Appendix: Government response
Introduction
1. The Government welcomes the report of the
Select Committee's inquiry into the science budget allocations.
This response has been coordinated by the Department for Innovation,
Universities and Skills (DIUS). It takes account of contributions
from the Treasury (HMT), and the Research Councils. This introductory
section sets out the Government's views on how the broad thrust
of future allocations should be made, learning lessons from CSR07.
It provides the context for the responses to individual recommendations
in the rest of this document.
2. The science budget has doubled in real terms
since 1997 from £1.3bn to £3.4bn in 2007/08. The CSR07
allocation sees the science budget increase to almost £4bn
in 2010/11. This is an average increase of 2.7% a year in real
terms over the next three years. Within a tight fiscal framework,
this strong settlement highlights the Government's long standing
support for science and research in the UK as set out in the 10
Year Science and Innovation Investment Framework[1].
The Framework recognises the advantages of providing stable and
predictable funding to ensure the research base can provide the
best value for the nation.
3. In allocating this budget, the Government's
overriding objective was to ensure the continued excellence of
the UK research base. The Government is absolutely committed to
supporting excellent fundamental research, which expands the frontiers
of our knowledge. In addition, it is important to recognise the
wider benefits fundamental research brings. It produces highly
skilled people; attracts inward investment; and can be translated
into many successful products and services. It is critically important
that every possible benefit is extracted from our world class
research base. As such, driving up the economic impact of the
research base goes hand in hand with supporting excellent science.
4. By operating within this overarching policy
framework, Government support has helped the UK research base
sustain a strong global performance. The UK is second only to
the US in global scientific excellence. With 1% of the world's
population, we carry out 4.5% of the world's research and claim
8% of scientific publications. The UK has increased its share
of highly cited papers to 13.3%. The proportion of uncited papers
produced by the UK continues to fall. At the same time, knowledge
transfer between research and business continues to grow. UK universities
are now producing spin-out companies of equivalent number and
quality to some of the US's top institutions. Since 2003 there
have been 30 companies floated on stock exchanges at a value of
£1.5bn at initial public offering (IPO). Furthermore, there
have been a number of high profile trade sales—seven of
these in the last two years have raised £1.9bn. University
income from business and user engagement has risen rapidly, now
standing at around £2bn per year.
5. It is the duty of Government to set the strategic
direction for the research base. To do this, the Government took
a number of high level decisions when allocating the CSR07 science
budget. For example over CSR07: research will be funded at 90%
of its full economic cost; the Sainsbury and Cooksey reviews will
be implemented; and work in collaboration with the Technology
Strategy Board and Energy Technologies Institute will be supported.
The Government also decided certain broad areas of research were
of strategic importance to the country, for example medical research
and research addressing the key challenges facing the nation (such
as energy supply and the environment).
6. For many years, the British Government has
been guided by the Haldane Principle, believing that detailed
decisions on how research money is spent is for the science community
to make through the Research Councils, once the Government has
set some overarching parameters. The basis for funding research
is also enshrined in the Science and Technology Act 1965. The
allocation of the CSR07 science budget has been consistent with
the Haldane Principle.
7. John Denham, Secretary of State for Innovation,
Universities and Skills, recently restated the Government's position
on the Haldane Principle in his speech at the Royal Academy of
Engineering on 29th April. He made clear that:
- it is researchers, through
their participation in peer review, who are best placed to determine
detailed research priorities;
- the Research Councils act as the "guardians
of the independence of science"; and
- the Government's role is to set the over-arching
strategy and framework.
8. The Haldane Principle is underpinned by the
peer review process. Research Councils fund research on a competitive
basis following independent expert peer review. This system is
regarded as an international benchmark of excellence in research
funding, and thus provides a guarantee of the quality of UK research.
9. The peer review processes employed are designed
to be sensitive to the different needs and cultures that exist
within the academic community. They reflect the variety of mechanisms
employed to support different types of research and the need to
encourage adventurous or multidisciplinary research. The Government
refers the Committee to the RCUK report Peer Review Benchmarking
of Grant Review in the UK. [2]
10. The Government understands how those whose
work is not funded may well question those who gave it a lower
priority. This is particularly the case when, as will so often
be the case in a scientifically strong nation, rejected research
proposals are themselves of real scientific quality. However,
it is hard to conceive of an alternative that does not shift the
responsibility away from scientists themselves. The Government
does not want the success or failure of detailed lines of research
to be determined by political lobbying.
11. For the peer review system to work, senior
researchers must give up their time to provide valuable expertise.
A number of eminent scientists have assisted STFC in its peer
review process. This involved making difficult decisions. Peer
review lies at the heart of the research decision making process
and it is important for the Government and researchers to defend
it robustly. The Government regards the Committee's criticism
of the outcome of STFC's peer review process, and of those researchers
who have undertaken it, to be unhelpful and damaging.
12. The relationship between DIUS and the Research
Councils balances the Government's duty to set the strategic direction
of the research base with the Research Councils' responsibility
for prioritising research spending through peer review. DIUS and
the Research Councils work hard to optimise this balance, avoiding
inappropriate direction of Research Council priorities whilst
ensuring high level strategic objectives are sufficiently aligned.
13. To ensure a robust allocation process, the
Government asked all Research Councils to submit detailed draft
delivery plans. These set out detailed plans under a number of
different funding scenarios. The rationale for this was to ensure
that each Council undertook a vigorous prioritisation process.
Coupled with the Research Council delivery plans, the Government
also collected independent evidence on other funding lines, such
as Science Research Investment Fund (SRIF). Through bodies such
as the Funders' Forum and through bi-lateral meetings with the
Research Councils, the Government regularly communicated with
the community. This body of evidence underpinned the allocation
of the science budget.
14. Research Councils have a duty regularly to
review their activities in the light of changing priorities and
the resources available to them. The Government made clear from
the outset that rigorous reprioritisation would be of particular
importance in the context of the CSR07 allocations.
15. DIUS Ministers considered that the final
Delivery Plan drawn up by STFC following the receipt of its allocation
in October 2007 raised two strategic issues, which merited further
independent advice. They therefore asked Sir Tom McKillop to extend
his work with the North West Development Agency to advise on the
future development of the Daresbury Campus, and asked Research
Councils UK to initiate a review of the health of physics as a
whole, given the interest of a number of Research Councils in
this subject. This review is being led by Professor Bill Wakeham
of Southampton University. In due course, RCUK will carry out
a series of similar reviews of individual disciplines.
16. The Government is working with STFC to review
the way in which this allocation was handled and to ensure all
the relevant lessons are learnt for the future. In particular,
STFC have recognised that it could have communicated its plans
better, and is taking steps to address this. STFC will take account
of these lessons as it takes forward an organisational review.
The review will cover strategy and planning, customer and stakeholder
engagement, governance and risk management processes, delivery,
value for money and management of change.
17. Further detailed information on the science
budget allocations can be found in the DIUS publication "The
Allocations of the Science Budget 2008/9 to 2010/11: December
2007". [3]
The Government Response
18. This document sets out the Government's response
to the IUSS Select Committee report on the science budget allocations.
Each conclusion of the report is followed by the Government's
response, sometimes drawing on contributions from the Research
Councils. For ease of reference this response follows the order
of the IUSS Select Committee report.
Research Council contribution to this response
19. As part of this response the Government has
asked the relevant Research Councils to respond to those conclusions
addressed to them. Following the convention adopted by Government
in recent years, responses from Research Councils are italicised.
THE SCIENCE BUDGET
Conclusion 1: Given the range of programmes and
disciplines covered by the Science Budget, the name is somewhat
misleading, especially since the transfer of AHRC into the budget
in 2005. We recommend that DIUS change the name of the Science
Budget to the Science and Research Budget to reflect the inclusion
of arts, humanities and knowledge transfer which we note matches
the welcome change in title of the DIUS official in charge of
the budget to the Director General for Science and Research (DGSR).
(Paragraph 11)
20. The Government accepts the Committee's recommendation
that the name of the 'Science Budget' be changed to the 'Science
and Research Budget' to reflect the inclusion of the arts and
humanities.
Conclusion 2: We welcome the Government's decision
to maintain its commitment in the ten-year framework to increase
the science budget by 2.5% per annum in real terms. (Paragraph
13)
21. The Government welcomes the Committee's support
for the commitment outlined in the science and innovation investment
framework 2004-2014. The ten year framework stated that the science
budget should increase at least in line with the trend growth
rate of the economy through the ten year period.
22. The commitment to increasing the science
budget reflects the high aspirations of the Government for science
and research. It is a result of the Government's continued support
for science and research over the past 10 years that the UK has
a world class research base, which delivers a high level of impact
on the economy.
SAINSBURY AND COOKSEY AGENDA
Conclusion 3: We welcome the evidence within the
Science Budget Allocations of the Government's commitment to the
Sainsbury and Cooksey agenda. (Paragraph 14)
23. The Government allocated resources from the
CSR07 settlement to implement the recommendations of Lord Sainsbury's
review of UK science and innovation policy. This included increasing
the Higher Education Innovation Fund to £150m p.a. by the
end of the CSR07 period and a commitment from the Research Councils
of £120m for collaborative work with the Technology Strategy
Board over the CSR period.
24. Funding was also provided for the new Office
for the Strategic Co-ordination of Health Research (OSCHR)—a
recommendation of the Cooksey Review. OSCHR is jointly funded
with the Department for Health. The creation of OSCHR will accelerate
the translation of the significant advances in fundamental biomedical
research into clinical practice.
THE SCIENCE BUDGET ALLOCATIONS PROCESS
Conclusion 4: We are concerned that a structure
of independent expertise such as suggested by the Royal Society
may be too bureaucratic. However, it is clear that more and better
information needs to be passed from the Research Councils to the
DGSR on the potential implications of projected allocations from
the Science Budget in order that Ministers can be made fully aware
of the consequences of those decisions. We note that the documents
prepared by STFC for use in the bilaterals with DIUS have been
made available through the Freedom of Information process and
we recommend that the Director General of Science and Research
and the Research Councils publish such documents as a matter of
course to increase transparency and accountability. (Paragraph
18)
25. After due consideration, the Government
agrees with the Committee that the proposal of the Royal Society
for an external expert panel on the allocations would be overly
bureaucratic.
26. Government accepts that information flows
between Research Councils and their communities could be improved,
as could information flows between Research Councils and Government.
DIUS will encourage Research Councils to consider how best to
communicate with the Government and their communities about the
choices they have to make when setting priorities.
27. During the allocations process the Government
holds regular, and detailed, discussions with Research Councils.
The bilateral meetings between DIUS and the Research Councils
are part of an internal management process leading up to advice
to Ministers.
28. Government agrees that wherever appropriate
there should be more transparency. However, it is important to
recognise the allocation stage is a process of negotiation. Incentives
must be in place to ensure thorough analysis of the options to
allow clear and accurate advice to Government. Research Councils
need to consult their communities effectively on the strategic
choices they face on priorities. However, some of these are commercially
confidential as they concern negotiations with international partners
and suppliers. The Government has strong reservations about making
the allocations process more public. Like the CSR process itself,
the allocations have been conducted without continuing public
disclosure to promote candid discussion and a robust appraisal
of the various cases. Accordingly, the Government's view is that
the preparation of advice to Ministers on the allocations, and
the specific interactions between Government and Councils which
lead up to this, should be kept confidential.
29. The Government continually strives for good
practice, and recognises the importance of learning lessons from
this allocation. Ministers will work with the new Director General
of Science and Research and others to consider the ways in which
the Government could draw more directly on strategic insights
from the science community.
FULL ECONOMIC COST
Conclusion 5: In view of the importance of attaining
sustainability and transparency for ongoing and future research
in the UK, we welcome the Government's commitment to FEC. (Paragraph
20)
30. The long term financial sustainability of
the research base is of great importance, and the Government welcomes
the Committee's support for the move to full economic costing.
31. In 2005, after extensive consultation with
universities and the research community, it was decided that Research
Councils would fund all research at 80% full economic cost (FEC).
This was necessary to ensure the long term financial sustainability
of the research base. Fulfilling this commitment had an impact
on the allocations for CSR07 and meant that some re-prioritisation
of existing activity was required. However, this should not distract
from the significant benefits that moving towards full economic
costing brings or the fact that this investment is still funding
for research.
32. Money from the Science Budget provided for
FEC is vital for the health of the research base. Ministers are
determined that the infrastructure and capacity for research in
universities should be properly funded. FEC makes a major contribution
to that goal. It provides funding that directly supports the costs
of undertaking basic research and employing the researchers involved.
This commitment towards research has been welcomed and supported
by the university sector.
33. In parallel with the move to full economic
costing, a new capital funding stream for universities has also
been introduced. The new capital fund provides a more predictable,
strategic approach to capital investment in the research base,
and replaces the Science Research Investment Fund (SRIF) which
had done its job making good the backlog of under-investment in
the research base. Over the CSR07 period there will be a transition
from SRIF to the new capital fund. This additional capital component
means that Research Councils are now paying 90% of the full economic
cost of research.
HALDANE PRINCIPLE
Conclusion 6: The increase in the Science Budget
does not fully cover increased expenditure on FEC and the new
bodies (OSCHR, ETI and TSB), which means that Research Councils
will have to redirect money previously earmarked for research
grants. Additionally large parts of the budget are tied to cross-council
programmes that largely follow a Government agenda. It is of course
acceptable for the Government to set priorities for UK research
but not for it to micromanage individual Research Council budgets.
We recommend that the Government make a statement on its application
of the Haldane Principle. (Paragraph 27)
34. The Government is pleased to provide a statement
on the application of the Haldane Principle. Continued adherence
to the Haldane Principle is important to the research community,
and the Government shares this view.
35. For many years, the British Government has
been guided by the Haldane Principle believing that detailed decisions
on how research money is spent is for the science community to
make through the Research Councils. The basis for funding research
is also enshrined in the Science and Technology Act 1965. In practice,
the Act respects the spirit of the Haldane principle.
36. John Denham, Secretary of State for Innovation,
Universities and Skills, recently restated the Government's position
on the Haldane Principle in his speech at the Royal Academy of
Engineering on 29th April. He made clear that:
- It is researchers, through
their participation in peer review, who are best placed to determine
detailed research priorities;
- the Research Councils act as the "guardians
of the independence of science"; and
- the Government's role is to set the over-arching
strategy and framework.
37. The Science Budget for CSR07 was allocated
in line with the Haldane Principle. Key priorities were set by
the Government, such as funding research at 90% full economic
cost to ensure the long term health and relevance of the research
base. Detailed decisions on funding will be made by Research Councils.
38. The Haldane Principle is underpinned by the
peer review process. Research Councils fund research on a competitive
basis by employing independent expert peer review. This system
is regarded as an international benchmark of excellence in research
funding, and thus provides a guarantee of the quality of UK research.
39. The Government understands how those whose
work is not funded may well question those who gave it a lower
priority. This is particularly the case when, as will so often
be the case in a scientifically strong nation, rejected research
proposals are themselves of real scientific quality. However,
it is hard to conceive of an alternative that does not shift the
responsibility away from scientists themselves. The Government
does not want the success or failure of detailed lines of research
to be determined by political lobbying.
40. For the peer review system to work, senior
researchers must give up their time to provide valuable expertise.
A number of eminent scientists have assisted STFC in its peer
review process. This involved making difficult decisions. Peer
review lies at the heart of the research base and it is important
for the Government and researchers to defend it robustly. The
Government regards the Committee's criticism of the outcome of
STFC's peer review process, and of those researchers who have
undertaken it, to be unhelpful and damaging.
41. As set out above, DIUS Ministers only take
those strategic decisions which, in the modern world, have to
be the responsibility of government. Beyond that, it is for the
research community itself—Research Councils and researchers—to
set priorities and to distribute funds. Ministers do not, and
should not in any way, micromanage Research Council budgets.
IMPACT OF THE SCIENCE BUDGET ALLOCATIONS
Conclusion 7: We are concerned that the Government
has failed to protect both the existing and planned research base
by allocating insufficient funds to cover FEC and the new bodies.
The large increase in MRC's budget means that the effect of this
near cash deficit is concentrated on the other Research Councils.
(Paragraph 29)
42. The Committee has welcomed the Government's
commitment to FEC and the Cooksey and Sainsbury agendas. It is
entitled to argue that there should have been an even bigger increase
but the Government regard that an average increase of 2.7% per
year in real terms over the next three years is a strong settlement
in a tight fiscal environment.
43. It is the role of Government to encourage
the research base regularly to assess and adjust funding to take
into account shifting priorities. It would not be appropriate
to adopt an approach that only funded new initiatives after all
existing activity is maintained. The scale of funding made available
to Research Councils enables them to fund the activities outlined
by the Committee as part of their overall priorities As stated
previously, it is the duty of Research Councils to review priorities
regularly and make funding decisions on that basis.
44. It is the sign of a healthy research base
to reprioritise spending in line with demand. Research operates
in a fast moving world. Being at the very top requires making
tough decisions. Countries which lead the world in research make
difficult choices in order to ensure their future success. If
we do not make these decisions, we will fall behind the pack.
So it is important Government and Research Councils review activities
to ensure a vibrant research community, where research is targeted
at cutting edge activities.
45. In the Government's view, the cross-Council
programmes and research with the new bodies, are just as much
Research Council activities, as any other, and cannot be correctly
portrayed as a reduction in volume.
46. The Research Councils were keen to respond
positively to the strategic challenges outlined by the Treasury
[footnote 4] as part of the Comprehensive Spending Review. The
Government welcomes their constructive approach. The Councils
recognised that they were already active in the areas identified,
and that they wished to increase their collective contribution
to them. The Councils identified six cross-Council programmes
to respond to those challenges, and developed these in bilateral
discussions with a number of Government Departments and other
public bodies. These programmes give a focus and a cross-disciplinary
emphasis to part of the Research Councils' budget. Within those
programmes, the majority of the work funded will be in responsive
mode. Moreover, the scope, definition and allocation of spending
is still determined by the Research Councils.
47. The Medical Research Council will receive
almost £2 billion over the next three years, an increase
in budget of 30% over the CSR period. This increase is recognition
of the national importance of medical research. The Government
is pleased the Committee supports an increase in the MRC's funding
(IUSS Select Committee Conclusion 33) and the creation of OSCHR
(IUSS Select Committee Conclusion 3).
SCIENCE AND TECHNOLOGY FACILITIES COUNCIL
48. The Government continues to attach considerable
importance to STFC's activities and to physics and scientific
research more generally. Research Council expenditure on physics
is already in excess of £500m, and is expected to increase
over the CSR period.
49. In October 2007, STFC received an overall
budget of £1.9 billion for the CSR period, an additional
£185 million compared to the 2007/08 baseline. This represents
an overall increase in funding of 13.6%.
50. There has been much speculation about an
alleged £80 million reduction in STFC's budget. This figure
appears to have been derived from STFC's aspirations for the three-year
CSR period (2008/9-2010/11), which it drew up before it received
its budget from the Department. These aspirations never constituted
an agreed set of activities or funding for them. The suggestion
that £80m has been cut from its budget is simply wrong.
51. Overall, STFC's level of funding is being
maintained. Taking into account the widely supported move towards
paying the full economic costs (FEC) of research in universities,
investments in key areas have grown considerably since 2005/06.
Between 2005/6 and 2008/9 there has been:
- A 43% increase in funding for
Particle Physics grants;
- A 78% increase in Nuclear Physics grants; and
- A 67% increase in overall funding for Astronomy
grants
52. Like all Research Councils, the STFC's Science
Board, and its advisory peer review committees, has undertaken
a programmatic review and prioritisation exercise, the results
of which are now available for public consultation. On 7 February
2008, the STFC Council announced that the underlying funding for
physics exploitation grants would remain broadly level in the
next financial year. This follows large increases in funding in
recent years.
53. The Government is working closely with STFC
on the lessons learnt from this allocations process. STFC has
agreed with DIUS that it will commission an organisational review
in the near future. This will comprise both a self-assessment
and an external scrutiny. The review will cover strategy and planning,
customer and stakeholder engagement, governance and risk management
processes, delivery, value for money and management of change.
The timetable for this review has still to be finalised but we
expect it to be complete by September 2008.
LEGACY ISSUES
Conclusion 8: We remain concerned that the former
PPARC community has been saddled with a £75 million (at 2006/07
prices) funding deficit derived from CCLRC to meet the additional
running costs of Diamond and ISIS TS2, despite assurances from
the Government that STFC would be formed without any legacy issues.
We conclude that the combined budget of PPARC and CCLRC was never
going to be sufficient for STFC to manage Diamond, ISIS TS2, the
other large facilities and all the PPARC research programmes.
This was noted by the National Audit Office in January 2007, and
therefore the Government should have known and should have acted
upon it. The fact that it did not has had unfortunate consequences.
We believe that the Government should ensure that its original
commitment to leave no legacy funding issues from the previous
Councils is honoured. (Paragraph 39)
54. The Government welcomes the Committee's recognition
in paragraph 36 of its report that STFC did not inherit a deficit
from CCLRC, when the new Council was formed on 1 April 2007. In
addition STFC was able to access the accumulated underspends of
the previous Councils—CCLRC and PPARC—and has subsequently
drawn these down. The Government considers that this fully meets
the commitment given at the time of STFC's creation.
55. The Government notes that both CCLRC and
PPARC, like all Research Councils, had long-term funding commitments,
which extended beyond the SR04 spending review period, and these
included the running costs for Diamond and the ISIS second Target
Station. In managing forward commitments such as these, the Government
has agreed with Research Councils that they can plan on the assumption
that their annual budget in any future spending review period
is their existing baseline (that is, there will be no increase
in their budget in cash terms). The Government does not believe
that it should exempt the running of new facilities from these
overall planning assumptions; in the event the Government provided
STFC with £185m in excess of flat cash over the CSR period.
56. STFC is a single Council, and has to manage
its commitments across the full range of its activities, and it
is under no obligation to maintain the balance between the expenditure
of its two predecessor Councils. It would be natural to expect
that this would change over time, as priorities change. That said,
it is not accurate to contend, as the Committee has done, that
increased commitments inherited from CCLRC have had to be funded
from the PPARC research programmes. The Committee referred to
the NAO's report of January 2007. The STFC does not accept the
assertion that the former PPARC community was "saddled with
a £75m deficit" (that is £25m per annum) derived
from CCLRC to meet the additional costs of Diamond and ISISTS2.
STFC's current plans for the CSR07 period show that the costs
of operating these new facilities will be absorbed within that
part of the STFC's budget which was previously the responsibility
of the CCLRC.
Conclusion 9: The timing of the formation of STFC
was not propitious. It takes time to set up a new organisation,
especially one as large and complex as STFC. The Government's
expectation that STFC would be ready for a new CSR was overly
ambitious. (Paragraph 41)
57. The Government announced in the 2006 Budget
its intention to consult about the possible creation of STFC (then
known as the Large Facilities Council). 125 responses to the consultation
were received, a substantial majority of which were in favour
of the creation of the new Council, but against the Government's
original suggestion that PPARC's grants for particle physics and
astronomy should pass to the Engineering and Physical Sciences
Research Council. The Government modified its original proposals
in the light of these comments and announced in July 2006 that
it intended to create the STFC in its present form.
58. Both PPARC and CCLRC urged the Government
to proceed to create the new Council as quickly as possible, once
the decision to create it had been taken. It was agreed that the
first practical date was the start of the following financial
year, 1 April 2007, and this target was achieved. Importantly
this gave the new Council, which had been operating in shadow
form for some months, time to participate directly in the allocations
process, which started before the announcement of the CSR settlement
for Science in March 2007. The Government does not agree with
the implication that further delay would have helped.
DELIVERY PLAN
Conclusion 10: We welcome STFC's decision to support
its major facilities to the extent set out in its Delivery Plan
and recognise the valuable role that these facilities currently
play, and will play in the future, in maintaining the excellence
and continuing the growth of UK science. However, we are concerned
that the decision to support the large facilities has come at
the expense of research in fields where the UK excels and in which
STFC and its predecessor Research Councils have made significant
investments. (Paragraph 46)
59. The Government allocates funding to individual
Research Councils on the basis of their Delivery Plan as a whole,
and does not divide the money between research and the running
of facilities. The balance between expenditure on these two types
of activity is for the Research Councils to decide.
60. In the particular case of STFC, the Government
notes that proposed expenditure on particle physics, astronomy
and nuclear physics, including the facilities that underpin these,
such as the UK investment in CERN, the European Southern Observatory
and the European Space Agency, will continue to rise over the
CSR period. The increased emphasis on facilities such as those
provided through our membership of CERN reflects their key role
in ensuring the continued excellence of UK science, and the UK's
strong performance in these areas.
GROUND-BASED SOLAR-TERRESTRIAL PHYSICS
Conclusion 11: We find Keith Mason's explanation
for the withdrawal of funding from ground based solar-terrestrial
physics (STP) facilities to be inaccurate, unconvincing and unacceptable.
PPARC did not decide to cut funding to all ground-based STP facilities,
but intended to maintain a reduced capacity in this field. We
urge STFC to suspend its decision on ground-based STP so that
the issue can be revisited with proper peer review and in full
consultation with the community, including NERC. (Paragraph 59)
61. The PPARC strategy for ground based Solar
Terrestrial Physics envisaged continued investment in EISCAT but
withdrawal from all other facilities. This was repeated in STFC's
Delivery Plan. STFC agrees with the Committee that future investment
in ground-based solar terrestrial physics should be subject to
discussion with a broader set of interested parties including
NERC. STFC does not agree that it should suspend the implementation
of the policy previously agreed by PPARC in March 2006.
DARESBURY AND HARWELL CAMPUSES
Conclusion 12: We do not see a major distinction
between Keith Mason's proposal of 2 November 2007 to move major
facilities from Daresbury to RAL and the situation in which Daresbury
currently finds itself. SRS is closing, 4GLS has been postponed
and the future of ERLP/ALICE is uncertain; the establishment of
a computational science centre—important and welcome as
this development is—and the influx of industry R&D teams
do not amount to the presence of a national facility. (Paragraph
71)
Conclusion 13: It is clear that Daresbury's future
under the current vision is as a technology and business park.
This cuts across previous Government assurances and pronouncements
about the importance of Daresbury in Britain's overall strategy
of scientific excellence. We urge STFC either to commit fully
to science at Daresbury, which would include confirmation of at
least one large national facility and a concrete programme of
future activity and scientific excellence at Daresbury, which
can then be the subject of proper scrutiny and review, or to make
an honest assessment of, and statement on, the future of Daresbury
as a technology and business park. (Paragraph 73)
Conclusion 14: We have no doubt of the desire
of the Government to see a thriving Daresbury campus and we note
from previous announcements that this would include major science
facilities. However, the Government must make clear, in line with
previous commitments, how it intends to deliver future large-scale
science facilities on the Daresbury campus. (Paragraph 74)
62. Ministers have made it clear that they are
fully committed to developing Daresbury and Harwell as world class
Science and Innovation Campuses. This commitment was set out in
the 2006 Budget, and has been repeated on a number of occasions
since then (most recently in Innovation Nation[4],
the DIUS White Paper on science and innovation). Having set this
strategic objective for Daresbury and Harwell Ministers look to
Research Councils and other public bodies to help deliver the
campuses.
63. The Government's specific vision for the
Daresbury Campus is that it should become a partnership between
STFC, NWDA, the private sector and regional universities. This
will build on the excellent start that has been made by these
parties and Halton Borough Council under the framework of Daresbury
Science and Innovation Campus Ltd (DSIC Ltd). Ministers have asked
Sir Tom McKillop to extend his work with the North West Development
Agency to advise on the future development of the Daresbury Campus.
The Daresbury Science and Innovation Campus will continue
to provide a location for collaboration in scientific research,
technology development, knowledge exchange and the cultivation
of a highly skilled workforce. A recent example of the practical
implementation of that vision is the £25m private sector
investment in a new Innovation Centre that the Minister for Science
and Innovation, announced on 2 April.
64. While there has been no previous commitment
to locate future large scale facilities at Daresbury irrespective
of the scientific or economic case for doing so the Government
has and continues to wish to strengthen science investment at
Daresbury. The implementation of the Government's vision will
reinforce the case to locate future large scale facilities at
Daresbury. These decisions will be taken on the merits of each
particular case, taking full account of scientific and technical
assessments, and the Government's campus strategy.
65. In line with the Haldane Principle, outlined
in paragraphs 34-41 above, it is for Research Councils, rather
than the Government, to make the detailed decisions about research
facilities and associated programme funding. The Government sets
the overall strategic direction.
66. The Government and STFC are committed to
maintaining Daresbury's capacity to carry out basic scientific
research. STFC will continue to invest at Daresbury to provide
global leadership in key technologies building on the world class
science currently at the Campus.
67. Specifically, STFC has it in mind to create
a national technological capability in computational science at
the Hartree Centre, and to support accelerator and detector research
and development for next generation large scale facilities at
the Cockcroft Centre. The proposal for a Detector Systems Centre
will build on STFC's world-class detector capabilities and knowledge
base. The intention is for academic and industrial collaboration
to develop sensors both for research and commercial applications.
Ministers are currently examining STFC's proposals for these capital
investments at Daresbury as part of the allocation of DIUS' Large
Facilities Capital Fund (LFCF)
68. STFC announced on 10 March that its New Light
Source (NLS) project would draw on the substantial scientific
expertise and technology capability at Daresbury, as well as involving
experts from throughout the UK.
REGIONAL DEVELOPMENT AGENCIES AND SCIENCE IN THE
REGIONS
Conclusion 15: We recommend that the Government
make clear its role in regional science policy and how this fits
with the Haldane Principle. We also recommend that the Government
clarify whether it regards its regional policy as a relevant criterion
when the STFC or other Research Councils make decisions about
capital projects or programmatic funding. We further recommend
that the Government publish a White Paper on Regional Science
Policy as a basis for discussion as a matter of urgency. (Paragraph
77)
69. The Regional Development Agencies (RDAs)
provide additional resource and capacity within their regions
in support of science and innovation. In the case of Daresbury
the North West RDA and the Science and Industry Council have been
particularly valuable in their support of the campus.
70. The RDAs and Science Cities will play a key
role in bringing together key partners to develop shared priorities
where science and innovation drive economic development. These
bodies understand the importance of place in achieving a critical
mass of science and innovation excellence.
71. The Government is committed to excellent
science and research, wherever this may be in the United Kingdom.
Research Councils will fund the very best research and facilities,
wherever they are located in this country. This fits entirely
with the Haldane Principle as set out at paragraph 34-41 above.
The Government does not plan to publish a white paper on regional
research policy. The ten year framework[5]
provided a clear statement on Government policy in this area:
Public funding of research at a national level, through
the Research Councils and funding bodies, is dedicated to supporting
excellent research, irrespective of its UK location. The 'excellence
principle' is fundamental to safeguarding the international standing
and scientific credibility of the UK science and research and
supporting an excellent, diverse, expanding and dynamic science
base, providing value for money for public investment." (9.52
p146, Science and Innovation Investment Framework 2004-2014)
This policy remains firmly in place.
72. The ten year framework made clear that regional
and national bodies need to co-ordinate their funding and strategies.
This reflects the importance of research and innovation in improving
economic performance at both a regional and national level. The
Research Councils and RDAs are working closely together at a strategic
and operational level to align funding and strategies where appropriate.
Ministers further highlighted the importance of innovative places
in the Innovation Nation White Paper of March 2008.
73. In line with the recommendations in Lord
Sainsbury's review of Government science and innovation policies,
Research Councils will be committing £120m, over the next
three years, to research programmes in collaboration with Technology
Strategy Board initiatives. This aligns with the £180m commitment
from the Regional Development Agencies to work with the Technology
Strategy Board.
74. The Government, in the Next Steps[6]
document, specifically set an overarching vision for science and
innovation campuses (SICs). The Government made a commitment to
two campuses because of their potential value to science and innovation,
rather than to favour one campus over another. The Daresbury and
Harwell SICs play an important strategic role for the UK research
base. The Government also recognises that there are other clusters
of research excellence which attract innovative business. Science,
innovation and business work closely together in clusters around
the country, for example in Norwich, Cambridge and Edinburgh.
STFC SITE MANAGEMENT
Conclusion 16: We recommend that STFC install
a Campus Director at Daresbury and at RAL. (Paragraph 79)
75. The decision to designate Daresbury and Harwell
as Science and Innovation campuses was made by Government in the
2006 Budget, and Ministers look to the Research Councils, and
other public bodies, to support their development. It is important
that the wider development of these campuses is promoted effectively.
Accordingly, Ministers have asked Sir Tom McKillop specifically
for advice on this in the case of Daresbury. This is distinct
from the management of the STFC facilities located on the two
campuses, which is a matter for STFC itself. STFC's current view
is that such facilities should be managed coherently across the
Council, as a whole.
CUTS TO THE GRANT LINE
Conclusion 17: Given the anxiety that grant cuts
are causing to the physics and astronomy community, we are dismayed
that STFC has been attempting to play down the effects of the
cuts on the grounds that reductions in future grants are not problematic.
We consider cuts to grants that had already been promised a major
problem. We urge STFC to take immediate steps to communicate clearly
and comprehensively to its research community the impact of its
grant cuts. (Paragraph 83)
76. Ministers recognise the importance of predictable
funding trajectories to ensure the research base can provide the
best value for the nation. Ministers also recognise the anxiety
in the astronomy and particle physics communities about STFC's
plans and have already commissioned the Wakeham Review to look
at the health of physics as a whole. STFC has made it clear that
its rolling grants to universities for astronomy research will
remain broadly unchanged for 2008-09, and the level of rolling
grants for particle physics will be unaffected until at least
2010-11. The number of postdoctoral awards provided by STFC in
2010-11 will be broadly comparable to the number in 2005-6. The
Wakeham Review will be available in September 2008, which gives
STFC time to consider its conclusions before its next review of
astronomy grants in late 2008.
COMMUNICATION
Conclusion 18: We deplore STFC's failure to consult
on ILC, Gemini and STP, a failure that has cost it the trust of
the scientific community. We conclude that STFC's communications
are inadequate, particularly its internal communications, which
are deficient both in terms of top down communication (for example,
alerting staff to proposed changes) and bottom up communication
(for example, engaging the community over decisions). We recommend
that STFC pursue urgently the appointment of a permanent Communications
Director with appropriate skills and experience. (Paragraph 87)
77. STFC has recognised that it could have
communicated better with its community. STFC has already advertised
for a new Director of Communications. It has completed external
reviews to identify how best improve its communications structure
and capability and stakeholder engagement and are producing an
action plan for early implementation. It has also implemented
a number of changes to improve internal communications.
IMPACT ON NON-STFC RESEARCH FACILITIES
Conclusion 19: We have grave concerns about the
impact of the cuts proposed in the Programmatic Review upon renowned
institutions such as Jodrell Bank. This illustrates the extent
to which the STFC's decisions affect research and facilities beyond
those that it directly funds or owns. (Paragraph 89)
78. STFC released on 3 March the advice it
received from its Science Board which had been asked to peer review
all approved STFC programmes, including the e-Merlin project that
would upgrade the scientific facilities at Jodrell Bank. The Programmatic
Review is aimed at evaluating the scientific priority of each
project, facility, or activity and assessing its likely productivity.
STFC announced that the release of the Science Board advice was
to be followed by a period of consultation which ended on 21 March
during which the views of the scientific community were sought.
79. The Committee is rightly keen that STFC
should do robust peer review and consultation where possible before
reaching decisions. However, that puts an onus on the community
to treat the process responsibly and to try to avoid fomenting
media headlines which undermine the consultation process and damage
the presentation of their science.
80. STFC has not taken any decision on the
funding of e-Merlin. Decisions on the future evolution of STFC's
programmes will be made once the input from the consultation exercise
has been considered. STFC has however made clear that the e-Merlin
project is part of its strategy for radio astronomy. It will discuss
the issues raised in the review with its partners to support the
UK's competitiveness in radio astronomy for the next decade and
beyond. The future of Jodrell Bank as a whole is for the University
of Manchester to decide.
PEER REVIEW
Conclusion 20: Community consultation is key to
peer review. This issue should have been addressed at the outset
using models from the previous PPARC and CCLRC structure. We conclude
that STFC's peer review system is inadequate and recommend that
DIUS review the make up of STFC's peer review committees. (Paragraph
93)
81. The Government rejects the recommendation
that DIUS should review the make up of STFC peer review committees.
As stated previously, the Haldane principle draws a clear line
between the Government's role to set strategic direction and the
Research Council's role to make detailed funding decisions, of
which peer review forms an important part. Research Councils are
responsible for establishing peer review structures and appointing
people to serve on the relevant committees.
82. STFC considers that the science peer-review
structure, which has been operating since July 2007, has demonstrated
its capacity to evaluate and recommend investment priorities across
the breadth of the STFC programme. This structure evolved from
that which operated, and was seen to be effective, in PPARC. It
has been developed to incorporate the nuclear physics programme
and supplemented by a new committee, the Physical and Life Sciences
Committee, which evaluates the ex-CCLRC facilities programme.
There was no such formal peer review body tensioning the investment
in facilities in CCLRC.
83. STFC considers the information on which
the committees based its recommendations to be sufficient. The
committees were asked to make recommendations on two separate
sets of programmes. The first in the context of the Delivery Plan
was whether or not STFC should ramp up its investment in the International
Linear Collider, and the Gemini Telescopes and whether it should
invest further in ground-based solar-terrestrial physics facilities.
In reaching its recommendations PPAN and the Science Board was
fully apprised of the history of support for these projects, the
options and the impact.
84. The second was the programmatic review.
Here the committees were asked to review existing projects and
facilities, assess their existing and future scientific impact
and prioritise them. The committees used a common set of criteria
in assessing each project or facilities and were provided with
information from the project leaders or facility Directors. The
members of the committees were also encouraged to consult with
members of the community.
85. The STFC has now opened up the recommendations
of the peer-review committees to further consultation to ensure
that any additional material information is available before final
decisions are made.
86. STFC agrees with the Select Committee
that wider community consultation is valuable, and are committed
to finding an appropriate way of achieving effective consultation
across the STFC's programme.
Conclusion 21: We are at a loss to understand
how Professor Mason could think that secretive reviews would have
anything other than a divisive effect on the community and undermine
confidence in any of his future decisions. (Paragraph 95)
87. Research Councils use peer review processes
to assess funding bids from university researchers. They may use
other approaches for in-house expenditure.
88. STFC note that these reviews of in-house
research were commissioned by the Chief Executive to assess and
benchmark the relative strength of the Council's in-house research
capability (not the research capability of university groups)
and as such were not part of the normal peer-review process. These
reviews were carried out by national and international experts.
89. STFC does not agree that these reviews
were 'secretive'. However, to enable these panels to carry out
their reviews objectively it was made clear they would report
initially directly to the Chief Executive. STFC always intended
to publish these reports in a suitably anonymised form and has
done so. Their recommendations will be taken forward with the
departments involved in decide how best to invest in in-house
research in the future.
90. The Committee repeats criticism made by
Professor Chattopadhyay to the effect that the process the CCLRC
adopted when setting up the review of its light source strategy
was "flawed". STFC strongly disagrees with this criticism.
The Light Source Review Panel comprised four of the most eminent
international scientists in the field, and sought and received
expert advice from those involved in developing ideas for the
next generation Light Source facility. The Council is concerned
that the Committee's remarks may make it more difficult in future
to secure the participation of eminent scientists in similar reviews
in future.
INTERNATIONAL REGULATION
Conclusion 22: In the context of ILC, Gemini and
ground-based STP, we do not believe that proper consideration
was paid to the impact of the UK's international reputation on
two counts. First, DIUS did not allocate enough money to STFC,
forcing it to make undesirable cuts. Second, STFC did not handle
the cuts well: it failed in its duty to consult with the community
prior to making a decision and in the case of Gemini made more
than one announcement on which it had to renege. (Paragraph 96)
Conclusion 23: We are concerned that withdrawal
from ILC has made the UK look like an unreliable international
partner and that indecision over Gemini and the withdrawal of
funding for ground-based STP facilities while the UK is engaged
in a long term commitment to EISCAT has made the UK look like
an incompetent international partner.
91. The Government disagrees with the Committee's
comment that it did not allocate enough money to STFC. STFC's
budget will increase by £185 million over the three years
of the Comprehensive Spending Review, which provides the Council
with resource to continue its investment in world class research
and facilities. It is the duty of Research Councils to review
regularly their investments to determine whether they remain of
high priority are on track to deliver their objectives and represent
value for money. The Government supports STFC's decision to evaluate
its activities in this light, and to include international investments
within the review.
92. STFC regrets that, in the case of Gemini,
it had to make an early announcement of its intentions for future
participation. However, peer review of Gemini, in both 2005 and
2007, concluded that the productivity of the telescopes was
such that funding at existing levels was no longer justified.
Early discussion with the Gemini Board was necessary because STFC's
international partners were pressing for a commitment in relation
to future funding. It was and remains STFC's view that in these
circumstances the Council had a responsibility to its partners
to inform them of the Council's position.
93. The Government believes that the UK remains
a reliable international partner. The UK research community will
continue to be able to carry out international research, through
access to a range of world-class facilities, including CERN, as
well as the European Southern Observatory, ESRF and ILL, and programmes
of the European Space Agency. Major new facilities in the UK such
as Diamond and the ISIS Second Target Station will also provide
opportunities for world-leading scientific research.
94. The Government does not consider that a decision
to withdraw from a particular project on the grounds that it no
longer remains a priority can justifiably be described as putting
into question the UK's reliability as an international partner.
95. STFC has honoured all of its existing commitments
to its international partners but decided to reduce future investments
in some. Although, it is true STFC has chosen not to ramp-up investment
in the current International Linear Collider project, STFC will
continue to participate in developing global strategies for future
Linear Colliders and continues to honour its commitments to the
common development fund. These decisions have been taken on the
basis of peer-review evidence. This ensures that the UK's substantial
investment in the Large Hadron Collider at CERN is exploited before
embarking on a further facility of such scale. The US Congress
seems to share this analysis and has massively cut US spending
on the ILC.
96. There has also been considerable speculation
about UK access to the Gemini telescopes, Contrary to statements
made by the Gemini Board, STFC has never issued formal notice
to withdraw from the project and continues to negotiate the terms
under which UK researchers have access to Gemini telescopes in
future. Consistent with this strategy STFC has paid the UK's 2008
contribution to maintain UK access to the Gemini telescopes for
the February - July 2008 semester, and will make a further payment
by the end of July for the rest of 2008.
WAKEHAM REVIEW
Conclusion 24: We recommend that STFC wait for
the results of the Wakeham review before implementing the cuts
proposed in the Delivery Plan and that it use this time to consult
with its stakeholders. (Paragraph 102)
97. Ministers note that STFC provided an undertaking
at its Council meeting on 28 and 29 January 2008 that it would
not reduce significantly the number of Post Doctoral Research
assistants supported under its rolling grants for universities
before the results of the Wakeham review are known.
98. The STFC has carried out a major consultation
exercise on its programmatic review. This exercise will inform
its future programme investment decisions and strategy that will
be considered by Council in July. STFC cannot delay unduly the
implementation of its Delivery Plan without seriously damaging
other critical elements of its programme. However, STFC does recognise
the impact on Physics Departments of any changes in the level
of its rolling grant funding. STFC has already announced
that it will not implement any changes to rolling grants provided
to universities until after the result of the Wakeham Review is
known.
SOLAR-TERRESTRIAL PHYSICS
Conclusion 25: We hope that STFC can liaise with
NERC and the STP community to find a favourable solution for all
parties. (Paragraph 103)
99. The Government encourages STFC to try to
find a favourable solution in liaison with NERC and the research
community.
100. The STFC agrees that future investment
in ground-based solar terrestrial physics should be subject to
discussion with a broader set of interested parties including
the NERC.
ASTRONOMY TECHNOLOGY CENTRE
Conclusion 26: We welcome news that STFC, ATC
and the University of Edinburgh have entered talks about a possible
transfer of ATC from STFC ownership to the University. We anticipate
that ATC would be able to retain its identity as a world class
technology centre and continue to thrive within the University.
(Paragraph 105)
101. The Government also welcomes the news of
these discussions, and encourages STFC, ATC and the University
of Edinburgh to reach a mutually satisfactory agreement.
102. The STFC is committed to sustaining the
UKATC as a world class technology centre and is working with interested
parties including the University of Edinburgh on how this can
best be achieved.
MANAGEMENT
Conclusion 27: We do not have any confidence that
rearranging the responsibilities of the existing staff will solve
STFC's problems. There is, as noted earlier, immediate need for
a Communications Director. However, the management failings at
STFC go deeper than this. The events of the past few months have
exposed serious deficiencies within STFC's senior management,
whose misjudgements could still significantly damage Britain's
research reputation in this area, both at home and abroad. (Paragraph
107)
Conclusion 28: STFC's problems have their roots
in the size of the CSR07 settlement and the legacy of bringing
CCLRC and PPARC together, but they have been exacerbated by a
poorly conceived delivery plan, lamentable communication and poor
leadership, as well as major senior management misjudgements.
Substantial and urgent changes are now needed in the way in which
the Council is run in order to restore confidence and to give
it the leadership it desperately needs and has so far failed properly
to receive. This raises serious questions about the role and performance
of the Chief Executive, especially his ability to retain the confidence
of the scientific community as well as to carry through the necessary
changes outlined here. (Paragraph 108)
103. The Government is working closely with STFC
on the lessons learnt from this allocations process. Changes to
the leadership of the STFC, at this formative stage, would only
be disruptive. STFC agreed with DIUS, that it should undertake
an organisational review in the near future. The review will cover
strategy and planning, customer and stakeholder engagement, governance
and risk management processes, delivery, value for money and management
of change. The review will also include scrutiny by a panel independent
of STFC. In addition to the organisational review, the Government
has asked STFC to consider how it can consult and communicate
more effectively with its stakeholders and make demonstrable improvements
in these areas over the coming months.
104. The STFC is a more complex organisation
than its predecessors, and this has required both continuity and
change in its management structures The initial priority was to
achieve an effective transition to the new Council, and in doing
so, the Council chose to build on the considerable management
experience which existed within both predecessor organisations.
STFC has, however, recognised from the outset that there was also
a need to strengthen the management team and structure, and the
Council took an initial set of actions in February 2008. Since
then we have also introduced further changes in the overall governance
of the STFC.
105. STFC has agreed with DIUS that it should
be subject to an organisational review in the near future. This
will comprise both a self-assessment and an external scrutiny.
The review will consider strategy and planning, customer and stakeholder
engagement, governance and risk management processes, delivery,
value for money and management of change. The timetable for this
review has still to be finalised but we expect it to be complete
by September 2008.
106. The independent members of STFC Council
have considered the Committee's observations about the Chief Executive,
and have publicly stated that Council is determined that STFC
continues to move forward in addressing these challenges. It fully
supports the Chief Executive and his management team in doing
so.
ARTS & HUMANITIES RESEARCH COUNCIL
Conclusion 29: We are concerned that AHRC's reduced
share in the science budget sends out a negative message to the
arts and humanities community. (Paragraph 112)
107. AHRC has received an increase in its funding
in CSR07 of 12.4% which, following the 43% increase received in
SR04, amply demonstrates the Government's commitment to arts and
humanities research.
108. The level of near cash that the AHRC received,
having taken account of funding for FEC, was comparable to other
Research Councils.
109. The ARHC has a far lower requirement for
non-cash and capital compared to other Councils. This is due to
the type of research which the Council funds.
110. As a result of these lower requirements
for other types of resource, AHRC received a slightly lower share
of the overall science budget than before (by 0.2%). The Government
believes that it is unhelpful and misleading to label this a 'reduced'
share. The type of resource, required and received by AHRC in
this settlement was comparable to that of most other Councils,
as explained above.
Conclusion 30: We are concerned that reducing
the number of postgraduate places will discourage younger researchers
from entering academia in the arts and humanities. This is of
particular importance at a time when the economic impact of the
sector is becoming increasingly recognised as significant. (Paragraph
114)
111. Some 90% of funding for postgraduate students
in the arts and humanities comes from sources other than AHRC.
AHRC are putting greater emphasis on strategic research programmes
where they have a distinctive and valuable role to play. The impact
of AHRC's reprioritisation on younger researchers entering academia
will therefore be limited.
112. AHRC currently fund about 10% of the
total number of arts and humanities postgraduates in UK HEIs at
any one time. The reduction in the number of AHRC new awards from
1450 in 2007-08, to 1000 in 2008-09 and thereafter to 1325 per
annum, will not have a significant impact in discouraging younger
researchers from entering academia in the arts and humanities,
especially given the increased numbers of doctoral awards
attached to strategic programmes. AHRC, like the other Research
Councils, each compiles a health of disciplines report on its
academic community, which would enable it to monitor the impact
of these plans.
COMMUNICATION WITH GOVERNMENT
Conclusion 31: It seems to be a breach of the
Haldane Principle that the Government should direct a Research
Council to switch funding from postgraduate awards to programme
funding merely on the basis of it being out of step with other
research councils, or indeed for any other reason. (Paragraph
116)
113. All Research Councils were asked to prepare
Delivery Plans for publication which reflected the activities
that the Council proposed to support once it knew its actual allocation.
The draft Delivery Plans were subject to discussion between the
relevant Research Council and the Government, to check that they
reflected the plans submitted by Councils in response to the scenarios
commissioned earlier in the allocations round, and the terms of
the Councils' specific allocation letter, including the contribution
to cross Council programmes. A number of comments were offered
to all Councils during the development of Delivery Plans.
114. As the AHRC's evidence makes clear, it made
the decision to change the number of postgraduate awards supported,
and it was not directed to do so by Government.
115. AHRC always intended to be entirely open
with the arts and humanities academic community about these budgetary
decisions and the Council announced this decision on the Web on
15th January 2008 (not 7th February 2008 as stated in the Committee
report).
Conclusion 32: We are concerned that the lines
of communication between AHRC and the Government are not clear
enough. We recommend that that there be an urgent review between
DIUS and the AHRC as to whether the scale of the proposed reductions
in postgraduate awards should be moderated, in the light of the
concerns we have expressed here. While respecting the Haldane
Principle, we recommend that DIUS review its working relations
and communication strategy with the Research Councils, so that
the process of decision-making should be more clearly in line
with overall strategy and Government policies. (Paragraph 117)
116. The allocation of the science budget is
a negotiation. However, it is one underpinned on evidence gathered
from the Research Councils. The Government had a clear approach
to allocating the science budget for the CSR07 period. Each Research
Council was asked to plan for four different scenarios (-5%, flat
cash, +5% and +10%). It was on the basis of these scenarios that
the allocations were made. It was made clear to Research Councils
that accurate information was required on how they would go about
a re-prioritisation of existing and planned activities at these
different scenarios. The Government recognises that there are
lessons to be learnt from this allocation, as there have been
from previous spending rounds. In particular, DIUS will encourage
Research Councils to consider how best to communicate with the
Government and their communities about future funding.
117. AHRC determined the proportion of its budget
that it allocates to postgraduate awards, and it would not be
appropriate for this to be jointly reviewed by Government and
AHRC.
MEDICAL RESEARCH COUNCIL
Conclusion 33: We welcome the large increase in
MRC's budget and a sharpening of its focus on knowledge transfer.
(Paragraph 118)
Conclusion 34: We ask the Government to justify
the Treasury rules on the treatment of excess on shortfalls or
surpluses on predicted revenue by Research Councils and in particular
the effect it has on higher risk innovation and on the accuracy
of revenue predictions. (Paragraph 121)
Conclusion 35: We are concerned that the Treasury's
decision to take £92 million from MRC's commercial fund will
act as a disincentive for the Research Councils to be entrepreneurial.
This outcome goes against the Government's aim, which we applaud,
to improve the translation of research into wealth. We urge the
Treasury to commit to a set of rules that encourages the kind
of entrepreneurship that DIUS is attempting to foster. (Paragraph
122)
118. The Government is pleased the Committee
supports an increase in the MRC's funding.
119. The rules about the treatment of income
apply to the Science Budget in the same way as they apply across
the public sector. In preparing for the next spending review,
Departments are required to provide forecasts of income to Treasury.
These income forecasts are one of the factors Treasury takes into
account in determining the level of funding provided to departments
in each spending review period.
120. Departments are permitted to retain all
the income they generate up to the level of the forecast for each
year. Recognising the difficulty of making precise estimates of
future income, the standard rules allow departments to automatically
retain income in excess of forecast amounts up to a limit of 20%
of forecast income. Approval to retain income above this level
is judged by the Treasury on a case by case basis. The intention
of these rules is to achieve a balance between encouraging the
generation of income whilst maintaining overall control of public
expenditure. The Government believes that these general rules
on income retention set out in the Consolidated Budgeting Guidance
provide the correct incentives. In the normal course of events
the operation of these rules is expected to mean that Research
Councils would be able to retain all of the income they generate.
121. One source of income for some Research Councils
is royalties from the exploitation of intellectual property rights
arising from research carried out within Research Council Institutes.
122. The recent decisions regarding the MRC Commercial
Fund were taken in response to a specific issue which emerged
in discussions between the Treasury and the DTI during the spring
of 2007, where it became clear 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 overall CSR07 settlement
for the Science Budget reached in March 2007. The Science Budget
Allocation to MRC, announced in October 2007, took full account
of these points.
123. 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. Going forward, the MRC will be subject to the same income
rules as the other Research Councils.
June 2008
1 "Science and Innovation Investment Framework
2004-2014", HM Treasury, DTI, DfES July 2004 Back
2
Peer Review Benchmarking of Grant Review in the UK, RCUK.
http://www.rcuk.ac.uk/aboutrcuk/efficiency/peer.htm Back
3
"The Allocations of the Science Budget 2008/9 to 2010/11",
DIUS, December 2007. http://www.dius.gov.uk/publications/URN07114.pdf Back
4
Innovation Nation, DIUS, March 2008 http://dius.dialoguebydesign.net/bgo/Innovation%20Nation%20White%20paper%20download%20page.asp Back
5
Science and Innovation Investment Framework 2004-2014,
HM Treasury, July 2004. http://www.hm-treasury.gov.uk/spending_review/spend_sr04/associated_documents/spending_sr04_science.cfm Back
6
Science and innovation investment framework 2004-2014: next
steps, HMT, March 2006 http://www.hm-treasury.gov.uk./budget/budget_06/assoc_docs/bud_bud06_adscience.cfm Back
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