Science and TechnologyWritten evidence submitted by Natural Environment Research Council (NERC)

THE PROPOSED MERGER OF NOC AND BAS

Background

1. NERC UK marine and polar sciences are internationally excellent. One source of this UK strength is the strategic science of the NERC owned National Oceanography Centre (NOC) British Antarctic Survey (BAS), and a second is the NERC supported work of the UK Universities, and other NERC Centres, particularly the Plymouth Marine Laboratory (PML) and Scottish Association for Marine Science (SAMS) and the National Centre for Earth Observation (NCEO). Outstanding discoveries by UK scientists include the discovery of the ozone hole by BAS scientists and the draw-down of the Pine Island and Thwaites drainage basins in West Antarctica by UK Universities. Scientists from NERC Centres and UK Universities have played leading roles in obtaining the first ever measurements of the strength and variability of the Atlantic overturning circulation; in making fundamental discoveries in ocean acidification and iron fertilisation; in analysing the EPICA ice core that showed the close 800,000 year connection between climate and CO₂; delivering synoptic views of Arctic ice volume from the CryoSat satellite; and exploring the sub-glacial Lake Ellsworth.

2. NERC is committed to maintaining the UK’s leading position in marine and polar science, and the present CSR settlement recognises the importance of NERC science to the UK economy, policy development and its quality of life through providing a ring-fenced level-cash resource budget to the UK research base. Nonetheless, NERC has had to accommodate a 3% cash reduction in its resource budget, amounting to an 11% real terms reduction by 201415. It also had its baseline capital budget reduced by 50%.

3. In preparation for the last CSR settlement, NERC undertook a science prioritisation across its entire science domain, which informed, following the announcement of the NERC allocation, its spending plans for this CSR period to 201415. These plans have been given definite form through allocations for the entire CSR period to NERC Responsive Mode grants, directed Research Programmes and National Capability funding.

4. In the case of the NERC wholly-owned Centres (British Geological Survey (BGS), Centre for Ecology and Hydrology (CEH), National Oceanography Centre (NOC) and British Antarctic Survey (BAS)) these spending plans have been given definite form in Centre Activity and Resource Plans (CARPs). These are the agreed basis for Centre income and expenditure for the CSR period. The CARPS take into account the National Capability and competitively-won NERC income, and other external income (from, for example, other Government Departments, the European Union, and the private sector), and set this against the Centre’s planned expenditure, including, particularly, staffing levels.

5. As part of its overall business planning, NERC will reduce staff costs at its Centres by around 8%, partly through losing posts and partly through refreshing its skills base, including replacing higher paid staff. The distribution of these reductions is not uniform across the Centres; in part this reflects the confidence with which specific Centre Directors expect to offset a reduced NERC NC funding through increased competitively-won or external income, and in part reflects the impact of increased logistical costs.

6. The marine sector, whose science prioritisation was widely consulted, placed highest priority on retaining the two “blue-water” ships (the RRS Discovery and RSS James Cook). In the case of the polar sector, and following consultations with stakeholder Departments, priority was given to maintaining the Antarctic bases, their supply, and levels of activity. NERC has stated consistently and publically that it will maintain its Antarctic activity at pre-CSR levels throughout the CSR period. The cost of these large-scale infrastructures is rising considerably faster than the headline rate of inflation, driven substantially by the cost of marine gas oil (which has increased by a factor of six since 2000). NERC estimates that by 20145 the cost of its large-scale infrastructure will have increased by £7 million over the CSR period, which is comparable and additional to the £ 9 million reduction in its total resource budget.

7. NERC has recognised that to contain the implications of these priorities in proportion to the pre-CSR budget division would result in a damaging reduction of the scientific capability of NOC and BAS. NERC has spread some of the cost associated with maintaining these priorities across its responsive mode and research programme lines. Nonetheless, mindful of its responsibilities under its Charter and the Haldane Principle, NERC’s business planning has resulted in NOC and BAS making larger science staffing reductions than in its other Centres.

8. NERC has committed to the budget allocations for the CSR period to NOC and BAS set out in the CARP documents, which have also been made available to all NERC staff. NERC has no plans to change these allocations. Contrary to some reports in the media, NERC also has no plans to close its offices in Cambridge or to move significant numbers of staff between Cambridge and Southampton.

9. NERC is not able to speculate on the outcome of a future CSR settlement. However, in line with normal business planning, NERC is in a continuous dialogue with BIS and other stakeholder Departments as to the implications of possible future settlements.

The Merger Proposal

10. At its May meeting, Council discussed how best to ensure that the UK sustains its leading role in polar and marine science. It recognised that a number of present “grand challenges” of marine and polar science are problems of great scale and complexity, and, in the Antarctic and Arctic, involve complex and poorly understood interactions between the ocean and the cryosphere. Examples include the sites, volume and variability of Southern Ocean ventilation, the deflation of the West Antarctic ice sheet resulting from warm water incursions from the Antarctic Circumpolar Current, and the increasingly spin-up of the Arctic Ocean resulting from sea ice retreat with its consequent implications for North Atlantic freshwater fluxes. Council was of the view that these scientific challenges, in the circumstances of a diminished scientific resource, demanded an integrated approach to its marine and polar strategic science, and to making the most effective and efficient use of its marine fleet.

11. At its May meeting, Council considered the business model of the scientific activity at British Antarctic Survey and noted a significant and increasing gap between its income in comparison with its present scientific complement. A cause of this income deficit, which has been apparent for some time, is that BAS is not recovering sufficient income from NERC research programme (RP) funding and has not build a portfolio of external income sources as have other NERC Centres. (The planned BAS competitively won income in 201415 is 22% of its total funding, in comparison with 36% for NOC, 59% for CEH and 57% for BGS.)

12. This situation is in part a reflection of the fact that RP is tensioned across all NERC science, and does not provide the same opportunity for Antarctic science as did earlier “core strategic” funding. Whilst funding models can and do change and it would be possible for NERC Council to reconsider the balance between research programme funding and National Capability funding, to do so as a way of solving a problem which is specific to Antarctic science would run counter to Council’s objective of supporting the highest quality, highest priority science.

13. At its May meeting, Council therefore asked its Executive to examine a detailed science and business case for the merger of BAS and NOC for consideration at its meeting of December 2012, with a view to achieving four objectives:

To provide a future pathway for NERC strategic polar science presently delivered by BAS that provided for the sustainability of the polar science activity.

To integrate NERC strategic marine science presently delivered by NOC and BAS to allow for the most ambitious scientific programs addressing the large-scale complex problems of ocean and polar climate system.

To integrate NERC ship planning, operations and future procurement to provide the most effective, combined strategic use of the NERC marine fleet, and to ensure that future NERC ship provision seeks to optimise blue-water and polar requirements in single ship purchases.

To fully engage the wider HEI community in NERC polar science at a strategic level and through increased interactions with the university sector, and to provide transparent access to all NERC polar infrastructure in a similar manner to that achieved for NERC marine infrastructure.

The case for the merger in pursuit of these objectives was ably summarised by Lord Willis’ address to the House of Lords on 18 October 2012.1

14. The Chief Executive established a BAS/NOC Merger Team of senior BAS, NOC and Swindon Office staff that developed outline proposals in July and August 2012 and on this basis prepared a document for consultation which was published on 11 September 2012.2 The Merger Team was led by Professor Ed Hill, Interim Director of BAS. (Appointments to interim or acting Director roles within NERC’s wholly owned Research Centres are made by the NERC Chief Executive, in consultation with the Chairman of NERC Council. In the case of BAS, the appointment of an Interim Director in February 2012 was notified to BIS and to the FCO in advance of any announcement, recognizing their particular interest in the role.) The consultation period closed on 10 October 2012. In addition to a consolidated report on the outcome of the consultation, the Merger Team also generated a final report of emergent findings. One outcome of the consultation was the need for NERC to consider whether its objectives may be achieved through means other than merger. Therefore the NERC Executive has examined alternatives to the merger. The consultation outcome, the Merger Team final report, and the benefits and risks of alternative means will be provided to Council on which to base their decision.

15. The announcement of the consultation and the contents of the consultation document have occasioned widespread comment in the press. Much of this commentary has been confused and in a number of cases misleading as to Council’s purpose and intention. In consequence, it was agreed in a Council teleconference on 19 October that, with the consultation completed and the final report of the merger team available to inform a decision, it was in the interests of NERC to reach a decision rapidly and end this speculation. NERC Council will meet on the 1 November to reach a decision on this matter.

16. A particular issue that has featured in press coverage is the extent to which the views expressed in the consultation will be fairly represented to Council. The NERC Chief Executive has asked Prof. Robert Allison, Vice Chancellor and President of Loughborough University, to provide independent assurance of the fairness of this representation. His findings will be tabled at the Council meeting.

17. As soon as possible after the Council meeting, NERC will prepare an announcement of the outcome of the meeting, including a consideration of the responses to the consultation and how Council took account of these responses. As part of this, Council will decide whether the consolidated summary, Prof. Allison’s commentary and/or some other communications should also made public. (NERC’s earlier written evidence to this inquiry refers to a “business case” currently being prepared by Ed Hill for (then planned) December Council meeting. We have been requested in this submission to comment on whether this case will be made public. This document is that referred to above as the “final report” of the Merger Team and its publication will also be the subject of Council’s decision on the communication of the outcome.)

October 2012