PROFESSOR SIR KEITH O'NIONS AND MR JOHN NEILSON

13 DECEMBER 2006

  Q420  Dr Harris: I think it was a £200 million deficit that they had to deal with, which they dealt with by a moratorium in part.

  Professor Sir Keith O'Nions: Yes, but that is primarily a matter for Defra. The way that impacts upon us is that it is convenient for us to have a very clear view from another government department, particularly where its contribution exceeds the 15% level that is identified in PSRE's contribution, that they do have a longish term view of what increasing or decreasing capacity in investment the department may make because of your opening statements about the long-term nature of it.

  Q421  Dr Harris: The OSI have an interest in ensuring that Research Council Institutes are viable because they are there for a purpose. They are not just happenstance; they do important work complementary to the university. Also, they do your research, so you need them to be there and doing that. Do you think OSI should have a more proactive role therefore in their governance or at least in terms of ensuring that there is closer monitoring of their viability? Otherwise there is the danger of divide-and-rule or one being threatened and then another and soon you are left with significantly fewer.

  Professor Sir Keith O'Nions: Through our involvement in RIPSS we do have a role in looking at all of the Institutes and I think there is quite a good procedure in place for flagging up the sustainability and changing sustainability with time. For flagging that up to other departments which either own those Institutes or co-sponsor them in some way, I think it is a question of what role we have to change the behaviour of another department, because clearly we do not have that responsibility but we do have the responsibility for making the information available to that department.

  Q422  Adam Afriyie: Do you treat Research Council Institutes differently from universities when you are undertaking government funded research?

  Professor Sir Keith O'Nions: At the OSI level, not in a fundamental way, no, because the balance of investment between university research, responsive mode grants and what goes into an institutional environment is very much a decision that the Research Councils are best placed to make and do make. We do of course look very closely at issues of sustainability and it is very important from our point of view that prioritisation of research takes place with appropriate rigour, that is formally through Gershon-type targets or indeed simply because there is never enough money to do what we all that to do and we must ensure that Institutes are prioritising their programmes with the same vigour as others. That is the principal level of our engagement. Quite what the balance of investment is between the two is a decision best made by the Research Councils.

  Q423  Chairman: Sir Keith, before we move on to Dr Turner, we received the RIPSS implementation project Sustainability of Research Establishments, in which you referred, as Dr Harris said, to one-third of them having problems with sustainability. Would it be possible for us to have the traffic-light assessment of all the PSREs that came with that report, either on a confidential or open basis?

  Professor Sir Keith O'Nions: Absolutely.

  Q424  Chairman: Thank you very much indeed.

  Professor Sir Keith O'Nions: I will decide on what basis it should be, but I am very happy to let you have that information.

  Q425  Dr Turner: Sir Keith, what steps will OSI take to ensure that Defra and BBSRC in particular reach agreement on the RIPSS recommendations as they affect the Research Institutes? Are we likely to see any progress?

  Professor Sir Keith O'Nions: I think we will resolve the issue because the issue is too important not to resolve. There are a variety of meetings principally between Defra and the chief executive of BBSRC. There has been the joint board meeting: the management board of Defra have met with the management board of the DTI, not specifically around this issue but certainly this issue was aired there. We are anxious for this to be resolved and my sense is that it will get resolved. I could add that we do not have the wherewithal financially, and nor does BBSRC, to solve that problem independent of their contribution.

  Q426  Dr Harris: Contribution from?

  Professor Sir Keith O'Nions: Defra; that is, we cannot just pick up the pieces.

  Q427  Dr Turner: How will you ensure that other departments fulfil your obligations under RIPSS?

  Professor Sir Keith O'Nions: I was addressing that point to Dr Harris. As I say, we have taken on the role of gaining the evidence on sustainability and making that available to other departments. I believe, first and foremost, it has to be the responsibility of the sponsoring department or the department that owns an institute to run these in a responsible way. We do not have the levers to force another department to change its policy. For example, if the Ministry of Defence was not sustaining DSTL, certainly that information would come through this reporting but we do not have a mechanism by which we can ensure that Defence does that. It may be a point you would wish to consider. I would not like to be in a position of being accountable for the sustainability of Institutes where we do not have the levers to deliver on that.

  Q428  Dr Turner: But you do have levers when it comes to Research Council Institutes.

  Professor Sir Keith O'Nions: We do indeed.

  Q429  Dr Turner: You perhaps did not hear the earlier evidence sessions.

  Professor Sir Keith O'Nions: No, I am afraid I just arrived.

  Q430  Chairman: That was very convenient!

  Professor Sir Keith O'Nions: Sometimes things work out well!

  Q431  Dr Turner: Can you tell us what part the Sustainability Forum is playing in the agenda?

  Professor Sir Keith O'Nions: Could I turn to John, because he does this.

  Mr Neilson: I chair the Sustainability Forum, which consists of representatives of the parent departments who have responsibility for these particular Institutes. That is why we undertook the first annual survey, where we published the report in July to which you referred, and that group met again in the autumn to commission the second survey which is under way. We thought it would be particularly helpful to departments, in bidding in the CSR, to have better information on a coherent basis across government about the sustainability of these Institutes. If they understand what the issues are and they are addressed systematically—and some departments may only have one or two of these establishments themselves—we thought that was a pretty useful function. But, clearly, yes, it is an advisory function.

  Q432  Bob Spink: What recent assessment have you made of the commercialisation of the public sector research fund and the large facilities capital fund (worth £100 million a year)? What assessment have you made of the usefulness of those funds?

  Professor Sir Keith O'Nions: The large facilities capital fund has been running for a number of years. The first assessment of the usefulness of that is the extent to which it puts us in a place where the UK can have a significant portion of these large international facilities. That is the first criterion. The next criterion is how valuable those scientific facilities are in terms of delivering scientific output and so on. That is very much a part of the performance assessment that each individual Research Council makes of those. Of course quite a number of these are in areas like CCLRC, so they are in very international facilities or very large research facilities like Diamond and so on.

  Q433  Bob Spink: Do you think they are a useful way of assisting RCIs?

  Mr Neilson: The Larger Facilities Capital Fund, potentially?

  Q434  Bob Spink: Yes.

  Mr Neilson: In terms of evaluation, we are collaborating with the National Audit Office who will shortly be producing a study of the Larger Facilities Capital Fund. In respect of the PSRE commercialisation work, I think we published an evaluation early last year.

  Q435  Bob Spink: Perhaps I can ask the more concrete question: Are they oversubscribed?

  Mr Neilson: Are there lots of bids for these funds? Yes, absolutely there are.

  Professor Sir Keith O'Nions: It is massively oversubscribed and it has become more so in recent times. It is about £100 million a year at the present time and the bids are far in excess of that. It is quite interesting: the nature of the bids is also changing. We have tended to see things like Diamond or the second target chamber at ISIS, the neutron facility, but last time there was another and very important sort of bid and that was from the Economics and Social Sciences Research Council for a very large household panel survey, which is a completely reasonable bid. We are actually seeing a broader part of the research spectrum now bidding.

  Q436  Bob Spink: What is your view of how the Research Councils apportion their funding between RCIs and grant funding? How would you intervene if you thought this was going wrong?

  Professor Sir Keith O'Nions: We know the numbers—and I am sure you have the numbers in front of you as well, so I will not repeat that. As I said in answer to a previous question, first and foremost I think it is a matter for Research Councils themselves to determine that balance between institutional investment and universities and, as you know, it varies very greatly across the Research Councils from none at EPSRC to substantial at NERC, BBSRC and MRC. I think institutions are an extremely important part of the delivery of particular parts of the—

  Q437  Bob Spink: If you thought it was going wrong would you intervene and how would you do that?

  Professor Sir Keith O'Nions: If we felt that there was demonstrably poor value for money in an institutional investment rather than spending it in another way, we would most certainly intervene.

  Q438  Bob Spink: How?

  Professor Sir Keith O'Nions: We would intervene in demanding higher performance in terms of their outputs. The performance framework within which we manage them is based on outputs, not inputs. Another level of intervention, if we are really concerned about the sustainability of an Institute where we have information—better information than we used to have, I should say—is that we would clearly intervene in requiring a statement from Research Councils of what they were going to do to sort that out and when.

  Q439  Dr Iddon: With the current restructuring of Research Council Institutes that is going along at the moment—and there are a number of them, as you well know—does the Office of Science and Innovation give any direct advice or assistance in any way to individual Research Councils who are restructuring?

  Professor Sir Keith O'Nions: I can think of two; John may think of some others. The first is we have given advice in terms of governance of these Institutes, which I think is a very important thing. There was a review undertaken by Gavin Costigan in OSI and this was not on the basis that it is all broken and needs fixing but it is a good practice to look at the quality of governance. Without going into the detail of that, there are some specific elements of advice to BBSRC on governance around some of its Institutes, some of which have charitable status and the governance probably is not best practice. Brian Follett has produced a report on the back of that. That is one level of guidance, if you like—if you can call it guidance. The other is that we very much encourage Research Councils. I encouraged them, prior to the allocation in the last spending review—and I will do the same thing this time—and asked them to flag up areas where restructuring of Institutes is an important issue. It is often quite difficult to contain restructuring costs within their normal budgets. There is usually upfront expenditure in any restructuring. I will be asking them this time. Last time NERC made it clear that they wished to undertake restructuring in CEH and we tried to make some estimates, early estimates of the cost and make financial provision for those. Those are two of the ways.

  Mr Neilson: That is fine.