Written evidence submitted by the Scottish Forestry Trust (Forest 02)
Background Context
1. The Scottish Forestry Trust is the leading Charitable Trust providing funds for research, education and training in support of UK Forestry. Established in 1983 by a gifting of share capital, the Trust is a registered charity (Scottish Charity No. SCO08465) and has a remit to provide private sector funds to support research and education throughout the UK forestry industry. Since 1983, we have provided in excess of £1.75 million in support of 120 projects ranging from funds towards postgraduate education through to contributing towards industry-applied research and assisting policy formulation.
2. Our primary objective from our beginnings in the early 1980’s has been to contribute to the scientific, social, technical and economic information required by forestry to enable it to develop its role in the countryside and in the UK economy.
3. Our funds are derived entirely from the commercial investment of our initial share capital. Starting with a modest £1.3 million in the 1980’s, and covering our overhead costs, we have provided £1.75 million to projects since that time and still have invested funds worth c. £2.3 million as at the end of March 2010.
4. Whilst our inputs to projects are relatively modest, they are genuinely privately sourced and so provide important leverage towards other funding from UK Government and EU sources. Having said that, our recent experience since 2008 has highlighted the volatility of stock market derived investments, a consequence of which was that we had to stop providing funds to new applications for a period of 18 months or so, a situation now happily resolved.
5. We have recently commenced a pilot initiative with the support of the Forestry Commission, whereby modest resources have been agreed to help us target support for Ph.D. and MSc students within certain agreed categories of forestry research. This pilot uses the Trust’s own approval and monitoring systems and potentially provides a useful synergy between partners with the same aims and objectives, delivering the support in a more cost effective and efficient way.
6. The Trust provides support for applied research and applied postgraduate education. The Trustees aim to both produce research results that have direct relevance to the wider forestry sector and help to prepare a cadre of appropriately trained students for a career in the forest industry and forest research.
7. Over the years, we have noticed the steady decline in activity on forest research in UK universities and a change in the attitude to supporting applied and tree related research by the research councils, especially the Biotechnology and Biological Sciences Research Council (BBSRC) and the Natural Environment Research Council (NERC). This constrains the research activity on tree related research and magnifies the potential effects of declining funding by FC on forest research.
Industry Context
8. Woodlands in the UK contribute hugely in many ways to the achievement of Government targets on climate change; access and recreation; timber production and increasingly, renewable energy. Scotland for example, has a bold expansionist target to see approximately a 50% increase in woodland cover from the current level during the course of the century, with a priority to see expansion of broadly commercial woodlands in the earlier part of that period.
9. Because of the multi faceted benefits of forestry, it is difficult to put an absolute value on woodlands and the spin off benefits surrounding them, but a figure of around £8.2 billion per annum has been suggested in Government publications. (Postnote; January 2007 Number 275.)
10. Whilst it is difficult to access information on the amount of Research and Development (R&D) spend by individual sectors in the UK, the problem is compounded by the fact that the forestry sector touches on so many other sectors of the economy. Understanding the proportion of forestry investment in R+D as a proportion of sector GDP/GVA in the UK is, it would appear, an almost impossible task.
11. In the current environment of rapid technological change, R&D has proven to be an important element of economic growth. R&D is considered one of a number of measures of innovation performance and various studies have shown that investment in R&D is an important source of productivity growth for economies. In Barcelona, 2002, EU heads of Government set a target for EU R&D to reach 3% of GDP by 2010, with two-thirds of this coming from businesses. As a result of this, many EU countries have set domestic targets, including the UK. The UK government set a target of 2.5% of GDP by 2014.
12. In 2004, expenditure on R&D in the UK totalled £21 billion, an increase of 1% in cash terms from 2003. However, as a percentage of GDP the rate of R&D in the UK has been falling over the past three years from 1.86% in 2002 and 2003 to 1.78% of GDP in 2004 (ONS, 2006). Reports from the OECD suggest that investment in R&D in other countries by comparison showed the US standing at 2.68% and Japan at 3.39% for the same period (OECD (2008) Main Science and Technology Indicators).
13. The Government’s decision in October 2010 to freeze the Science Budget was broadly welcomed. However, no such safeguards were provided for R&D spending undertaken directly by government departments, and the Science and Research Budget funding allocations to these Departments have given cause for concern. The forestry sector’s primary funder of Research is the organisation Forest Research and its funds had already declined from around £15 million in 2008 to £10 million in cash terms in 2010 (Spending Review Evidence by Prospect (SR06)). The announcement of a 25% cut, taking account of inflation, is anticipated to reduce that to £6 million by 2015–16.
Consequences of Reduced Support for Forest Research
14. The impact of climate change and the aspirations to achieve carbon reduction targets in the UK, means that Forestry as a sector is facing unprecedented challenges in the coming years. We are already seeing outbreaks of pests and diseases and further climate change will only create the conditions for more pest activity. Thus the demand for forest research is likely to increase rather than decrease.
15. There is no mechanism in the UK Forestry Industry to make generic contributions towards forest research that is then openly available. Most companies will carry out their own in-house R&D or will commission others to tackle a specific business related opportunity or technical challenge. Although some countries operate a levy system to fund conservation, research, education and access, that has so far not happened within the UK.
16. Notwithstanding the above observation, it is clear that with the current state of the UK economy and the lack of growth and activity in the construction sector, it would be a particularly difficult time to see the UK Timber Processing sector becoming more active in funding generic research. It seems unlikely therefore, that the forest industry will be able to step in to fill any funding shortfall in the medium term.
17. A reduction in support for public sector bodies, like Forest Research, also means that their ability to draw in match funding from EU sources is significantly compromised. Thus the overall impact of their work programmes progressively declines. Furthermore, with budgets already allocated to long term EU Projects, the consequences of budget cuts “mid programme” reduces the flexibility to commit to new projects even more than is apparent by the headline reduction figure.
18. Voluntary bodies and Charities like The Scottish Forestry Trust, generally speaking, have fixed resources available to them and whilst we as a Trust can help to provide match funding to some degree, we are already seeing demands for our funding increasing and for the proportion of our contributions to increase accordingly. This is not a sustainable position for us as a Trust.
19. In conclusion, we believe that forestry as a sector is a major contributor to the achievement of many of the Government’s policies in terms of climate change, the environment, health and well-being and to its financial contribution to the wider economy. The principal source of funding to forest research comes through the public sector, principally in the form of the organisation Forest Research, and the impact of the proposed cuts to their budgets will not in our view, be made up by either the private sector or third sector. Demands for research in forestry are however likely to increase rather than decline. Whilst we recognise that the wider economy is in significant difficulties and cuts have to be made, we would recommend that there is a reconsideration of the level of cuts currently proposed for Forest Research.
Declaration of Interests
20. Trustees of the Scottish Forestry Trust are appointed for their experience, expertise and objectivity, and to provide a good balance of appropriate skills according to the Trust’s constitution. The Trust currently has ten Trustees, including the following individuals are all directly involved in research in forestry related issues.
21. Dr Chris Quine is Head of the Centre of Human and Ecological Sciences at the Northern Research Station of Forest Research, the research agency of the Forestry Commission and is an Executive Member of the Board of Forest Research. Dr. Stephen Woodward is reader in forestry in the Department of Plant and Soil Science, School of Biological Sciences at the University of Aberdeen, specialising in tree pathology and urban forestry. Dr. Michelle Pinard is a Senior Lecturer in Tropical Forestry in the Institute of Biological and Environmental Sciences at the University of Aberdeen.
Bob Stubbs
June 2011