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Select Committee on Science and Technology Fourth Report

7 Role of OSI

Responsibility for the health of the RCI sector

140. The Government's memorandum to this inquiry states unequivocally that "individual Research Councils are responsible for determining the activities and funding for the Institutes they own and for deciding how much of their Science Budget allocation goes to each Institute".[336] However, the OSI has taken some responsibility for the overall system, with two major reports commissioned by the Government into RCIs: the Costigan report into governance and the RIPSS report on improving the sustainability and strategic coherence of the non-university public research sector.

141. Of these, the RIPSS agenda has become an important component of the relationship between Government departments and the RCIs which undertake commissioned work for them, and the OSI's ownership of the RIPSS agenda offers the Director General of Science and Innovation an opportunity to monitor and influence the health of the RCI sector. Sir Keith O'Nions told us that the health of RCIs was a "crucial" issue for the OSI in terms of ensuring their sustainability within the UK science base.[337] He then distinguished his responsibilities for "those Institutes that belong to Research Councils that are supported and financed through OSI and the DTI" from other public sector research establishments.[338] Sir Keith maintained that the OSI had "a more direct involvement with those we finance".[339] In this chapter, we examine first the assistance which the OSI offers to RCIs through the Research Councils, followed by more overarching measures such as RIPSS and finally some proposals that have been raised with us to extend the OSI's role as custodian of the UK science base.

Research Councils and RCIs

142. In addition to allocations to the Research Councils which form the basis of RCI core funding, the OSI provides direct assistance to RCIs through the public sector research exploitation fund which provides support for the commercialisation of public sector research, and the large facilities capital fund (worth around £100m per annum), designed to help Research Councils manage large and lumpy capital investments that they would otherwise find it difficult to fund from their standard allocations from the department, for example, the construction of facilities operated by RCIs or the redevelopment of the institutes themselves.[340] Applications to this fund are managed by RCUK which draws up a large facilities roadmap of new facilities under construction and "potential large facility and equipment projects that the Government and Research Councils would like to see available to researchers over the next 10-15 years".[341] RCUK then prioritises projects from the roadmap to put forward through the standard Office of Government Commerce (OGC) gateway process to a review of the full business plan and a recommendation to OSI for funding. This is the process in which the MRC's plans for NIMR are currently embroiled.

143. We asked the OSI about the effectiveness of the two main funds in assisting RCIs. Both had been subjected to recent evaluation, with a major report published by the National Audit Office into the large facilities capital fund.[342] The funds are greatly oversubscribed. Sir Keith O'Nions told us that bids were far in excess of the funds available for the large facilities fund, with a "broader part of the research spectrum now bidding".[343] For example, ESRC had bid for funds to conduct a very large household survey whereas a more typical bid to the fund would be the CCLRC's Diamond Synchrotron or the MRC's proposed restructuring of the NIMR.

144. We also asked the OSI about their control of the Science Budget as allocated to RCIs by the Research Council. Sir Keith O'Nions asserted that "first and foremost I think it is a matter for Research Councils themselves to determine that balance between institutional investment and universities".[344] However, he went on to say that "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".[345] This would be done by "demanding higher performance in terms of their outputs" and "if we are really concerned about the sustainability of an Institute where we have information … we would clearly intervene in requiring a statement from the Research Councils of what they were going to do to sort that out and when."[346]

145. We were very interested in this assertion of the willingness to intervene between Research Councils and RCIs on the part of the OSI. It is an important recognition of the fact that the health of an individual institute can be adversely affected by its own Council as well as by outside factors, and in such rare cases there may be an argument that the OSI is the only party which could act as an honest broker between institute and Council. We have seen the need for such intervention in the account of MRC's planned renewal of the NIMR.

146. The Management Statement agreed between each Council and the DTI makes the Chief Executive of each Council accountable and responsible to the DTI/OSI for the oversight of any institutes controlled by the Council, including a responsibility to ensure the proper maintenance of the infrastructure of such institutes and to assess their performance on an annual basis.[347] In addition, Sir Keith O'Nions gave us two examples of how the OSI had given direct advice or assistance to Research Councils dealing with restructuring projects. The first of these was advice on the governance of RCIs, based on the Costigan report. The second level of guidance was to ask the Councils "to flag up areas where restructuring of Institutes is an important issue" in the process of allocating the Science budget so that financial provision could be made, as had been done in the case of NERC. [348]

147. The OSI is also working closely with the MRC on the preparation of its Business Case for the NIMR move. The DGSI saw his role here as "to give every encouragement and impetus, verging on the cattle prod, to get a proper professional business case on the table".[349] This falls some way short of a brokerage role between factious parties, as Sir Keith put it, but it is clear to us that an important part of any such Business Case affecting an RCI ought to be the impact on UK science and that the OSI is best placed to undertake such a role. This would be in keeping with the Office's overall responsibility for the UK science base. We support the OSI's role in intervening where the sustainability of an RCI is in doubt and believe that this could usefully be deployed in cases of serious concern over the restructuring of an institute, without compromising the autonomy of the Research Councils. We also recommend that the impact upon UK science be expressly examined by the OSI when considering any bids for funding to assist restructuring of RCIs.

The RIPSS agenda

148. we have discussed earlier the findings of the RIPSS report and its recommendations which stemmed from the view that "the long-term sustainability of this part of the science base required a number of issues to be tackled including low cost recovery, complex lines of strategic responsibility and low investment in physical infrastructure".[350] After the publication of the report in March 2006, the OSI took the agenda forward by establishing the Research Establishment Sustainability UK Forum where matters relating to the implementation of Full Economic Costing and the RIPSS guidelines can be discussed. This is chaired by John Neilson, Director of Research at OSI and includes representatives of the parent departments of PSREs. As part of its work programme, the OSI issued a newsletter and booklet in August 2006, updating PSREs and their strategic partners on progress in implementing RIPPS and highlighting good practice and development ideas. Much of the content of both of these documents was based on the first annual survey of sustainability in PSREs conducted in summer 2006, which was intended to provide a baseline against which to measure future progress. While the booklet and newsletter were fairly upbeat, comments on the monitoring process issued separately 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 trends and uncertainties" .[351] The most significant areas of threat were identified as:

"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);

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;

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);

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."[352]

149. The RIPSS agenda gives the OSI a clear responsibility and, equally important, a recognised mechanism to exert its influence to protect the health of the RCI sector. Even Defra, which as we have seen has been accused of bad faith over its failure to implement RIPSS, has repeatedly stated that it "fully supports the agenda set by RIPSS".[353] The question therefore is how effectively the OSI can use RIPSS to persuade others of their interest in maintaining the sustainability of the RCI sector. Professor Sir Keith O'Nions agreed that through RIPSS the OSI "do have a role in looking at all of the Institutes and I think there is a quite a good procedure in place for flagging up the sustainability [to other departments which either own those Institutes or co-sponsor them in some way] and changing sustainability with time".[354] On the other hand, he queried "what role we have to change the behaviour of another department because clearly we do not have that responsibility".[355] He later explained that "we do not have the levers to force another department to change its policy".[356] This can be seen in the ongoing dispute between BBSRC and Defra over IGER and Rothamsted Research, in particular. It is clear to us that if the RIPSS agenda is to be more than a means of disseminating examples of good practice, then the OSI needs more powers of enforcement. We believe that it is an excellent initiative which could make a vital contribution towards the sustainability of an important part of the science base but so far it appears to have identified problems rather than to have solved them. We recommend that the RIPSS agenda should be binding on Government departments and that the OSI be given responsibility and the means to intervene where it judges that a department is not fulfilling its responsibilities under RIPSS.

150. Another important element of RIPSS is the introduction of Full Economic Cost (FEC). We note that there is also a discrepancy in the perception of whether or not FEC is paid at the moment. For example, BBSRC and MRC told us that they had both "been paying full economic costs on the research it funds in its RCIs for some time".[357] Defra, on the other hand, claimed that while it has been "paying 100% FEC", the Research Councils "currently only pay 80% FEC, requiring contractors to find the extra 20% required to meet their FEC of the research".[358] This is flatly contradicted by the IAH who told us that "when Defra funding is secured for a given piece of research, the level of funding does not reflect the actual costs of the research, as defined using the full economic cost (FEC) model introduced following changes to the funding of Research Councils grants".[359] They calculate that "the shortfall can be as much as 40%".[360] This matters in terms of the amount of science that can be done since, as BBSRC pointed out, "one of the impacts of Full Economic Costing … is to raise the cost of research, ie there is less funding for more expensive research".[361] We recommend that Defra provide an explanation in the Government's response to this Report of how the conflict of evidence over its payment of FEC arises. Since it is too soon to assess the issue of full economic cost at this time, we intend to return to the subject as the evidence on its impact becomes clearer. We also note that the Sustainability Forum is designed to be the place in which the repercussions of the implementation of FEC might be discussed and mitigated, and we look forward to seeing how this works in practice.

Co-ordination of policy on RCIs and protecting the UK science base

151. The move towards greater oversight of the RCI sector exemplified by the RIPSS agenda suggests that the OSI could play a more central role in co-ordinating policy towards the RCIs. We have discussed earlier how there needs to be greater co-ordination between the policy needs of those players who wish to influence the strategy of individual RCIs. Witnesses to our inquiry have suggested that this could be taken further and that OSI could, for example, "have a role in informing the RCIs on likely future research requirements (horizon scanning)".[362] Others identified a need for what Professor Crute described as "a regular dialogue between Research Councils and between government departments … that rely upon Research Councils and their institutes to deliver things which are of policy importance, so that we can vision the future and make sure we do not have these gaps opening up where we can lose expertise or we have to bridge for long periods".[363] This was echoed by Professor Thorpe of NERC who called for "better and improved dialogue between key government departments",[364] especially when those departments and NERC are devising their individual science strategies.

152. Going further still, we heard suggestions that the OSI should take on a role as the champion and protector of UK science as exemplified by the RCIs. Prospect told us that "there is currently no effective central oversight or responsibility for the health of the nation's science base" and that the impact of individual decisions by the Research Councils and government departments upon the national core scientific capability is not monitored.[365] The BES suggested to us that the OSI could help in this regard by taking "a more strategic approach to ensuring that the UK has the scientific capacity to address pressing scientific issues as it is responsible for Research Councils and overseeing science in government".[366] We have certainly seen the need for greater monitoring as witnesses have pointed to the "gap [that] can open up between the sort of science the BBSRC is very keen to support and the science that gets supported by other funders, such as Defra".[367] Lord Rooker too pointed to the difficulties over who should fund an institute where the income streams from other areas have disappeared and it "has no other work, no other income stream, but it has some narrow area vital to the Government and to the public sector and a good thing for the public to own and buy".[368] This work needs to be maintained and protected or it will disappear and like the research conducted by RCIs characterised by CaSE as "partly funded on the basis of the need for background research that might very well prove useful in developing Government policy but which was not necessarily concerned with a single, easily identifiable political question …by its nature, it is unlikely to missed immediately, but sooner or later, the nation will lose (and regret the loss of) capacity in areas of research such as long-term environmental monitoring or into diseases that it happens to be unfashionable to study."[369]

153. In some narrow areas the OSI already takes more direct responsibility for individual RCIs. For example, it is involved in the British Antarctic Survey review group set up by the Cabinet Office in 1987 to provide a mechanism at official level to tackle and clarify issues of BAS funding and the extent of its operations. This example was raised by the DGSI himself in evidence to us.[370] However, it would be a major change to extend this approach across all RCIs and the national science base as a whole. This move would also not be universally welcomed: the University of Leeds, for instance, argued that "the OSI role should be an overseeing one, aimed only at ensuring best practice" and that "the question of whether in particular areas the national need is best met by RCIs or other funding routes is best left to the RCs".[371]

154. We agree that Research Councils should be allowed to decide on their own strategies and that Government departments should also have the freedom to decide and change their policy priorities. We do not consider that the OSI should have a vision for the number, type and structure of RCIs needed in the future. Rather, what concerns us is that some body should be charged with monitoring the impact of all these individual decisions on the science base as a whole. This would include a national register of facilities and of skills available throughout the UK. We accept Professor O'Nions' point that the OSI do not have the levers necessary to be accountable for the sustainability of Institutes.[372] However, there needs to be a mechanism for the OSI to raise the alarm where the planned changes of one department or Council would have a detrimental impact on the work of another or on the UK research base as a whole. This could be, and no doubt to an extent, is done informally but we should like to see a formal systematic process established. We recommend that the OSI be given the responsibility, and the resources, to monitor the state of national research facilities and the skills base within the RCI sector and that a formal mechanism be devised whereby the OSI issues an impact assessment when a department sets a science budget or alters its priorities or spending decisions or a Research Council plans changes to one of its RCIs.

336 Ev 78 Back

337 Q 414 Back

338 Q 415 Back

339 Ibid Back

340 Ev 80 Back

341 Ev 112 Back

342 Q 434; NAO, Big science: Public investment in large scientific facilities, HC 153, Session 2006-07 Back

343 Q 435 Back

344 Q 436 Back

345 Q 437 Back

346 Q 438 Back

347 Ev 80 Back