Appendix: Government response
DIUS's Departmental Report 2008: Government response
to the Committee's Report.
The Select Committee's recommendations and conclusions
are in bold text. The Government's response is in plain text.
Style of Departmental Report
Recommendation 1:
DIUS's 2009 Departmental report be written in
plain English, be shorter than the 2008 report and use terminology
appropriate to its functions. (Paragraph 14)
We have taken on board the various comments of the
Committee on future Departmental Annual Reports. We intend to
produce a more concise and more accessible Report in 2009 written
in plain English.
In its discussion of the use of terminology in the
2008 Departmental Annual Report, the Committee commented particularly
on the Department's use of the word "customers" to describe
the users of DIUS services, and on the use of the phrase "the
DIUS brand".
We do not agree that the term customer should only
be applied in a commercial sense. We believe strongly that we
should consider the users of our services as customers, recognising
that we are here to best meet their needs rather than deliver
simply at our convenience. This means using customer insight to
understand their needs and motivations, tailoring our support
accordingly and ensuring we communicate what's available to them.
Our use of the phrase "the DIUS brand"
is connected with this focus on our customers. By building the
DIUS brand we will help our customers, along with key stakeholders
and other Government departments, to better understand what we
are here to do and what they can expect from us.
Whilst we are aware that the processes of gaining
customer insight and creating a departmental brand are primarily
internal matters, we included these in the Departmental Annual
Report in recognition of the fact that they have been fundamental
areas of work in establishing the new Department.
Use of statistics
Recommendation 2:
Where a statistic is used in the Departmental
report, evidence to support the statistic is included in a footnote
and comments on the quality, the source, baseline and commentary
on past performance. (Paragraph 20)
The Department will ensure in future Annual Reports
and similar documents that information on statistical sources
and definitions is provided through footnotes, notes to tables
or in a similar format. In some cases, this might include reference
to other documents with fuller descriptions such as the Data Annex
of the relevant Public Service Agreements (PSA) Delivery Agreement.
Recommendation 3:
We therefore recommend that future departmental
reports are reviewed before publication by either the UK Statistics
Authority or by an independent person such as an academic statistician,
whose opinion on the statistics is included in the report and
that the appropriate metrics are specified in advance. (Paragraph
21)
The Department's Head of Statistics, Adrian Smith,
a distinguished Professor of statistics, will quality assure the
use of statistical material in the report and associated documentation
in line with UK Statistics Authority's Code of Practice.
The Department does not believe that it makes sense
to specify in advance the metrics that will appear in the Annual
report. While certain data items, such as those underpinning PSAs,
will necessarily be required, the choice of data must be made
at the time the document is drafted to reflect both the external
environment and data availability.
Recommendation 4:
We commend DIUS for owning up to the error in
the three tables in the Departmental Report setting out country
and regional data and for supplying corrected tables. But we must
put on record our concern that significant errors in the three
tables setting out the country and regional analyses were not
noticed before publication. (Paragraph 23)
Drawing on this experience, we have put in place
a number of measures to ensure greater accuracy in our published
material.
Recommendation 5:
We recommend that DIUS, as a matter of urgency,
put in place a consistent method for ensuring that the policy
it develops is soundly based on evidence (Paragraph 24).
Our policy is soundly based on evidence. Evidence
based policy making is integral to the work of our policy teams
and the policies inherited from the DTI and the DfES were strongly
evidence based.
To build on this, we have appointed Director-level
Heads of Profession for Policy and for Analysis. They are responsible
for overseeing how evidence is used to inform policy making in
DIUS. Together, the Heads of Profession for Analysis and Policy
have been leading work to provide tools, training and other guidance
to staff to ensure better and consistent use of evidence to underpin
policy.
Cost of the machinery of Government changes
Recommendation 6:
We recommend that the NAO review the costs of
the Machinery of Government changes at DIUS. (Paragraph 30)
The Department has informed the NAO of the Committee's
recommendation.
Staff
Recommendation 7:
We recommend that, to test their validity, the
DIUS staff surveys be comprehensive, independently validated and
published. (Paragraph 32)
The Department undertook its first annual all staff
survey in October 2008. The survey questionnaire was based on
the model developed by the Cabinet Office to measure and benchmark
employee engagement across the Civil Service. Some questions specific
to DIUS were also added. This was a comprehensive survey which
provided staff with the opportunity to have their say about the
Department and how their working life could be improved. The response
rate was over 70%. The survey results were analysed by an external
research company and the Departmental level results were published
on the intranet, with reports at Directorate level provided to
each Director. The staff survey report has also been published
on the DIUS internet.
Relationship with Department for Children, Schools
and Families (DCSF)
Recommendation 8:
We conclude it is too early to say whether the
arrangements for joint working between DIUS and DCSF are working
satisfactorily (Paragraph 8)
We believe our joint working arrangements are working
well. We have set up an effective infrastructure for joint working
with DCSF, at all levels of the organisation. This includes regular
shared Board meetings and shared programme management arrangements
for policies and projects that contribute to the work of both
Departments.
Arrangements for joint working between our Departments
are being put to the test in a number of projects and are proving
to be effective, for example in joint work on the Apprenticeships
policy, that is managed by both Secretaries of State.
Furthermore, the Capability Review praises the Department
for good relationships with other government departments, and
recognises the "examples of successful joint ventures."
Recommendation 9:
We recommend that future departmental reports
contain a chapter setting out the arrangements for joint working
at all levels between DIUS and DCSF and that DIUS report on the
effectiveness of the arrangements. (Paragraph 37)
The 2009 Departmental Annual Report will include
material setting out how we manage our working relationships with
key partners including DCSF and also BERR and DWP.
Departmental website
Recommendation 10:
We accept that it is unrealistic to expect a newly
established department to have a fully functional website the
day after it is set up, and to give DIUS credit, we find that
it has improved recently. But we conclude that after 18 months
to reach this point is excessive and it is unacceptable that DIUS
should have had until recently one of the poorest websites in
Whitehall. We urge DIUS to make further improvements. (Paragraph
39)
We do not agree that our website was in an unacceptable
condition. We established a three phase plan to create and develop
the Department's website:
1. Establishing a temporary website as an immediate
solution to the Machinery of Government (MOG) changes. This was
to provide updates about the new Department and to direct visitors
to information on the policy areas, still hosted on previous websites.
2. Consolidating the content from previous Departments
remits on the DIUS website and ensuring links to other Departments
were maintained, taking account of other MOG changes. This was
to act as a short term solution whilst a more sophisticated and
appropriate website was built.
3. Replacing the interim website with a final
version that is more informative, interactive, and innovative.
The final website has now been launched according
to plan, and has been designed using comprehensive user research.
It includes latest web functions such as:
- Using Google Mini as a search
engine.
- Greater use of audio and video
content.
- Greater use of social media,
personalisation, user-generated and content sharing features.
- An infrastructure and content
management system with the flexibility to enable further content
to be incorporated, including allowing partners to have micro-sites
which they can maintain themselves.
We have a planned continuous programme of improvement
to our website going forwards.
Risks
Recommendation 11:
We consider that the inclusion of items which
are essentially the measurement of the effectiveness of policy
in a list of risks undermines the point of the list. We are also
concerned that the list of risks in the Departmental Report does
not align with the risks in DIUS's annual accounts. We recommend
that, when it produces next year's departmental report, DIUS reconsider
the basis on which the list is produced and explain the rationale
for the inclusion of items on the list, and produce a risk list
that distinguishes between risks over which DIUS has direct control
and responsibility from those that it does not. (Paragraph 44)
The Department recognised that risk management was
an important issue from when the Department was created. The Department
quickly implemented a strong set of risk management procedures.
The Board held a number of discussions to identify
the top risks. These were validated by Ministers and stakeholders.
These were published in our Business Plan and replicated in the
2008 Departmental Annual Report. They have proved to be a good
tool for the Board to manage risk.
In addition we created an independent Audit and Risk
Committee to oversee and advise on risk management. This is chaired
by one of our experienced Non-Executive Directors, who has a wealth
of experience from the private sector of managing risk. Members
of the Audit and Risk Committee are made up of a combination of
non-executive Board members and independent external members to
ensure impartiality. The Audit and Risk Committee provides regular
input to the Departmental Board and the Board have regular discussions
on the risks set out in the Department's Business plan.
The risks reported in the Departmental Annual Report
and the control issues reported in the Statement on Internal Control
in the Resource Accounts are driven by different reporting mechanisms
set by HM Treasury[1].
The Departmental Report is expected to cover business risks, which
affect our policy outcomes, and the Resource Accounts report on
significant control issues. As risks and internal control issues
are different the two lists in the respective documents do not
align.
Recommendation 12:
We recommend that DIUS, as a matter of urgency,
review the systems that it has in place for managing and assessing
risk and for scrutinising the systems within the department and
by those bodies for which it has responsibility to implement policy
efficiently and effectively. (Paragraph 46)
Good progress has been made to establish systems
for managing and assessing risk. The Capability Review acknowledges
that mechanisms have already been introduced internally to monitor
departmental performance and provided direction on areas for further
action.
We are already looking at ways to improve our risk
management procedures. This will entail an internal review of
the corporate governance arrangements, including risk management,
which are in place between the Department and its delivery partners.
The Department will also undertake a review to assess the standard
of risk management within the Department.
During 2008-09 the Department has continued to develop
its systems and procedures for risk management including:
- the continued support of the
Audit and Risk Committee which provides assurance to the Accounting
Officer and the Board through its monitoring of the effectiveness
of risk assessment, risk management strategies and internal control
processes;
- the establishment of a sub-committee
of the Executive Board, the Risk Sub-Committee, with responsibility
for identifying, assessing and advising the Audit and Risk Committee
and the Board on the most significant and emerging risks to the
Department's objectives;
- improved its corporate risk
register, informed by risks escalated from business areas, with
regular reviews by the Risk Sub-Committee;
- developed guidance and support
for its staff, including risk management seminars for its sponsor
teams.
Capability Review
Recommendation 13:
We found it instructive that the Capability Review
with its independent and outside perspective produced a much more
critical assessment of DIUS than either the Departmental
Report or the 2007 or 2008 Autumn Performance Reports,
which were essentially DIUS produced assessments of its own record.
(Paragraph 49)
The Capability Review recognised the progress DIUS
has made to date and commented that we have "done a good
job of setting up a new department in challenging circumstances."
Overall on the capability review assessments, DIUS compares well
to other Government Departments that have been in existence for
much longer.
Of course, the Review also highlighted areas for
improvement, which the Department welcomes and has already launched
a rigorous action plan to address these areas.
Recommendation 14:
In our view, DIUS needs to face up to and address
the criticisms in the Capability Review published in December
2008. We expect to follow-up the findings in the Capability Review
of DIUS in 2009. (Paragraph 50)
The Capability Review recognised the progress DIUS
has made to date and commented that we have "done a good
job of setting up a new department in challenging circumstances."
Overall on the capability review assessments, DIUS compares well
to other Government Departments that have been in existence for
much longer.
Of course, the Review also highlighted areas for
improvement and the Board of the Department has accepted all of
these. Following the review, our internal change programme has
launched a detailed work programme designed to address the issues
raised. Each part is owned and led by a member of the DIUS Board.
We want to be able to demonstrate significant progress in meeting
the Capability Review recommendations when we are reviewed again
at the end of 2009.
Managing budgets
Recommendation 15:
We found DIUS's written statement on announcing
a cut in student support in 2009-10 unhelpful and incomplete.
It fell below the standards we would expect from a government
Department. We recommend that when DIUS makes announcements affecting
the financial support of students it sets out in the announcement,
or in supporting material, the full consequences of the change.
(Paragraph 57)
The Department explained, in the 29 October announcement,
the proposals that were being made as clearly and in as much detail
as was possible at the time. The written statement explained the
key changes—notably the reduction in the income threshold
for a partial grant to £50,020 for new entrants to Higher
Education in 2009-10, and the slower rate of growth in additional
student numbers. It set these changes within the context of the
Department's overall budget position and announced an increase
in spending on student support of £100m per annum when the
policy reaches its steady state. Further details of the package,
including maximum loan rates for 2009-10 entrants, were posted
on Directgov.
It was the Department's intention to inform Parliament
and prospective students of the existence of a change in the Student
Support policy as early as possible. While we were not ready at
that point to table the detailed Memorandum on Loan, Grant and
Fee Rates, raising awareness of an upcoming change merited an
announcement. The Memorandum was subsequently laid before the
House on 25 November.
Recommendation 16:
We conclude that DIUS is trying to have it both
ways on budgetary management. On the one hand it pointed out that
it was managing billions and appeared to claim that the switch
of £49 million from further to higher education was an end
of year "adjustment". On the other hand, however, in
2008-09 DIUS could not find £100 million to provide continued
support for students studying equivalent or lower qualifications.
We shall continue to monitor budgetary adjustments made by DIUS.
(Paragraph 61)
The Department notes the conclusion of the Committee.
The recent response to the Select Committee's questions on the
Winter Supplementary Estimate 2008-09, provides information on
budget adjustments which we hope will be useful to the Committee.
Transfers between Further Education and Higher Education
budgets are discussed further in recommendation 28.
Recommendation 17:
We recommend that, in responding to this Report,
DIUS give a firm undertaking that the ring-fence on science resources
will be maintained and that resources will not be switched from
science. (Paragraph 61)
The Science and Research Budget is the subject of
a separate Request for Resource which mean resources cannot be
used for any other purpose without Treasury and Parliamentary
approval and there is no intention to change this position. In
a recent speech, the Prime Minister said, "in meeting
our ten-year commitment we will maintain the ringfence we have
placed around science funding—protecting money for science
from competing demands in the short-term and providing the sustained
support the research community needs to deliver world-class results
in the medium and long term."
Recommendation 18:
We recommend that in future departmental reports
DIUS set out in full the total amounts of unallocated provision
and reserves (or end year flexibility) available and claimed by
DIUS. (Paragraph 61)
The Department notes the recommendation.
Recommendation 19:
The emerging pattern of overspending on higher
education met in part by switches from underspends on further
education raises a question about the accuracy of DIUS's forecasting
and, potentially, wider policy issues about the relationship between
higher and further education. The accuracy of DIUS's financial
forecasting is a matter we shall keep under review. (Paragraph
64)
We note that the Committee will keep the Department's
forecasting under review and we look forward to working with the
Committee to ensure the greatest possible accuracy.
The Committee may like to note that Recommendation
28 discusses in more detail the rationale for the budget transfers
between Further Education and Higher Education budgets. These
are shown to be appropriate responses to the operating context
of 07-08 and 08-09 rather than part of a management pattern.
Administration Costs
Recommendation 20:
It is unacceptable that, when we sought to scrutinise
DIUS's administration costs, to be advised that this has to be
done by a consolidation of DIUS's, DCSF's and BERR's costs. Our
job is to scrutinise the financial management of DIUS, not DCSF
or BERR. We recommend that, in responding to this Report, DIUS
produce accurate, hypothecated figures for its administration
costs for 2006-07 which we can scrutinise and compare with subsequent
years. (Paragraph 67)
We note the Committee's comments and set out below
an analysis of the central Department's administration costs.
The administration expenditure of £60.0m (staff,
other admin and income) reported within the DIUS 2007-08 Resource
Accounts for the year 2006-07 does not take account of the full
range of capabilities and overheads provided by DfES and DTI which
we estimate (though not audited) to be approx £25m. The extent
to which the activities that subsequently formed DIUS benefited
from the central governance and support functions of DfES and
DTI, such as ministerial offices, finance and HR, was understated
in the figures in the Resource Accounts. The reported figures
were determined by allocation when the Resource Accounts for 2007-08
were prepared.
A similar situation applies to the first year of
the Department when we were beneficiaries of informal support
from DCSF and BERR for part of the year. We estimate (though not
audited) the impact to be approximately £15m, incremental
to the £69.0m reported in the Resource Accounts 2007-08.
Informal support was replaced by formal shared service
Efficiency savings
Recommendation 21:
We recommend that in responding to this Report
DIUS set out in detail with full baselines and costings—beyond
those usually provided in Autumn Performance Reports—the
savings promised as a result of CSR07 with progress made to date.
(Paragraph 71)
The Department is committed to delivering annual
net cash-releasing efficiencies of £1.543 billion by 2010-11.
The total forecast for efficiency savings by the end of the CSR07
amount to £1.632 billion. These are to be delivered from
programmes managed within:
- Science & Research and
Innovation;
- Higher Education;
- Further Education and Skills.
Within the programmes, efficiency savings will be
made through the following:
- Reprioritisation of funds to
channel more resources to frontline services;
- Reduction in administrative
costs within delivery partners;
- Improved use of resources through
a range of measures including more efficient estate maintenance
and occupancy costs;
- Ending of programmes;
- Increasing co-funding from
external sources;
- More efficient procurement
processes through greater collaboration.
In addition to the three main Value for Money programmes,
DIUS is also committed to achieving gains against its Departmental
Administrative Costs, of £12 million by 2010-11. We expect
to report on these savings in the 2009 Departmental Annual Report.
This, along with the profiles for each programme,
is explained in more detail in Annex A.
Progress to date
Science & Research and Innovation
- By 1st October 2008 the Research
Councils had reported gains of £40.5 million, which is equal
to its half year target.
- £108 million has been
reprioritised from the Science and Research Investment Fund (SRIF).
This has enabled the funding to be used for entirely new investment
projects.
- £26 million efficiencies
have been made in 2008/09 by making reductions in funding and
reducing baselines for certain programmes, detailed in the table
above.
Higher Education
A review of all HEFCE special funding programmes
has identified the following potential efficiencies which were
agreed by HEFCE in July 2008:
- The Research in Learning and
Teaching Programme ended in July 2008 so the budget is no longer
required resulting in efficiencies of £9m across the spending
period.
- Foundation Degree Development
costs are no longer needed and can be met from a reduced budget
releasing £9m across the Spending Review period;
- Closure of the Overseas Research
Students Award scheme, mainstreaming Teaching Quality and Enhancement
Fund and combining with retention funding into a new targeted
allocation; and
- Centres of Excellence in Teaching
and Learning moving towards becoming self-sustaining.
Further Education and Skills
- The Department is only able
to report final progress on the FE procurement and improved FE
estate efficiency approximately one year after the financial year
on which we are reporting—when the information from colleges
becomes available through their financial returns. However, these
efficiencies are based on approaches that were delivered in the
2004 Spending Review and we remain confident that they will be
delivered in this Spending Review period.
- We can at this stage report
on delivery to date from reprioritising of expenditure towards
skills priorities and the reduction in the administration costs
of arms length delivery bodies. Over the period 2008-09, we have
delivered £116.7m of efficiencies through reprioritising
towards skills priorities. Up to January 2009, £0.2m has
been delivered through reductions in administration costs.
- We will need to update our
forecasts on the Train to Gain efficiency measure to take into
account the implications of the SME flexibility package. Confirmation
of progress achieved for 2008-09 will be available in December
2009 when learner achievement data for that year is available.
Innovation in DIUS's operations
Recommendation 22:
We conclude that, while the changes DIUS detailed
in evidence as innovatory may be innovative in Whitehall, they
might be better classified as the adoption of working practices
used elsewhere. (Paragraph 73)
The definition of innovation established in DIUS,
through the White Paper, Innovation Nation (2008) is "the
successful exploitation of new ideas". It is important
to recognise that innovation is not just about creating new ideas,
but also about the application of ideas and new ways of working.
This includes adapting ideas that work elsewhere and introducing
them into another organisation.
This definition is expanded by the National Endowment
for Science Technology and the Arts (NESTA) in their report, Hidden
Innovation, which recognises that innovation can include changes
to process, organisational structure, new ways of using technology
or about adopting ideas from elsewhere.
This is referred to as hidden innovation because
it is activity that is not reflected in traditional indicators
of innovation, such as investments in formal R&D, and it is
often, "the innovation that most directly contributes
to the real practice and performance of a sector". (Hidden
Innovation, June 2007)
The Department can point to a whole range of examples
of this type of innovation. Particular examples around how we
are using technology to help us engage with customers and stakeholders
are set out below:
- Using Twitter and Flikr to
communicate more widely with citizens. We keep people informed
about the work of our science Minister, Lord Drayson through short
posts on these sites.
- Using blogs to generate debate
and shape policy. Last year we hosted a debate to inform a framework
policy for Higher Education and a strategy on Informal Adult Learning.
- The Student Finance Team are
using Bebo to engage and advise young people on finance issues.
- Using innovative approaches
to help staff with their policy work. In particular, we have introduced
web pages that can be personalised, and bring together news and
information on issues relating to their policy areas so that their
policy is always well informed, by the wider perspective.
- Creating opportunities to have
department-wide debates on our policy issues through online forums.
This has been particularly effective at drawing on the skills,
knowledge and experiences within the Department to inform our
policy direction, and provides a platform for staff to challenge
Ministers on policy direction.
We are being recognised by experts and stakeholders
for our adoption of new media channels:
"DIUS is developing a reputation within the
UK and more widely as innovators in internal collaboration and
citizen engagement They have recognised the potential of Web 2.0
approaches and used them in a string of initiatives from the Innovation
Nation consultation which combined a range of forms of online
and offline engagement and culminated in an executive summary
which allowed citizen discussion paragraph by paragraph to its
SME panel discussion forum which opens out the department's engagement
with SMEs and allows a much larger number of people to get involved".
Paul Johnston, Internet Business Solutions Group
Director, Cisco
The Department has also been shaping and refining
the organisational structure of the Department, to mitigate the
risks of silo working and to create the conditions for innovation.
For example, we:
- Have created a flexible central
pool of resource that can be deployed at short notice, according
to business need.
- Have created an environment
that supports flexible working, with wirelessly enabled lap-tops,
a follow-me phone system, hot-desking, and state of the art video
conferencing facilities.
- Are the first department to
adopt the Prime Minister's Delivery Unit (PMDU) model to create
a small team to ensure focus on delivery of our PSAs and DSOs.
- Have a team dedicated to digital
engagement, with Community Manager roles that support policy teams
to work with social media, to ensure DIUS is at the cutting edge
of new media channels. This is a Whitehall first.
- Have created Heads of Professions
for Analysis, Policy and Sponsorship to strengthen our professional
capability through networks of professions, spanning our policy
areas.
- Have embedded innovative leadership,
recognised by the capability review as 'new' and 'modern'.
The flexibility created by DIUS' organisational structure
responds to the Cabinet Secretary's challenge in the Office of
Government Commerce Guide Working Beyond Walls that to modernise
working practices, Whitehall should be "ready and able
to work anywhere".
The Department continues to strive to be innovative
in its nature, not just in its name.
Recommendation 23:
We conclude that the "Perfect Gift"
voucher scheme launched in October 2007 needed more evaluation
before it was launched. (Paragraph 76)
The Perfect Gift Voucher scheme was intended to be
a pilot in order to test demand and establish whether there was
sufficient interest to roll out the scheme nationally. Piloting
is a vital stage in policy development in order test its viability.
Initial research, prior to the pilot, showed there would be some
demand for this scheme, with 56% of people surveyed saying they
would like to receive a gift voucher for training as a present.
However, the pilot resulted in a low take-up of vouchers
and a decision was taken not to develop the policy further. The
pilot was an important part of the policy evaluation as it established
at an early stage that further investment would be wasteful as
the project was unlikely to succeed.
Regularity and propriety
Recommendation 24:
We recommend that, in responding to this Report,
the Permanent Secretary at DIUS: (a) set out how it will manage
and assess financial risk within DIUS and the bodies for which
DIUS has responsibility; (b) clarify how he will balance the promotion
of innovation with his responsibilities as Accounting Officer
to ensure propriety and regularity in expenditure; and (c) explain
the role and responsibilities he has devolved to the Audit and
Risk Committee in respect of the management and assessment of
risk. (Paragraph 81)
(a) The Department has a clear structure to manage
and assess financial risk:
- The Accounting Officer of the
Department has overall responsibility for ensuring that the Department
manages its financial risk.
- The Finance and Performance
team works with finance teams across the Department to monitor
financial performance and provide timely information for the Accounting
Officer and the Departmental Board.
- Significant financial risks
are reported to the central Risk Management team as part of the
regular risk reporting arrangements and inform the corporate risk
register which is reviewed by the Risk Sub-Committee.
- The Chief Executives of the
Department's delivery partners are appointed as the accounting
officers with responsibility for their delegated budgets.
- There are formal arrangements
between DIUS and its delivery partners setting out the terms and
conditions attached to the funding of the delivery partner, the
arrangements for setting financial and performance targets and
the provision of monitoring information to DIUS.
- Within the Department we have
dedicated sponsor teams to manage and monitor the performance
of delivery bodies against their budgets. The sponsor teams provide
monthly updates to the Finance and Performance team and this information
is reported at the monthly Departmental Executive Board meeting.
This report highlights any emerging budgetary pressures.
- Internal Audit provides assurance
to the Accounting Officer that adequate systems of budgetary control
and operational control are in place and being applied by budget
holders.
- A quarterly Forward Look document
that scans forward over the remainder of the Comprehensive Spending
Review period, identifying emerging pressures is presented to
the Board who use it to inform strategic decision making.
(b) The Department promotes innovation in all of
its activities but this is balanced against a need to recognise
the impact and level of risk involved. The Department complies
with the requirements for regularity and propriety as set out
in HM Treasury's guidance, Managing Public Money.
In terms of the Department's responsibility for innovation
policy and delivery, the majority of support for innovation is
administered by the Technology Strategy Board (TSB), an executive
NDPB. In order to ensure the innovation budget maximises value
for money and minimises risk, the Technology Strategy Board has
a number of mechanisms for assessing the impact of projects and
maintaining financial control.
The Chief Executive of the Technology Strategy Board
is accountable to the Accounting Officer of DIUS for the management
of the innovation budget and for ensuring it is managed in a manner
consistent with Government accounting rules. Finance within the
TSB is overseen by its Audit Committee, a sub-committee of the
Governing Board, which is chaired by a Governing Board member.
The Governing Board is made up of independent members drawn from
the private sector and academia, who oversee all aspects of the
TSB's operations and expenditure. The TSB's annual accounts are
also subject to audit by the NAO. DIUS itself operates various
governance arrangements to monitor the TSB's progress against
objectives and financial position through its sponsor team.
(c) As explained in our response to recommendation
12, the Department has established a Risk Sub-Committee with responsibility
for advising on the management and assessment of risk. The Audit
and Risk Committee has responsibility for reviewing the Department's
overall approach to risk management and for advising the Board
and Accounting Officer on whether risk management is operating
effectively.
In addition to reviewing risk management strategies
and systems, the Committee reviews the corporate risk register
and advice received from the Risk Sub-Committee. The Committee
also commissions reports from individual business areas on the
major risks facing the Department and meets with senior managers
to discuss their approach to managing those risks.
Innovation targets
Recommendation 25:
On the "vision" of achieving public
and private investment in R&D [research and development] of
2.5% of GDP by 2014, we recommend that DIUS set out in response
to this Report: whether this is still a target, how it is to be
calculated and, in addition, what effect the current economic
downturn may have on the target. We also recommend that, when
DIUS has created the new innovation index, it explain the basis
of the calculation of the index and provide tables restating the
UK's performance since 2000 with comparisons with major industrial
countries over the same period. Where a new measure is introduced,
or an old measure changed, it is crucial, to ensure transparency,
that both the old and new metrics continue to be published. (Paragraph
82)
As stated in the Science and Innovation Investment
Framework Annual Report 2008, the Government remains committed
to the ambition to raise R&D to 2.5% of GDP by 2014. In light
of the current economic circumstances this is likely to prove
challenging. Business R&D investment has been rising in real
terms, but not as a proportion of GDP. The 2.5% target will continue
to be calculated on the basis of combined Business and Government
expenditure on research and development (GERD) from ONS data and
reported on annually.
The Innovation Nation White Paper committed the Government
to developing an Innovation Index for the UK. The intention is
that the indicators in the Index will enable us to make a comprehensive
assessment of the innovation performance of the UK, for example
enabling us to measure innovation in the services sector or creative
industries that is not captured by measurements of R&D investment.
We have asked NESTA, working with other stakeholders across the
research base, academia and the private sector, to take this forward.
NESTA will produce a draft Index during 2009, and a final Index
during 2010. It is NESTA's intention to fully explain the reasons
behind the choice of the indicators used in the Innovation Index,
and to test these to ensure they are robust. This will include
the use of historic data and international comparisons, where
available.
Recommendation 26:
We recommend that DIUS set out clearly and consistently
the basis on which its targets are calculated and measured with
the baseline data, and we reiterate our recommendation that its
collection, use and interpretation of statistics be reviewed independently.
We found this exercise frustrating as DIUS shifted the basis of
the calculation of the measures and revealed baseline data not
included in the tables or commentaries of the Departmental Report.
(Paragraph 87)
The Department recognises the value of a consistent
approach to the measurement of innovation. For this reason, we
have sought to use both the same measures and same mechanisms
as far as possible. For the last 18 years, we have published the
R&D Scoreboard, which identifies the top 850 companies by
investment in R&D and sector, and benchmarks their investment
against the top 1,250 global competitors. In addition, we have
consistently used the ONS Business Enterprise Research & Development
(BERD) statistics to measure investment in R&D across the
UK economy, and the shares attributable to the public and private
sector, as well as foreign investment. We also use the Community
Innovation Survey (CIS), which helps to benchmark the UK against
EU competitors. We are aware of the shortcomings of this data,
notably the focus on R&D investment, which fails to capture
the breadth of investment in innovation in the UK economy. It
is for this reason that we have asked NESTA to develop the Innovation
Index with other stakeholders across the research base, academia
and the private sector.
FURTHER EDUCATION COLLEGES
Recommendation 27:
We welcome the Secretary of State's commitment
to further education colleges. We intend to watch developments
in the sector carefully. (Paragraph 92)
We welcome the Committee's support.
TRAIN TO GAIN
Recommendation 28:
It appears that a significant part of the provision
for further education and skills, and for Train to Gain in particular,
in 2007-08 and 2008-09 has not been spent and has been used to
meet both temporary and permanent shortfalls in other DIUS programmes.
We would be concerned if a central flagship policy of the Government's
skills programme—Train to Gain—were persistently raided.
We recommend that in responding to this Report DIUS provide a
full account of financial transactions to, and from, (including
any change in the definition of training used) the budget for
Train to Gain in 2007-08 and 2008-09 and that future departmental
reports set out, and account for, Train to Gain separately. The
accounts should also provide a commentary explaining the reasons
for transfers to, and from, the budget for the programme indicating
separately temporary "loans" to, and repaid from, other
DIUS programmes and permanent transfers from the Train to Gain
budget to other programmes. (Paragraph 97)
There are a number of reasons why the Train to Gain
budget could be subject to transfers both inwards and outwards.
These include the:
(a) LSC needing to prioritise funding from one programme
to another as it balances delivery of its overall remit across
all of its individual programmes;
(b) Department needing to prioritise its Parliamentary
funding for any given year in a way that it regards as being most
effective in order to deliver its overall objectives;
(c) Department needing to manage its funding between
CSR years.
The tables below summarise the movements in the LSC's
Train to Gain budget in 2007-08 and 2008-09.
| £000s
| 2007-08
| Comments
|
| LSC Grant Letter |
| 460,608
| |
| DIUS transfer in |
66,012
| | Additions to increase delivery, including £33m for pilots to deliver Level 3 entitlement for young people up to age 25.
|
| Total transfers inwards
| | 66,012
| |
| |
(21,500)
| | In addition to £27,500 from apprenticeships this makes up the £49m transfer to HE mentioned in John Denham's letter to the Select Committee on 28th October 2008.
|
| |
(67,000)
| | Loan to HE mentioned in John Denham's letter to the Select Committee on 28 October. This, together with the £21.5m listed above and £27m from apprenticeships, makes up the £116m mentioned in the same letter
|
| | (30,496)
| | Transfer out due to TTG underspend
|
| Total transfers out |
| (118,996)
| |
| | | 407,624
| |
The table below refers to 2008-09 and reflects the information
we have provided to the Select Committee in response to its questions
on the Winter Supplementary Estimate.
| £000s
| 2008-09
| Comments
|
| LSC Grant Letter |
| 657,073
| |
| Repayment of loan |
67,000 |
| Repayment of previous year's loan by HE.
|
| |
208,275
| | As announced in the Statement of Priorities published in November 2007, from 2008/09 employer-based NVQs that were delivered through the FE funding system (types 2 and 3) transferred into the employer-responsive budget and will be funded through the employer-responsive model.
|
| |
30,000
| | Reallocation of other LSC resources to boost colleges capacity to use Train to Gain and engage with employers, as announced on 18 November 2008.
|
| |
7,000
| | Additional funding from DIUS to fund delivery of Level 3 entitlement for those aged under 25 through Train to Gain.
|
| |
39,917
| | Transfer from TTG non-participation budget into TTG participation budget.
|
| Total transfers inwards
| | 352,192
| |
| |
(20,538)
| | Changes made by the LSC in the course of the year as part of its responsibility to manage budgets.
|
| |
(135,000)
| | Transfer to HE Group to help manage student grant pressures.
|
| Total transfers out |
| (155,538)
| |
| |
| 853,727
| |
It can be seen that over the two years under analysis the net
movement is an overall increase in the LSC funding of £143.67m,
as set out in the table below.
| £'000
| Opening Position
| Closing Position
| Movement
|
| LSC Grant Letter 2007-08
| 460,608
| 407,624
| -52,984
|
| LSC Grant Letter 2008-09
| 657,073
| 853,727
| 196,654
|
| Net Position |
| | 143,670
|
However the 08-09 position is obviously not finalised and subject
to changes in activity from those anticipated.
The Department has taken active measures to boost demand of the
Train to Gain Programme and we are now on track to spend the Train
to Gain budget in 2008-09. Despite the downturn, the number of
employers and employees starting the programme each month has
increased over the course of the financial year, and satisfaction
levels remain high. We remain committed to further expansion,
with the aim of raising the budget for Train to Gain to over £1
billion.
EFFECTS OF THE ECONOMIC DOWNTURN
Recommendation 29:
We shall continue to monitor the effects of the economic downturn.
We are particularly concerned about the impact of the downturn
on the provision of, and planning for, places at higher education
institutions which are heavily dependant on public sector employment
such as nursing, medicine, and other professional degrees, especially
given indications of rapid slowdown in departmental spending growth
under the 2008 Pre-Budget Report. (Paragraph 101)
To date there is no evidence of a fall in demand for Higher Education
provision because of any knock-on effects of a slowdown in Departmental
spending growth but this will certainly be kept under review by
the Department, HEFCE and other partners.
Along with the Committee, the Department is also monitoring the
effects of the economic downturn. We have been working closely
with the National Economic Council on a range of packages that
will support businesses and individuals in these tough economic
times. For example, to support people facing redundancy and new
graduates wanting to find their first job, HEFCE have announced
a £50 million matched funding initiative (£25 from HEFCE
plus £25 million from HEIs own resources) to provide real
help now for individuals and businesses. The ECIF (Economic Challenge
Investment Fund) will help HEIs provide swift and responsive help,
to both employers and employees, at this difficult time through
promoting investment in workforce development as a route to long-term
recovery.
REVIEWS OF HIGHER EDUCATION
Recommendation 30:
We conclude that DIUS is right to consider how higher education
will look in ten to 15 years and we intend to play a full part
in the debate on the future of higher education next year. We
launched an inquiry on 30 October into students and universities,
which will focus on (a) admissions; (b) the balance between teaching
and research; (c) degree classification; and (d) student support
and engagement. (Paragraph 106)
We welcome the Committee's support for our Higher Education debate.
DEGREE CLASSIFICATION
Recommendation 31:
We conclude that the Secretary of State was right to raise
the issue of degree classification, and this is an issue we shall
examine in our inquiry into students and universities in 2009.
(Paragraph 107)
The Department notes this conclusion. We welcome the Higher Education
sector's trialling of the Higher Education Achievement Report
which would provide a more detailed academic record for students
alongside their overall degree classification. We look forward
to learning the outcome of the trials.
WIDER PARTICIPATION
Recommendation 32:
We share the Secretary of State's objective to wider participation
in higher education and we welcome the emphasis that he has placed
on the issue. We are concerned that as a result of the new targets
and measures agreed from the 2007 Comprehensive Spending Review
the previous emphasis on widening participation will be lost.
We recommend that in responding to this Report DIUS set out in
detail how it will measure and report on widening participation
over the next five years. In addition, we recommend that future
departmental reports set out, and report on, the three elements
used to measure progress on the 2004 Comprehensive Spending Review
target to raise and widen participation in higher education. (Paragraph
111)
The Department is committed to widening participation in Higher
Education and has a clear set of measures and reporting mechanisms
to monitor progress against its targets. We have announced in
New Opportunities White Paper[2]
a range of initiatives to maintain and increase that focus, including
requiring universities to make a strategic assessment of the widening
participation activities they support and working with DCSF to
support talented pupils from low income backgrounds to progress
to higher education. Currently the Departments draws on two main
sets of data to monitor widening participation and reports into
three different PSA Boards.
The first set of data is the annual widening participation performance
indicators collected by the Higher Education Statistics Agency.
This provides comparative data on the performance of higher education
institutions in recruiting entrants from various under-represented
groups by measuring:
- percentage of entrants who attended a school or college in
the state sector;
- the percentage of entrants who were returned with National
Statistics Socio-economic Classification (NS-SEC) categories 4
to 7;
- the percentage of entrants whose home area (as denoted by
their postcode) is known to have a low proportion of 18 and 19
year-olds in higher education;
The second set of data is collected by Government and measures
full-time participation of young people in higher education by
socio-economic class. This measure was introduced in 2007 and
shows the proportion of young people from the top three and bottom
four socio-economic classes who participate for the first time
in full-time higher education, together with the difference (or
"gap") between these two participation rates.
The Department reports on widening participation through the indicators
in PSAs 2 and 11 in the 2007 Comprehensive Spending Review and
PSA 14 from the 2004 Spending Review.
PSA 2 (Improve the skills of the population) is a DIUS-led programme.
The widening participation indicator is to "Increase participation
in Higher Education towards 50 per cent of those aged 18 to 30
with growth of at least a percentage point every two years to
the academic year 2010-11." Quarterly progress reports are
produced for the PSA Delivery Board and these also feed into the
Departmental corporate reporting mechanisms for the Departmental
Board.
PSA 11 (Narrow the gap in education attainment) is a DCSF-led
programme. The widening participation indicator is to "close
the gap between the initial participation in full-time higher
education rates for young people aged 18, 19 and 20 from the top
three and bottom four socio-economic groups". We also produce
quarterly progress reports for this PSA Delivery Board and these
feed into the DCSF corporate reporting mechanisms.
PSA 14 from the 2004 Spending Review outlined a target that "By
2010, increase participation in higher education towards 50% of
those aged 18 to 30 and also make significant progress year on
year towards fair access, and bear down on rates of non-completion."
We will be happy to report on progress in widening participation
in future Department Annual Reports. This will include the three
elements of the 2004 Spending Review and the new measures used
in the 2007 Comprehensive Spending Review.
HIGHER EDUCATION FUNDING COUNCIL FOR ENGLAND (HEFCE)
Recommendation 33:
We intend to monitor the development of higher education sector,
and the work of HEFCE, closely. (Paragraph 113)
Clearly the Funding Council is an important part of the higher
education landscape, and it is understandable that its operations
should be of interest to the Committee. We look forward to working
with the Committee.
SCIENCE IN DIUS
Recommendation 34:
We conclude that, while the links between the Government Chief
Scientific Adviser and DIUS are useful, they are not such to lead
us to revise the Science and Technology Committee's recommendation
that the Government Chief Scientific Adviser should be based in
the Cabinet Office. (Paragraph 116)
The Government notes the views of the Committee. It has found
that the current arrangements work well, but will continue to
keep the issue under review.
ROLE OF GOVERNMENT CHIEF SCIENTIFIC ADVISER
Recommendation 35:
We are concerned that on homeopathy Professor Beddington did
not take the opportunity to restate the importance of the scientific
process and to state that what was important was the balance of
scientific evidence, which in the case of homeopathy, does not
provide strong evidence that it has an effect, beyond the placebo
effect. In both the case of cannabis reclassification and homeopathic
treatments we are concerned that the Government Chief Scientific
Adviser has not chosen to challenge departments where no evidence
was produced. (Paragraph 124)
Recommendation 36:
Professor Beddington is the Government Chief Scientific Adviser
and we are surprised that rather than champion evidence-based
science within government he appears to see his role as defending
government policy or, in the case of homeopathy, explaining why
there is no clear government policy. This is an issue we expect
to return to in our inquiry "Putting science and engineering
at the heart of government policy". (Paragraph 125)
The responses to recommendations 35 and 36 have been combined.
The Government Chief Scientific Advisor (GCSA) believes it is
critical that scientific evidence relevant to policy should be
examined and where appropriate publicly challenged. He will continue
to do this. He believes that the Committee has misunderstood the
evidence he presented on homeopathy and cannabis and its implications.
On homeopathy, he indicated in his oral evidence that that he
was aware of no evidence, other than a placebo effect, of the
efficacy of homeopathy. Subsequent to this he was made aware of
material that purported to show that homeopathy had effects beyond
the placebo effect and he felt the Committee should be made aware
of this evidence. However, he also said that on examination he
thought this evidence was highly questionable.
For the avoidance of any doubt, the GCSA believes that there are
no credible physiological mechanisms that can be adduced for homeopathic
effect.
On cannabis, following examination of the evidence, he concluded
that the majority view of the Advisory Council on the Misuse of
Drugs (ACMD), that cannabis be reclassified, was appropriate on
the basis of the scientific evidence. In deciding not to follow
this recommendation, the Government concluded that non-scientific
factors outweighed the scientific factors. This is a statement
of fact and not an attempt, as the Committee suggests, to defend
the Government's position.
USE OF METRICS
Recommendation 37:
We recommend that in responding to this Report the Government
Chief Scientific Adviser explain what follow-up action has been
taken by the Council for Science and Technology on the use of
metrics for evaluating work done by the Government Chief Scientific
Adviser. (Paragraph 126)
Although the transcript mentions metrics for evaluating the usefulness
of the things which the GCSA is involved in, the context of that
part of the discussion was whether the CST was a useful body and
how its usefulness might be evaluated. The CST was last evaluated
in 2003 and a further evaluation sometime after the next general
election would be appropriate. The CST co-Chairs will discuss
this further when they next meet.
GOVERNMENT OFFICE FOR SCIENCE ANNUAL REPORT
Recommendation 38:
We agree with the Government Chief Scientific Adviser that
it would not be appropriate for the Government Office for Science
annual report to be included within the DIUS Departmental Report.
We welcome that the Government Office for Science is producing
a report on its activities. We recommend that Government Office
for Science report annually on science across government. (Paragraph
128)
The DIUS Departmental Report does cover the activities
of the Government Office for Science, although as Professor Beddington
explained it is not a substantial part of the report. This is
because GO-Science comprises less than 10% of DIUS's staffing
and less than 0.1% of its expenditure. GO-Science's achievements
are reported on pages 46 and 57-58 of the 2008 Departmental Annual
Report.
There is no plan to publish a separate annual report on GO-Science
in 2009. However the DIUS Departmental Report will have a dedicated
section reporting on GO-Science activities. The Government plans
to publish a strategy for science in Government shortly, which
it would be pleased to discuss with the Committee.
Recommendation 39:
We welcome the Government Chief Scientific Adviser's proposals
to speed up and streamline the Science Review Programme. (Paragraph
130)
The Government was clear that the Science Review Process needed
speeding up. The new programme of 'Science and Engineering Assurance'
replaces the former Science Reviews, to provide assurance to Departmental
Permanent Secretaries and the GCSA that science evidence is effectively
integrated into policy development and delivery.
The Government recognises that the focus on high quality delivery
and the fast pace of change in modern government requires a fast
paced process for checking effectiveness of the management and
use of science. Science and Engineering Assurance Exercises will
be agile; they will operate flexibly and quickly through a set
of principles rather than standardised processes. This will enable
departments to receive a service that is tailored to support their
particular business requirements while retaining objectivity,
rigour of analysis and comparability.
HALDANE PRINCIPLE
Recommendation 40:
We do not propose in this Report to reopen the debate about
the science budget allocations and we put on record that we do
not necessarily share the Secretary of State's definition of the
Haldane Principal. We accept, however, that it is entirely reasonable
for the Secretary of State to raise, and to suggest refinement,
to the application of the Haldane principle 90 years after it
was formulated. We hope that there is a debate on the application
of the Haldane principle to scientific research in the 21st
century and we expect that this is an issue we will return to
in our inquiry "Putting science and engineering at the heart
of government policy". (Paragraph 136)
The Government has been consistent and clear in its position on
the Haldane Principle. As the Committee notes in its report, the
Secretary of State clearly outlined this position in his speech
of 29 April 2008 at the Royal Academy of Engineering. He clearly
stated three principles that form "the basis for Haldane
today, and over the decades to come". This position has
not changed. Indeed, it was restated by Lord Drayson in a recent
speech to the Foundation of Science and Technology and in the
Government's response to the Committee's Inquiry on the Science
Budget Allocations. For clarity, this position is restated below.
For many years, Government has been guided by the Haldane principle:
detailed decisions on how research money is spent are for the
science community to make through the research councils. Our basis
for funding research is also enshrined in Science & Technology
Act of 1965, which gives the Secretary of State power to direct
the research councils—and, in practice, respects the spirit
of the Haldane principle. This principle has been interpreted
to a greater or lesser extent over the years, but three fundamental
elements remain entirely valid:
- Researchers are best placed to determine detailed priorities;
- The government's role is to set the over-arching strategy;
- The research councils are "guardians of the independence
of science".
Recent debates have thrown up questions about each of those elements.
Given the strength of research base, there are always more proposals
for top class research than the nation can afford to fund. Decisions
on which specific projects to fund are rightly taken by the Research
Councils, using peer review, but Ministers have an important role
at a strategic level. The UK's world class research base requires
major strategic and sustained investment to underpin it.
Conclusion
Recommendation 41:
We found the Departmental Report showed signs of relying on
jargon as a substitute for having a clear idea where DIUS was
going and how it would achieve the Minister's goals. The Departmental
Report needs to be made much more informative and helpful to the
reader. A better more concise report written in plain English
would aid the scrutiny of DIUS in future years. We expect to return
to many of the policy issues we touched on in this Report during
the remainder of the parliament. (Paragraph 137)
We recognise that the IUSS committee has made a number of useful
points on the 2008 Departmental Annual Report.
In particular, we have taken on board the comments that future
Departmental Annual Reports are written in plain English. We intend
to produce a more concise and more accessible Report in 2009,
and have outlined the steps earlier in this report which we will
take to do this.
Given that the Department had been in existence for less than
a year at the time when the 2008 Departmental Annual Report was
written, the Report was inevitably more forward than backward-looking.
As we approach our two year anniversary it is clear that the Department
has achieved a great deal since its creation, and we are confident
that the Department is well placed to meet the challenges of the
future as outlined in the Department's recent independent Capability
Review.
Looking forward, we expect that our work will remain at the forefront
of the Government's response to the economic downturn giving real
help to individuals and businesses and helping to shape the future
UK economy.
Recommendation 42:
With a new Government Chief Scientific Adviser, Professor Beddington,
taking up post in 2008 we found a noticeable change of gear. Professor
Beddington has adopted a lower media profile than his predecessor
and has embraced a more collegiate approach to the job. We can
see strengths in this approach as he works behind the scenes and
with the grain of government to seek to ensure that scientific
advice is taken into account by civil servants and ministers in
the formulation of policy. But there is a risk in this approach:
the Government Chief Scientific Adviser could merge with the bureaucracy
and draw back from challenging policy in other departments. (Paragraph
138)
The Government welcomes and values the ability of its Chief Scientific
Adviser to maintain his professional independence and to engage
with the media whenever that helps in achieving his objectives.
However it sees no merit, and nor does he, in maintaining a high
media profile for its own sake. Professor Beddington can and does
challenge the Government whenever it appears to him that scientific
evidence may not be playing its full role in policy making.
Annex A: Efficiency Savings
Present plans show forecast efficiencies by the end of the CSR07
period to total £1.478 billion, against our target total
of £1.543 billion. In addition, DIUS has been given approval
by Treasury to count as early delivery towards the CSR07 total,
£154 million over-achievement from the SR04 Efficiency programme.
This would bring the DIUS total forecast to £1.632 billion.
The profiles for achieving annual gains in each programme are
set out in more detail in the tables below. Where baselines are
already confirmed these have been shown.
Science & Research and Innovation efficiencies
Science and Research Group and Innovation Directorate aims to
provide efficiencies of £416 million over the CSR period.
The table below profiles total forecast CSR07 VfM gains by year.
| VFM Programme efficiencies for CSR07
| Baseline
£m
| 2008-09
£m
| 2009-10
£m
| 2010-11
£m
| Notes
|
| Standards | 7.3
| 1.0 | 1.0
| 1.0 | Baseline funding reduced
|
| Global Watch Service |
8.3 | 9.0
| 9.0 | 9.0
| Withdrawal of programme
|
| Business support legacy schemes
| 4.7 | 4.0
| 4.0 | 4.0
| Reprioritising funds to Technology Strategy Board
|
| National Measurement system
| 62.3 | 9.0
| 11.0 | 13.0
| Reducing costs and spend
|
| BNSC | 32.9
| 2.0 | 4.0
| 6.0 | Scaling back expenditure
|
| Design Council | 6.0
| 0.0 | 0.0
| 1.0 | No increase to baseline funding
|
| Knowledge Transfer Networks
| 18.5 | 1.0
| 1.0 | 2.0
| No increase to baseline funding
|
| Knowledge Transfer Partnerships
| 22.0 | 0.0
| 1.0 | 2.0
| No increase baseline funding
|
| Research Councils | 2,420.0
| 81.0 | 162.0
| 243.0 | Increasing co-funding, reprioritising expenditure and reducing administrative spend
|
| Science Research Infrastructure Fund (SRIF)
| 300.0 | 108.0
| 77.0 | 135.0
| Reprioritisation |
| Total |
| 215.0 | 270.0
| 416.0 |
|
Higher Education efficiencies
The Higher Education Group aims to provide efficiencies of £450
million over CSR07. The table below profiles total forecast CSR07
VfM gains by year.
Please note that for many of the Higher Education targets under
individual strands of activity, performance data will be provided
in July 2009, when HEFCE'S end of year report on efficiencies
is available. The Department has an agreement with HEFCE to minimise
the number of requests for data to reduce the bureaucratic reporting
burden. For some of the strands efficiencies are built into allocations
up front and this is noted in the table.
| VFM Programme efficiencies for CSR07
| Baseline
£m
| 2008-09
£m
| 2009-10
£m
| 2010-11
£m
| Notes
|
| Reprioritisation
| | | |
| |
| Reductions in running costs NDPBs
| 65.2
(HEFCE - £16.74m
Student Loans - £47.996m
OFFA - £500k)
| 1.0 | 2.0
| 4.0 | Reductions of running costs accounted for in baseline. To note £16.879 of Student Loans Company baseline is exempt under front line work rules.
|
| Employer Engagement Co-Funding
| Unknown | 10.0
| 34.0 | 80.0
| Baseline funding to be determined by matched funding from employers. Efficiencies will be measured by comparing the actual costs of delivering provision through ECF with what would have happened otherwise. Programmes will be reported to the HEFCE Board in July 2009
|
| Targeting HEIPR-relevant students
| 4,018.0 | 16.0
| 45.0 | 78.0
| Efficiency gains created through reprioritisation
|
| HEFCE special funding streams
| 337.0 | 6.0
| 26.0 | 66.0
| Efficiency gains created by releasing of resources to other services
|
| Reduced Bureaucracy in HE
| Unknown | 42.0
| 42.0 | 42.0
| Baseline will be determined by VfM efficiencies for 2008-09—these will be reported to the HEFCE Board in July 2009
|
| Core Funding Streams |
Teaching - 4,632.0
Research - 1,460.0
| 0.0 | 25.0
| 36.0 | A range of measures have been identified to create efficiencies within funding streams. these will be reported to the HEFCE Board in July 2009
|
| Aim Higher Assocs Scheme and HESSG funding
| 87.5
(Volunteering -£9m
Voluntary Giving - £57.5m
HE unallocated resource - £21m)
| 3.0 | 6.0
| 27.0 | VfM efficiencies are achieved by funding the costs of these new policy priorities from within our existing CSR07 settlement by re-prioritising resource. Baseline reductions to these budgets were made prior to allocation of funds
|
| Moderation Funding |
Unknown | 13.0
| 13.0 | 13.0
| The level of moderation is determined annually by the HEFCE Board, depending on the circumstances at the time.
The baseline is determined each year by reference to how much would need to be provided if each institution's recurrent grant plus regulated tuition fee income was maintained in real terms compared with the previous year.
VfM efficiencies for 08-09 will be reported to the HEFCE Board in July 2009.
|
| Access to Learning (ALF)
| 56.1 | 6.0
| 6.0 | 6.0
| Baseline reductions will be made prior to allocation of funds. Progress will be measured through comparing the 2007-08 baseline figures against ALF budget allocations in
2008-09, 2009-10 and 2010-11.
|
| Student Finance Customer First
| 78.4 | 0.0
| 0.0 | 5.0
| The investment in developing the Customer First Programme will outweigh the initial benefits gained in those years. The first net annual efficiencies, estimated to be around £5m, are anticipated in 2010-11, rising to provide annual efficiencies to Government of c.£20m from 2011-12.
|
| Aim Higher | 51.0
| 3.0 | 3.0
| 3.0 | Baseline will be made prior to allocation of funds which factors in efficiencies.
|
| Foundation Degree Development
| 8.0 | 3.0
| 3.0 | 3.0
| Baseline reductions will be made prior to allocation of funds. This reduction will be redeployed to meet the commitment on growth in student numbers
|
| HE Small Projects Fund |
7.0 | 1.0
| 1.0 | 1.0
| Baseline reductions will be made prior to allocation of funds
|
| Improved use of Resource
| |
| | |
| Improved Procurement |
Unknown | 24.0
| 45.0 | 66.0
| Efficiencies achieved through increased collaborative procurement in HE; increased use of e-procurement by HEIs;
and increased institutional procurement efficiencies
|
| Improved use of assets |
The baseline figure for research income spent in relation to use of assets in HEIs is £3.789 billion.
| 20.0 | 25.0
| 30.0 | The baseline for measuring efficiencies in this area will be from the 2005-06 Estates Management Statistics data provided by HEIs (the year used for the 2007-08 annual efficiency review report).
|
| Benefits of ICT | Unknown
| 5.0 | 15.0
| 20.0 | Efficiencies will be achieved through central procurement of on-line content (electronic journals, books, datasets and other research data) which allows lower costs to be negotiated than if individual institutions purchased the items themselves.
|
| Shared Services in HE |
Unknown | 0.0
| 5.0 | 10.0
| We have not so far sought to or reported any shared services efficiencies, so will be working from a zero base
|
| Total |
| 153.0 | 296.0
| 490.0 |
|
FURTHER EDUCATION AND SKILLS EFFICIENCIES
We plan to make £560m of efficiencies over the CSR period
within Further Education and Skills Group. The table below profiles
total forecast CSR07 VfM gains by year.
| VFM Programme efficiencies CSR07
| Baseline
£m
| 2008-09
£m
| 2009-10
£m
| 2010-11
£m
| Notes
|
| Efficiencies |
| | |
| |
| Procurement | Unknown
| 16.0 | 28.0
| 40.0 | Improving procurement in the FE sector through promoting collaboration, improving processes and building capability through guidance and training . The baseline will be set once we have the financial returns from colleges.
|
| Train to Gain L2
| Unknown | Unknown
| Unknown | Unknown
| We will measure value for money in this area by taking the number of achievements delivered through Train to Gain compared to the costs of delivering the same achievements through the Adult Learner responsive model. The introduction of new flexibilities within Train to Gain to respond to the economic downturn mean that we are currently reassessing the scope of the VfM savings in this area.
|
| FE Estates | Unknown
| 5.0 | 10.0
| 15.0 | The FE estate is undergoing modernisation through Building Colleges for the Future Programme and this will provide efficiencies.
|
| Reprioritisation
| 528.8 | 116.7
| 237.8 | 352.1
| The savings in these areas will be achieved through baseline budget reductions.
|
| of which Local Initiatives Fund
| 47.8 | 46.7
| 47.8 | 47.8
| Funding for the Local Initiatives fund has been reprioritised towards learning that better supports individuals in the economy and society such as the expansion of apprenticeships and Train to Gain.
|
| of which Reprioritisation
| 481 | 70
| 190 | 304.3
| Funding has been reprioritised in line with the Government Investment Strategy.
|
| NDPB Admin efficiencies
| 13.9 | 0.2
| 0.7 | 0.9
| We are committed to ensuring that the delivery chain is as efficient as possible. These efficiencies have been made through reductions in the administrative expenditure of these bodies.
|
| of which LSIS |
5.7 | 0.1
| 0.3 | 0.4
| |
| of which IiPUK |
2.4 | 0.1
| 0.1 | 0.2
| |
| of which CES Administration
| 5.8 | 0.0
| 0.3 | 0.3
| |
| Total |
| | | 560
| |
1 HM Treasury (2007) Public Expenditure System paper
21 and HM Treasury (2007) Managing Public Money Back
2
Cabinet Office (2009) New Opportunities White Paper: Fair chances
for the Future Back
| 
