UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 1170-i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

INNOVATION, universities, SCIENCE AND SKILLS COMMITTEE

 

ENGINEERING AND PHYSICAL SCIENCES RESEARCH COUNCIL:

RECENT developments AND INTRODUCTORY HEARING

 

 

WEDNESday 12 NOVEMBER 2008

PROFESSOR DAVID DELPY and MR JOHN ARMITT

 

Evidence heard in Public Questions 1 - 114

 

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Oral Evidence

Taken before the Innovation, Universities, Science and Skills Committee

on Wednesday 12 November 2008

Members present

Mr Phil Willis, in the Chair

Mr Tim Boswell

Dr Ian Gibson

Dr Evan Harris

Dr Brian Iddon

Ian Stewart

Dr Desmond Turner

 

________________

 

Witnesses: Professor David Delpy, Chief Executive, and Mr John Armitt, Chairman, Engineering and Physical Sciences Research Council, gave evidence.

Q1 Chairman: Good morning to our two witnesses: David Delpy, the Chief Executive Officer of the Engineering and Physical Sciences Research Council, and John Armitt, the Chairman of the EPSRC. Welcome to you both, gentlemen, this morning. It is the first time that our Committee has had a chance to formally congratulate you on your appointments, but also we welcome you to the IUSS Committee. I want to be fairly pacey this morning, if you would keep your answers as tight as you possibly can, please! David, you came in as a Chief Executive at a time when there was considerable change, particularly in physical sciences. What have been the big challenges over the past year as Chief Executive?

Professor Delpy: I suppose there have been internal and external challenges. If I start with the easy one, that is internal challenges. As a result of the way that funding has been moved between the various research councils themselves but particularly because of the development of the shared service centre and the eventual move of the finance HR and grant-based staff out of the research councils and into a separate shared service centre, there has been an internal reorganisation that I have had to pick up although it was largely planned before I came on board. The major challenges externally, which are not just unique to EPSRC, have been finding ways of managing the increased demand for grant funding and the increased cost of grant funding with the transition to FEC; tackling ways of overcoming the inherent conservatism of peer review, and therefore enabling much more ambitious projects to get through the peer review process; and in the longer term, and particularly for EPSRC, increasing the visibility of engineering and physical sciences and the impact it has on society.

Q2 Chairman: John, can I just put on record our thanks to you for joining us for the launch of the e-consultation last week at the Lambeth Academy because we very much appreciate that! As its Chairman, is this an organisation that is fit for purpose?

Mr Armitt: Yes, I have been impressed by what I have found. It is an organisation that I believe has a very good set of top staff - programme managers in David's directorates. I have worked with him and them on the reorganisation that he has discussed, and we have now got an organisation that is facing in the right directions, given the stakeholder interests that we have. I have been very impressed by the professionalism of the organisation. I would describe it as an organisation that, like all, could always do with tweaking, but which is fundamentally sound. Organising the shared service centre I think is one of the challenges that we and the other research councils will face in the next 12 months because that is a significant change in day-to-day operation of the research councils. Very often, of course, it is that side of any organisation that keeps the whole thing going, and if that is tripping over itself with new IT systems and so on, that can be a problem.

Q3 Chairman: One of the things you have both mentioned is the community you are facing. Can you comment on this issue, which the Committee constantly has brought to its attention: has the Government's policy of emphasis on transitional research had a significant effect in terms of the way in which your organisation views its objectives, and indeed funds those objectives?

Professor Delpy: I come from an applied science background in the medical physics area anyhow.

Q4 Chairman: So you are all in favour of it!

Professor Delpy: I am all in favour of it anyhow. I would argue, to be honest, that probably to all the research councils this represents less of a culture change to our community. When I came on board, the statistics - and they have not changed significantly - were that something like 35 to 40 per cent of all the research that we fund in universities is funded in collaboration with a user of some sort, whether that be a government department or an industry. About 40 per cent of the PhDs that we fund are also jointly or in some form of collaboration with an end user. I would say that the EPS community as a whole has historically always been engaged in translational research anyhow; so I do not really find that it is the problem that it is perceived to be. There are differences in specific communities across the whole region.

Q5 Chairman: That is a very fair response. In your delivery plan you said that there is more to do to reduce the time of exploitation of breakthrough research; and given your comments about the Research Council's central mission, what are you doing that is fundamentally going to change, because everybody says that there is this big gap?

Professor Delpy: There are a variety of things. One of the things EPSRC pioneered were the collaborative training awards, which has now transformed into knowledge transfer awards. Knowledge transfer awards are large-scale lumps of funding for universities. We have just got a big call-out, which closed last week, and we will be announcing that over the next three months or so, having gone through peer review. That is a tranche of funding that is provided in a very flexible way and enables universities to mix and match the training that they provide for students, together with support for the transition of the research that comes out of masters and PhD packages through some small amount of follow-on fund, and support for the staff, either Rais through what used to be the old Research Associates Industrial Secondment scheme, which can now be expanded through to PhD students, being able to move into the university sector. Obviously, in collaboration with the TSB, we are involved in a large number of the knowledge transfer networks and the integrated knowledge centres, and we have a new initiative with a venture group. John hosted a dinner with some venture capitalists a month or so ago, to get a collaboration so that they are involved early on in helping us with our small follow on fund.

Q6 Chairman: John, given your background and the fact that you are a deliverer, you must be very frustrated about the time it takes to get basic research into products and wealth creation; so what are you doing about it as Chairman?

Mr Armitt: Yes, I think that perhaps sometimes we expect too much too quickly. If you accept that what we are funding and what the universities are doing is largely the front end, in years one to three in a research programme, and business is unlikely to pick it up until years ten to twenty, what we are really looking for is how you make that transition in years three to seven, where business can say there is something we can pick up and take forward. One of the things I said a few months ago - but times change rather rapidly - was, "There is all this money sloshing around in the City; why can we not get more of it into research, and why can we not get these private entity guys showing some interest in what we are doing?"

Q7 Dr Iddon: Their bonuses!

Mr Armitt: The encouraging thing about the dinner we had was that they said they would be able to bring funds for years five to ten, and I had been afraid they would only be interested in years nought to five in terms of seeing a return on their money; but they were prepared to fund things. The key thing was that they would be very, very critical of course of the decision to go forward with something, so they would be very probing in seeing whether this is something that really is going to be possible to bring to market in a couple of years' time - or whether it is just some academic whimsy that frankly is very nice, but is not going to lead to product. I was encouraged by that. The other thing I would add to David's comment is about these engineering doctoral training centres where we have 21 universities operating with 500 companies, and in which people are doing eng.docs where three of their four years is spent very much focused on business and one year in pure academia; so that is helping to create this transition. Our links with TSB will be very important in this whole area but we have to be careful that we do not stray too much into one another's fields; nevertheless the more that we can link together at the right time, then we will see some real benefit.

Q8 Chairman: I will come back to TSB because we want to explore that with you. The split of PPARC and CCLRC was a major event in the setting up of STFC. There was at the time, and has been increasingly since then, a suggestion that your research council should take over the smaller response-mode funding for the physics community. Is that a suggestion you are seriously looking at? Is it one you should be looking at?

Professor Delpy: The discussion and consultation on that pre-dated my coming on board, but the Council at the time of the consultation recommended that the whole of physics funding for awards should be handled by one research council, not necessarily EPSRC. We did get the Council to reconsider that at the time of the Wakeham Review and the evidence that we put into it, and the Council felt that was still the same, or it held the same view. To be honest, I see no real problem in having the physics funding split across the two because they are very different forms of physics community with much longer-term goals for the particle physics and astronomy side than perhaps on the rest of physics. STFC and ourselves have obviously got to make sure that we work together to avoid a real gap, and to enable us to tension the support across the whole of the physics portfolio in a balanced way. We are working at the moment with STFC to do that as part of the follow-on from the Wakeham comments.

Chairman: Thank you very much. I want now to move to funding.

Q9 Dr Iddon: Good morning, gentlemen. You are having to put some money into the TSB, which obviously is welcomed; 90 per cent of overheads is funded through the FEC mechanism, which everybody seems to approve of; and you mentioned the training centres, which you also have to fund. The problem with that is that the money available for grants, whether programmed or responsive, has gone down by 15 per cent, which is a considerable figure. The research community you are involved with is extremely worried about the direction of money away from what I would call blue-sky research or responsive-mode applications towards what you call the global challenges. You must be aware of the concern in the academic community: what is your response to that?

Professor Delpy: The total amount of funding that is going into research has increased. We have had an 18.6 per cent increase, which enables us to cover our 80 per cent of FEC, the other 10 per cent coming through the infrastructure fund. When we were making our bids during the CSR preparations we consulted extensively with our strategic advisory teams, which are largely discipline based, with our user panel, which is largely industrial based, and our strategic academic panel, as well as more widely with our framework universities. The message we got, consistently, was that irrespective of the overall level of the funding, the thing that we must preserve is training. The thing that we must preserve is research in areas of strategic priority, and those areas have been identified through that process of consultation.

Q10 Dr Iddon: Who has identified them, David?

Professor Delpy: The SATs, the strategic advisory teams.

Q11 Dr Turner: Who are the strategic advisory teams?

Professor Delpy: The strategic advisory teams are generally somewhere between 12 and 15 representatives of the research community, so they are active researchers.

Q12 Dr Turner: Who has appointed them?

Professor Delpy: We appoint them. We advertise openly for nominations and then we go through an interview process.

Q13 Dr Gibson: Do you get the nominations or do you have to pick the phone up?

Professor Delpy: No, we get lots of nominations. The selection process is more difficult, because we do get a lot of nominations. These are all active researchers in their specific disciplines and there are about 14 or 15 SATs covering maths, physics, chemistry, materials, engineering and so on. That is who they are! The message that we got was that irrespective of whatever funding we got, we needed to preserve training and funding in the strategically important research areas. As a consequence, when we did get our overall 2.4 billion, we set aside approximately half that budget for both training and the training associated with the knowledge transfer activities. We are putting 592 million over the three-year CSR period into what could largely be called training, fellowships and studentships, and about 480 million into things that we corralled under a knowledge-transfer heading, but which are largely, again, training and research, which is geared around industrial priorities. We are then left with 866 million, our largest single pot, which is for responsive-mode/blue skies - the open research portfolio. So it comprises 37 per cent of our total portfolio, that responsive-mode pot, but about 60 per cent or 65 per cent of our research portfolio, if you remove the training component.

Q14 Dr Iddon: Traditionally, research councils were awarded grants to departments - the chemistry community, the physics community and so on; however, as I understand it the grants in the future will be awarded to the universities for internal distribution. Is that correct; and, if it is correct, why has this change occurred?

Professor Delpy: The quick answer is "no". Certainly all the responsive-mode grants are awarded in exactly the same way to the principal investigator - although obviously it is the university that holds the award, the PI is the person responsible for it. We have for many years now made the nominations of the doctoral training award, which is the PhD allocation, to the universities as a whole. It was probably five or six years ago that we changed the allocation of those from departmental to a university allocation, leaving the universities with the freedom to decide strategically how they wish to allocate studentships. The large KTA process that we are currently going through is again issued to the university, but then it was in its original format as a CTA award back in 2001, so nothing much has changed, to be honest.

Q15 Dr Gibson: You must be selective in a number of universities and the particular universities that you allocate the funds to.

Professor Delpy: We are indeed.

Q16 Dr Gibson: Can you tell me roughly - besides Oxford and Cambridge - how many others benefit from this and how many do not?

Professor Delpy: In terms of doctoral training awards, it is about 28, if I remember rightly that get a doctoral training award. The decision on whether we award a doctoral training account is based on the volume of research funding that the university has attracted from the EPSRC. When we set up the doctoral training account mechanism, because there are universities that would not receive the account we introduced the project studentship mechanism, which enables individual researchers to apply for a PhD student on their normal responsive-mode grant.

Q17 Chairman: How many of those are there?

Professor Delpy: In fact, interestingly, that is a mechanism that has driven behaviour in a way that we had not anticipated. Out of about 8,000 students that we now support, the largest of any research council, about 1,800 are currently project students. So that mechanism which we put in place as a catch-all for those who did not get a doctoral training account has grown enormously.

Q18 Dr Gibson: Why is that?

Professor Delpy: Because academics are bright people and if they can see a source of money and a mechanism, then they will apply for it. It is a general policy of EPSRC not to be restrictive, and so we did not say, "You can not apply for a project studentship if your university is in receipt of a DTA"; so if you look at the distribution of the project studentships, they map pretty well on to the universities that also have a doctoral training facility.

Q19 Dr Gibson: Which mechanism do you like best? Do you want both mechanisms to be working, or why not go for your 1,800 and increase to 3,600 or whatever?

Professor Delpy: If you ask my personal opinion, I think there are too many going through the project studentship route. One of the things we found, and why we have now gone on to doctoral training centres and large cohort training, is that the message from students who are taught as part of a cohort - although obviously working on an individual research project - is that they find it a much better experience and that there is a much greater degree of coherence in their training. The universities believe that it is a more efficient way of training the students and that the students receive a more consistent and coherent training; and the industries that take these students say that the students who come out of this larger coherent doctoral training centre are much more fit for purpose.

Q20 Dr Gibson: What happens to the others, the 1,800 who are on their own?

Professor Delpy: They would have been on their own if those studentships were restricted to universities that did not have a doctoral training account. In reality, of course, a large number are in those same universities. I think we are putting a few too many studentships through the project studentship route but we are going to have a look at the training and the Council will consider this later in the New Year.

Q21 Dr Gibson: What about universities with cohorts and individuals?

Professor Delpy: It is another mechanism. Academics will apply for funding wherever it is available.

Q22 Dr Gibson: I do not blame them, do you?

Professor Delpy: No, of course not, and they are very bright people and put very good cases so they get them.

Dr Gibson: Well, some are.

Dr Iddon: Can I come to early career researchers about whom a lot of concern is being expressed at the moment? If they are not part of one of the large programmes and are trying to establish themselves independently in academia, apparently it is getting more difficult because I am told that of the grants that they apply for, less than 10 per cent are actually funded, which is a very low figure, and that figure has gone down significantly in recent years. If we get President Obama in post on 20 January and he starts to fund science and technology to a greater extent - well, he probably will, I admit, Chairman!

Dr Gibson: Where were you last week?

Q23 Dr Iddon: Then he is reversing the stem cell decision that President Bush put in place. If we frustrate our young researchers and do not encourage them in this country - can I put it to you, David, that you are going to encourage a brain-drain like we have never seen before, across the "Pond"?

Professor Delpy: First of all, I would not want to do that, and I would argue in fact that the brain-drain has been reversed because of the increase in science over the last ten years. The UK has been seen as a very attractive place for research. The question of early career researchers is one that does concern us, and we are currently undertaking a review of how we handle that. The problem is that we used to have a simple scheme for early career researchers which was capped at 60,000, so it was a small grant but it enabled a first-time academic to really dip their feet into the water. The peer review of that was a lighter touch. Because it was a small amount, we checked that the science was not flawed and that there was a good case made, and then it was awarded at 60,000. With the transition to FEC that went up and then about three or four years ago, in response to the pressures from the community, we took the cap off because the argument was that people should be asking for the funds they required to undertake the piece of research. I would approve that in principle. The consequence of that is that the average first grant that we now receive from the chemistry community - those are the ones who raised this in particular - has gone up from 60,000 to 600,000. We have had our first few first grants of over 1 million, and these are from people who have not yet established a track record in research. First of all, if we do not have any extra money and the amount of the award has gone up from 60,000 to 600,000, we can only fund a tenth of the number. Secondly, the peer review that we would undertake, and that we ask the community to undertake on our behalf, for a 600,000 grant is very different to that for a 60,000 grant; so the peer-review mechanism has consistently stated: "It has not met that quality threshold for a 600,000 grant."

Q24 Dr Iddon: Did the research community decide to take that cap off itself, or was that a decision of your Council?

Professor Delpy: We took it off, but in response to the views of the community that the cap was inappropriate because it restricted people in the ambition that we were demanding of them. It was not just an arbitrary decision chosen at random, but it has driven a behaviour that is totally inappropriate. I would argue that is partly the blame of the universities, because in mentoring a first-time academic - I just cannot understand how a head of department or a research Vice Provost, Vice Chancellor, whatever the university has - I do not see how one could sensibly advise a first-time academic to go and bid for something of that order of magnitude.

Q25 Dr Iddon: Let me turn now to full economic costs, which we have all supported - but there might be unintended consequences of moving in this direction, I suggest to you. It has come to my notice that universities are expected to bank this money to keep a well-endowed laboratory going into the future. We all know what pressures universities are under, and I put it to you that universities are hardly likely to bank full economic costs so that when a department comes to replace a very large piece of equipment costing half a million to several million pounds, the money will not be there in the individual university and they will be coming back and putting pressure on you to help them out. What do you have to say to universities that are thinking in that direction?

Professor Delpy: The first thing I did when I came on board, which coincided with the CSA Award, was to do a series of road shows with the 12 major universities that take 70 per cent of our funding and with whom we have a strategic relationship - the so-called framework universities - together with four regional road shows to cover the others. In every one of those my talk covered this specific point. I said that once FEC and infrastructure funding was fully in place, the universities were expected to provide a well-found laboratory - and those of you who were in research and my age - and that is most of us, I suspect - can remember that dim and distant past of the well-found laboratory. I have been telling the universities that they have got to do this, and framework universities are very well aware of it; and RCUK in its study of how FEC is being implemented is also passing that message on. The whole idea of FEC-based funding, and the JM Consulting report, was to provide a sustainable research basis and not to provide an increase in the volume of research. The universities have to put in place that mechanism. Some of them have moved very quickly, to be honest. Unfortunately, they are not always the major research universities but some have moved and the rest I think are realising that they have to do it.

Q26 Dr Gibson: They are thinking about it.

Professor Delpy: They are thinking and they have to think very quickly.

Q27 Dr Iddon: We all know that companies act on a global basis these days, particularly the big ones, and I am getting vibrations that they are not prepared to give universities a research grant to support students in a project together with paying their overheads along the FEC concept to keep a well-founded laboratory going, and that this is likely to lead to the larger companies putting more and more of their money into other countries within Europe and probably beyond Europe. That would be a bad thing for this country. Have you picked up this criticism, and what is your answer to that?

Professor Delpy: We have obviously picked up the criticism. When I was at UCL, I used to complain from the other side. Let us be honest about the application of FEC. The requirement is that the universities cover their full economic costs in the broad and over a reasonable timescale, so if they believe a piece of research that they wish to undertake with an industrial sponsor is of strategic significance to them, or that they wish to share IP rather than just in effect do a contract research activity, then they can charge less than the FEC as long as over the whole of their portfolio they balance it out; so there is a flexibility there for universities. I would argue, having worked in industry myself and costed things on an industrial basis, that industry is as schizophrenic in its arguments as some of the academics can be. Costing in industry was always done on the basis of direct materials, direct labour, then add 200 per cent, and that was your base price on which you then decided upon the profit margin. In fact FEC works out at about 100 per cent on top of direct labour costs, so I do not think the universities are tremendously out of line with what the costs would be if industry tried to do this work internally, and they get better quality research done through the academics.

Q28 Dr Turner: It seems to me that there are perhaps unintended problems lurking around the way that you have restructured your response-mode funding operations: not only is it clearly a problem for early researchers in having taken the cap off and funding so few; but I am getting the message that there is also a problem for the whole response programme because grant applications are getting very large, and even of those that are eminently successful in the peer review process, of those - call them alpha++ for want of a better description - only a small percentage of those are getting funded. Presumably, they are focused very much along the strategic priorities, so this is starting to place basic research into something of a straitjacket. If you are going to do that, you are not going to get the unexpected breakthrough, are you, because you are almost designing the system against it? Are you happy with this, because some people are doing very, very well, but the majority are being left in the cold?

Professor Delpy: There are several things I want to say on that. The first thing is that we made a specific decision to try to get the research portfolio structured in a way that included a much greater proportion of longer-term research. The standard EPSRC research grant has been three years long, one PhD student, and 300,000-400,000. Research does not break up into nice little chunks like that, research projects require large-scale coherent long-term focus - not all areas, because there are some where it is not applicable, but I would argue that a large number of really ambitious projects require that type of funding. If you looked in the biomedical sciences area you would see that that is the case; that larger term programme grant funding of five or six years' duration is the norm.

Q29 Dr Turner: But large-scale products do not come into being perfectly formed; they start out as relatively small projects that mushroom, so you are mitigating against the initial -----

Professor Delpy: The intention is to have one-third of our portfolio in these longer-term more ambitious projects and programmes which still leaves two-thirds. It is true that what will gradually happen is that there will be an increasing focus of research in a smaller number of research groups - not institutions but research groups, wherever the expertise lies. That has been the trend over the last 15 to 20 years within university research, and I do not see that changing. Trying to ensure that we maintain sufficient funding for the off-the-wall, blue-skies proposals that come in left field, not from the usual suspects, is part of the balance that we have to ensure we put in place, but two-thirds of the portfolio is still to be maintained outside of those larger, longer-term, more ambitious programmes.

Q30 Dr Turner: You are making provision for the left field!

Professor Delpy: Two-thirds is just sitting there.

Q31 Dr Turner: There is another problem: you have not in the past only funded response-mode projects, but you have also funded, if you like, national services that are used by research groups up and down the country, and the obvious example is the national service for computation of chemistry, which is, I know, highly valued and last year was used by about a hundred research groups up and down the country. It is my understanding that rather than being maintained on its previous funding basis, it was made to apply as another response-mode grant application, and it did not quite make the top seven, however the top seven were arrived at, assuming that that process was totally objective! It looks as though that highly valued service will disappear. Do you think that is wise, because it is undermining the rest of your activities?

Professor Delpy: The first thing to say is that we started funding that particular service 40 years ago, and I would argue that the requirements of computational chemistry have changed over that time, and the software is more commercially available now than was the case. We cannot afford to fund services and infrastructure in perpetuity; every now and again we have to tension it against the other demands on our resources. We decided this time round that that proposal would come in to be tensioned against the other proposals coming in from the chemistry community. It went through peer review at a chemistry panel, peer-reviewed by chemists, the panel members were chemists and they placed it fourteenth on the list, and decided that in terms of chemistry's priorities it did not make the cut.

Q32 Dr Turner: How many were on that list? Was it 45?

Professor Delpy: Something like that, yes.

Q33 Dr Turner: But only the top seven got funded!

Professor Delpy: I am afraid so, in that particular round.

Q34 Dr Turner: Which is a very small percentage, is it not?

Professor Delpy: It is, and in fact that is one of the problems that all research councils are facing; that success rates in terms of all statistics, the number of applications is falling. We are going to have to find ways of managing demand.

Q35 Dr Turner: This is dramatically smaller even than the success rate when we came into office in 1997, when British science and the researchers were on the point of collapse through under funding. Now the funding has been doubled, yet we have a success rate of 7 out of 45, which is about 15 per cent, so it is pretty dire, is it not?

Mr Armitt: If you look at this - and I accept you might not want to look at it this way - in a normal supply and demand situation, the money has gone up and the universities are asking for more for each of their research grants, and the expectation is higher from the universities; but at the end of the day there is a competition. It is not our duty to fund poor-quality applications, and the peer-review process is there to weed out what is a poor-quality application.

Q36 Dr Turner: We are not talking about poor-quality applications; we are talking about applications that have cleared all the hurdles.

Mr Armitt: You cannot assume that if the success rate is going down that it is simply because there are wonderful schemes out there that have got to be funded. It is quite likely that the universities themselves are encouraging people to put in more grants. The volume of grants is increasing and the value of grants is increasing. If the amount of money that is available is not going faster than the applications that are coming in, then fewer people will be successful. As David says, therefore we have to sit down with the universities and say: "Clearly, this is not a satisfactory situation; it is a waste of your money; it is a waste of our money in peer-reviewing this large number of applications; so we have to get into a balanced situation where a sensible success ratio is achieved." A successful success ratio might be one in three. If you are a commercial organisation - and the universities are increasingly shaping themselves as commercial organisations - FEC drives them into being more commercial in their approach - then they have to take some of the responsibility for ensuring that what is coming forward is likely to lead to a sensible rate of success. At the end of the day, the pot is limited and what we want out of the end of that pot is the highest quality and excellence of research - not lots of research, but the highest quality and excellence of research.

Q37 Dr Turner: But your policy of focusing on larger grants in the more strategic areas is contributing to this process, is it not?

Professor Delpy: Maybe, but if in fact, as a consequence, it is resulting in better quality research and more research coming through which will lead to economic benefit for the country as a whole, then that surely is a preferable outcome?

Q38 Dr Turner: Can you be certain that it is leading to better quality research? After all, this is a relatively recent development and it takes a little time to assess the results.

Mr Armitt: Some of the criticism is being made on a few months of lower success rate. If you look at success rate on chemistry, which people talk about a great deal at the moment and if you compare chemistry and physics from 2003 right through to 2007/2008, the success rate of the announced grants for first grant schemes for physics and chemistry disciplines is 70 per cent. It has stayed pretty well at that level right the way through. This year we have placed a slightly greater volume of grants in chemistry than we had by this point last year. People will say that we have got fewer success rates. You cannot just determine a success rate on one year's rate of applicants; you have to look at it over several years. If you look at the moment at our success rate over several years, it is still sitting in the thirties. There has been a short-term change. What we will do is look at what is causing that short-term change and what we should be doing about it.

Q39 Dr Turner: We cannot take that perspective because you have changed the policy. We cannot look back over the years because you are not comparing like with like.

Mr Armitt: We have changed the policy after listening, and one thing that surprised me as an outsider to this debate, because I expected when I came in to see distinct differences between users and universities, is that the user group and the top group have come forward with consistent messages about the need to focus and concentrate on the important areas, and an acceptance that longer/larger is on balance better. So the considered view is that longer/larger is very worthwhile and that we should continue to do that.

Q40 Dr Turner: How much extra cash would you need to bring the success rate back to a more reasonable level?

Mr Armitt: I do not think that is the right question to ask.

Q41 Dr Turner: It is the question I am asking.

Mr Armitt: I know it is. I am saying it is not a question I am able to answer because we are at the early stages of this change in the success rate. Six or twelve months is not sufficient to determine an absolute trend. We can get under the skin of what is happening there and talk to peer-review groups and others about precisely what is happening. Maybe we are going to have to bring a cap back on some of the grants. Perhaps universities are just going a bit too far in trying to develop the ideal project with the ideal resources when the ideal resources may not be available.

Q42 Dr Turner: Can you be sure that this is not being driven by a few powerful individuals or well-placed individuals?

Mr Armitt: In the universities?

Q43 Dr Turner: Yes.

Professor Delpy: I feel very confident, having now been through a complete cycle of consultations, that it is inconceivable that EPSRC - and, to be honest, the communities that we consult - would be easily swayed by a small number of powerful individuals. It does not happen that way. EPSRC is an incredibly consultative organisation.

Q44 Chairman: We take you at face value on that.

Mr Armitt: Yes.

Q45 Dr Gibson: I find it exceptionally hurtful that you suggest that people at universities are putting in grants under pressure from vice chancellors or others. They have got to do that research to stay alive; they have got to get it for the universities to stay alive. You are suggesting that some of them are putting frivolous grant requests in -----

Mr Armitt: I am not suggesting they are frivolous.

Q46 Dr Gibson: ---- because they do not; they put them in seriously. I think they get good ratings and you turn them down because you are short of money. You should not be taking them. I do not know how you do the job. This is something that has been going on for years. The MRC at one time, through this Committee, doubled its request for a budget and they got it because they were in exactly the same position as you are now and they fought to get that money; and I think that is what you should be doing. You should be creating merry hell about these bright young people not getting the support they need. I think that should be the way forward. Let us talk about bright young people! These young people, these PhD students, are driven by the need to get money to do research, because they are the fount and they provide what is needed. They do most of the work in the labs anyway, if you are honest about it. If you do not have PhD students, you do not have research programmes. Are we getting less research PhD studentships now than we did in the fields that you are in control of?

Professor Delpy: The total number of PhD students that we are supporting in 2007/2008 is 8,200, back in 2005/2006 it was 7,600. The number of students that we are supporting has continued to increase. Last year it was 8000, it is 8,200 in this current year.

Q47 Dr Gibson: I have letters here from academics saying that they have less students in the fields that you cover now from different universities; so overall you may be doing that, but probably all at your university actually?

Professor Delpy: I do not belong to a university now. I resigned from UCL.

Q48 Dr Gibson: Right. You may have to go back!

Professor Delpy: I may have to.

Q49 Chairman: We have some very confusing figures, which we would like you to clarify. For a start, since 2005/2006 the UK Atomic Energy Authority, which was getting 29,221 from you in 2005/2006 suddenly gets nearly 51 million in 2007/2008 out of your total grant allocation.

Professor Delpy: The fusion research grant was transferred to EPSRC and that is a two-year figure.

Q50 Chairman: What confuses me is that some figures you have provided to Research Fortnight as part of an investigative piece of work they are doing into grant allocations, and these are figures from your office.

Professor Delpy: They are from our grants on the Web.

Q51 Chairman: They indicate that in 2005/2006 the net grants after UK were 926 million. In 2007/2008 it has gone down to 644 million. It is a huge difference; it is about a 30 per cent drop over those two years, despite the fact that your accounts, which you have produced for us, show that your grant allocation overall is going up. It is not surprising, if these figures are correct - and they are your figures - that the comments that Dr Gibson has just made very passionately - and it is the first time I have ever heard him make that passionate plea about young researchers coming in - they will not get those grants, particularly if the large research-intensive universities are getting these huge 600,000 outreach grants as well. We are confused - or perhaps it is just me that is confused as the Chairman - about the figures you are providing for us.

Professor Delpy: I cannot answer your question about the data that Research Fortnight has compiled.

Q52 Chairman: These are your figures.

Professor Delpy: Sure, but it depends on what the question was that was asked.

Q53 Chairman: It was asked about grant allocation.

Professor Delpy: What has been included in the grant allocations? You have to remember that if you want to compare year on year you need to look at spend. Commitment is a different matter. This year, for instance, we will be committing 250 million into training through the doctoral training centres - 40 of those - and that is a five-year commitment, so there will be a sudden tranche of funding but we are going to be committing about 1.3 billion this year, so although on average we have added 800 million per year, there is a large chunk this year because of the commitments to KTAs and DTCs; but that spend will be spent over five years.

Q54 Chairman: David, it would be useful if you would let us have a breakdown of this whole issue because so many figures are being presented in different formats, and we would like to know the basis of individual grant allocations and the size of those allocations and where the other grant resources go.

Professor Delpy: Yes, I can do that.

Q55 Dr Gibson: How many doctoral schools are you going to have? How many are planned within this 250 million?

Professor Delpy: We are hoping to fund about 40 doctoral training centres.

Q56 Dr Gibson: All over the country?

Professor Delpy: Wherever the peer review says the quality is appropriate.

Q57 Dr Harris: Quality of volume?

Professor Delpy: No, quality both of the research they are proposing to do and the quality of the training that they will be putting in place.

Q58 Dr Harris: You cannot have a training centre for two people!

Professor Delpy: There is a minimum.

Q59 Dr Harris: That is what I mean, so there has got to be a volume. So small departments are not going to get those!

Professor Delpy: The small departments have access of course to the project studentships anyhow.

Q60 Dr Gibson: Are they graduate schools by another name? Yes.

Professor Delpy: I would say that most universities that hold doctoral training centres now have graduate schools, but we do not award them on the basis that a graduate school is -----

Q61 Dr Gibson: How is it different from a graduate school, a doctoral school or training centre?

Professor Delpy: We award doctoral training centres to some universities that do not have graduate schools. What we are looking for is coherence in the way that the students are trained and the focus on the quality of PIs who are going to be working with those.

Q62 Dr Gibson: So if you have a graduate school - they are not going to get anything!

Professor Delpy: It is not an either/or. Some graduate schools will and some without graduate schools will.

Q63 Dr Gibson: It is selectivity by another name.

Professor Delpy: It is peer review and quality I am afraid.

Q64 Ian Stewart: The Technology Strategy Board has a budget for 2008-2011 of 711 million, plus it has a line funding from the Regional Development Agencies of 180 million and at least 120 million from the research councils. When our Committee did its report into budget allocations, we highlighted that the increase in the size of budget does not fully cover the increased expenditure on FEC for the new bodies, including TSB. The questions I want to press you on revolve around what proportion of EPSRC's budget is committed to the Technology Strategy Board and the Energy Technologies Institute because we do understand now that what is happening here, as has been highlighted by previous questions, is that you are having to move budgets, which means that some lose out.

Professor Delpy: The headline figures, the simple figures, are that EPSRC is committed to spending 45 million over the three years of the CSR in collaborative projects with TSB. Obviously, we are committed to provide 60 per cent of the public sector funding for ETI projects, which, when ETI is fully up and running, would be 30 million a year. In fact, over the CSR period it is probably going to be somewhere between 21 million and 29 million, because it is only ramping up. Our headline figures, we would estimate, to be about 21 million to 29 million for ETI and 45 million for TSB. To put the TSB figure into context (and in response to my very first question about translation), EPSRC's academics have always worked with industry. In fact, hitting a target of 45 million is not a challenge for us. In fact, I would argue that our academics would have been involved in probably research of that sort of volume with the TSB over the period anyhow.

Q65 Ian Stewart: David, Dr Paul Golby and Dr Alison Wall told this Committee that funding for the ETI had reduced the funds available to support pure research. You heard that implicit in the questions before. How will this change in the future and what difference does it make?

Professor Delpy: ETI is funded out of our overall energy portfolio, to which we are committing about 220 million. So about 20 million to 29 million of that energy portfolio is going through to ETI. Was our budget cut as a response to ETI allocation? To be honest, I would say that, probably, the amount that we would have wanted to spend on energy has been reduced slightly. However, our overall energy allocation has increased over the period, or will increase over the CSR period, and I would argue that, in fact, the demonstrators that are going to be funded via ETI will become a really valuable resource for the academic research base to use and enable them to undertake basic research on a scale which they could not do individually within universities. So there is a long-term benefit once those demonstrator programmes come about.

Q66 Ian Stewart: How does that top-slicing impact on the funds available for responsive mode grants? Brian Iddon was pressing you on that earlier.

Professor Delpy: The energy programme is separate from that responsive mode pot of 866 million, although I would argue, in fact, that the so-called managed programmes, that everybody calls managed programmes, like energy, nanotechnology, digital economy and health and so on, are very broad programmes. In fact, we always encourage academics to feed responsive mode into those. So they are not tightly constrained programmes. Our energy programme does not have a single narrow focus with a project manager who restricts the areas of application. So I would argue that the vast majority of our energy budget is available for responsive mode bids in the energy - or they have a potential application in the energy - area.

Q67 Ian Stewart: So you are redirecting budgets to, for example, the TSB. How are you monitoring that to see how effective the redirection of that money is being implemented?

Professor Delpy: Obviously, the calls that are put out, the academic component of those calls goes to our standard peer review anyhow, and then is followed up in our standard way through peer review. What we have done is look at - because this is precisely a question that comes up when I go to visit universities - the academic groups who have been most successful in getting our standard responsive mode blue skies peer review grants, and those who have been most successful in bidding into what you would call the managed programmes (like energy, nanotechnology and so on) 70-75 per cent of people who are most successful in managed programmes are the same academics who are most successful in our responsive mode. So it is the high-quality academics who are not just undertaking basic responsive mode, pure blue skies research, but they are also the most successful in translating that research and applying it. It is not two separate communities.

Q68 Ian Stewart: Can you give us some examples of what collaborative projects you are doing with the TSB currently?

Professor Delpy: Obviously, there is a recent one on low carbon cars. I have a list of them here: there is a low-impact buildings programme; a network security programme. I think, in fact, of all the calls that have been issued by TSB this year, EPSRC has been involved in every single one of them.

Q69 Ian Stewart: When will you know that the transfer of funds to do collaborative work with the likes of TSB was the right thing to do, and how will you know that?

Professor Delpy: I would actually disagree with the question. You are implying that we ----

Q70 Chairman: You are always disagreeing!

Professor Delpy: Of course we do. You are implying that we have transferred funds specifically to work with the TSB. My argument, right from the outset, was we were already doing that level of funding jointly with the user base (?), in fact, through the TSB's predecessor.

Q71 Ian Stewart: For your benefit, I will pose the question the way you want it to be posed. Now give me the answer.

Professor Delpy: The answer is: are we actually reducing the accessibility of research funding by working in collaboration with industry?

Mr Armitt: We know because the quality of the outcome is better.

Q72 Ian Stewart: How and when?

Mr Armitt: How long is a piece of string? That is the whole problem, is it not? On the one hand, the Government, quite rightly, I think, wants to understand what the impact is of research. There are people working on models and we will continue to work on models to try and understand and follow through: can we actually identify what is the consequence of the money in and what is the result coming out at the end of the day in improvement to the UK's situation of holding its own in research competency around the world, where we currently hold a very high level. We are highly regarded for our research around the world. That has not been diminishing. What the Government is seeking is to see that Britain retains and improves its competitiveness around the world, and science and engineering are clearly absolutely fundamental to us achieving that, but to say: "Have we done that" (in ten years' time even) "as a consequence of the ETI or the TSB, or the continuing work with the research councils?" I have to say I think will be not easy to answer. You might be able to pick a particular project which was promoted - let us take the low-carbon vehicle; low-carbon vehicles are being researched in every country across the world; Britain wants to be part of researching low-carbon vehicles and the TSB is putting some money to that. Some people might say: "It is a complete waste of money; just leave the Japanese to get on with it and we will pick up the technology". No, we are going to invest in it and we are going to seek to be there, alongside and ahead of the Japanese. However, when you get there, and given the degree of collaboration which will be taking place over the next 10 to 15 years in this area, to be able to say that it is because we allocated 30 million in 2008 towards the generation of a new low-carbon vehicle, and if we had not put it in would we have been better off or worse off, or are we where we are because we put that 30 million in, frankly, I do not think anybody will be able to accurately answer.

Q73 Ian Stewart: What do you say then to those who assert that you are too closely following the Government agenda?

Mr Armitt: At the end of the day I would assert that we have a responsibility to ensure that for UK society as a whole, regardless of who the Government is, we are doing our bit in promoting excellence in science and engineering, and the research councils are there to ensure that we continue to be at the cutting edge of that. At the end of the day, as with every other element of government expenditure, there is a limit to the amount of money we have. Therefore, I think we have an obligation to ensure that that money is spent as efficiently as possible and that we are supporting the best - at times at the expense of the mediocre or the medium. So being a medium-quality researcher is not necessarily going to add value to the UK economy. What is going to add value to the UK economy are the best researchers. We have a responsibility to seek them out and make sure that that is where we direct our money. Ask all the academics and ask all the users what they see as the priorities; perhaps not surprisingly the answer is not very different to government policy because government policy has been asking the same people the same questions. So there is a bit of a sort of circular argument here. We held a session only last week, a SAT session at Loughborough, where we asked people to just tell us: "What do you think are the real issues for the next 20 to 50 years? What are the key research areas that we need to be focusing on and that you want to focus on?" Nothing new came out of that question.

Q74 Chairman: With great respect, it will not come out, will it, because the TSB really is a soft organisation ----

Mr Armitt: I am sorry; this has got nothing to do with TSB.

Q75 Chairman: Just let me follow the argument. Lord Carter, when he appeared before us last week, basically said that this is an organisation that needs to be sharpened up; that, in terms of its five major priorities, these are areas which, as Ian Stewart has said, are very much government led, which are involved in significant government procurement. This was an organisation, together with the research funds which you are putting in, supposed to pull in private sector funds to drive far greater commercialisation. This is why, with respect, you were appointed Chairman of this organisation as well, to bring that focus in. You have gone back to this nice, cosy nest of government procurement and government funds. Is that fair comment?

Mr Armitt: No, I do not think it is fair comment at all. I am probably slightly to the right in this debate in terms of believing that this should be a cosy government-funded environment; I do not think it should be at all. There is an enormous challenge in saying: "How do you get industry?" When I have been out and talked to, for example, some of the trade associations of industries which you would say are at the cutting edge of technology, they will say to me: "John, we are not interested in doing blue skies stuff. We do believe that is your job in the research councils because we are looking to pick it up later on." If we only did nothing but blue sky I think we would have difficulty in identifying what is the right blue sky to do, so I think we have got to have a mixed portfolio. However, I do totally accept that we do have a duty in the blue sky area. David made the point at the beginning that one of our concerns there is whether there is a level of conservatism within our peer review process which perhaps means that sometimes the blue sky stuff does not get through as well as it might. The Council does intend, in the next 12 months, to look at the peer review process as we currently operate it. Many people say it is good; maybe it is, but it could probably be better, and so we are going to look at it to see whether it is delivering what it should deliver, and, particularly, whether it is delivering what it should deliver on the blue sky end.

Q76 Dr Iddon: In Spring of next year you will be undergoing an international review, I understand. If that international review makes significant recommendations about your operations and the way you allocate money - for example, the balance between responsive mode and programme grants that we have been discussing this morning - would your Council be prepared to accept those recommendations and act on them?

Mr Armitt: The Council has a duty to look at any recommendations which come through from any group; it would not necessarily blindingly accept them but it would take them on and consider the value that it should give them, and the weight of evidence which, clearly, it had been possible for that review to look at. It certainly would not ignore it. We would take it seriously and if it needed to be reflected in what we did, then we would take action.

Professor Delpy: Can I be just a bit more positive about that? We would not undertake these reviews if we did not believe that we ought to act on any problems that they have identified. Chemistry is the next one which is on board, we have just had one on materials, and maths will be the last in a five-year cycle. I would argue, and I am quite happy to provide the evidence if you want, that the recommendations that have come from those international reviews have been considered by Council and, in large part, those recommendations have then been implemented - often in a subsequent CSR period because of the way that our forward commitment does not give us the flexibility to switch something on or off at short notice. I would say that we have, in general, always seriously taken on board what the international reviews say. That is why we have them.

Q77 Chairman: Continuing on the international theme, EPSRC is the managing partner in the US RCUK office in Washington. You have also got a significant part to play in the collaborative projects in China and, also, in Delhi. What role do you have, as a research council, in actually setting the UK's international research priorities in terms of international research?

Professor Delpy: The first thing to say is these are RCUK offices; they are not EPSRC. Individual research councils have taken on a responsibility for managing a particular office.

Q78 Chairman: So you manage the US one but not the ones in China or India?

Professor Delpy: We manage the US one. No, those are handled by ESRC and the MRC. We have a straightforward management responsibility. The priorities in terms of collaborations with those countries was determined within RCUK, both through our research directors' group, which is the research directors from each of the councils, then feeding advice in to the chief executives of the research councils. So the priority areas were determined by RCUK as a whole and, in the first instance, since the amount of funding available is limited, we have tried to identify a small number of key areas for each country but, also, some general strategic principles as to what we wish to get out of those. The two strategic principles are that we want to use those to engage the best of researchers in the UK with the best of researchers in those countries. So it is a best-with-best policy, and that is therefore necessarily selective. The second one is through the mechanism of the office to try to reduce the risk of double jeopardy. The problem with working across countries is that you finish up, inevitably - or have done in the past - with grants having to be reviewed through two separate peer review mechanisms, which, if you have a 20 per cent success rate in each and you multiply your statistics together, means that it is very hard to get both panels to agree funding and to agree it at the same time. So we are trying to put in place mechanisms through MOUs with the funding agencies for single peer review of the research that is going on between the best researchers there and the best researchers here.

Q79 Chairman: In terms of quality research, the one thing that the UK prides itself on is its peer review process being incredibly rigorous. You are seeking to lower the peer review barrier for collaborative projects. How does that maintain the high quality? Or have we misunderstood that?

Professor Delpy: I would disagree totally. With America, I would say the American peer review mechanism is as equally rigorous as ours, and with the programmes that we have got in place with both India and China, the influence that we have and the presence that we have on those peer review committees - in some instances it has been agreed that we will handle the peer review ----

Q80 Chairman: Let me just stop you there, David, because I am quoting now directly from your annual report. "A barrier to international collaboration can be the 'hurdles' encountered when applying for support when working with overseas funding bodies. EPSRC is in the forefront of working with agencies around the world to seek lower peer review barriers to collaboration."

Professor Delpy: Yes.

Q81 Chairman: That is, really, what we are wanting you to explain.

Professor Delpy: That barrier is that double-jeopardy barrier; it is not a quality barrier. The quality threshold has to be paramount in everything that we fund.

Chairman: It was important to get that on the record.

Q82 Dr Harris: I just wanted to catch up on a couple of things, rather than trying to interrupt the flow from my left. In respect of Ian Stewart's question, would it be a fair summary to say (and I am just reading this from what someone else has said): "The increase in the science budget does not fully cover increased expenditure on FEC and the new bodies, OSCAR, ETI and TSB, which means the research councils will have to redirect money previously earmarked for research grants." Is that a fair statement, as far as you are concerned?

Professor Delpy: We got an increase of 18.6 per cent, top level value or single number in the CSR period. If we try to strip out the FEC component of that ----

Q83 Dr Harris: And the contribution to ETI and TSB.

Professor Delpy: Let me come to that. The first thing to do is remove the FEC because you can then look ----

Q84 Dr Harris: I do not want a long answer.

Professor Delpy: We reckon that our overall increase was about 1.5 per cent, having removed the FEC. Now, 1.5 per cent of our total budget of 2.4 billion - our commitment to TSB is 45 million over the period and, let us say, 30 million for ETI - so 75 million. One per cent of 2.4 billion means that, in fact, those two commitments still left us, in principle, with a small overall rise in budget, but very small. Essentially flat.

Q85 Dr Harris: So it is not right to say that the reduction in research grant funding in any area is due to those pressures. That is helpful to note. Secondly, when you removed the cap, what consultation did you do? This is on first time grant applications. What consultation did you do with the community? That is a big decision. You did not raise the cap; you just removed it completely.

Professor Delpy: We had raised it previously from 60,000 to 120,000. The consultation occurred before my time, so I may have missed some of the consultations that did take place. We have a regular meeting with the Royal Society of Chemistry and their people come in at least once a year - usually twice a year. We also have a regular meeting with the Royal Academy of Engineering and then obviously through our strategic advisory teams, top-and-up. We also, of course, have our programme managers and university interface managers who are out in the universities - at 22 universities we asked specific interface managers dealing with them. So we did not hold a single open town meeting to arrive at this decision, but there was a general consultation ----

Q86 Dr Harris: Can you show people calling for this or supporting it? Could you show that? Or would you say that Council has to make a decision in the end, after consulting, even if it is not supported?

Professor Delpy: We did not hold a poll so I cannot come up with a figure: "75 per cent of the community supported this". I may have some evidence from the feedback that was presented both to Science and then, through top-and-up to Council, that led to that final decision. In the end, Council has to decide on the basis of the evidence coming up through the community.

Q87 Dr Harris: I think you ought to be able to answer the question: "Was there support or calling for it in the community" because it has been quite controversial. That is why I asked the question and maybe you can let us know whether there was a call for this outside the Council.

Mr Armitt: I cannot remember specifically whether it was a decision which was made before I became Chairman, but given the way in which Council works I would be amazed if it was a decision made by Council which was not strongly recommended from the officers. The officers' recommendation is as a consequence of what they are getting from top-and-up, particularly. Top-and-up are on Council, so if there was any disagreement I am sure - why would we do it? It is hard to imagine that would have taken a cap off unless there was a request to do so.

Q88 Chairman: If we could have a note on that, that would be very useful.

Mr Armitt: We will give you a note on it.

Q89 Dr Harris: David, you said that the brain drain had been reversed. Could you let me know where I can find that published research demonstrating that, or is that just your hunch?

Professor Delpy: That is my feeling based upon my period at UCL, prior to this, as research vice-provost and as research vice-provost representative on the Russell Group.

Q90 Dr Harris: It can be weighed against the feeling of other people sitting there who say it has not been reversed, or it is variable different levels.

Professor Delpy: It could. I am happy for you to consult with the other Russell Group representatives.

Q91 Dr Harris: I would be happiest to see data, actually.

Professor Delpy: There may well be.

Q92 Dr Harris: In our field - or your field - we like to have data. On this PhDs thing, I do not understand. I understand, and I am not criticising, your move towards these national training centres. However, let us take small departments, which have good work but who want to train PhDs in a small department. They may not have the threshold of overall funding that is required, and therefore they would rely on the PhD funding allocations inherent in the smaller grant funds. Why not restrict that element of that funding to those places, universities mainly, that do not benefit from the large clump of funding that you are giving? That would make sure that people felt that you were not rewarding and then rewarding again those universities, like the one I have in my constituency, which get a huge amount of this funding anyway. Would you consider that?

Professor Delpy: Yes. As I said, Council is undertaking a review of training in this coming year, and that is certainly one option that we would look at. I think I need to correct a misunderstanding, which is that the allocation is based on the overall universities' income from EPSRC exceeding the threshold rather than individual departments. In fact, many of the doctoral training centres that we fund - in fact, most, I would argue - are made up of bids from a group of departments coherently coming in

Q93 Dr Harris: I understand, but then it is for the university to allocate. Also, this is universities that are already getting a lot of funding and they are getting the national training centre on top - and if they have got ten times as many grant applications successful they stand to get ten times as many of the responsive mode ----

Professor Delpy: They could, in principle.

Q94 Dr Harris: It just seems that "To those that have, more shall be given".

Professor Delpy: Yes, but every one of those studentships that is allocated on a project grant is a project grant that has gone through peer review ----

Q95 Dr Harris: I understand that.

Professor Delpy: --- with the community doing that peer review, not the officers in Swindon.

Q96 Dr Harris: But the national training centre is not; it is just an extra lump of money that is not linked directly to a peer review. It is to go with volume. I am not criticising it.

Professor Delpy: There is a very rigid peer review of the DTC applications. We have a threshold to enable you to bid but then out of 280 applications we have had it will be short-listed down to 88. It is peer reviewed.

Q97 Chairman: I think you are actually agreeing with each other. The point that Dr Harris is making is: are you prepared to consider the issue which he is raising about, if you like, the triple funding of the research-intensive universities against those who, in fact, are emerging stars of the future, which seem to get left out - going right back to the question that Dr Gibson raised.

Mr Armitt: You would still come back to the quality issue.

Q98 Chairman: You cannot develop quality, John, in an emerging department unless there is some method of being able to get in on the game.

Mr Armitt: I agree, but I am not sure that we can easily have a policy which says that there are 142 universities and we are going to ensure that everybody gets something, because I am not sure that that would actually deliver.

Dr Harris: What I am saying is once you have passed peer review and you get your grant you should be able to get a PhD within that. Is it fair that the bulk of those go to universities that have already got PhDs allocated on the basis of peer review because of the volume they are doing and because of the national training centre? There is an argument to say that to avoid "for those who have shall be given more in plentiful" ----

Chairman: I think we are going round the houses again.

Q99 Dr Harris: I have just one question on the NSCCS. In your response of 31 July you explained that these things have to go through peer review, and unless you are a big facility which is STFC-linked you are going to have to go for renewable funding. When we looked at research institutes we recognised that there were some long-term projects that were worth giving long-term funding to which were not necessarily big infrastructures - national datasets, for example. My first question is: NSCCS maybe, but is there any other that could never therefore have the reliability of long-term funding - people put their careers into it - because they will always think: "Every three (or five) years I'll have to put in and, even if my quality is still good, if there happens to be higher quality coming in from elsewhere I cannot be assured of continuing my work".

Professor Delpy: In part I would come back to John's answer: it has got to be quality. There has to be some tensioning. There are things which we have funded for significant periods. That particular example was funded for the best part of 40 years via us, and I think had run its course. In fact, the community, in peer review, said that it had run its course compared to other things that they wished ----

Q100 Dr Harris: In general, you are saying that in future all the national services that have received support will be required to make their case through responsive mode, and these are distinct from larger, more capital-intensive national facilities. So what you are saying, and clarity would be useful here for people listening, is that if you have an idea of doing some long-term research, you are still going to have to compete every three to five years, unlike some other research councils which have provided long-term funding for high-quality, long-term data collection, for example.

Professor Delpy: They also undertake a quinquennial review anyhow, and I would disagree with it having to be three to five years. Many facilities we would want to fund for ten or 15 years before we then undertake a review and tension it against the priorities, because science changes, priorities change, and the communities' ideas and priorities change.

Q101 Dr Gibson: Do you accept that the community is pretty fed up with you?

Professor Delpy: Part of the community is inevitably going to be upset with change. I think EPSRC has to be able to demonstrate how it has taken on board advice both from the community and what the strategic priority is across the research councils - and internationally are - and provide a degree of leadership and guidance in that. That does mean that priorities will change.

Q102 Dr Harris: This is my last question on this issue of the NSCCS. You said in your reply to them that they could charge their users in order to fund themselves. What lead time did you give them, in making clear that they would not be funded, to enable them to set that in place? Their open letter suggested that you led them up the garden path with a five-year call in July 2007, then that was changed, and then another in October 2007, that you would need to respond to an OJEU call issued in November 2007 - that call was never issued. So then, only in January 2008, which is seven or eight months after they were first told what the approach would be, were the goalposts finally positioned for them. Is that fair? And then expect them to set up a user fee in good time.

Professor Delpy: It may not have been our finest hour. I do not know if the exact details of the timings, as you have read them out, are actually ----

Q103 Dr Harris: It is in that open letter.

Professor Delpy: It might be in the open letter but the open letter was written not by us.

Dr Harris: You did not rebut it - yet.

Q104 Chairman: Please just answer.

Professor Delpy: The answer is that we may not have given them as much time as they would feel they have had. I would argue that in running this service for 40 years they should have been putting this mechanism in place anyhow. The message has been going out consistently to universities - I got it myself, as research vice-provost at UCL - that one had to put in place a mechanism for charging and recovering costs. That is precisely what the FEC when it was allocated enabled you to do. The fact that the academics who were running this service did not do it - they did have 40 years in which to try to do this - I would argue, indicates that they were also not really anticipating that in the long run they will not get funding in perpetuity from us.

Q105 Dr Harris: Let me ask you about public engagement. Which aspects of your research activities do you feel would most benefit from increased public engagement?

Professor Delpy: All activities, although if I express a personal choice it would be those that would bring an increased visibility, particularly, to the engineering work and research that goes on in the UK and the value that engineers bring, not just to the manufacturing side of the economy but, also, to the service side. That CBI report which said that 76 per cent of gross value added (or whatever) is in the service sector - if you dig inside it, 30 to 40 per cent of that service sector depends upon STEM subjects, and engineering is a key component. Visibility of engineering - if you ask me for a single topic.

Q106 Dr Harris: Your annual report is part of your public engagement and has very interesting pictures and stories, and good coverage for naked scientists (page 44). On page 45, if you have a copy there, you give the proposed budget for Science in Society expenditure. In 2005/06, 2.9 million outturn; 2006/07, 3.9 million, and then there is a chart above - 4.2 million for 2007/08. On page 20 in your actual budget headings it gives the same two figures: under "Public Engagement", the very bottom item of the top table on page 20, 2.9 million for 2005/06; 3.9 million for 2006/07 and then 3.5 million only, not 4.2 million, for 2007/08. So those figures are otherwise equivalent. I cannot find the other missing 0.7 and, as I understand it, in the briefing I have, the 3.5 million is the correct figure. There is a drop this year.

Professor Delpy: As John has pointed out, the table on page 20 is net grant expenditure, whereas the Science in Society programme expenditure is the table that you were referring to first of all. The other major difference may, in fact, be the inclusion of some of the fellowship or engineering stage awards.

Q107 Chairman: Could you let us have a note?

Professor Delpy: I can let you have a note as to what goes into the two tables.

Q108 Dr Harris: It is not clear because there is no commentary on the figures in your public-facing document. Can I just refer you, while we have your annual report, to your facts and figures on people on page 37? You set out how many people you are funding (very interesting) and we have gone over the overall numbers. I just wanted to know if you had a gender breakdown of those, because I cannot see it here and I would have thought that was an interesting issue for your annual report, given that you yourself, I know, personally, are committed to doing something about, as perhaps our Committee should as well, the gender imbalance.

Professor Delpy: I am not sure if I do have a gender breakdown table. I am surprised that we do not, in fact, include it in our report.

Q109 Dr Harris: So was I.

Professor Delpy: That is a correction; if it is not there we will have to ----

Mr Armitt: Certainly it is data we have because I can recall seeing it in the last 24 hours, but I cannot lay my hands on it. If I remember it was roughly 50/50.

Q110 Dr Harris: Coming back to this issue of the importance of peer review (if it is my last question), your contribution to ETI is not peer review; it is just a top slice. That is right, is it not?

Professor Delpy: Yes.

Q111 Dr Harris: It was not your decision, was it; you were told you were going to have top-slice funding ----

Professor Delpy: We are the route through which the public sector funding goes into ETI, yes.

Q112 Dr Harris: That is just a decision made for you, not peer reviewed.

Professor Delpy: It is, although we are heavily involved in the process that was put in place to select the programmes which are going to be funded through ETI. I am on the board of ETI, together with Ian Gray, anyhow, but I would argue, in fact, that the majority of the process that has been put in place to set it up was driven by our energy team and Alison Wall, in particular. So although you are correct that we do not have a control over the peer review mechanism that is used - and ETI is not funding in our space, it is not funding in the technology levels 1 to 3; it is funding in the 4 to 6 range - we have, in fact, helped them to set up a rigorous peer review mechanism similar to that that the TSB uses for its part of the industry funded grants. Yes, it is not a peer review that we control.

Q113 Dr Iddon: Do you recognise this, Sir David: that we have squeezed more and more research funding into a smaller number of elite universities? We would all support excellence, but would you accept that there are pockets of excellence in universities like, may I say, the University of Bolton, in my constituency, in material science and flame retardancy work? However, if an application came from a research group in the University of Bolton side-by-side with a similar application from Imperial College, do you really believe that they would taken on their merit?

Professor Delpy: Absolutely. In fact, what I said was that there had been an increasing concentration of research in a smaller number of groups, not institutions. In fact, if you look at our framework universities, they are not all the Russell Group; we have specific areas of strength at Loughborough and Cranfield - and Bolton, as you say. There is work on particles and emulsions at Bradford that was of incredibly high quality. So I would agree there is an increasing concentration, but I would argue that it is in the research groups where excellence is shown. Inevitably, a large number of those research groups are in the larger institutions. It is an open transfer market, and if there is excellence somewhere then one of the larger institutions will make a bid for an individual to transfer their research group to the university. However, we will fund on the basis of the excellence of the group, not the fact that it came from Oxbridge or UCL or Imperial.

Mr Armitt: Chairman, could I come back for two seconds? On page 49 of our annual report there is actually a summary of success rates by gender.

Q114 Dr Harris: I saw that for grant applications; I was interested in doctoral students.

Mr Armitt: "Standard research grants"; "First Grant Scheme"; "Partnerships for Public Engagement", young researchers, fellowships.

Professor Delpy: It does not have the student number there.

Mr Armitt: We will look at those and if there is some more information we will let you know.

Chairman: Thank you very much indeed. On that note, could I thank very much indeed David Delpy, the Chief Executive Officer, and John Armitt, the Chairman of EPSRC? Thank you for a very interesting morning.