Recent changes affecting the Research Councils

45. The remit of our Committee includes scrutiny of the OSI's associated public bodies. We have interpreted this to mean the Council for Science and Technology, the Learned Societies sponsored by the OSI and the Research Councils. Of these, it is the Research Councils which receive most public funding and which are therefore most often called upon to contribute to our inquiries. Previously, scrutiny of the Research Councils was conducted on an individual basis, looking at the work of each in turn over the course of a Parliament. However, at the start of the current Parliament we decided to adopt a more thematic approach to scrutiny of the Councils in order to examine issues which affected the broader research community to a greater or lesser degree. The first inquiry in this series was into knowledge transfer which reported in June 2006; the second, into Research Council Institutes reported in March 2007; and we have recently announced the third, into international policies and activities.

46. In addition, we hold introductory hearings when there are new appointments to key posts within the Research Councils. Most recently, on 28 February 2007 we took evidence from Professor Philip Esler, Chief Executive of the Arts and Humanities Research Council. This session highlights a further change affecting the Research Councils since the last scrutiny report in January 2005: the incorporation of the former Arts and Humanities Research Board into the Arts and Humanities Research Council which came into existence on 1 April 2005. The number of Research Councils has therefore increased to eight, all coming under the umbrella of the strategic partnership, RCUK. The addition of the arts and humanities to the otherwise science-dominated research council system throws up challenges in developing practices and output measures which can apply across all disciplines. We welcome the inclusion of the new Council as providing more comprehensive representation of research in the UK and opening up more opportunities for interdisciplinary research and exchange of best practice.

47. In the rest of this chapter, we concentrate on three issues within the direct responsibility of the OSI which directly affect the Research Councils: the RIPSS review of sustainability; the review of health research funding by Sir David Cooksey; and the establishment of the new Science and Technology Facilities Council.

The RIPSS review

48. The full title of the RIPSS report, published in March 2006, is PSREs and the science base: a policy for sustainable trading and joint strategic investment in PSRE infrastructure. Final Report of the Research Council Institute and Public Sector Research Establishment Sustainability Study (RIPSS) Steering Group. It was commissioned to examine how to improve the sustainability and strategic coherence of the £1.6 billion non-university public research sector, and it found that the publicly-funded research system is crucial to the current and future interests of the nation and that Public Sector Research Establishments (including RCIs) exist because the research capacity they provide is either specialist, or of strategic or policy importance. It also commented that PSREs may have to be directed to change focus if a national emergency occurs. It made twelve recommendations to government departments, the research establishments and their strategic partners, aimed at improving the sustainability of the sector.

49. The OSI completed its first annual survey of sustainability in PSREs in summer 2006 to provide a baseline against which to measure future progress. The monitoring process concluded that "there are serious concerns about the sustainability of something like a third of PSREs", and that "there are serious concerns about a higher proportion of all PSREs, based on current known tends and uncertainties".[86] The most significant areas of threat were identified as:

a)  PSREs which are failing to invest adequately to maintain physical infrastructure needed for research (and especially where they already have a significant proportion of old and unfit infrastructure);

b)  PSREs whose financial forecasts suggest that they have no financial headroom to deal with investment needs, research developments, and the uncertainties and risks that affect any research organisation;

c)  PSREs which have real uncertainty about the level of commitment and continuity of support from a major research customer (future investment by Defra is a common factor in several of these due to a number of reviews currently underway);

d)  PSREs which are concerned about ageing profiles of scientific staff with key skills, facing issues of succession planning, competitive salaries in the private sector attracting new entrants and in some cases under-skilled new graduate entrants.[87]

Following completion of this first annual monitoring sector, as well as the publication of a report on Monitoring financial sustainability in UK HEIs by the UK Higher Education Funding Councils in April 2006, the OSI is now able to engage in developing indicators and baseline figures to assess the sustainability of universities and public research institutes as required under the output performance management system.

50. We have discussed the RIPSS agenda in some detail in our recent Report on Research Council Institutes. We regard this work as an important component of the OSI's role in protecting and promoting the research capacity of the UK and we intend to use future OSI scrutiny sessions to follow up our findings and recommendations in this area.

The Cooksey Review and OSI

51. The Next Steps document published as part of the March 2006 Budget package included a commitment to the creation of a single, jointly held research fund of at least £1 billion per annum, bringing together the budgets for health research administered by the MRC and by NHS Research and Development. Sir David Cooksey was commissioned by the Chancellor of the Exchequer to examine the administrative arrangements for this new fund. His report was published on 6 December 2006, alongside the Pre-Budget Report.

52. We took evidence from Sir David on his review on 24 January 2007 and published a Report on 15 March 2007. We were surprised to discover the extent of the recommendations made by Sir David and directed at the OSI. Whilst it was only to be expected that the OSI should be closely involved in the new administrative arrangements because of its role in overseeing the MRC, the Cooksey review concluded with a series of wide-ranging recommendations that went beyond responsibility for oversight of the new OSCHR. For example, it recommended that:

• OSI and DH with input from DTI should carry out an analysis of the entire range of public/charity funding streams which are applicable to the translation of health research, to create a coherent picture of the support available and identify gaps in that support, with particular reference to simplification and the needs of SMEs and individuals (para 7.9);
• DfES, HEFCE, DH and OSI together with their counterparts in the Devolved Authorities where appropriate, establish a working group with a remit to develop a strategy to ensure that the UK has the right mix of skills, experience and career structures across the whole spectrum of health research, including ensuring more effective translation of research (para 7.17); and
• OSI, together with HEFCE, review the current technology transfer activities across the HEI sector so that strengths and best practice can be identified and promulgated across the sector (para 7.40).

53. We asked the Minister for Science and Professor O'Nions for their view on the proposals. Sir Keith told us that he had "had the benefit of many conversations with David Cooksey during his review" and was not surprised by the recommendations aimed at the OSI.[88] He also told us that "Cooksey did an extremely good job and I am very content at the outcomes and I am pretty confident ... about the future".[89] When we asked specifically about protecting basic science within the new emphasis on translational research in the medical field, the Minister stressed that under the reforms "there will still be an MRC doing its excellent work but there will be a better relationship with the need for application in the Health Service".[90]

54. We will be interested to see how these reforms are implemented and how they work in practice, especially as they affect the work of the MRC and the relationship between that Research Council and the OSI. We look to Sir Keith O'Nions to use his role in overseeing OSCHR to ensure that the existing, highly praised, MRC structures are protected and that basic science does not come a poor second to other more exciting fields in winning funding for research. We will also be interested in the outcome of the three tasks highlighted above which OSI is intended to perform out of the Cooksey report. We recommend that the OSI publish a timetable of the reviews it is conducting under the auspices of the Cooksey recommendations on public/charity funding streams, a strategy for skills in health research and a review of technology transfer activities, and that the results of these reviews be made public.

Science and Technology Facilities Council

55. Next Steps also proposed the merger of the CCLRC and PPARC to create a Large Facilities Council, with PPARC's grant-giving functions moving to the EPSRC. Following consultation, it was announced that the new Council would be a straight merger of the CCLRC and PPARC, with the addition of the nuclear physics research activities of the EPSRC, and that the new Council would not lose PPARC's grant-giving powers to the EPSRC. In introducing the instrument which sets up the Science and Technology Facilities Council, the Minister for Science told a Commons Delegated Legislation Committee that:

The aim of the new council will be to create a more integrated approach to large scientific research facilities, including in international negotiations for long-term projects involving several countries acting together; to obtain more value from the knowledge and technologies developed as a result of the new council's programmes; and to deliver both those goals using the two science and innovation campuses at Harwell and Daresbury as identifiable knowledge transfer centres that host UK-based large-scale international facilities.[91]

The new Council should begin operating on 1 April 2007 with Professor Keith Mason, currently of PPARC, as Chief Executive.

56. The STFC will have significant funds to expend. At present, the Science Budget invests approximately £500 million in building and running large-scale research facilities, mainly managed through PPARC and CCLRC. The OSI also manages a separate Large Facilities Capital Fund (LFCF) worth about £100 million, which allows Research Councils to seek additional capital for large-scale investments. The STFC will have a budget of around £530 million for 2007-08. Transitional costs are described as "modest", but the Regulatory Impact Assessment which accompanied the Order predicted that there will no administrative cost savings because of the shared service centre planned by the Research Councils.[92] There were concerns that the STFC would be hampered by CCLRC liabilities, but we have been reassured by the Minister for Science that these will not be transferred to the STFC.[93]

57. The Regulatory Impact Assessment suggests that "The OSI will address longer term funding after the DTI's CSR07 settlement is known".[94] We asked Professor Mason, the Chief Executive designate, about the likely budget of the new Council. He stressed that "if we are to make a success of this new council and realise its full potential we need to resource it appropriately, and that requires some increase—a modest increase".[95] He was confident that "in setting up the new council … the Treasury and OSI have both been very clear that the aim is not to save money; the aim is to make the UK more effective in the scientific arena and to allow us to compete".[96] We recommend that the funding for the Science and Technology Facilities Council from the CSR round be an increase over the combined existing budgets of its component parts in order that it can achieve its potential.

58. The RIA prepared by the DTI identified the risks of establishing the new Council to be that

funding may be diverted away from grants to support facilities management and that Universities could also be disadvantaged in favour of Government-run facilities as a result. This approach could also lead to the risk of a potential conflict of interest in grant giving for example in the future management of large facilities which are currently operated by CCLRC on behalf of the UK.[97]

During the course of our ongoing inquiry into UK space policy, we received evidence suggesting that there could be tension within the STFC between funding for large facilities and funding for basic science within other programmes.[98] Professor Keith Mason assured us that "there is no conflict": he averred "I am comfortable that we already have mechanisms in place that can handle this transparently and achieve an appropriate balance".[99] Sir Keith O'Nions also assured us in January 2007 that "I think you will be quite impressed with sort of advisory structure that is being put together for STFC" and that "It is going to be a very distinctive and exciting council".[100] He had previously described it as "a significant prize in innovation".[101]

59. When the suggestion for the new Council was first mooted, we were concerned at the lack of consultation within the research community on the idea, even with key players at the existing Councils. However, we have been reassured by the strength of the support expressed in the consultation process for the Council and by the Government's responsiveness to those elements of the proposals which were raising concerns. We will monitor the operations of the STFC once it has come into being and will look for an opportunity to discuss its progress, work and administration with Professor Mason once a reasonable period has elapsed.

87   Ibid, para 19 Back

88   Q 323 Back

89   Q 313 Back

90   Q 311 Back

91   Third Delegated Legislation Committee, Draft Science and Technology Facilities Council Order 2007 and Draft Technology Strategy Board Order 2007, 11 December 2006, col 5 Back

92   Regulatory Impact Assessment on the Science and Technology Facilities Council Order 2007 (RIA), para 20 Back

93   Ev 95 Back

94   Regulatory Impact Assessment on the Science and Technology Facilities Council Order 2007 (RIA), para 20 Back

95   Oral evidence taken before the Committee on 10 January 2007, HC 66-ii, Q 208. This transcript is currently available at http://www.publications.parliament.uk/pa/cm200607/cmselect/cmsctech/uc66-ii/uc6601.htm and will be published with the Committee's Report on UK Space Policy in 2007, 10 January 2007, Q 208 Back

96   Ibid, Q 209 Back

97   Regulatory Impact Assessment on the Science and Technology Facilities Council Order 2007 (RIA), para 25 Back

98   SP 48, submission from a group of interested scientists, currently available at http://www.parliament.uk/documents/upload/spacememosforwebupload.pdf and will be published with the Committee's Report on UK Space Policy in 2007. Back

99   Oral evidence taken before the Committee on 10 January 2007, HC 66-ii, Q 208. This transcript is currently available at http://www.publications.parliament.uk/pa/cm200607/cmselect/cmsctech/uc66-ii/uc6601.htm and will be published with the Committee's Report on UK Space Policy in 2007, 10 January 2007, Q 206 Back

100   Q 331 Back

101   Q 154 Back