Background and history

78. Defra, and its predecessor MAFF, have a long tradition of working very closely with RCIs to fulfil their science needs and it is still the case that, as the British Ecological Society told us, "in many areas [Defra] relies on NERC and BBSRC RCIs to provide the long-term scientific infrastructure to achieve its evidence and innovation objectives".[186] Defra itself acknowledged in evidence to us the "key role that RCIs play in maintaining the UK research and skills base" and the "distinct" value of RCIs "from that of universities and other research providers in that they provide long-term capability in some areas of research".[187] The department identified "the provision of continuity and the alignment of research with strategic priorities without necessarily following 'scientific' fashion [as] one of the important strengths of the RCIs" and noted that "in some areas of interest to Defra (for example, animal health), the RCIs form a major part of a very limited supplier base".[188]

79. Traditionally, these factors have led to some RCIs having a much closer relationship with Defra than other research bodies. Defra describes "the relationships between Defra and the RCIs (and their parent bodies, the Research Councils) [as] primarily founded on long-term dialogue and joint identification of research priorities. These relationships are not simply those of contractor-supplier but also have a strategic/investment element".[189] Defra goes on to explain that "In some areas of science within this wider competitive research market, RCIs enjoy preferred supplier status by virtue of strategic partnerships with Defra built up over many years and through their custodianship of long-term data-sets and experimental sites".[190]

80. Defra and its public bodies have therefore worked closely with the RCIs, most notably during times of national crisis, but also on less high-profile, long-term programmes. We note in this context the current project to develop a new IAH laboratory on its Pirbright site in conjunction with Defra's Veterinary Laboratories Agency to study exotic viral diseases.[191] IAH and two other BBSRC institutes have received a significant proportion of their funding from Defra/MAFF since the early 1970s when some funding from the then Agricultural Research Council was redirected to the institutes via MAFF.[192] Partly as a result of this and partly as a result of "the continuing importance to Defra of the work of the RCIs", as described by the Costigan review, Defra remains by far the largest individual funder of RCIs after the Research Councils.[193] The Costigan review explained how this funding is awarded:

Defra fund the RCIs in two ways, by "Commission" and by individual contracts. The Commission R&D is not competitively let. It does not however represent a set funding amount—work agreed depends on policy needs. Commission also helps to underpin the science base in research areas of particular interest to Defra. RCIs also successfully tender for research following limited or open competition. The Commission and the competition funding is not owned centrally but by each of Defra's four Policy Directorates General—Sustainable Farming, Food and Fisheries (SFFF), Natural Resources and Rural Affairs (NRRA), Animal Health and Welfare (AHW) and Environment.[194]

In 2005/06 13.2% of Defra's baseline R&D funding went to BBSRC institutes (compared to £22.7m or 14% of the total income of £163m in 2004/05).[195] Over 60% of this funding was Commission. This includes a block grant for the core activities at IAH's reference laboratories at Pirbright, for example, but mainly, and increasingly, the funding comes in the form of discrete contracts for specific pieces of research which have to be renewed.[196]

81. From an institute's point of view, Defra's contribution can represent its major funding source. The tables below illustrate just how important the department is to three of the BBSRC institutes in particular: IAH, IGER and Rothamsted Research:

Tables 5 to 7: Income by major funding sources, 2003-2006

Table 5: Institute for Animal Health

£m

Table 6: Institute of Grassland and Environmental Research

  £m

Table 7: Rothamsted Research

  £m

NB Annual Report figures may differ from figures for amounts awarded due to timing differences. Ev 91

These tables also show the significant decrease in levels of funding experienced by the institutes in the last few years. This decline is not a wholly recent phenomenon, as the table below shows, but it has become more marked and more reductions are anticipated. BBSRC told us that they had been advised by Defra of a fall by "a further 20% by 2011-11 on top of a 12% cut for 2006-07" in funding for sustainable agriculture and a cut of £1 million in animal health and welfare which the BBSRC interpret as meaning "at least 20% by 2011" in real terms, partly due to inflation and partly due to the introduction of changes in costings.[197]

Table 8: MAFF/Defra funding to BBSRC-sponsored institutes, 1974/75 to 2005/06,

£M

NB: Includes SRI and commissioned and non-commissioned funding; Excludes FSA. Ev 124

In addition, the sense of crisis in financial planning for the RCIs affected by Defra's budget decisions was heightened at the end of July 2006 when BBSRC was informed of a departmental moratorium on all spending due to acute budget pressure. This led to deferred funding of £0.24m at IGER, £0.36m at Rothamsted Research and £0.45m at IAH.[198] Defra's financial management during the period leading up to in-year changes in budgets in 2006-07 has been severely criticised by the Environment, Food and Rural Affairs Committee in a recent Report.[199]

DEFRA'S SCIENCE POLICY

82. A further significant factor which is likely to lead to major changes in the traditional relationship between Defra and the BBSRC RCIs in particular is its review of its science policy. Defra has just completed the long process of developing its Evidence and Innovation Strategy (E&IS). This has identified what the department describes as "significant gaps … in the evidence needed to meet strategic priorities, in particular in relation to climate change and energy" and "a future, increasing need for analysis and for the social and economic sciences".[200] Defra's evidence to us raises doubts that the RCIs are necessarily best placed to meet these needs, and also makes the more general comment that "there may … be limits to the extent to which Defra's traditional partners among the RCI community can reconfigure their science towards new objectives in an appropriate timeframe".[201] A third warning is sounded in Defra's admission that its "new and pressing evidence requirements will inevitably squeeze the resources available to invest in research in some traditional areas of RCI science".[202] Following the long and frustrating delays while Defra reached decisions on these matters, the conclusions drawn from the E&IS process make depressing reading for the RCIs.

Impact on the RCIs

83. Defra's recent decisions and indecisions have had a significant impact upon those RCIs most directly affected. Defra's funding decisions affect the RCIs directly, in that cuts lead to redundancies, and indirectly, in terms of the uncertainty caused which leads to the RCIs being unable to plan ahead or in some cases attract business from elsewhere. Since the proportion of funding from Defra is so high for certain RCIs, these decisions (or lack of them) can place the sustainability of the Institute in doubt. BBSRC told us that "the IAH, IGER and RRes [Rothamsted Research] have each, in recent years, had to cope with the on-going uncertainties associated with Defra's inconsistent approach to funding research, including short-term decision making and lack of notice for changes, with the BBSRC (ie the Science Budget) and the institutes themselves having to pick up the high costs of resulting redundancies".[203] According to BBSRC, "the impact of these funding reductions" in sustainable farming and food has led to IGER and RRes "identifying the potential need for up to 105 redundancies in 2006/07, including the closure of one of IGER's sites, with an expectation of further redundancies in 2006/07 and beyond" at an expected cost of "around £5M".[204] BBSRC was adamant that these redundancies were "caused by Defra's funding changes".[205]

84. Evidence that this problem goes back further than the last few years was submitted by the Biosciences Federation who told us that changes in the work commissioned by Defra could have a detrimental effect on an institute in two ways: first, it could lead to the risk of an institute "losing their strategic direction in order to sustain an uncertain funding stream" and thus also lessening their attraction for the best scientists; and secondly, "periodically these institutes cannot keep juggling successfully and their finances implode with all the obvious sequelae", in terms of "redundancy payments, loss of direction and loss of capacity".[206] The Federation points out that "some BBSRC sponsored institutes that are in receipt of Defra funding have been forced to make redundancies or lose posts on a near annual basis for two decades".[207]

85. We discussed their concerns over Defra funding with the directors of the three institutes most concerned. Following the session, the director of IAH clarified in written evidence that "difficulties are caused to IAH for two main reasons in respect of Defra funding: 1. A reduction in Defra funding streams per se from one grant to the next; 2. indecision or delay by Defra to continue with funding, even when IAH has been approached in the first place to undertake an area of work."[208] He went on to explain that "the impact of these scenarios is that either key individuals at IAH are lost as individuals projects finish (1 above) or that IAH has to fund staff with bridging funds from the core budget for the months during which Defra takes key decisions (2 above)."[209] In the latter case, this obviously has knock-on implications for other programmes and it is not sustainable in the long run. Professor Shirley gave us examples of where he had had to intervene to maintain work after reductions in Defra funding, including work in cellular immunology.[210] Delays in decisions on a follow-up grant for work on the bovine syncytial virus was also currently causing grave concern, and Professor Shirley gave details of how his institute was itself having to pay to maintain genetically-distinct lines of poultry and cattle which were essential to Defra's research needs.[211] Even where Defra did pay a block grant, as for the laboratories at Pirbright which provide emergency diagnostic services for animal diseases such as foot and mouth disease, African swine fever and bluetongue, the grant has remained static for three years, meaning that the institute had no possibility of replacing equipment which had been officially noted to be "in desperate need of investment".[212] The effect of this is that "year on year, we are able to do less science or we are able to employ less people".[213] Professor Shirley was also concerned about "one of the more subtle changes that is happening in the Institute of Health: we are losing key staff and relying more heavily on PhD students to fulfil that research function."[214]

86. Professor Crute from Rothamsted also provided us with examples of areas of science "where critical mass of expertise is being or has been severely eroded".[215] These included weed ecology and control; alternatives to agrochemicals for pest and disease control of major crops; environmental fate and behaviour of pesticides; crop agronomy and nutrition; honey bee pathology; and soil processes and environmental protection.[216] He described these as areas "where the work is either applied, policy driven or addresses specific problems as distinct from generic scientific principles", thus making it "the sort of research that would not be considered appropriate for research council support and formerly was supported by MAFF (and now Defra) as a proxy customer for the land-management sector or in support of policy objectives".[217] These reductions in capacity affect not just RRes but the national picture, since in some cases, most notably the honey bee sector, "there is no longer any credible capability … in the UK".[218] In oral evidence, Professor Crute further argued that this "is not just to do with national expertise but [also] the way in which the United Kingdom is appearing to the international science community".[219]

87. The director of IGER, Professor Pollock, echoed the comments made by his colleagues and added the emphasis that "the institutes are well adapted to cope with gradual change in direction from policy customers; they find it difficult to maintain resilience when the rate of change is very abrupt".[220] It is also a question of clarity and of a sense of direction. There was quite rightly general acceptance amongst witnesses that Defra was entitled to change its policy objectives. The difficulties arose when there was a long period of uncertainty while this process was in train, both over what would be funded and by how much. This situation has been implicitly recognised by the Government itself with the unqualified inclusion in its memorandum to us of the conclusion from the Costigan report that "the current lack of clarity about Defra's future needs and budgets presents real challenges to the Councils, especially BBSRC" who as the employer "is liable for the costs of any redundancies resulting from reductions in Defra's budgets" and "in some cases … is carrying a significant risk whilst Defra establishes its R&D allocations and its own science needs".[221]

Defra and RIPSS

88. A further strategic difficulty in the relationship between Defra and BBSRC RCIs is the department's failure to reach agreement with the BBSRC on the RIPSS agenda. In particular, the department has been unable to agree with the Research Council on "the interpretation of RIPSS Recommendation 2 as obliging Defra to make medium to long-term financial commitments to IGER and Rothamsted Research".[222] The department told us that "Defra and BBSRC are able to agree a programme of science required but Defra cannot commit funds without first agreeing, in some detail, the research to be delivered in return for our investment."[223] It later defined the disagreement as:

"BBSRC maintains that RIPSS requires Defra to make medium to long term core funding to institutes and wants a cash-led top down approach to funding. Defra favours a bottom up "needs" led approach which means funding follows the science we need rather than cash first, details second."[224]

For its part BBSRC argued that "it is becoming increasingly difficult to engage Defra constructively in implementing the recommendations" in the RIPSS report and that "There is little evidence that Defra intends to meet its obligations to IAH, IGER or RRes under the RIPSS report".[225] Discussions began in 2004 and were restarted in February 2006 but little progress has been made.

89. The failure to reach agreement on RIPSS was noted by the OSI: Science Review of the Department for Environment, Food and Rural Affairs, published late last year, which recommended that "Defra urgently needs to reach agreement with other funding organisations on how best to sustain the science expertise and infrastructure required to deliver the department's policy and delivery needs".[226] It then went further in applying the lessons from this to other Government departments, concluding that "Departments that commission a significant amount of science have a duty to play a part in maintaining the scientific expertise and infrastructure on which they rely, now or in the foreseeable future"[227] and that "Departments should not be expected to supplant the Research Councils but neither can they expect the skills they need to appear without their contribution, both strategic and financial" .[228] Sir Keith O'Nions confirmed that the OSI "are anxious for [the RIPSS issue] to be resolved and my sense is that it will get resolved".[229] He also commented more generally on Defra that:

"I think the situation is that we do need from Defra a view on the three- to five-year period as to what capacity, capability and requirements will be in order to have a proper planning situation. It may well be that on those time scales there will be job losses. I think it is difficult to live with if on a year-by-year basis there are significant shifts in funding inconsistent with the recommendation of RIPSS."[230]

90. Clearly, this situation has not contributed to harmonious relations between the two sides. Defra's deputy CSA, Miles Parker, told Research Fortnight in September 2006 that there is

"an interaction between us and BBSRC headquarters which I don't think is an easy relationship. We are looking at ourselves as a policy business; their remit is to advance science. The BBSRC still tends to think of the funds that were transferred to us [following the Rothschild Inquiry of 1972] as "their money" - which we are supposed to give back to them."[231]

Of course, it is neither BBSRC money nor Defra money, but money for science. For her part, Julia Goodfellow, Chief Executive of the BBSRC, considered that: "On the animal health side we seem to have better dialogue… On the land use side which is where the cuts are we do not see a strategic change going on. They have to recognise that they are losing skills and they are going to lose infrastructure as well because they are withdrawing resource very rapidly so it is not a strategic withdrawal".[232] However, she added that the Defra CSA "has been working very hard to get a strategy through and [coordinate policies] and to change a culture".[233]

Defra's view

91. We were concerned by the evidence we had received about the impact of Defra's policy changes and budget cuts, not just upon individual RCIs but upon the national scientific capacities they represent. It seemed to us that the relationship between Defra and the BBSRC institutes in particular raised vital questions about the current and future role of RCIs within the UK science base and also about who was responsible for ensuring that the capacity was there to meet Government demands for research and emergency responses. In its written evidence Defra stated categorically that it is

"committed to having [the RCIs'] laboratory capability to ensure provision of the evidence needed to underpin the development and delivery of policy and in the case of emergencies. It is important for the Government to invest in RCIs because the open market is not able to supply all Government's needs. This happens for a number of reasons: the R&D is commercially unattractive; the science requires high levels of physical or biological security; the availability of capacity to respond to emergency situations needs to be guaranteed; the need to ensure that particular scientific services will be available in the future."[234]

92. We put some of these questions to the Minster of State for Sustainable Farming and Food, Rt Hon Lord Rooker, and Professor Dalton, Chief Scientific Adviser at Defra. Their defence was robustly conducted and we found it worryingly difficult to get either Minister or scientist to take responsibility for either the RCIs or the scientific capacity they represent. On funding, the Minister repeatedly claimed that "we have made no cuts in any of our programme to the research institutes".[235] While it is true that funding for ongoing programmes has been deferred, rather than cut, as a result of the immediate situation with the moratorium on spending, this is missing the point that the ongoing trend is for Defra's funding for the RCIs to be reduced, and reduced without adequate notice. The Minister argued that "you cannot claim that that is a cut" when a time-limited contract comes to an end and that "there is usually a time limit" on the contracts with the RCIs.[236] The Chief Scientific Adviser also referred to the part played by short-term contracts in changing the amount of funding from Defra to an RCI, comparing them to universities:

"BBSRC themselves fund universities, as indeed do we, and they fund universities on very many short-term contracts, as do we, and universities have learnt to adapt to that environment. They have learnt to say, 'Okay, we have a three-year research contract, so we plan for that and we work towards it', as indeed do the research institutes, as indeed also do our own agencies in some cases."[237]

We believe that this attitude shows a fundamental lack of comprehension of the role of RCIs as represented by the OSI and the rest of the science community. As we have repeatedly observed, it is the stable long-term funding which allows RCIs to achieve their potential and keep focussed on their missions. It is deeply disturbing that such a key player as Defra fails to perceive this and believes that the RCIs should be identical to universities in terms of their long-term planning.

93. This issue is important because it is directly linked to whether Defra is prepared to take up its responsibilities under RIPSS for the sustainability of the RCIs. It appears that the answer is no. Lord Rooker told us that Defra was "the customer" only of the RCIs and that "we need them there and if one of them was not there, we would find someone else to do the work we want to do".[238] It is not clear to us who this "someone" would be in many cases. When we put it to the Minister that the RCIs might be the only source of capacity in the UK, he responded: "the implication of that is that nothing changes, that if you start a programme to set up any institute and whatever your circumstances are that might change your priorities in the future, you are bound to continue with what you have been doing. I do not think that is living in the real world."[239] Again, when we asked about the particular case of ring-fencing datasets, Lord Rooker refused to countenance the idea, although he agreed with Professor Dalton that they would fund such long-term science "providing it is not seen as though we are a milch cow for the infrastructure payments in terms of core funding irrelevant to the research".[240] In view of this, it is perhaps not surprising that Professor Dalton implied that redundancies as a result of the department's moratorium could be staved off by the ability of the institute directors to "use their core strategic grant in order to be able to support the infrastructure that is necessary in order to continue the research ethos that they have".[241] The institute directors see this as a measure of desperation, rather a useful tool for buying time for the department.

94. We were a little more reassured to hear Professor Dalton's explanation that:

"It is clearly and simply whether or not we should be funding and putting money in in the way the research councils put money into their own research institutes as a core strategic grant or not. We cannot do that. We do not have that flexibility. We are prepared to fund the research councils long-term so long as they deliver the sort of science that we want and, as long as they keep doing that, and in many cases they do, we will continue funding them."[242]

However, this illustrates the difficulties that BBSRC and Defra have in agreeing over the RIPSS agenda. Professor Dalton told us that "the relationships are pretty good" between BBSRC and himself, with many points of interaction and co-ordination but that "There is one little, tiny sticking point … this belief that the research councils and BBSRC have that we have a sort of long-term obligation to put money into their pot which they are allowed to use in any way they like".[243]

The way forward

95. We accept that Government departments have the right, indeed the duty, to review and redirect their activities, including their scientific strategies, in order best to meet current and future policy needs. We are also well aware that many of the problems which are arising now and have arisen in the recent past have been the direct result of pressures on the scientific budget at Defra which has not increased at the same rate as the budget given to BBSRC or the other Research Councils. We also recognise that the relationship with the RCIs is one which Defra has inherited from a previous era and which it is now trying to adapt to fit in with its new priorities, new financial constraints such as Full Economic Costing and new standards of practice under RIPSS. Nevertheless, we are struck by the discord between the recognition of the strengths and importance of the RCIs to the department in Defra's written submission and the more dismissive attitude expressed by the Minister in particular who showed little appreciation in oral evidence of how the RCI support the work of the department. It may be that, contrary to what has been suggested to us, Defra could meet all its scientific and strategic needs without recourse to the RCIs. It would seem a sensible risk assessment exercise to test this. We recommend that Defra catalogue all the science programmes and infrastructure made available to it by RCIs, both on a regular basis and in emergencies, and clarify how this capacity need could be met from elsewhere in each case. In the meantime, we recommend that Defra review its processes for giving adequate notice to RCIs of changes in policy requirements and thus in research contracts. We recommend that this be done as part of a three to five year strategy to allow institutes and the BBSRC to plan their response and to ensure that the RCIs are able to supply the science that Defra needs.

96. We have made recommendations earlier on ensuring the continued funding of nationally-important long-term datasets and monitoring work, and on ring-fencing science budgets within departments to protect research programmes from short-term cutbacks. These conclusions apply to Defra at least as much as to any other department. Here, though, the interdependence of the RCIs and Defra make it particularly important that it is clear who is going to pay for infrastructure and programmes maintained by RCIs for national policy purposes. Part of the solution to this lies in ensuring that Defra has the money to pay for the science it needs, but the more contentious part lies in persuading the department that it is Defra's responsibility to fund such basic facilities and capabilities. Here, the RIPSS agenda is potentially of vital importance. We see no clear way forward through the public positions of the two parties on this issue but we hope that the private negotiations will prove more fruitful. We agree with Professor Sir Keith O'Nions that "the issue is too important not to resolve".[244] We recommend that Defra make it an absolute priority to reach agreement with BBSRC on the implementation of RIPSS and to report back to the Committee by the time of the Government's response to this Report on the steps they have taken to secure agreement.

97. The suggestion was raised in the course of this inquiry that given the fraught nature of the relationship between Defra, the BBSRC and its institutes, it would be better to consider some mechanism whereby Government funding was channelled entirely through the BBSRC. This would have the advantage of stability of funding and of ensuring that there was only one external master dictating strategy. It would also free the RCIs from the effects of Defra delays and rapid changes of policy direction. On the whole, witnesses on both sides were against such a change. Professor Crute of Rothamsted Research, for example, told us that:

"I personally see advantage in the government department involvement because they have different perspectives on science. The Research Councils are there with a particular agenda for looking after the quality of science in an international perspective with, you might say, very much a quasi-academic role. The government department has, as you have said, a policy direction. It also has an industry to which it is, in some senses, attempting to deliver science information. I think that perspective is important."[245]

Professor Dalton also counselled against such a move, saying that it was not "necessarily the right approach to have all their core funding from BBSRC".[246] There clearly is value in having direct interaction between a government department and the RCI sector and we look to Defra to put its relationship with the RCIs on a proper footing in order that the full benefit of this linkage may be realised.

187   Ev 170 Back

188   Ev 171 Back

189   Ev 170 Back

190   Ibid Back

191   Ev 119 Back

192   Ev 120 Back

193   Office of Science and Innovation, Research Council Institutes, surveys, centres and units, a review of issues, Gavin Costigan, January 2006, http://www.dti.gov.uk/files/file27331.pdf, 10.3 Back

194   Office of Science and Innovation, Research Council Institutes, surveys, centres and units, a review of issues, Gavin Costigan, January 2006, http://www.dti.gov.uk/files/file27331.pdf, 10.3 Back

195   Ev 171 Back

196   Ev 179 Back

197   Ev 169-70 Back

198   Ev 176 Back

199   Second Report from the Environment Food and Rural Affairs Committee, Session 2006-07, Defra's Departmental Report 2006 and Defra's budget, HC 132 Back

200   Ev 171 Back

201   Ibid Back

202   Ibid Back

203   Ev 163 Back

204   Ev 121 Back

205   Ibid Back

206   Ev 100-1 Back

207   Ev 101 Back

208   Ev 179-80 Back

209   Ibid Back

210   Ibid Back

211   Ibid Back

212   Ev 180 Back

213   Q 159 Back

214   Ibid Back

215   Ev 191 Back

216   Ibid Back

217   Ibid Back

218   Ev 192 Back

219   Q 159 Back

220   Q 159 Back

221   Office of Science and Innovation, Research Council Institutes, surveys, centres and units, a review of issues, Gavin Costigan, January 2006, http://www.dti.gov.uk/files/file27331.pdf, 10.7 Back

222   Ev 172 Back

223   Ibid Back

224   Ev 176 Back

225   Ev 164 Back

226   OSI: Science Review of the Department for Environment, Food and Rural Affairs, 2006, recommendation 14 Back

227   Ibid, recommendation 14 Back

228   Ibid, summary para 4.12 Back

229   Q 422 Back

230   Q 453 Back

231   Research Fortnight, 27 September 2006 Back

232   Q 70 Back

233   Q 76 Back

234   Ev 93 Back

235   Q 172 Back

236   Q 192 Back

237   Q 177 Back

238   Q 174 Back

239   Q 175 Back

240   Q 185 Back

241   Q 201 Back

242   Q 211 Back

243   Q 208 Back

244   Q 422 Back

245   Q 163 Back

246   Q 177 Back