MEDICAL RESEARCH COUNCIL

  "an explanation of the difference of some £17 million between the EYF surplus (or underspend) of £34.8 million quoted on page 9 [of the RCUK response] and the figure of £52 million quoted in the report of the Times Higher Education Supplement on 4 November 2005, and apparently provided by MRC."

  The EYF surplus of £34.8 million quoted on page 9 of the RCUK response relates to the expenditure in 2004-05 against all categories of DEL (cash resource, non-cash resource and capital) compared to the allocation for the year. It does not include any brought forward surpluses from previous years, and is based on provisional, pre-audit outturns as published by OST. The figures are in line with those provided by the other Research Councils.

  The £52 million figure provided to and quoted in the THES is the difference between the MRC's actual resource expenditure in 2004-05 and the total available to be spent including resource EYF from previous years. Capital expenditure was excluded as the THES journalist was inquiring about the funding of grants. The estimated over-allocation of non-cash resource DEL was also excluded.

  £8 million of the £52 million difference was non-cash resource underspend and therefore not relevant to grant funding. Of the remaining £44 million, £30 million resulted from delays in universities taking up new awards already committed. MRC had expected that those grants already awarded would start in 2004-05 but they will now do so in 2005-6. This £30 million is not available for other purposes. A further £9 million was the result of money being returned by universities after grants had finished because it had not been spent. The remaining £5 million was the result of a variety of other factors.

BIOTECHNOLOGY AND BIOLOGICAL SCIENCES RESEARCH COUNCIL

  "BBSRC provided £14.8 million for institute restructuring... The Committee would like a little more detail on the nature of this expenditure. It would also like to know for what reason these requirements were not considered at the time of the 2004-05 spring supplementary estimates and the appropriate funds made available then."

  BBSRC was indicating during 2004-05 that a large provision would need to be established principally because it had decided to withdraw funding from the Silsoe Research Institute. During the year AEA Technology Ltd had expressed an interest in the business and it took some time and much effort before their interest eventually foundered. The Silsoe change was not significant in overall resource terms for the Science Budget and an increase in cash was not immediately required in that year so no spring supplementary adjustment was required.

  The timing of costs for institute restructuring can vary considerably. The provision required in the accounts for restructuring costs is dependent upon when the decision to restructure becomes confirmed and the actual cost varies according to the individuals affected and other disposal assumptions. Staff affected may alter through redeployment, resignation or transfer through the restructuring process. Another variable is whether the cost falls entirely to BBSRC or whether part of the liability is shared with the institute affected. In the case of major change, such as BBSRC withdrawing funding from the Silsoe Research Institute, the Council agreed to meet the full cost and helped to secure an orderly closure process over two to three years, ensuring that priority areas of science could be continued elsewhere or concluded.

  The actual cash cost of restructuring is spread over a period of up to 10 years as annual compensation payments for early retirees can continue for that time.

  The provision of £14,800,000 related to three institutes as follows:

—  Silsoe Research Institute—closure—£10,800,000.

—  Institute for Animal Health—restructuring—£2,500,000 (50%).

—  John Innes Institute—restructuring—£1,500,000 (50%).

  Less than £1 million was spent against this provision in 2004-05.

COUNCIL FOR THE CENTRAL LABORATORY OF THE RESEARCH COUNCILS

  "CCLRC provided £22.9 million for the closure of the Synchrotron Radiation Source. The Committee would like a little more detail on the nature of this expenditure. It would also like to know for what reason these requirements were not considered at the time of the 2004-05 spring supplementary estimates and the appropriate funds made available then."

  On 7 March 2005, the Secretary of State for Trade and Industry formally announced the closure, at the end of December 2008, of the Council's Synchrotron Radiation Source (SRS) at Daresbury. Based on an internal technical assessment, CCLRC has estimated the costs of the SRS closure as £27.6 million after allowing for inflation. The estimated costs are made up of:

	£M
Staff redundancy costs (240 posts)	22.4
Beamline, machine and building demolition and decommissioning	5.2
TOTAL	27.6

  This amount has been discounted at the Council's notional cost of capital (3.5%) to arrive at the 2004-05 provision of £22.9 million. The anticipated cash flows associated with this provision are as follows:

Financial Year	£M
2006-07	0.6
2007-08	6.2
2008-09	16.3
2009-10	4.5
TOTAL	27.6

  Parliament votes the cash grant-in-aid. There was no reference to the closure costs in the Spring Supplementary because the cash consequences do not arise until 2006-07 and beyond.

January 2006