Examination of Witness (Questions 20-39)
PROFESSOR STERLING
FRENG
13 JULY 2009
Q20 Graham Stringer: I will come
back to this point, if I may. One of the major conclusions of
the report was to be critical of the Chief Executive and the communications
both within the organisation and by the organisation with the
outside world. How would you deal with those problems of communication?
Professor Sterling: As I understand
it, the Council has reappraised its communications strategy and
I think that is necessary because, just as an observer as a vice
chancellor on the difficulties that the STFC was having some six,
nine or 12 months ago, it seemed that the communications could
have been better, both to those who were proposing to fund STFC
and to the user community. Having said that of course, one is
aware of the characteristics of each of the different subject
groups, the way in which they operate, and the physics community
is very vociferous about the need to fund the scientific activity
adequately.
Q21 Graham Stringer: They had a lot
to be vociferous about, did they not, 18 months or so ago?
Professor Sterling: I think had
they understood more the way in which the Council was trying to
deal with the financial situation they would have been less vociferous.
There is a danger of course that special interest groups have
a strong lobby and are able to effectively communicate that to
the general public which then brings pressure back on to the Council,
so I think one has to guard against that, and the way one does
that is by better communication to the science community itself
such that they are party to the inevitable hard decisions that
have to be taken. There I think STFC have put in place mechanisms
that will improve that for next time round, so it was not handled
in an optimal way last time and I think the Council knows that
it could do better.
Q22 Graham Stringer: You have talked
about structural changes. Have you any sense about whether those
structural changes, either internally or externally, are working,
or are you just relying on the fact that there have been changes?
Professor Sterling: As I was reading
through the briefing for today's meeting I realised that I did
not even know the abbreviations for the various physics experiments
that were going on, let alone exactly what they were doing in
scientific terms, so I would be on dangerous ground if I were
to try to answer that question directly. It is really up to those
parts of the community to be communicating to their colleagues
in the physics area what the advantages of research in that area
are and for that to be an open dialogue such that the Science
Board is able to give the Council good recommendations about what
to fund because otherwise one is in a position that the Council
cannot judge, I suspect, adequately the scientific merit of detailed
proposals. That is why you have the physics community doing it.
Q23 Graham Stringer: You have been
very open about not knowing what all the initials stand for and
all the acronyms are and the fact that you are an engineer and
not a physicist. Are there any areas, apart from those areas,
you feel you should be better acquainted with or will you make
any efforts to get better acquainted with them?
Professor Sterling: The part that
I think I will not have a difficulty dealing with is the people
management side. Birmingham has 6,000 staff and I think STFC has
around 2,000, so I am not intimidated by that in the least. I
enjoy the financial management side of large organisations and
I think my colleagues would say that that is where I have made
a contribution. So I am quite comfortable with those aspects of
running the STFC. Where I would need to learn is to get from what
was essentially A level physics to university research level physics,
and that is going to be a challenge but one I am greatly looking
forward to. Some of the terms I do understand and I have listened
to and read the press reports about what is going on, so I am
enthusiastic about learning but I am absolutely an amateur at
this point.
Q24 Graham Stringer: Can I return
finally to the point that the Chairman was making that the problem
that the research councils have is over-subscription with lots
of very good science and projects across the board. My sense having
listened to the Chief Executive and listened to the Government
as well is that there is a move away from ground-based solar terrestrial
physics and particle physics. Do you agree with that and if there
was a sense of the process moving either way really, how would
you deal with those strategic decisions, because you have said
that it is really your role to chair and master the strategic
debate, knowing whether the money should be put into a particular
atom smasher in Birmingham or Newcastle?
Professor Sterling: How would
I chair that discussion, is that what you are asking?
Q25 Graham Stringer: Not how you
would chair it; how you would deal with the strategic issues.
What would be your response if there was a big drive either towards
more money into fundamental physics research or away from it?
Professor Sterling: There one
is advised by the community itself and they can be quite cutthroat.
All the academic disciplines that I have had the privilege of
working with in universities have had a very clear idea of what
is important in their discipline and, as long as they have enough
of the academics involved in that discussion then usually what
comes out of that is a clear idea of the priorities which the
community is willing to sign on to. That will inevitably mean
there are a small number of people who are disadvantaged by that
and they will be, as indicated, very, very vociferous about that
cut-back that they are having. I do not think I could encourage
the STFC Council to be digging down to try and second-guess what
the physics community has decided is good science. When it comes
to the strategy I think that is something where the Council is
legitimately involved in the discussion with those who fund it,
principally the Government, about the national priorities, and
there one enters straightaway into the Haldane Principle as to
who is actually making the final decisions. There perhaps with
my engineering background I am much more comfortable with the
fact than some, as I understand, in the physics community that
it is up to government to decide the major strategic directions
that it wants to fund at the broad level of research councils
but it is up to the research councils to look within that budget
at what areas they think are good science and the relative merits
of each.
Q26 Graham Stringer: That is a very
interesting answer. There has been a debate over the last six
months or so instigated by different government ministers about
that. If the Government said, "Right, we want to put a lot
more money into particle physics," you would see it as your
job to ensure that happened rather than make the case for those
engineering or scientific groups who were going to lose out?
Professor Sterling: No, it would
not be as passive as that. By the time it got to the decision
that government ministers were taking about budget we would have
argued our corner as well as we could. We would have suggested
the different advantages of putting more funding into STFC relative
to other activities and making as strong a case as we could. If
at the end of the day the Government decides other than what we
have recommended then it is the job of the STFC Council to implement
that. We would have had our day in court and we would have tried
to persuade but thereafter we would be charged with living within
our budget.
Q27 Dr Harris: I was going to ask
you about this in a moment but if I may while we are on the subject.
That is a strategic decision. Do you think that is a decision
for government or would you argue that that should be a decision
for Parliament? The two are different.
Professor Sterling: Yes, indeed,
and appearing here today I think makes that clear. Ministers are
as accountable as the STFC is for the decisions that they take,
so a minister eventually, as I understand it, makes the decision
and signs the letter that tells us what to do.
Q28 Dr Harris: Yes, but you see Parliament
may have a view but it could never express the view, nor could
the public, if they do not know what is going on. To what extent
do you think directions from ministers to you in the negotiations
about how you spend your budget strategically (because I think
there is no debate about who chooses in the responsive mode at
least the best projects) to what extent do you think that conversation,
if it is a conversation, or that instruction or direction, should
be public so that accountability can exist at the time?
Professor Sterling: I think that
could cause difficulties because that sort of conversation is
normally highly sensitive and could cause unnecessary waves within
the funded community. I think where it does come into the public
domain is when the strategic plan is produced. That is a public
document. I would be uneasy about the detail of discussions with
ministers about the budget being directly in the public domain
without going through a separate process.
Q29 Dr Harris: I can understand what
you mean about contemporaneous publication because that does interfere
with how you do things. You would rather not create waves and
keep things a secret. I am not sure I subscribe to that but I
can understand that you do not want to have negotiations in public.
Is your view that Parliament is entitled to know after the fact,
if you like, to establish accountability, what led you to take
the position of proposing the final business plan given that we
know there was some interaction between you. Do you instinctively
feel that should remain secret for 30 years?
Professor Sterling: No, I am quite
comfortable with that and I would be surprised if that were not
already the case because the research councils produce a strategic
plan that is justifying. It is not just we are going to do this
without any justification. As I understand it, it is fully justified
and the explanation as to why is produced.
Dr Harris: I think in our report we did
make a recommendation that something should be made public that
the Government felt should not be.
Q30 Chairman: I think the issue which
Dr Harris is referring to is the secretaries of state letters
of instruction to the research councils which the Chief Executive
was happy for us to have but the Secretary of State was not happy
for us to have. You have also indicated that you would be happy
for Parliament—because we represent Parliament, that is
all we are at the end of the day—should have those.
Professor Sterling: I think I
am indicating that I am surprised that through the strategic planning
process and the published document that is produced by the Council
that is not actually there. In other words, that the reasoning,
as Dr Harris was pointing out, why we have taken a particular
course of action or supported a particular activity, it strikes
me that should be in the public documentation. That is different
from publishing the letter of guidance from the minister. It is
downstream, as you rightly point out, it is a downstream justification
of why the Council has taken a particular decision.
Q31 Chairman: Both of these issues
were not published, the bilaterials between the Council and the
Government and indeed the Council and various parts within the
organisation were not published, and that meant that analysing
why the STFC made a particular decision was not transparent. You
have indicated that you would be open to looking at that in a
more transparent way.
Professor Sterling: I think that
is a fair summary, Chairman. I do understand the sensitivities
of ministerial letters. It was sensitive in the university world
and I imagine it is sensitive in the research council world as
well. Any organisation that is in receipt of large amounts of
public funding needs to be able to justify its decisions and I
would expect the STFC to be doing that.
Chairman: Okay, I will move on. Dr Iddon?
Q32 Dr Iddon: If we can carry on
with the discussion on your vision for the STFC and particularly
on the strategy of that organisation, Professor Sterling. Can
I ask you first of all how much consultation have you had on the
STFC's strategic plan or its strategy up to date either with the
Chief Executive or others?
Professor Sterling: I think the
short answer to that is very little, I am afraid, Dr Iddon, because
I have only known that I was appearing before you for a little
over a week and that I was the preferred candidate for a little
over two weeks, so I have not have had time to go through in any
detail with the chief executive the strategic plan. I have clearly
spoken to him and I have had a teleconference with him and I have
also met officials but more than that I am afraid I have not had
time to do. It is an early priority.
Q33 Dr Iddon: I will not press you
on questions on that because clearly you have not had time to
study it in depth yet. Obviously the STFC was a marriage between
the former CCLRC and PPARC and some of us were a little sceptical
about that merger because it was bringing together large facilities.
In fact the rationale behind the merger was "to create a
more integrated approach to large scientific research facilities".
Will you attempt to measure this or indeed have you given any
thought to whether that marriage has been a happy one or not?
Professor Sterling: I think that
is very much what the Council needs to do because we are now some
two years downstream from that decision. I sense, and it is only
from a superficial knowledge, that things are settling down. Bringing
two organisations together is always difficult, even in the university
world it is difficult, and here you have large facilities coming
together with funded programmes. There are bound to be tensions
and I have read in the press some of those tensions about which
areas seem to be getting priority. The organisational aspects
are actually quite interesting as to whether there have been economies
of scale. There may have been diseconomies for all I know, I would
be interested to find that out, because one reorganises in the
hope of doing something better, producing better science or a
more efficient organisation, and I think that is something which
the Council does need to ask itself. I do not know the answer
to it at the moment, but it is something I would be keen to find
out.
Q34 Dr Iddon: If you saw there were
difficulties, would you as Chairman be brave enough to flag these
up, first of all obviously with the Chief Executive and your Council
and, if they agreed with you, with Government ministers?
Professor Sterling: I certainly
would. I think my track record would show that I will not duck
those sort of issues, because I do not like waste—engineers
set out to do things economically and there are lots of jokes,
Chairman, which I will not bore you with about the difference
between engineers and physicists, but they do point to an underlying
difference of approach, and engineers look for value for money.
That is something which I would find hard to leave behind so I
shall be on the case essentially looking to see if it has gone
smoothly and is a more efficient operation.
Q35 Dr Iddon: I think rather than
call it "waste" I would prefer to call it "efficiency".
Professor Sterling: Efficiency,
of course.
Q36 Dr Iddon: Obviously the STFC
is running some of the biggest facilities in the world, with its
involvement with the Swiss project, the large Hadron Collider
and they have recently announced cuts to the Diamond Project and
the ISIS project at RAL. It just seems to me that the cost of
running these very large facilities is very unpredictable in some
ways, particularly when you are paying out large sums of money
in foreign currencies on the astronomy projects as well, and that
the research community and the grants going to the research community
are suffering as a result.
Professor Sterling: Yes.
Q37 Dr Iddon: If, when you have looked
at this huge enterprise that you have kindly agreed to chair,
you thought the same way as some of the community thinks, again
would you be prepared to flag this up very strongly with those
who matter?
Professor Sterling: Most certainly
and in fact I have already begun to ask the question about who
takes the risk in relation to foreign currencies. In the university
world we might hedge the foreign currency situation, but I understand
that hedging is not allowed because effectively there is an element
of speculation against one's own currency which the Treasury would
not be happy with. But we are allowed, I understand, to buy forward
currency, so to an extent, I am sure, the Council have already
done that to try and mitigate the effects of the exchange rate
changes. In the end it is a question of who carries the risk for
that exchange rate. Is it the Treasury, is it the department or
is it the research council? Provided everybody knows who is taking
that risk, they are all workable. The difficulty is that the lower
the level the risk is borne, it has a bigger implication on those
areas which are outside the currency risk, in other words the
funded programmes. So in the extreme one could get into a difficult
situation where all one could afford to fund were the subscriptions,
because of the exchange rate variation, and no science to go with
them, which would be a ludicrous situation. So there has to be
an element of risk management and I will need to understand where
that risk management is actually taken on now and I do not fully
understand it. I understand that the response I am giving is based
on the question I have already answered but I think I need to
dig deeper because, you are quite right, the community might reasonably
say, "If all we are paying for is the subscription, what
about the science to go with it?" and that is a perfectly
reasonable thing for the community to be upset about.
Q38 Dr Iddon: There is no secret
that in some of the leading research countries, that risk is carried
by the governments of those countries.
Professor Sterling: Indeed.
Q39 Dr Iddon: So that it does not
damage the basic research within the enterprise you will be running.
If that becomes high up in your agenda, again would you argue
that strongly with the Government?
Professor Sterling: Once I was
convinced that that was the right solution, I would argue it.
At the moment, I do not know. My initial reaction when I was approached
about this job was to ask that very question, why is the Treasury
not carrying the risk of currency variations, because there are
commensurate gains for governments when currencies fall, but I
do not understand the politics yet of how the Treasury operates
in relation to exchange rates. I am looking forward to learning
more.
| 
