is confirmed?
Professor Sir Keith O'Nions: I
am similarly perplexed as is the Minister, and we do not know
the detail between us. However, when you look at the figures there
is an increase in the budget, FEC paid for, otherwise a pretty
much flat cash with perhaps a 1% reduction, you would say that
overall there will be a small reduction in volume but you would
not—
Q226 Chairman:
500 less PhDs?
Professor Sir Keith O'Nions: I
am looking at the cash. Overall you would expect some small reduction
in volume in as much as inflation is not paid for. Would you expect
swingeing cuts? No, frankly and I think we do need to understand
more. I just hope that this and other research councils are not
being so conservative that they are going to underspend, because
the biggest single risk that all research councils carry is not
overspending, it is underspending. We do not know the details
but reductions from 1,500 to 1,000 are not the sort of numbers
that we would expect. That is as much explanation as we can offer
you; we will take a close interest in it.
Q227 Mr Marsden:
Can I pursue this point, and in fairness to the overall figures,
as I say, in the overall figures the reduction is about 20%, but
I would agree with you that it does seem rather curious. It would
be useful for the Committee to know what the implications of the
cuts in these post-graduate awards are going to be particularly
for collaborative and inter-disciplinary work across the piece
because that is surely something that we ought to be promoting.
Professor Sir Keith O'Nions: Or
even if those are included.
Q228 Mr Marsden:
Or indeed if those are included.
Ian Pearson: Yes and it may well
be the case that because the AHRC is participating in a number
of collaborative cross-council programmes and that it is not factoring
the awards that are going to be made in those areas into its calculations,
so the reduction in volume might not be as much as it seems to
be saying in its report to you. I do think that one of the things
that we will need to do is to talk to the Arts and Humanities
Research Council to understand better their assessment of their
priorities and why they are making these decisions.
Mr Marsden: Through you Chairman, could
I therefore ask that when you have been able to do that you might
be able to write further to the Committee on this matter. I know
my colleague Tim wants to come in on something.
Q229 Mr Boswell:
I have really got two points. I would group the first under flexibility
and the second under autonomy, if I may. As I understand it, some
of these cuts go back to the reduction in end-of-year flexibility
resulting from the science budget cut-back that happened a year
ago, the £68 million. Can we have an assurance from the Minister
that the CSR07 budget will be honoured so that the councils can
plan their budgets properly and they are not going to find themselves
caught short by further cutbacks?
Ian Pearson: I do not feel the
need particularly to go back over the old ground of the £68
million. The Committee is very well aware of the situation and
the Government's view on this. I can confirm that the AHRC's share
of this was £5.3 million and, like other research councils,
the AHRC had to make some adjustments to its budget for 2007-08
to reflect that. There still is the situation however where its
overall budget has gone up, not as much as I accept it would have
liked, but it has seen an increase in budget allocation for the
next three years. As far as a guarantee on the ring-fence of the
science budget, I cannot bind the hands of people who might make
decisions in the future, but the Government has always remained
committed to a ring-fenced science budget and it is certainly
the Government's intention that we will keep committed to that.
Q230 Mr Boswell:
That is helpful. My second is perhaps smaller in that context
but it is about flexibility for research councils in their recurrent
activities and particularly CSR overlaps, and the more they have
a degree of flexibility, particular in relation to their larger
programmes even if those are not typically so large in the humanities,
it is going to be easier for them to manage these difficult interfaces.
How do you feel about that? Would you be inclined to give them
as much flexibility as you can?
Ian Pearson: We certainly look
to use all the flexibilities that exist within the system to make
sure that we get maximum benefit, so for instance if there are
underspends in particular areas often they can be balanced by
overspends in others, and that is part of what you would expect
of good financial management of a department. Keith will have
operational responsibility for this.
Professor Sir Keith O'Nions: Good
financial management of these budgets is very important. If you
actually look at the figures, you can see that you often do not
get a smooth increase over a three-year spending period. It maybe
very flat in one year and typically they often have quite large
rises towards the end of the Spending Review. In order to manage
the sort of profile of a research council spend over that period,
which is a much smoother curve, you are obviously going to have
to accumulate some underspends and EYF and spend it somewhere
else. Our job is to try and manage that. Good financial management
will involve end year flexibility and cross-CSR transfers, but
we have to persuade councils not to be so conservative that they
carry enormous amounts of EYF which ultimately there is no prospect
of spending, and that is part of my job.
Q231 Mr Boswell:
My final question is simply about the management side. It slightly
concerned me, and my eyebrow metaphorically lifted, given that
the announced impact on AHRC has been known for some little time,
that it is only now that you appear to be, as it were, undertaking
to call them in to talk about it. Everybody, from whatever previous
experience they have, understands that there are Haldane principles
and you should not be digging up research councils by the root
every few minutes. It does slightly concern me that apparently
the information links are not, as it were, immediate and readily
operating in both directions so it appears almost to have caught
you by surprise.
Ian Pearson: Can I say that it
does slightly concern me as well because when I read the AHRC's
delivery plan it did not come screaming out at me that there was
going to be a major reduction in research grants. I expected some
small decrease in volume over the CSR period as with some of the
other research councils, but I did not expect to see that, which
is why I said I was surprised. That is one of the reasons why
I would want to take this away.
Q232 Dr Harris:
Some straightforward questions just on this point, is it fair
to say that for the EPSRC that significant funds that would have
been allocated to it were instead directed to the new Technology
Strategy Board and the Energy Technologies Institute, around 3%
of its annual budget?
Ian Pearson: It is fair to say
that the Government believes that the Energy Technologies Institute
is a strategic priority and it is fair to say as well that the
Government agreed with the research councils as part of our response
to the Sainsbury Review recommendations that the research councils
combined would commit a total of £120 million over the CSR
period to collaborative work with the Technology Strategy Board.
Overall, when you add both of those, that is a relatively small
and modest proportion of EPSRC's budget.
Q233 Dr Evans:
It is not the volume. You will not be aware that myself and the
Chairman were at an SI committee that set up the Technology Strategy
Board and I asked: "Will the new research council's funds
come from the DTI in the normal way, or is there any likelihood
of money that had been allocated to other research councils through
RCUK being transferred to the new body". And Malcolm Wicks
said that funds would be allocated to the board in the normal
way depending on the Comprehensive Spending Review. "We hope
that adequate funding will be provided, given the priority that
we give to the matter." And I confirmed to the Liberal Democrat
spokesman "that money will not be taken from other research
councils to fund the new board; the money will be allocated in
the normal way by the DTI." Is what you have just described
not a contradiction?
Professor Sir Keith O'Nions: That
is a wonderful gizmo you have there, I must say, it is a very
impressive piece of high technology.
Q234 Dr Harris:
That is all to the purpose of asking these questions.
Professor Sir Keith O'Nions: The
undertaking that was given has been adhered to. There is no transfer
of money from research councils to the Technology Strategy Board.
The arrangement is actually quite welcome by the research councils.
It is an alignment of spend. The strength of the proposal is that
there is a clear line between where the TSB spends its money in
collaborative arrangements with business according to state aid
rules and where the research councils spend their money is on
aligned programmes, funding what is appropriate for their priorities
in their councils in universities. They are not transferring money
to industry and to the TSB. We have discussed this before. It
is not a subtle point, but actually the undertaking has not been
reversed at all. Just remember that EPSRC has a very large proportion
of its budget behind missions that logically underpin some of
the challenges that face the TSB.
Q235 Dr Harris:
Time prevents me from exploring the subtleties.
Professor Sir Keith O'Nions: It
is not subtle.
Q236 Dr Harris:
Would you agree with what Mr Watmore told us when he and John
Denham came to see us that the financial side of the settlement
was previewed before we turned up, so the science budget had been
announced in the Budget of 2007?
Ian Pearson: Yes it was and it
is a matter of record, is it not?
Professor Sir Keith O'Nions: The
broad structure was determined in the Budget. There was a commitment
in the Budget settlement to the national challenges issue, to
the implementation of Cooksey, to support of the Energy Technologies
Institute and, most importantly, to full economic costing, so
the broad structure was there.
Q237 Dr Harris:
I will come to my point. The Treasury claw-back from the MRC of
£92 million was decided, I think, in the summer of 2007 by
the Treasury. Is that correct?
Professor Sir Keith O'Nions: We
can give you the precise date but it might have been a bit earlier.
Q238 Dr Harris:
A bit earlier? May?
Professor Sir Keith O'Nions: Can
we send you the precise date. It was June apparently.
Q239 Dr Harris:
So that was after the science budget had been announced in the
Budget. I do not understand how it could be said that that clawback
was known about before the science budget was set and was compensated
for in an enhancement in the science budget. If you get the timings
correct it does look as if the science budget was set, then the
Treasury intervened—that is not your fault and I am not
blaming either of you—and took away £92 million from
the commercial fund of the MRC. The figure £92 million is
not unadjacent to the £80 million that the STFC is down on
and so it is fair to say that there was no compensation in the
science budget for that clawback.
Ian Pearson: Again you are wrong
to quote the figure of £80 million when it comes to the STFC.
The simple fact is that there has been an increase in the STFC's
budget, but not as much as it would have liked. In fact, all research
councils would have liked more money.
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