Appendix: Government response
The Government welcomes this report and agrees with
the Committee's findings that the UK Centre for Medical Research
and Innovation (UKCMRI) should have substantial benefits for the
public as well as British science. The Prime Minister stated in
December 2007: "We strongly support plans to create Europe's
leading centre for medical research in the heart of London. It
will maintain Britain's position at the forefront of global medical
research, strengthen the UK economy and, through its links with
the NHS, has huge potential to change patients' lives."
The Government agrees in particular with the Committee's
observations that UKCMRI would:
- Encourage scientists and researchers
to tackle and overcome the biggest healthcare issues we face both
in the UK and in the developing world;
- Address Sir David Cooksey's recommendations
for action to ensure that the UK can reap the full economic, health
and social benefits of public investment in health research.
- Make the UK and London a focus of international
excellence in health research.
- Ultimately help us to improve the quality of
life for people.
The Project is still at an early stage, and, as the
Committee recognises, a number of key issues have yet to be resolved.
The Government will require MRC to develop comprehensive science
and business cases for its involvement in the Project, and that
its eventual design offers good value for money in respect of
the public funding involved.
Recommendation 1. We are at a loss to understand
the rationale for the behaviour by the Treasury in changing the
application of the rules with regard to the MRC's Commercial Fund
and request an explanation. (Paragraph 5)
The Treasury did not change the application of the
rules with regard to the MRC's Commercial Fund. In discussions
between the Treasury and the DTI during the spring of 2007, it
became apparent that the long-standing arrangements for the MRC
Commercial Fund were not in accordance with the Government's public
expenditure rules. This was due to a genuine misunderstanding.
As a consequence, the MRC did not have the authority
to spend the cash surplus it had accumulated. It was important
to put that right and in a way which did not affect the CSR07
settlement for the Science Budget reached in March 2007.
Under the agreement reached between the department
and the Treasury, the MRC will now be allowed to gain access to
a large part of the Commercial Fund accumulated cash surplus -
resources that it would otherwise not have the authority to spend.
The MRC is paying £92m of the accumulated income
of the Commercial Fund into the Government's Consolidated Fund.
Under the Government's budgetary rules MRC did not have the authority
to spend this money. As a result of the decision, the MRC will
be able to spend £106.9m of the accumulated income in the
Fund and have access to £153.4m of Commercial Fund income
in CSR07.
This change to the Commercial Fund was taken into
account when the Science Budget allocations to MRC for the CSR
period were decided. These were announced on 9 October 2007, and
involve the MRC's funding increasing by over 30 per cent to £707m
in 2010/11.
Recommendation 2: We expect to receive quarterly
updates, beginning in March 2008, on the development of the project
with particular reference to the concerns highlighted [in the
Report] from the MRC and DIUS and would much welcome similar briefings
from the other partners. (Paragraph 13)
The Government and MRC recognise the close interest
that the Committee has in this Project and will provide further
information as the Project progresses, however we do not think
it is sensible to produce quarterly reports for the Committee
irrespective of whether there have been material developments,
as this risks creating a bureaucratic burden on what is already
a complex project. This proposed approach will avoid confusion
over the proper roles and accountability responsibilities of DIUS,
MRC, the Consortium and the Project Team.
Paragraph 5 of the Committee's report refers to the
"earmarking" of £140 million for the UKCMRI from
the Large Facilities Capital Fund (LFCF) of the Science Budget.
No earmarking of monies from the LFCF for this project has yet
been made. Nor were funds from the LFCF earmarked for the MRC's
earlier plans to relocate the National Institute of Medical Research
to the former site of the National Temperance Hospital. DIUS Ministers
will be taking decisions in due course on the earmarking of LFCF
funding (including for the UKCMRI Project) in the light of the
advice received recently from Research Councils UK on the priorities
for LFCF funding, and on the development of a clear business case
for the Project.
March 2008
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