House of COMMONS












Evidence heard in Public Questions 1 - 150





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Oral Evidence

Taken before the Innovation, Universities and Skills Committee

on Monday 21 January 2008

Members present

Mr Phil Willis, in the Chair

Dr Roberta Blackman-Woods

Mr Tim Boswell

Mr Ian Cawsey

Dr Ian Gibson

Dr Evan Harris

Dr Brian Iddon

Mr Gordon Marsden

Graham Stringer

Dr Desmond Turner

Mr Rob Wilson


Examination of Witnesses


Witnesses: Professor Michael Rowan-Robinson, President, Royal Astronomical Society, Professor Peter Main, Director of Education and Science, Institute of Physics and Mr Tony Bell, National Secretary, Prospect, gave evidence.

Q1 Chairman: Good afternoon and could I welcome our witnesses to this, the first evidence session with the Innovations, Universities and Skills Committee, looking into the science budget allocations. Could I welcome our first panel, Professor Michael Rowan-Robinson, the President of the Royal Astronomical Society, Professor Peter Main, the Director of Education and Science at the Institute of Physics and Tony Bell, the National Secretary for Prospect, the professional association representing many of the scientists in some of our universities and institutes. Professor Main and Professor Rowan-Robinson, in October 2007 the Government announced the Comprehensive Spending Review settlement for science, a 17.4% increase, one of the most generous settlements we have seen. This is building on two successive comprehensive spending reviews raising the overall level of resources for science. What on earth is the problem? Why do you have a problem with it?

Professor Main: You are absolutely right that government put a lot of money into science and it has really been very, very welcome. A recent international review of physics made the point of how much things had got better.

Q2 Chairman: Including physics.

Professor Main: Absolutely. I think what has happened here is that for a number of reasons - which, I have to say, are not entirely transparent from where I am sitting - the settlement for STFC, although it looks very impressive at 13.6%, in actual fact when you take into account the FEC and a number of other factors it has led to essentially a flat cash settlement. Due to the specific nature of STFC with its responsibilities for international subscriptions, for running national facilities, most of the cuts that will occur due to inflation and so on and due to the effects of the increase in international subscriptions have been concentrated in the elements of the STFC budget which are flexible, specifically the 25% cuts which STFC announced for grants.

Q3 Chairman: Overall you would agree that the 17.4% for science was a generous settlement.

Professor Main: Absolutely.

Q4 Chairman: The 13.6% for STFC appears to be a fairly generous settlement, so can I move to you, Michael. Were you expecting more than that in the overall budget.

Professor Rowan-Robinson: I do not think I knew enough about the whole budget of STFC to know what the settlement ought to look like. It is only when you see how STFC meets its various requirements and aims that you start to see that somehow it seems they have a hole in their budget of about 80 million. I want to reiterate what Peter said to make sure we give a positive remark at the beginning, that basically we are very conscious in the case of astronomy that the Government supported our entry into the European Southern Observatory in 2001; it found extra funds to do that. We are also very appreciative obviously of the full economic costs of universities which potentially have a very positive impact. The problem is that once one looks at the STFC plan the FEC increases are entirely negated in our fears by the 25% rise.

Q5 Chairman: I am trying to get to the point of why was this such a big surprise? Here you are, the Director of Education and Science at the Institute of Physics and the President of the Royal Astronomical Society, you are leading figures within your fields; surely the consultation that went on before the plan emerged led you to say that something is wrong and why were you not writing to the Committee at that point saying we really ought to do something.

Professor Rowan-Robinson: There was no consultation.

Q6 Chairman: None whatsoever.

Professor Rowan-Robinson: None whatsoever. Basically it was a complete bolt out of the blue. The first hint of it was the leaked announcement about the withdrawal from Gemini to which we reacted of course, not knowing that this was merely one straw in the wind. The second hint we had was the day before the announcement, I was leaked a figure of 25% cuts to grants. That was the first we had heard. Basically I think STFC did consult the panels it had set up, the Science Board, the PPAN Committee and so on; they were in the know.

Q7 Chairman: They did not speak to you.

Professor Rowan-Robinson: They were told they must not speak to anybody. I had a conversation with Keith Mason in this period up to the announcement and although he gave hints that things could be bad if the settlement was not good but he did not say that we were facing a huge hole in our finances.

Q8 Chairman: Tony, we have a situation here where you represent the scientists on the ground and as a trade union you did nothing to flag up these cuts.

Mr Bell: We were not aware of them; again there was no consultation with staff.

Q9 Chairman: You were not aware of them.

Mr Bell: No.

Q10 Dr Gibson: There are other research councils that are involved in getting settlements, have you ever heard of consultation taking place there in this current situation? Were they consulted about their success or failure, however the Government thought of it? Were you just differentially picked on, that is what I am asking really, as far as consultation is concerned?

Professor Main: I believe the consultation in this area, particularly as it is likely to lead to hundreds of redundancies of employees of the STFC, was not done in the same way as it has been in other councils.

Q11 Dr Gibson: In what way?

Professor Main: I would contrast it with the restructuring of the Centre of Ecology and Hydrology undertaken by NERC where there was a business plan produced, there was consultation with the stakeholder community, the unions were consulted with a view to avoiding the redundancies and to comment on the restructuring and we made a presentation to Council prior to the final decision being taken. In this event the funding model has been decided upon through the CSR; we are now being consulted about the impact in terms of redundancies, not with a view to it being changed.

Q12 Dr Gibson: So there was not even a phone call saying, "We're going to sack you"?

Professor Main: When the CSR emerged certainly it was hinted it was going to be bad but there was no hint of it at consultation.

Professor Rowan-Robinson: If you compare STFC with PPARC part of the problem is that STFC had not got around to setting up a proper advisory structure. It created PPAN (Particle Physics, Astronomy and Nuclear Physics Committee) and it was clear when that was set up that although that committee or panel was supposed to recommend an advisory structure below it - which would have involved far more of the community and I think in the previous council far more of the community were involved at a lower level in the structure - they would have been consulted about bits of the plan and they would have felt some ownership of the plan.

Q13 Chairman: I am now reading the Delivery Plan, "4.1 Stakeholder Engagement: STFC Council has established an advisory structure comprising a Science Board and two Science Committees - Particle Physics, Astronomy and Nuclear Physics Committee (PPAN) and the Physical and Life Sciences" so it was done but none of your members were on it.

Professor Rowan-Robinson: There a couple of astronomers on it.

Q14 Chairman: But they did not speak to you.

Professor Main: They were not allowed to speak to us.

Q15 Mr Wilson: I have a quick question generally about consultation. In recent times with the Government we have had no consultation before changes to the foundation degrees, no consultation about ELQs and the changes there and now we find there has been no consultation about this. In general have you found that government is not consulting the science community about changes they are making, or is this something new, something recent that they have not been consulting thoroughly enough with you?

Professor Main: That is not the easiest question to answer because different situations have led to different consultations. I would say that in general in science there has been good consultation and that in general we feel, in the physics community, that we have had an opportunity to put ideas forward to most of the research councils. I think this is a special case with STFC for two reasons, one is that the very disparate research councils came together very soon before the Comprehensive Spending Review which I think has made a large difference. The other issue to do with STFC which makes it different in this context is the number of fixed commitments that it has relative to EPSRC (which is the other main physics funding research council). EPSRC more or less does have flat cash and that has a less ferocious effect on the finances of physics departments than does STFC where most of the cuts have been concentrated in the areas to do with flexible money, as I said earlier.

Q16 Chairman: Trying to cut to the chase, this 80 million deficit that we all agree on - there are also other savings within the STFC budget going up to 120 million, that is what it says in the Plan - is this poor management on your behalf and the science community's behalf, the particle physics, physics and astronomy communities? Is it just poor communication as you have already hinted at? Or are there other factors?

Mr Bell: I do not think I would necessarily agree with you that there is an 80 million deficit here. It does look to me that there is 80 million less than the Council hoped to acquire out of the Comprehensive Spending Review, there is no question about that. Quite clearly, as has been described in the earlier part of evidence, there is basically a level funding across the Comprehensive Spending Review. It strikes us and it strikes the staff that therefore there has been a decision by Council to make a radical departure from one area of science to another to the tune of 80 to fund the bits that did not receive that amount of money. In addition to that they have actually made a decision to increase the amount saved to create what they call a headroom of 40 million, so this is a Council decision.

Q17 Chairman: So with 120 million - 80 million plus the extra headroom to 120 million - you say it is displacement funding; it is taken from one to put into new research.

Mr Bell: Yes.

Q18 Chairman: Do you know where it is going?

Mr Bell: I know what is in the Delivery Plan; I am not going into any more detail than that.

Q19 Chairman: You just think that the rational explanation is that it has been a movement of funds from science which the Council no longer wishes to do to science which the Council wishes to do.

Mr Bell: That is how it looks to the staff, yes.

Q20 Chairman: Is that how it looks to you too?

Professor Rowan-Robinson: I do not see it quite that way. I think that having completed Diamond and the ISIS II they felt obliged to fund the running costs of those facilities fully and I think the 80 million deficit is a deficit against continuing the programme as it stands at present. It is a cut, I think, against a level programme. The STFC feels they have to do certain things; they have to run Diamond and ISIS II fully having only just built them; they have to invest in the campuses which they made a big feature of in their Plan. Having done that they then have to look around at what else there is and that is where the blow has to fall; it has fallen both on the labs and on the universities. The universities are facing potentially 25% cuts.

Q21 Chairman: Another possible explanation is the issue of Diamond and ISIS coming on stream and having to find extra money for that.

Professor Rowan-Robinson: Yes.

Q22 Chairman: That really backs up Tony's point.

Professor Rowan-Robinson: Yes.

Q23 Dr Iddon: Are you suggesting that the running costs for Diamond have not been budgeted for and that the outturn is greater than was in the original budget? Could you be specific about figures?

Professor Rowan-Robinson: I think you have to press the STFC about that. It is hard for us to have clear visibility about that.

Professor Main: We are told that the running costs were not underestimated but that there is a particular problem in fact with the success of Diamond. It is of course worth making the point that Diamond is used not just by physicists, about a third of its usage is medicine which of course is a major priority for the Government at the moment. I would certainly reinforce what Michael has been saying about where the problem lay for the 80 million. It is because of these fixed commitments and what is causing the problem is not so much the cut; had there been a cut due to inflation, due to the Government giving slightly higher priority to medicine and environmental science - which is fine, the Government of course can do that - that would not have been a problem. It is the concentration of the cut into the flexible funds which is causing so much pain.

Q24 Chairman: In terms of full economic costs which you mentioned earlier, do you feel that that has had a disproportionate effect within STFC? The other research councils do not seem to be reporting a problem with it.

Professor Main: I do not think it is a disproportionate effect in total. If one looks at EPSCR, for example, they had a rather larger rise than STFC but in fact when you take into account the effects of FEC on their funds it is flat, so it is about the same.

Q25 Dr Turner: I find it very difficult to understand why the difficulties with funding running costs of Diamond and ISIS should be a surprise; they should have been predictable. Were they not planned for?

Professor Rowan-Robinson: I think there have been some misunderstandings along the way and perhaps this is something that the Committee can pursue. I do not know for sure but my feeling is that there were two errors really one is in the allocation so basically the IUS wanted to focus the big increase in science especially on medical research which is an entirely justifiable thing to want to do. However, they went a little bit too far. The amount involved compared with the total budget is small; it is just that they overdid it. They did not appreciate that they were leaving STFC with a huge problem. I think that was an error.

Q26 Chairman: So it is the Government's fault.

Professor Rowan-Robinson: Yes, I believe there was an error in the allocation. I do not think it was their intention to hit astronomy and particle physics in the way they did. The second part of the error though was at STFC. I think that STFC, having been given this budget, could have managed it in a slightly different way. I think that they almost provocatively set this headline figure of 25% to all university grants which immediately feels like a catastrophe for all the departments concerned. If it had been 10% or 12% or something then it would have just been regarded as bad weather, but 25% sounds like the first step in closing the fields down.

Professor Main: Particularly since it is taking immediate effect.

Q27 Dr Gibson: If they had consulted you, what would you have said to them? Suppose they had phoned you up and told you you were going to get a reduction, what would you actually have said to them?

Professor Rowan-Robinson: I did have conversations with Keith Mason in the run up to this. I did not get a clear picture that this was coming at all. I did say to him, "Whatever you do, make sure you protect the grant side". I have said that to him many, many times. He did not attempt to do that in my view. If you look at the Delivery Plan on page two, the introduction, it says, "Our overall strategy ... support a healthy and vibrant university community". Further down it says, "Investment in university departments is of strategic importance". Then you go over to "Strategies" and "Priorities for the CSR Period" and you cannot find a single item in there which is directed towards supporting university departments and universities. I do think that the STFC could have fallen in line more clearly with their responsibilities for fundamental science which is a part of their mission and safeguarded it.

Professor Main: I think one of the big issues about this affair has been the fact that a number of fairly important and long-reaching decisions have been made in a very short space of time. We know from the meeting that STFC called when we were given a timetable that only the day before the launch of the science budget was the final Delivery Plan agreed. We know some very, very major decisions were made at very short notice. It is the nature of STFC, of course, that many of their projects are tens of years long.

Q28 Mr Boswell: I have a quick question about reputation in two respects. Obviously science at this level is an international business. Has this damaged the reliability or the reputation of reliability of British science? Secondly, in terms of the participants - your scientists at the coal face of this - is the credibility of STFC itself and the system to deliver a reliable flow of funds also impaired?

Professor Rowan-Robinson: Absolutely, I think you have hit the nail on the head. UK physics, UK astrophysics and astronomy and particle physics have a very high international reputation. They are a key part of why the UK score so highly in science ratings. If you look at citations and publications these are areas with the highest international reputation and real harm is being done by the news of this level of cuts. In the Royal Astronomical Society we have many overseas fellows and I get e-mails all the time from them wondering what on earth is going on.

Professor Main: We went to the trouble of contacting many of the people who did take part in the international review of physics just two years ago now and they made very similar comments. As a member organisation many of our members contacted us and I think it is fair to say that STFC has lost some of the confidence of the community.

Q29 Dr Gibson: How would you like to resolve this situation? If you had a clear piece of paper from this morning, how do you think you can get it to some kind of compromise situation?

Professor Main: We have spoken to DIUS, we have spoken to STFC and we have spoken to our community and all three of them seem to regret the current situation. No-one seems to have intended it but it is very difficult to unravel, as we have said. I think that what is important is that while Wakeham is spending the best part of this year reviewing physics and deciding what the medium term funding is according to the terms of reference we saw today, then I think we need to have something in place to prevent irreversible decisions being made in that period, decisions that later on we will not be able to unravel.

Q30 Dr Gibson: What would you say that something was?

Professor Main: Money, I would guess.

Q31 Dr Gibson: From whom?

Professor Main: I think the money should probably be made available from RCUK. There are various ways of doing this. One could top slice some of the other research councils; one could delay certain projects, introduce delays into the system. We are talking probably about 20 million - it is not a terrific amount of money - in order not to allow things to go beyond the point of no return.

Mr Bell: I think that is a crucial point that some irreversible decisions will be taken, the redundancies that are likely to impact on STFC we are being told need to be made almost immediately in order to make the saving in the Comprehensive Spending Review. At risk are not only those number of jobs but I think the critical mass, at least two of the sites and a huge capacity for science in the UK. I think that deserves a longer consideration. As far as the staff are concerned they do not understand why this is happening; they do not understand the logic behind the decisions and they are not brought into it. You asked the question about reputation, I believe not only the reputation of the STFC and therefore the UK outward looking, but certainly the reputation of STFC amongst the UK community, particularly among the staff, is now at rock bottom.

Q32 Dr Gibson: With all this concern then, are you going to take part in the Wakeham Inquiry?

Professor Main: Yes, of course we will.

Q33 Dr Gibson: Even thought that is just physics and does not include astronomy, is that right?

Professor Rowan-Robinson: Yes. Astronomy is a loose term meaning astrophysics, cosmology, space science, solar system science. We call it astronomy because the public understands astronomy.

Professor Main: HEFCE calls the subject physics and astronomy.

Q34 Chairman: Can I just ask a rider to your earlier question? Tony, you did not give a response to Dr Gibson about the solution. One of the suggestions Professor Main made was top slicing the other research councils' budgets because RCUK does not have any money itself. This would mean that for your members some of the grants they were expecting would go. Is that an acceptable solution to you?

Mr Bell: I think we need to have a look at why the decision has been taken for the funding to STFC.

Q35 Chairman: I am asking for a solution; would you support that as a solution, top slicing other research councils' budgets?

Mr Bell: I think the logic for us and for our members is that there has been no consultation; there has been no understanding as to why we have got to this position.

Q36 Chairman: I am asking you a question. Would you support that? Is that a possible scenario that you would actually support the top slicing of other research councils' budgets?

Mr Bell: I think there arguments to be said that some of the research councils -----

Q37 Chairman: You would just make other scientists redundant elsewhere.

Mr Bell: Not necessarily; I think we have to look at what that funding is being allocated for. The key question that I have is why have the decisions been taken within STFC under which there is going to be a radical reduction in the science delivered in certain areas. I think it is a consideration that Council have gone through in private without consultation either with staff or stakeholders.

Q38 Dr Gibson: Whilst this Wakeham thing drags on - it will drag on, I am sure, because we are going to have a comprehensive review - people will be made redundant, the subject will lose its international status; you are prepared to live with it.

Mr Bell: No, we would want this issue to be resolved very rapidly.

Q39 Dr Gibson: What is "rapidly"?

Mr Bell: What we need to do is stop people being made redundant now. There has to be a moratorium for that for a proper and fundamental review of the decisions to be taken. After that then hopefully we can have a strategy. Not everyone is going to be happy if we accept that, but it is actually understand and is considered and stakeholders feel they have had a share in it. That is what we are missing at the moment.

Q40 Dr Gibson: Does the Wakeham Review accept that? Has the Wakeham Review Committee been set up yet?

Professor Main: No, it has not. The Royal Astronomical Society and the Institute of Physics have both been approached to try to nominate some members for the committee. You can ask Ian Diamond later, but I believe the committee is in the process of being set up now and the terms of reference of course have only been made available today.

Q41 Chairman: You would wait for that.

Professor Main: We would wait for it but it is absolutely essential that in the meantime could we have some moratorium.

Q42 Chairman: You would have a moratorium, you would wait for Wakeham and then make some decisions.

Professor Main: Yes.

Q43 Mr Wilson: I think your union has been talking about a couple of hundred redundancies and we know how difficult it is to get young people into science anyway. What do you think the impact of these redundancies is going to have inspiring confidence in school and university students to pursue a career in research?

Mr Bell: I have not actually mentioned 200; the numbers could well be more than that. What I would say is what future is there in a career in physics and astronomy when the capacity is being ripped out of the UK? It cannot send a positive signal at a time when we are having reviews about how we can encourage, particularly in the physics area.

Q44 Mr Wilson: So you think it is going to be a pretty devastating message.

Mr Bell: It has got to be.

Professor Rowan-Robinson: This is where I think all this is a mistake. I do not think it is an intended cut in this way because basically the impact of astronomy and particle physics is far greater than its actual size within physics. If you look at what draws school children into science in the first place you will find that very often it is things like astronomy, space science and so on. If you ask why students choose physics at university again it is astronomy and particle physics. We have had recent surveys of first year students suggesting that as many as 90% of them came into physics because of those kinds of subjects. When they get there they find out all the wonders of physics and they do not all do astronomy and particularly physics, which is just as well. They are needed in all areas of physics and the economy needs physics as a whole. However, if you hit astronomy and particle physics in the way they are being hit at the moment the impact is going to be devastating to the whole physics programme and eventually the UK economy, the UK science reputation. The knock-on effect is far-reaching.

Q45 Dr Iddon: I will put my cards on the table. I am a northern member of Parliament from the Greater Manchester area and when the original decision on Diamond was taken the north west group were very, very disappointed (that is the north west group of members of Parliament), we lobbied the Prime Minister and we got some extra money for Northwest Science, as you well remember. Of course we accept the Diamond decision; that was made and we were expecting 80 job losses during the current year and 30 next year as a result of that decision. I add that up to 110 job losses a result of the Synchrotron decision. I am reading that the STFC are putting it about that 180 job losses come out of that decision. There is a difference of 70 there I cannot reconcile, and altogether 350 jobs look as if they are going to be lost at Daresbury. Where are the rest coming from?

Mr Bell: My understanding is that 80 were already planned in the reduction of SRS as you described. Further programme will be cut at the Daresbury site which will result in more redundancies. We do not know the numbers yet; it will depend on how many efficiency savings can be made or extra funding could be attracted, but those numbers that you describe sound entirely possible to me from what I understand.

Q46 Dr Iddon: I do not know what the status is of the fourth generation light source - I do not know whether anybody knows, we will ask STFC when they come in front of us shortly - but obviously there are going to be some job losses there if the programme is either suspended or especially abandoned. Let us assume it is going to be abandoned; to you know how many job losses there would be at Daresbury as a result of abandoning 4GLS?

Mr Bell: No, I do not, not specifically. We are in discussion at the moment about the implications of the actual numbers that are likely as a result of cutbacks of programme, but the absolute detail is not known to me.

Q47 Dr Iddon: Do you think that if two-thirds of the jobs go at Daresbury - because that is what it is looking like from the figures that are before me - science and innovation can actually survive on that site?

Mr Bell: I do not see how it can. We have already tasked Keith Mason with the obvious dichotomy in the statements in the business plan about encouraging a technology campus at Daresbury whilst withdrawing from the key science that would make it attractive. I cannot see how those two square up.

Q48 Dr Iddon: Does it look to you - as it looks to north west MPs - that the original fear that we had that science was being pulled into the golden triangle and that Daresbury was going to be abandoned is going to come true?

Mr Bell: It does look that way to me and it certainly looks that way to the staff at Daresbury.

Q49 Dr Iddon: Obviously there are three science and innovation sites that were declared by the last science minister, Lord Sainsbury - who I think did a good job and we were very pleased to hear that these three sites were going to develop as science and innovation sites - can you tell us something about cuts at the other two sites, the Scottish site and the Harwell site?

Mr Bell: Again the details are not yet there but quite clearly with the withdrawal from Gemini there will be an impact on the UK ATC and if you look at the Delivery Plan it is quite clear that a different model of governance is being looked at with regards to the UK ATC and I believe that the STFC no longer wish to actually own the site and the staff.

Q50 Dr Iddon: I am looking at 200 job cuts here at Harwell Rutherford Appleton alone and presumably more at the Scottish site. Has anybody calculated the cost of redundancies and severance packages that will obviously come out of all these job cuts? Has that been allowed for in the STFC budget? Have you asked STFC this question?

Professor Main: I understand that the 27 million that they were allowed to bring forward in their budget was for were called restructuring costs which I assume are redundancy costs.

Q51 Dr Iddon: So it is covered in the budget.

Professor Main: There was some flexibility allowed to STFC. There was an extra 5 million a year they were allowed to bring in from their capital costs and 27 million, the self-loan, was able to be brought forward to allow for these restructuring costs.

Mr Bell: I think until you know the numbers you cannot say what the money will be, but it is going to be big.

Professor Rowan-Robinson: On the ATC I can give you a number. The number of potential job losses at ATC is 40 people I believe, so approximately 50% of the workforce there are facing redundancy consequent on the withdrawal from Gemini and the abandonment of the instrumentation programme there. It means that the capability to build instrumentation to support our membership of the European Southern Observatory and get a juste retour from our subscription to them may be lost.

Q52 Dr Turner: In addition to all the potential damage to Daresbury and the other sites, what is going to be the impact in your view of the research grant costs? What is going to be lost?

Professor Main: You mean in universities?

Q53 Dr Turner: Yes.

Professor Main: It will of course not be evenly spread but there at least half a dozen universities - some large, some small - whose dependence on STFC is about 75% of their funding or more and lots with about 50% of their funding so a 20% cut in that will be a 20% cut in their income. If you look at what the actual figures are - in terms of grants it is money in/money out because you spend it on the research - there are also now full economic costs and the direct costs that go into the university. Some universities are standing to lose about three quarters of a million pounds a year in terms of their direct costs, ie the money they will lose as a result of these cuts. Some departments, even some of the very largest, will suffer very badly. Some of the smaller ones with high dependence on STFC may really be under a lot of financial pressure, particularly since, as we know what I call the parachute funding for HEFCE (the extra 75 million that HEFCE found for certain subjects including physics on the teaching side) is due to end at the end of the next academic year. If these things all come together at the same time it will put a lot of pressure on physics department.

Q54 Dr Turner: That also implies a further wave of redundancies.

Professor Main: It is perfectly possible, yes. What is so frustrating about this from my point of view because I have an interest in education as well as research is that we really did seem to have turned the corner in physics with more people doing A levels last year, a lot more people applying to go to university. I am personally convinced that the reason for that is that senior people in government have been sending out some very positive messages about the use of physics, the jobs in physics and how important physics is. What worries me most about this - and I do regret it so much - is that we are all perhaps sending a negative message out and that is very, very regrettable. I know that the Government desperately wants to avoid more physics departments closing; they want more to open. It would be very regrettable if, as a result of this, we lose physics departments.

Q55 Dr Turner: The message is: study physics and be redundant in a few years. That is not a good message, is it?

Professor Main: I think that might be exaggerating a little.

Q56 Dr Turner: It is not good though.

Professor Main: No, it is not good.

Q57 Chairman: Just to follow this point up, Tony said earlier in this conversation that this is not a loss of funding to STFC, this is a redistribution of 80 million - possibly 120 million - into this area. One of the big beneficiaries will be space which actually requires physicists and astrophysicists to actually go into that area. There will be a lot of new work for academics; there will be new work for scientists. Why are you not looking at this as a glass half full?

Professor Rowan-Robinson: In astronomy we have our subscription to the European Space Agency, we have our subscription to the European Southern Observatory so ESO will select the missions and the UK will try to get involved with instruments on that but they will be doing so with a budget that is 25% lower. The number of post doctorate researchers available in the universities will be 25% lower in three years' time. The possibilities of significant involvement in these space missions that ESO selects will be reduced. I think the net result will be that whereas currently the UK has a presence in most fields of astrophysics, solar system science and so on and is a major force in European astronomy, that will slowly disappear and we will find that all the opportunities have been taken by France, Germany, Italy or Spain and we will not be able to compete across the full range of science.

Mr Bell: The work we have done shows that those who are made redundant from science - we followed our members who had been made redundant - the vast majority of them do not remain so it is not as if you can make them redundant now and pick them up in two or three years at another location. A lot of them will have drifted out of science, they will have gone abroad, they will have changed careers or whatever; they do not just sit around in the wardrobe waiting to be lifted back out for another project.

Q58 Chairman: I was not suggesting that; I was suggesting that overall within the budget there will be new opportunities.

Mr Bell: But it is the lead time between one and the other; you will lose people.

Q59 Mr Marsden: Professor Main, earlier you referred to some of the international reactions or concerns that have been expressed about the cuts in this budget. I declare an interest as a north west MP and am profoundly concerned about any implications of savage cuts that would affect Daresbury's viability. My colleague Brian Iddon went through the job numbers but there are other issues as well. For example, Prospect, in their written evidence to us, say that if this results in the withdrawal of STFC from science programmes key to the future of the Daresbury site (they mention the Linac Prototype for a next generation light source and the EMMA project) that this again will completely nullify the intention of the department for Daresbury to act as a focal point for collaboration and knowledge. Is that too stark a prospect?

Professor Main: I do not think so. I find it very difficult to comment specifically on the Daresbury project partly- as Tony has hinted - because of a lack of transparency in the decision making process. We know next to nothing about how these decisions were reached. I have heard John Denham say in public that he puts Daresbury at the top of his priority list; he says that he will see that Daresbury will continue.

Q60 Mr Marsden: Tony Bell, could I ask you, because it was you who flagged this up in the evidence and echoing what Professor Main said, is it not possible that there is a huge dichotomy here between the declared and the sustained intention of ministers to diversify outside what I think one of my colleagues referred to as the "golden triangle" and what appears to have been a sort of handed-down very quickly and very regionally focussed decision. Would it be unfair for those looking at it from the outside to say that actually the STFC have taken advantage, potentially, of this situation to produce a rather slash and burn approach to Daresbury?

Mr Bell: It does look like there have been radical decisions taken in the Council in light of the CSR and certainly our members in Daresbury are saying, "Well, where will be the critical mass for this technology campus if those sort of programmes are being stopped?" They are very doubtful for the future for a technology campus at Daresbury.

Q61 Mr Marsden: So that is a central issue for Wakeham as well, is it?

Mr Bell: I would have thought so.

Q62 Dr Gibson: Just for the record, this will affect Scotland as well. You cover the work that goes on there and there is a very proud tradition of physics and astronomy. Edinburgh, for example, is very frightened that they are going to lose a lot of facilities which are international. Is that true?

Mr Bell: Absolutely.

Q63 Dr Gibson: Just to correct the record, everything is not just in the north west, it is right across the country.

Mr Bell: Yes.

Q64 Chairman: Professor Main, we have been told that solar terrestrial physics is going to be removed totally from the UK's portfolio. What is going to be the effect of that?

Professor Main: Could I just say that one of the international people we did contact, Professor Roger Blandford, made the comment that it was a rather curious thing to be doing at a time when climate change is so important.

Professor Rowan-Robinson: Just to make clear, it is ground-based solar terrestrial physics facilities, it is the ground-based radars but there are still space missions doing solar terrestrial physics. The key point about the ground-based radar is they complete the picture of the interaction between the sun and the earth. If the sun is active in solar storms and so on it can trace them through space and then you see the impact at the earth with the ground-based radars. As an aside, they also track debris from the Chinese satellite destruction so they have a value for society basically. These solar storms, of course, disrupt electrical networks and cause potential harm.

Q65 Chairman: The other point we have received a lot of information on is really the International Linear Collider and the abandonment of any involvement in that programme. Surely the fact that we are continuing to invest significantly in the Large Hadron Collider demonstrates a commitment to this area of particle physics and therefore we do not need, given tight resources, to actually involve ourselves with the International Linear Collider.

Professor Main: The International Linea Collider of course is much further down the line. I think the biggest criticism we would put forward there is that the decision was made with very, very little consultation with the people involved. The people who have been involved - Brian Foster at Oxford is the European leader of the ILC programme - were not given any opportunity to present their case before the project was terminated. It is not useful at this sort of meeting to get involved in the ins and outs of whether it is a good thing; they are very complicated issues. It is really a question of the time available for the decision and the lack of consultation.

Q66 Mr Cawsey: I would like to ask a little bit about the headline increase of 17.4% for the research councils which disguises some considerable variation in the amounts received. What do you make of the range of increases that different research councils have been allocated?

Professor Main: It seems to me that the Government has the right to put priority where it thinks. It is the Government; it decides where the priority should be in the science budget. I think it is perfectly reasonable of course to put more money into medical research and perhaps the environment. I do not think we have any problem with that. I think the problem has been the way it has been concentrated on these specific projects and such a large cut was not intended when it made the original plan to allocate the budget as it is.

Q67 Mr Cawsey: You say that obviously the Government has the right to make priorities.

Professor Main: Yes.

Q68 Mr Cawsey: Do you generally agree with the priority calls they have made?

Professor Main: We would like to see that physics would be at the heart of all the sciences. One of the things about physics is that it is basic nature and I hope that the Wakeham Review will take that into account. I used to be at the University of Nottingham; my colleague Peter Mansfield is a physicist but he won the Nobel Prize for medicine. I think the actual priorities are fine but one has to recognise that the contributions to those priorities will not necessarily always come from medical schools in medicine, they will often be from physics.

Mr Bell: I think as well that we should be aware that the process is not as joined up as just looking at the CSR for science, I would imagine, because there is no coordination with the spend on science in other government departments. We are only looking at a microcosm of the UK science spend; the rest of it is vested in departments and I am not convinced that departments talk to each other and research councils talk to departments. We are only looking at that small part of it. The wider picture is not known to us.

Q69 Mr Cawsey: Is that what your members have been saying?

Mr Bell: Yes. We have been saying for ages that there should be a coordinated policy across government for spending in science. We already see the very point you are making, that there are large differences just within the research councils. When you start looking at government spend across the departments as well there are huge variations and that has impacts because they are all inter-related.

Professor Rowan-Robinson: Coming back to this point about unintended outcome, basically the intention was to have a big increase in science spending, tick; the intention was to focus that pretty much on medical research, tick. The unintended consequence was slashing cuts in key areas of physics. That was not intended and that, I feel, was an error somewhere along the line.

Q70 Mr Cawsey: Moving on from that, Professor Main, the Engineering and Physical Sciences Research Council received a funding increase of 18.6%, so why are you predicting a reduction in grants?

Professor Main: Shortly after the CSR Review was announced we spoke to officials from EPSRC - of course it is rather difficult because FEC is complicating the calculations - and in terms of their volume of research they are expecting a decrease over the CSR period roughly according to inflation. In other words, their allocation is flat in terms of the volume of research. What has happened of course with FEC is that more money will be going into the university sector as a result of the increases. This is to be welcomed; certainly the universities have been calling for it for some time. I was speaking to the chief executive of EPSRC just three days ago and he was saying that one of their key issues for the next year was educating universities in the use of the full economic cost funding. I think that will be very, very important. It was always the case that FEC money was not going to increase the volume of research; in fact, even in EPSRC there is going to be a slight decrease in volume as a result of getting flat cash.

Q71 Mr Cawsey: Some people are going to see a benefit of flat cash elsewhere.

Professor Main: There will be benefit within the universities and if the money is spent wisely in the universities it may give an overall benefit to science.

Q72 Mr Cawsey: UK subscriptions to international projects are currently compensated by the OSI to currency fluctuation but that is due to end at the end of March. I would be interested to know your view on what is likely to happen if there is a drop in the value of the pound post-April?

Professor Main: It is clear what will happen, there will be a further cut on the flexible funding that we have referred to, Michael's unintended consequences, and so the grants will be cut even more. I have to say that this change in policy is quite extraordinary. It could go the other way; it would be just as absurd for STFC to have more money simply as a result of a slightly stronger pound than it is for it to have less money due to a weak pound. I do not see this as a very sensible decision at all and it is quite out of kilter with most of the rest of our European colleagues.

Q73 Mr Cawsey: It is bringing in additional uncertainty.

Professor Main: Yes, absolutely. It is uncertainty in funding which, as any funder will tell you, is not what you need because you always have to have a contingency for that.

Professor Rowan-Robinson: It is not just currency fluctuation, it is also GDP changes so that drives several of the subscriptions as a proportion to GDP. If the UK does really well and has less funding then the subscriptions go up. Our belief is that these international subscriptions should be taken out of the budget basically, they should be paid either off the top or RCUK or at the Treasury or something like that. Fluctuations should not sabotage science planning.

Q74 Mr Cawsey: The review of physics is to be followed by reviews of other subjects. Is this something you welcome

Professor Main: Yes, although I would say one thing that slightly concerns me and that is the way that the subjects are split up and really there is a continuum in science, physics in particular. One of the things I always say is that if you look at where physics graduates go, they go everywhere, into all the sciences and engineering. You can visit any campus and you will find people with physics degrees in all sorts of different areas. The campus at UEA is an excellent example. They do not have a physics department at the University of East Anglia - as Ian Gibson knows well - but in fact they have several dozen people whose first degree is in physics.

Q75 Chairman: Tony, would you agree with the fact that disciplines with those caveats should be included in these reviews?

Mr Bell: Yes, I think so. I take the point as well that it is very difficult to make these arguments on rigidly academic discipline lines. There is a lot more integration of science happening which is surely to be welcomed and I think breaking it down into these little subheadings is not necessarily helpful

Chairman: On that note, where everyone seems to agree, could I thank very much indeed Professor Michael Rowan-Robinson, Professor Peter Main and Tony Bell for being excellent witnesses. Thank you very much indeed.

Witnesses: Professor Ian Diamond, Chair, Research Councils UK and Professor Keith Mason, Chief Executive of the Science and Technology Facilities Council, gave evidence.

Q76 Chairman: Could I welcome our second panel of the afternoon who have been sitting quietly, listening and observing. Professor Ian Diamond, the Chairman of Research Councils UK and Professor Keith Mason, Chief Executive of the Science and Technology Facilities Services, welcome to you both this afternoon. Could I start with an obvious question? Who is to blame for the STFC being 80 million in deficit?

Professor Mason: Firstly, I do not think there is anybody to blame. It is not a blame situation. We have, as we all know in this room, a rather good settlement for science but it was only constant volume and in the current economic climate that is nevertheless a good outcome. You know that FEC was a big component of that and that puts real money into universities. When we consulted on this a number of years ago it was quite clear that the universities would prefer to put their programmes on a sustainable basis rather than to increase the volume. We all accept that as a good thing. The other aspect of course, is that DIUS made a decision to support medical research and we all know why and so MRC got a settlement which corresponded essentially to increased volume and that implies that every other research council has to have an increase which is less than that. In other words, we were not able to maintain volume and in most cases when you take FEC out we are pretty close to flat cash. That is certainly the case STFC; it is certainly the case for EPSRC. If you just do a simple mental calculation as to what flat cash actually means in the context of an inflationary scenario, if we take an inflation index of 2.5% - which is the usual number - then it is not hard to figure out that on a 400 million budget - which is what our near cash budget is - then the impact of inflation erosion over three years is 60 million, which is virtually the sort of numbers we are talking about in terms of the so called deficit. I have to say that to correct Tony's assertion that we are actually moving money from one place to the other. Basically what we are doing is filling in the hole created by inflation over a three year period and every other research council has that problem too. Essentially we have to be more efficient, to do more with less by that amount. You may recall when I appeared two years ago in front of your predecessor committee I said at the time in the context of PPARC that if we had another flat cash settlement we had no alternative but to reduce the breadth of programmes that we undertook. What we have now is exactly that situation.

Q77 Chairman: I would agree with all that you have said so far, Keith, but why, given that scenario which you have predicted for two years, have you not then been in deep consultation with the very people that you have now suddenly sprung these cuts on?

Professor Mason: I think there is perhaps the danger that it is a self-fulfilling prophecy to an extent but I would disagree that we had not been in consultation with people. The statement I made to you two years ago I have also made to the PPARC community in that context because I was CEO of PPARC at the time, and I made it in very strong terms. It is rather surprising when we get the settlement - which has been known since April - that people did not realise that a flat cash settlement of that sort would imply some programme cuts.

Q78 Chairman: You have two committees set up with your new organisation at STFC and you are saying to the members of those committees that you cannot even speak to your community. That is not consultation, that is something we would find in Russia.

Professor Mason: I disagree. Firstly I think we do consultation extremely well in STFC; I am very proud of the peer review system that we have set up, it is very effective, it does involve the community, it involves people who are able to look across the whole programme and I think it is a very good system. However, the period of time we are talking about is essentially a period where all the research councils are making bids to DIUS for funding and one of the reasons for so-called secrecy - or at least keeping this under wraps - is that it was a negotiating situation and I think to ensure a level playing field DIUS quite rightly insisted that these negotiations be taken under wraps because otherwise one would have had lobbying from all sorts of corners of the scientific community which would not have been necessarily helpful to a proper outcome.

Q79 Chairman: The big issue here - you will pardon me if I and members of the Committee have got information from other sources which may be wrong - is that this is really a cock-up. In reality, if we take the Diamond Light Source, for instance, you have failed to calculate the costs of actually running that once it goes into full operation.

Professor Mason: That is simply not true. The costs of running the Diamond Light Source were established when Diamond Light Source Ltd was established in 2003. They were correctly determined at that point and they have not changed so these numbers have been known for a long time.

Q80 Chairman: To stop you there, two years ago you had a 10 million overrun on Diamond; last year it was a 20 million overrun on it; you have suddenly been presented with a 10.5 million bill for VAT on it. Are you saying that all those were planned deficits?

Professor Mason: Forgive me for not having these numbers immediately to mind, but in terms of the capital phase of Diamond it was essentially on budget and on time with a minor variance.

Q81 Chairman: Are you saying 10 million and 20 million is a minor variance?

Professor Mason: Ten million on a budget of approaching 300 million is not a bad outcome for such a major project of that sort of complexity. The running costs were correctly estimated in 2003; the 20 million number I think - if I am remembering the right number - is the variance compared to the very early estimates made in 1997/1998 before anyone had really done any work on understanding what Diamond was. This was highlighted in the PAC hearing and the NAO report but it is not surprising that at such an early stage in the project you do not get the numbers quite right. The VAT is one of those items which was unexpected and does cause us problems to the tune of 4 million a year.

Q82 Chairman: Ten and a half it says in your submission.

Professor Mason: The VAT on the running costs is 4 million a year. You may recall the reason for that is that the Treasury determined that we were liable for VAT whereas originally we had presumed we were not.

Q83 Chairman: The final bit on Diamond is that on your Delivery Plan submission on light sources there was this final sentence which says: "Our ability to fully exploit the facility will depend on the success in making the savings elsewhere in this plan" so there is a clear statement there that in order to now run Diamond you really have to slash and burn elsewhere.

Professor Mason: It is true to say that the base line budget allocation to the ex-CCROC (the predecessor organisation) was not fully raised to compensate for the running costs of Diamond and ISIS Target Station II. Of course there are savings which come in from closing the SRS and that was factored into the calculation. It is true that we are in a situation with flat cash settlements, the buying power of the budget is eroded and yet we are doing more things. Diamond is a great thing, ISIS Target Station is a great thing but they do require more running costs which means that we have to restructure the programme in order to pay for them.

Q84 Chairman: I came to the launch of the Science Budget Allocation as many other members of the Committee did. Sir Keith O'Nions and the secretary of state seemed to be a little taken aback by the sense of outrage there was from the physics particle, physics and astronomy community at that meeting. When were they briefed as to these changes which were going to hit their political wallets?

Professor Mason: I cannot really answer that in detail because I was not in the room when they were briefed. All I can say is that in our draft delivery plan - there were several drafts over several months - we made it clear what the consequences of a various funding scenarios were.

Q85 Chairman: So they raised no critique at all; they said it was perfectly fine to decimate the physics community.

Professor Mason: I am in a position with STFC - we will come onto this later - where I have fixed budget and I have to make hard choices as to what we fund. I think DIUS are in exactly the same situation. They had a fixed allocation which was only constant volume, they had to make hard choices and we know the choices they made - I cannot argue with those choices - to fund FEC and to put more into medical research - but the consequence of that is that other areas have to contract and I accept that.

Q86 Chairman: This is not the fault of the Government; this is entirely a consequence of your decision making within STFC.

Professor Mason: There are two levels, obviously. The overall allocation of STFC is a consequence of the decision making at the DIUS level; the remaining consequences are a result of the consequences of the decision making in STFC.

Q87 Chairman: So you are planning to cut 80 million - you have said it is a cut, it is not a re-allocation of resources - why are you actually upping that to 120 million given the fact that 80 million is going to be difficult enough?

Professor Diamond: The answer is again remarkably simple, rather than avoiding consultation and not using peer review we have quite the opposite stance, which is that we want to get peer review involved in making decisions about which programmes we cut and which programmes we continue with. The extra 40 million is basically the by-back space, as we put it, to allow decision making to be made about which programmes are continued and which are cut. That decision making is a process going on now, a process that has been undertaken by our PPAN panel with the review by our science boards, so the community are fully involved in that decision making.

Q88 Chairman: When Peter Main says that the physics community need roughly 20 million in order to actually plan sensibly for the future, you have already got 40 million in your back pocket of which you could actually pull some in. Is that right?

Professor Mason: The 40 million is not free money.

Q89 Chairman: What is the point in consulting on that extra 40 million if you have already made the decision to do the cuts?

Professor Mason: I think you are misunderstanding. We have a menu of possible programme elements that adds up to more 40 million. We have created headroom in our programme on 40 million and we are consulting with our science advisory system as to which of that menu we will put within the 40 million. These are programmes which, in some cases, are already started but we are getting the priority information from the peer review system as to which of the possible menu things that we could do that we should do in the next few years.

Q90 Chairman: So out of 120 million of cuts 40 million could be reinstated following peer review.

Professor Mason: Yes, that is correct.

Q91 Chairman: I think it is important to have that on record.

Professor Mason: Absolutely, I agree.

Q92 Dr Iddon: Could I just ask you whether you are running the current year's budget with an estimated surplus at the end of it? Do you have any money in reserves anywhere?

Professor Mason: We are required to plan on a flat cash budget and we have a flat cash settlement. We have to reduce the running costs of the Council by 30 million a year. The Council has actually worked very, very hard to come up with a plan which delivers the maximum value for money from the allocation that we have received. In order to do that we are going to have to do some restructuring of internal assets and essentially we have forced an effort to reduce costs in this year so we can take those costs forward in order to pay for that restructuring. This is a device which is essential in order for us to be able to balance our books. It does assume that we can actually carry those monies forward and that is not a given, as I presume you are aware.

Q93 Dr Iddon: What sort of figure are you talking about? 20 million? 30 million?

Professor Mason: Twenty million; 17 million actually.

Q94 Dr Iddon: What about reserves? You have not mentioned reserves.

Professor Mason: We do not have reserves; we have to come out with a zero balance sheet at the end of every financial year.

Q95 Dr Iddon: When the collision between LRSC and PPARC took place I was under the impression that the physics budget was likely to be protected, at least that is what the physics community were led to believe. Now we can see that that has all crashed.

Professor Mason: The budget I received to run STFC was the sum of the budgets that were previously in PPARC and CCRLC. I think again there is a lot of misunderstanding perhaps about that statement but I interpreted that statement to be that the Government were not motivated to bring the councils together in order to save money and nor did they, we got the full budget for the combined.

Q96 Chairman: You had to include, within your overall budget, part of EPSRC's budget.

Professor Mason: That is correct.

Q97 Chairman: Was that included?

Professor Mason: That was in addition. We had a transfer from EPSRC as well. Essentially the merger was cost neutral.

Q98 Chairman: Is flat cash the same as near cash plus non-cash?

Professor Mason: No.

Q99 Chairman: Can you give us a little note on that because I am terribly confused between flat cash and near cash.

Professor Mason: Yes.

Q100 Dr Turner: On the face of it the 17.4% headline increase for the research councils is very good news, but we have actually got a PR disaster in practice. How do you think we got here?

Professor Diamond: Let me start by saying very clearly that I think it is good news in the context of this spending review. It is an affirmation of the Government's support for science and, within that, a clear view that science can help to provide not only the brilliant science that we do but also economic impact and the quality of life improvements for the people of this country and indeed other countries. In saying that there is then a decision as to how that should be allocated and clearly some decisions were originally made around the funding for transformational medicine which were supported and secondly full economic costing was, in this spending review, fully involved in all the funding decisions. I think we have to go back to 2003 when the original consultation around full economic costing came in and at that time all senior managers in the university community, properly consulted, said they would prefer to have sustainability of funding through full economic costing than an increase in volume. I think it would be unrealistic to have expected that this spending review would have resulted in anything other, particularly as after full economic costing it was flat cash, than a reduction in volume. I have to say that across all research councils there is a degree of reprioritisation taking place and difficult decisions are being made. That there has been what you have described as a PR disaster I think is unfortunate.

Q101 Dr Turner: I have the suspicion that the 17.4%, although looking quite an impressive figure, is not that impressive because inflation for scientific research is not the same as inflation in the normal economy.

Professor Diamond: We would agree with that entirely.

Q102 Dr Turner: It is in fact significantly higher. Is that a factor which is adequately factored into these sorts of calculations?

Professor Diamond: It is a factor which we have to take within the research council community as an important issue when we are allocating our resources to our different funding areas. That is why across all research councils you will see reductions in success rates and reductions in volume. Having said that, more real money will be going into the universities for research because of full economic costing and the universities will have real increases in funds so long as they are successful in the competitions that take place. It is then for the universities to make strategic decisions on how this extra money, over and above inflation, is funded.

Q103 Dr Turner: The implication of what you have just said is that unfortunately we are going to see a diminution in the volume of projects that get funded and in fact we are starting to creep back towards the situation which most of us came into this place where a depressingly small percentage of alpha-plus projects in 1997 were getting funding.

Professor Diamond: I have to agree. I am absolutely clear in my mind that in every research council over the next few years there will be some of the most depressing letters that research council personnel have to write and that is, "I am terribly sorry, because of the budget we cannot fund this alpha-plus rated project". That is an incredibly difficult letter to write. You cannot explain why this grant was not funded, it is simply that a decision has had to be made that this falls slightly below the line. That means that world-class science will not take place. I have to agree with that, but at the same time extra money will be in the universities and the universities will have the opportunities to provide some kind of flexibility which may allow - but that will be for them to decide - some research to take place.

Q104 Dr Turner: It is a message which needs to be sent back to government, is it not, that if government policy, ie to grow and enhance British science, is actually going to mean anything it is actually going to cost more than the Treasury has put in so far.

Professor Diamond: In welcoming the amount of money that has come, I have no doubt in my mind that higher percentages would have resulted in very much more world-class science taking place. There is absolutely no doubt at all in my mind that all councils could very wisely spend more funds on truly world-class science. World-class is very much overused, but really cutting edge science. I am using science here right the way across arts and humanities, right the way through the piece.

Q105 Mr Boswell: Is the logic of what you have just said that as we have started with what might be called a quite serious apparent situation in STFC - although you have explained the reasons for that - we can look forward to similar situations arising in other research councils, possibly on a predicted, possibly on an apparently somewhat random basis as they restructure their affairs to meet the new situation over the next year or two. Is this just the first of many?

Professor Diamond: Each council has its own strategy and each council broadly has a flat cash after full economic costing settlement. That means that each council will need to be very careful about how it manages its affairs. I suspect there will be reductions in success rates across the board. The way in which that impacts on different councils and therefore on different individual disciplines may work in different ways so that for councils which have one responsive mode it would not impact on an individual discipline but on those at the margin, whereas those with specific areas - for example in STFC - it is perhaps a little more visible on a particular discipline.

Q106 Dr Turner: Can you tell us something about the process of negotiating this research settlement? Were the heads of research councils involved in negotiating this? How did it evolve?

Professor Diamond: Late in 2006 each council was invited to set out priorities in the broadest sense for the then Office of Science and Innovation. These were discussed in a set of bilaterals in late 2006 and early 2007. In May or June of 2007 each research council received a formal letter with a template for a draft delivery plan and as part of that each council was invited by DIUS (or it may still have been DTI) to provide four scenarios, each of them after full economic costing: one, how you would manage a 5% cut after full economic costing; secondly, how you would manage flat cash; thirdly, what you would do with an increase of 5%; fourthly, what you would do with an increase of 10%. Each council provided those scenarios by early July. The allocations were then announced, as you know, in October and we were invited by the end of October to submit the final draft delivery plan on the basis of those allocations.

Q107 Dr Turner: So those of you like Keith, who have to take some fairly tough cuts, were invited to help construct their own decimation, as it were.

Professor Diamond: We were all invited to provide a strategic plan effectively of how we would manage various scenarios of budget over the spending review period and that required some deep thought and some consultation within each council.

Q108 Dr Turner: Keith's council is going to be immediately hit by the loss of protection against currency movements, over and above the pain that Swindon Town is already suffering, especially the pound against the euro, that is going to cost heavily. How did this come about? Who negotiated that?

Professor Diamond: I think you would have to ask Keith about that particular issue.

Professor Mason: Let me just describe the previous situation and the current situation. The previous situation was that the liability for exchange rate fluctuations, GPD variations fell on essentially the science vote in total so it was essentially top sliced at the RCUK level. Essentially AHRC would suffer if the subscriptions were to change. In the current round it was argued that it was more appropriate to put that risk onto the user councils, that is STFC and NERC, so we now have a situation where we are liable for the first 6 million of any variation and beyond 6 million there is negotiation at the next spending review basically to undertake how that is split more widely, with a wider base. Our risk is capped but it is at the 6 million level and it does contribute some 10 million over the three years to the so-called 80 million that we are talking about. In other words, we have to allow for that risk; we have to allow a contingency for that risk. The previous arrangement was that that risk was carried by all the research councils collectively. This does lead to some non sequiturs as I think I have described in one of my previous appearances in front of your predecessor committee. We are in the situation, as I think one of the earlier witnesses said, that if the economy of the country does really well we can actually do less science which does not feel right to me. There is no easy answer; it has to be borne at some level and it is a question of whether you see these subscriptions as something that benefits the physics community or something that benefits the nation and I can argue the case as you wish.

Q109 Dr Iddon: There is something in this debate I do not quite understand. We have all supported full economic costings as being part of research grants; there is no argument about that. You are having to find the money to do that and it is causing pain, we can all see that. However, somebody was supplying the money to carry out that research at universities before. It may not have been as much money as you are now providing through full economic costs but the universities were actually supporting research. Where has that money gone that was supporting research previously? Has it been transferred to the science budgets? That is an argument I do not understand.

Professor Diamond: The money that was in the universities or the fact that the universities were funding research.

Q110 Dr Iddon: Yes, previously.

Professor Diamond: You would need to ask the vice chancellors that. The one or two that I have asked have said they were running at a loss and managing at best they could. Now they are able to fund research as it should be funded. The one thing I can say to you is that the research councils are, as we have said over the last couple of years that we would always do, just about to start a review of full economic costing, its process and what it is being spent on. That report will report round about September or October 2008 and I would be delighted to send you a copy as soon as it is finalised. We are all very comfortable that the process is working but I think that will enable us to answer that question of exactly what the funds are being spent on now.

Q111 Dr Iddon: Vice chancellors are always maintaining that teaching was subsiding research. We would expect to see the teaching budgets increase significantly this year if that is the argument the VCs have used in the past.

Professor Diamond: I think you would have to ask the vice chancellors that question.

Q112 Dr Turner: The Royal Society has suggested an independent group of experts to advise the Director General of Science and Innovation on science budgets. Do you support that suggestion?

Professor Diamond: As I understand it that is a return to the position in the late 1980s and early 1990s. I have to say that my own sense is that this allocation has been undertaken extremely professionally and that the research councils were given the opportunity to present the case not only for the individual councils' science but also Research Councils UK presented a draft delivery plan, although there was a budget and the idea there being to highlight the cross-council priorities that were seen, for example, around some of the real cross-council programmes in energy and environment for example. The process was done incredibly professionally and used the budget in a reasonable way. Whether one would have got a different answer had there been a group of wise people advising the Director General, I am not able to say.

Professor Mason: Let me just add to that that in my view I do not see evidence that the outcome would have been any different.

Q113 Dr Turner: Finally, the Wakeham Review. We know its terms of reference and it is entirely possible that it will come up with some conclusions that will have funding implications but for the next three years you do not have any available. How do you see yourselves responding to the physics review?

Professor Diamond: I think it is worth saying that no sooner has one spending review finished than the next one starts. Certainly the Wakeham Review will report as we are in the thrust of preparing the case for the next spending review and it will have an opportunity to feed into that case. The second thing I would say is that we will wait and see what the Wakeham says before answering firmly that question. I think it has an interesting and exciting set of terms of reference to enable us properly to look across the entire spectrum of what is physics research and how it contributes right across the five research councils which currently provide funding in physics.

Q114 Dr Gibson: Why has it not happened before the Wakeham Review? None of this is new really. Physics has been having trouble for years, getting students at one time when you gave students new programmes and so on. Why are they putting it in now? Is it just a smokescreen for the real problems?

Professor Diamond: RCUK, as I am sure you will have seen from our Health of Disciplines Annual Report, has looked very carefully at the health of all disciplines, particularly looking at the demography of the academic community.

Q115 Chairman: Why do you need to do it again then?

Professor Diamond: What we have not done until now is to have a really in-depth scientific cross-council review of the science and the medium term needs. I think it is important that this is now done across a range of areas because of the real importance of inter-disciplinarity and the need, if we are to accept inter-disciplinarity as being absolutely cutting-edge but applied across two or more disciplines, to ensure that we have a place to do that while maintaining the core discipline itself. Physics is a really important example that there is a really good reason for doing that and then to follow it with others.

Q116 Chairman: Could you make this absolutely clear to Des and Ian's point, that the Wakeham Review will have no effect whatsoever on the current plans in the Delivery Plan proposed by STFC? It is totally detached from it; this is looking at something else.

Professor Diamond: It is not the intention that this will impact on the budget of STFC in this spending review.

Q117 Chairman: So waiting for it to be concluded and delaying these cuts until that point is not an option.

Professor Mason: No, it is not an option.

Q118 Chairman: It is not an option at all; it is just a smokescreen in that sense.

Professor Mason: The Wakeham Review is, as Ian says, a valuable exercise but it was never intended to address the current situation.

Q119 Dr Gibson: What do you think the Wakeham Review will find out that we have not known for ages? We know how important physics is. You were having trouble getting students; we managed to get round that and the student numbers are increasing, thank goodness. Physics is interacting with other subjects which it was not doing at some point in its evolution. Molecular biology evolved from physics; there is a huge great record there and I think that has been recognised. What I do not understand is what more is there to find out?

Professor Diamond: I think you have just summed it up beautifully and perhaps your knowledge of the base is so great that we should invite you to be a member of the committee. It is important that we continue always to look at where disciplines are going and where the priorities are laying and physics, it seems to RCUK, is an area which not only has been through some difficulties but which is evolving extremely quickly, it is one of the most exciting areas of science. I think you need to look across the piece because there are five research councils funding physics and if you look at the funding of physics between the spending review of 2000 and the spending review of 2007 then you will see a 70% increase, broadly, in the funding of physics. I think we have to be absolutely clear that full economic costing does mean that more money across the entire research council base will be going into physics.

Chairman: Of course the whole of the RC humanities research programme goes into grants which are affected significantly by full economic cost. The same applies to BBSRC; the same applies to every one of the other research councils. This is the only one that is suddenly praying in aid of full economic cost, which it has known about now for the last three years in terms of preparing for, to actually say that this is the big problem.

Q120 Mr Boswell: We cannot wait for Wakeham and if we were to wait for Wakeham the analysis of the physics side would not by itself by sufficient necessarily to determine the reallocation of resources across the piece. I just want to be clear about that.

Professor Diamond: In this spending review, no.

Q121 Mr Boswell: My next question is something I asked our earlier witnesses about reputation more generally, but specifically about international subscriptions. If we are pulling out of international subscriptions is this going to be damaging to our reputation internationally in a way which will make us difficult to be partners in the future?

Professor Mason: It is part of our strategy to protect the major international subscriptions and we do that because we have a long term commitment to them and they are extremely valuable to the country, not only in terms of science but also in other ways and we are protecting them. We are withdrawing from a couple of relatively minor commitments - minor in monetary terms - but what I look for in international partners for is me is people who tell it as it is. We are being straight with our international partners. We have notified them of our intention to try to negotiate a withdrawal from the Gemini programme. We have told them that we do not believe that the current strategy for the ILC is the correct one and we cannot participate in that. We are being very upfront and very direct. What would be unfortunate in terms of international reputation is if we try and pull the wool over people's eyes and not tell it as it is. Quite the contrary, we are telling it exactly as it is.

Q122 Mr Boswell: Is it your judgment that any of these projects will fail on account of our withdrawal?

Professor Mason: In terms of the International Linear Collider you will be aware that the US has also withdrawn funding for the next year and I think this is a signal that we actually need to re-think the future of particle physics and find a more sustainable way to go onto the next stage. That is my own personal opinion. What happens to the ILC project is perhaps debatable, but I am pretty sure at some stage there will be a next generation Linear Collider. In terms of Gemini all the indications are that there are other users who would wish to take up the slack that we leave and I emphasise again our decision to withdraw from Gemini is not that there is anything wrong with Gemini but we are involved in the European Southern Observatory as well. There are four eight metre telescopes in the southern hemisphere - Gemini provides a fifth - and in terms of our overall strategy I think it is clear to the Council that we have to give priority to ESO. I think we have made our rationale clear and I hope people respect us for being open and honest about it.

Q123 Dr Blackman-Woods: We have had a briefing from the Russell Group of universities that says that these cuts, the 80 million, will add to the general pressures on physics, the closures of departments concerned (we have already heard about the supply of graduates) and increased competition from international competitors. They also say that this will increase the vulnerability of physics departments, that the impact of grant cuts will mean that not only will there be further demoralisation of staff but there will be fewer opportunities for post-doctoral research and for post-graduate research, and that the utilisation of leading facilities will be adversely affected. My first question is, do you agree with their analysis of the impact of the cuts?

Professor Mason: As we have said earlier, when asked a question would you prefer to maintain the volume or to have full economic costing the unanimous advice from universities was to have full economic costing. This gives them a huge extra resource in order to manage their budget, their research strategy and their research activities. There is at least the option there for universities to handle their research staff in a very responsive and creative way and I hope they will take that, it is obviously not under my control. I do not accept that the opportunities for trained scientists in this country are diminishing; quite the contrary, they are increasing. Maybe it is physics to bio-medicine but the skills of physicists are in huge demand and I do not see any reason at all why physics students or post-docs should be demoralised. The other point I would make in relation to our campuses and to correct a statement that was made earlier that the redundancies that we are talking about will affect the viability of the Daresbury campus in particular, again I do not accept that. We are pursuing a new model for doing science in this country which involves partnership with the private sector and local authorities in order to get more science done. Daresbury is a shining example of this and we are planning huge additional investments from all these sectors into Daresbury; I think Daresbury has an absolutely shining future. The number of jobs that we are going to have to sacrifice for the spending review will be dwarfed by the number of new jobs coming into those areas in a very short timescale.

Professor Diamond: You mentioned it was the Russell Group that wrote to you and it is the Russell Group that receives the bulk of research council funding, so it is the Russell Group which will receive the bulk of the real additional money that is coming in through full economic costing.

Q124 Dr Blackman-Woods: You are more or less not agreeing with them is, I think, what you are saying. Can you tell us a bit more about how the decisions were made regarding which programmes to cut? I am totally confused about whether there was consultation or whether there was not consultation because we have had different answers today. I think you need to say something more about that.

Professor Mason: I will be very happy to. If you analyse our Delivery Plan in terms of decisions, we made two and a half decisions, to put it very bluntly. Those were strategic decisions. We made a strategic decision to withdraw from Gemini; we made a strategic decision to withdraw from ILC. These were not ill-considered decisions made overnight; these were based on advice that we got from our science community over the last year in terms of relative priorities and the fact that we cannot do everything. The half decision was in relation to STP ground-based facilities which was actually a decision that we made at the last spending review but we are confirming this time because clearly within a shrinking budget we could not restore the cuts that we needed to make at the last review. All the other decisions, as I said, are being handled through this 40 million headroom process where we have peer review committees sitting down, as we speak, drawing up a priority list for using that money, so they are fully involved.

Q125 Chairman: I am confused now. The 25% cut in terms of grants is still open for review.

Professor Mason: I was talking about programme cuts, cuts to projects like Gemini and ILC.

Q126 Chairman: In the Delivery Plan you said there were three things.

Professor Mason: It is unfortunate that we have to make cuts to research grants but research grants actually make up the bulk of the money that we spend in universities so you cannot make the books balance unless you put a reduction on them. I do think actually that people misunderstood but the impact of those cuts is not as great as people are perhaps expressing in some circles. It is 25% of new commitment year on year; it is a gradual rank down on grants and against an aspirational programme that would have been an increase. The actual reduction in research, in the numbers of PDRAs in astronomy for example, will be some 10% down on what they were in 2005 by the end of this period, not 25%.

Q127 Dr Blackman-Woods: Can I try to summarise what I think it is you are saying and please correct me if I have got this wrong. You are saying that there should not really be this hoo-ha from affected departments because, although they may lose out a bit, they will have some compensation because of full economic costs, they will have new programmes that they may be able to apply for and they should be looking at new methods of funding and perhaps looking more to the private sector or other sources of funding. Because of those three things they should not really be complaining to the extent that they are.

Professor Mason: From my point of view I do not want to belittle the problems. We do face collectively as research councils challenges in getting quarts out of pint pots; we do have to tackle the inflation problem et cetera. There is real loss of potential here which I do not want to underestimate, but on the other hand I think this is an opportunity to sit down, through the Wakeham Review and wider, to think about our scientific strategy in this country and what we want to do as a nation. Science is quite clearly an important component of the future economic wellbeing of this country. We need to plan it properly; we need to be aware of all the wrinkles, all the difficulties and talk about them in a fully open and calm and collected way. I do not want to comment on the reaction of certain elements of the community, but I think we do have real problems that perhaps have been overstated in some circumstances and in some circles. We actually need to look at the facts and plan our way forward.

Q128 Chairman: Keith, it would be enormously helpful if the answer you gave to Roberta, which was particularly in terms of the grants, and the actual analysis that you have made of the impact of your cuts in grants could be given to the Committee because that is in direct contradiction to the evidence that we have been receiving from a vast number of physicists and astronomers in the community.

Professor Mason: I think there is a genuine misunderstanding here which I am happy to correct.

Q129 Dr Harris: Professor Diamond, is it your view that there is anything in the Haldane principle that prevents the Government from switching money from one research council to another to deal with problems that require additional funding over the short term?

Professor Diamond: I do not know the answer to that off the top of my head. I cannot think of a reason why not other than, of course, the other money has been allocated very properly. The allocations have been made and the councils have already made decisions on how to spend that money. The amount of spare cash in any individual council at the moment is minimal.

Q130 Dr Gibson: Why can people not apply to the MRC for money if they are doing medical research that is important?

Professor Diamond: They can; it is absolutely not a problem.

Q131 Dr Harris: We know that the Government has been known to take money out of the science budget. We know it did that once and we know that it has taken money from the MRC's innovation fund. Presumably what the Government taketh away it can giveth again. I just wanted to clarify that there is no reason of research council independence that prevents research councils receiving money from the Government. You are not going to reject money on the basis that that is interference.

Professor Diamond: The research councils are very clear in the great majority of funding that each research council receives comes in grant in aid from the Government and we are very thankful to it and we use it incredibly wisely. Therefore if the Government were to choose that it wished to make additional allocations to the science budget then that would be for the Government to choose, and I do not see anything against and I do not see anything in the Haldane principle to prevent them doing so.

Q132 Dr Harris: On this question of the health of physics before we leave it, you said there would be plenty of jobs for physicists because physics is funded by other means, but do you understand what the implications are for people who progress down a career in a certain area of physics? It is not something - as I understand it and this probably applies in other disciplines as well - that you can switch out of, from astrophysics into biophysics. Can I suggest to you that if you accept that, if you were going to make a strategic change in the way you wanted to put your investment - as you might be entitled to do based on good science and evidence - you would want to have a lead-in time so that you did not lure people into PhDs when there were no post-doc jobs available after that in that field and have specialists stuck in a post-doctoral area with nowhere to go. Do you accept that that would be a good way of doing strategic re-prioritisation?

Professor Mason: I do not accept your statement. I think there are many instances - one was quoted by a previous witness - of people who have very successfully changed fields. I think that is one of the beauties and one of the strengths of inter-disciplinary research, that we need to encourage people to branch out and think beyond their own narrow disciplines and how they can apply their skills more widely.

Professor Diamond: There are a number of research councils, for example EPSRC, who have things called discipline hopping grants which enable people to retrain. It happens an awful lot. One of the things also is that many particle physicists have found careers in the city, not doing particle physics but using their skills to be able to apply them in particular areas. People are prepared to re-train in those arenas. I think it is the case that re-training is part of a career in some instances.

Q133 Dr Harris: This is a vital point, may I say. You cannot be serious in saying that the solution to wrecked careers, of dead-end careers - whatever the reasons for it - is to become a stockbroker. That cannot be what you are saying.

Professor Diamond: I am not saying that.

Q134 Dr Harris: Before you answer that, I understand that when one does collaboration - as one does collaboration with other fields - I can understand that someone can develop an interest from those collaborations and seek to go into it. Do you accept that there is a difference between that voluntary interest-led approach and the suggestion to say to somebody that unless you go right back to an area you know nothing about - let us say you are involved in solar terrestrial physics - there will be no future in your career for you.

Professor Mason: I cannot agree with virtually anything you have said because I think that the sort of training we give to people both as students and post-doc level is more widely applicable than in the field. This is one of the reasons we do it. We train far more students than can ever go into particle physics and astronomy, for example, because the skills that they pick up in doing those subjects have a very broad range of applicability. Similarly, as was referred to earlier, we need physicists in the bio-medical area, we need physics for bio-medicine, we need people to discipline hop and to apply their skills more widely. It is the way of the future in terms of driving the maximum benefit from the investment we put in science. We need to think across the whole patch and not just think as a solar terrestrial physicist but look at the whole climate system.

Professor Diamond: One of the excitements across the piece is people broadening and going into areas, looking in new areas and not just ploughing the same furrows. Those opportunities are essential and that is why, right across the research council base, the training of PhD students is to include the broad base of transferable skills which enables people to transfer, not only into a career in research. When you undertake a research studentship you do not say "I am going to spend the rest of my life in research" - although many people do - there are many avenues that people with PhDs have ended up in, some of them sitting to your right. The skills they learn are entirely useful in those arenas.

Q135 Dr Harris: I am just astonished at the spin you put on this because I thought that our world leading researchers had a publication record in their field. Some of them need laboratories and have senior people below them able to teach because they are specialist in that area. My understanding was that you could only teach specialism as a specialist.

Professor Mason: There is no reason why you cannot change your specialism and there are many people, as I said, who have a broad range of specialisms.

Q136 Dr Iddon: Lord Sainsbury created three leading science and innovation campuses; how many jobs are we losing at each of those?

Professor Mason: I cannot tell you the answer to that because I do not know. What we have done is to put target savings on the costs of running our centres internally and those target savings can be achieved by a number of ways and we are pursuing all those ways. One is certainly redundancies but also by looking at efficiencies in the way we run our operations. There will be reduction in programme and we are encouraging our scientists to look elsewhere for funding. For example, somebody mentioned applying to the Medical Research Council, that is precisely what we should be doing because that is part of our mission. The numbers that might have been banded around, with the exception of SRS where there is a well-defined, long ago defined number, the other numbers that might have been banded around are absolutely worse case if we totally fail at these other avenues. We are working as hard as possible and we are consulting and talking to unions and to our other stakeholders about how to actually minimise the loss of skills, recognising that in the cases of both Daresbury and Harwell actually we are looking at a situation where the requirement for skilled jobs is going to mushroom in the next few years if our strategy comes off, which I am sure it will. In the case of Edinburgh we are not as far along in terms of our plans for Edinburgh because this is something that has come along with the creation of STFC basically, but again I am very keen to explore the possibility of a wider partnership that makes use of the very unique and useful skills that we have in the ATC in order to apply them to a wider portfolio. I have to say just one other thing in regards to the ATC, that the original concept for the ATC was that it should be a group of about 40 people but because it was very successful in the pre-ESO era in winning contracts for telescope building and operation it has actually turned into an organisation of about 100 people. We have known for a long time - it is nothing to do with the spending review - that the work available to the ATC is going to drop off because we are now a member of ESO. We do not have our own telescopes to maintain and build instruments for so we are always looking at a roll off to a number which is not far from the one we first thought of, about 40. As part of the strategy of that roll off we do not want to lose those skills so we are exploring how we can use them in the wider context. There is not enough work for those people in building telescopes any more but they have skills that are generic and can be applied in other areas which are very valuable. As I said, we are beginning a process of working with the local universities and local funding agencies to explore how we might use a similar model to Daresbury and Harwell up in Scotland.

Q137 Dr Iddon: On 14 December, according to my inside information coming out of Daresbury, your director of administrations, Paul Hartley, told the staff there that there would be 140 jobs left on the site. There are 490 jobs there at the moment and if you do the calculation that is 350 job losses at Daresbury, roughly two-thirds of the staff. Does that support David Sainsbury's leading science and innovation campus idea for Daresbury?

Professor Mason: Yes. Firstly, Daresbury is a place that is growing. We have an innovation centre at Daresbury which is overflowing; we need more buildings for new companies coming in. What you see happening is a change in the model where instead of having a research staff solely funded by the research council we are moving to a mixed economy where we are, like I said, in partnership with private industry and with local universities and local funders. We are actually growing the Daresbury campus. The numbers that my director of administration mentioned to the unions were, as I said, worse case numbers; that is where we will be if we fail in all these other avenues but I am sure we will not fail so they are worse case. The exception to that, of course, is the numbers for the SRS and the closure of the SRS was something that was decided before my time. There is a known number of redundancies and a known cost to that. What happened was that the jobs that will be lost in SRS have already been created at Diamond so it is essentially because of the position and location of Diamond that those jobs moved to Harwell.

Q138 Dr Iddon: I have seen Daresbury described as a technology gateway centre. Does that phrase mean that instead of scientific discovery on the Daresbury site we are going to have a science technology campus? You have mentioned involvement of private industry already and there is some there of course at the moment.

Professor Mason: One of the things we anticipate doing is setting up a number of gateway centres across the two campuses. I do not know where the term "technology" came from but these are science and technology gateway centres. Basically these are facilities that allow users to come in and use the high value facilities that we have across the two campuses (it is a dipole model) most effectively and very easily to increase the amount of science they can do, to increase the amount of economic return that might come if we get industry involved. There is no conflict in these terms and we are fully committed to developing what is already a very successful site to be even more successful.

Q139 Dr Iddon: I wanted to press you further, Keith, on Daresbury, but time has obviously run out. However, I will just ask this one final question. Tom McKillop is being brought in in some way to look at Daresbury. The Wakeham terms of reference have been released just this very day, can you tell us what Tom McKillop's role is going to be and what his terms of reference are likely to be when they are produced?

Professor Mason: I cannot tell you; I can try to get hold of them and let you have them. I understand that Tom McKillop is doing a review of issues in the north west and he has been asked to extend it to include the specific issue of the Daresbury area. I would imagine that it is an extension of his current terms of reference, but I can try to get you chapter and verse on that.

Q140 Dr Harris: Assuming you are right to restructure in the way you wish to, would you not have preferred to have been able to do this over a longer lead-in than what you have, or do you think the way to do it is through a call of voluntary redundancies which may happen in departments where actually you do not want to reduce budgets for.

Professor Mason: It has been claimed that voluntary redundancies equate to a scattergun approach, well that is simply not the case. We are looking for voluntary redundancies; we are not bound to accept applications for voluntary redundancy and we would not in skill areas that we absolutely know we need to keep.

Q141 Dr Harris: Let us take solar terrestrial physics because that is quite a wide field with a lot of things in that and you are going to cease all funding for ground-based work. That is one way of saying that you are taking one subject and you are not going to fund of it. An alternative way might be to fund just the best science here. Is it consistent with a philosophy of funding the best science to say that you are going to cease all funding for a particular area?

Professor Mason: As I said that decision was actually made by PPARC at the last spending review based on a programmatic review that ranked all the activities that PPARC funded. For reasons which I will not go into that particular area came low down on the list.

Q142 Dr Harris: You say you will not go into it but my understanding was that research councils - this was certainly my understanding of what the Science and Technology Committee's understanding was - funded the best science. There are reasons you will not go into, but they are science based reasons, are they not? The science there is not good.

Professor Mason: It was lower priority and we were in a situation of making hard decisions. We get this in grant applications all the time where we have five excellent proposals but we can only fund three.

Q143 Dr Harris: So it is either lower quality or lower priority. I accept you can set your priorities in quality areas, but it begs the question why something like solar terrestrial physics - which is relevant to subjects like satellite communications and climate change - is seen as a lower priority than the formation of galaxies. I do not dismiss the formation of galaxies as being fascinating but one could say, in terms of what you are asked to do, surely communication systems and climate change should be a priority and therefore it must be a quality issue.

Professor Mason: To be fair communications and climate change were not part of PPARC's remit. The priority of these facilities - we are talking about funding again with international subscriptions in many of these cases - was judged to be down the priority of what PPARC needed to do.

Chairman: I think you have made that point; I do not want you to go over it again.

Q144 Dr Blackman-Woods: I think an obvious question to ask at the moment in the context of the controversy over the science budget allocation is how is your relationship with DIUS developing?

Professor Mason: Our relationship with DIUS is excellent. All research councils' relationship with DIUS is excellent.

Professor Diamond: We supported the formation of DIUS. We think it is entirely right that we get a situation where the whole of higher education and skills is put in one department. There is an extremely good relationship between the research councils and Keith and I in this group. There is an extremely good relationship between the research councils and the ministers when we have the opportunity - and we regularly have the opportunity - to interact with them.

Q145 Dr Blackman-Woods: How do you feel about the independence that you have? Has it been affected at all by DIUS or is the relationship exactly the same as it has always been?

Professor Diamond: With regard to that specific question around independence the relationship is entirely the same as it was with DTI. The allocations are made and we then organise the allocation of those resources.

Q146 Dr Blackman-Woods: When I asked the secretary of state in an oral question last week where responsibility lay for these cuts he made it fairly clear that because he had got to the above inflation supplement and because of the independence he could not actually affect where you were making the cuts but these cuts were very much up to yourselves and not the responsibility of the department. It seems quite clear cut to me what he said; you do not seem to have said something that is quite as clear cut this afternoon.

Professor Diamond: I am sorry, I thought we had spoken in exactly the same way. The allocations were made by DIUS having seen our draft delivery plans, we have then implemented the plans against the budgets that we have given and those decisions have been made by the individual research councils independent of the view of the department.

Q147 Chairman: Professor Diamond, could I ask you in terms of the science budget itself, would you like a guarantee from DIUS that it is ring-fenced throughout this CSR period and beyond? Have you had that assurance?

Professor Diamond: In the context of the allocations that we have?

Q148 Chairman: The money that is within the CSR for the science budget in total will not be affected at all by interference from government.

Professor Diamond: Our plans are all made on the basis of the allocations that we have been given for the next three years.

Q149 Chairman: Have you asked for that guarantee?

Professor Diamond: We have not explicitly asked for that guarantee but we have been given allocations year on year on year and our plans are all based on the trust with DIUS that these allocations will result in funds within each spending year.

Q150 Chairman: On that note can I thank Professor Ian Diamond and Professor Keith Mason. I am sorry we have overrun but you will appreciate that this is an important area and we are incredibly grateful for your time and also for the very frankness of your replies.

Professor Diamond: Could I just say that if there are other questions you wish to ask us as you reflect on this issue we are only too pleased to respond to you at any time either in this form or in written form.