The Natural Environment Research Council (NERC) welcomes the opportunity to provide input to the Committee's inquiry.

  NERC is one of the UK's eight Research Councils. It funds and carries out impartial scientific research in the sciences of the environment. NERC trains the next generation of independent environmental scientists. Its priority research areas are: Earth's life-support systems, climate change, and sustainable economies.

  NERC's research centres and surveys are: the British Antarctic Survey (BAS), the British Geological Survey (BGS), the Centre for Ecology and Hydrology (CEH) and the Proudman Oceanographic Laboratory (POL). In addition, NERC currently funds 15 Collaborative Centres under contract often to an HEI or group of HEIs. Details of NERC's Research and Collaborative Centres are available at www.nerc.ac.uk.

Q1.   The role of RCIs in maintaining the UK research and skills base

The value of NERC's strong research institute sector

  NERC has a science strategy that addresses environmental science questions within the framework of Earth System Science. This requires an interdisciplinary approach as environmental issues involve interactions between all the basic science disciplines. Consequently, this science is by its nature big science and requires, for example, long-term monitoring of the environment; facilities for measurement and modelling; teams of researchers and support staff working closely together; foci for knowledge transfer. These are requirements that a strong research institute sector can provide.

  Clearly, reliance on institutes has to be balanced with a healthy academic sector in environmental science that utilises the data and facilities of the institutes to make their research and training much more effective. The RCIs skills base tends to be more clearly directed towards meeting national economic and societal need than is necessarily the case in HEIs where the primary focus is on academic inquiry. Having said that, the scientific outputs of RCIs (eg in terms of publications having a significant impact) easily equal those of successful academic groups from around the world.

  An internal NERC report (the Randall Report), published in June 2001, set out the defining characteristics of NERC Research Centres as providing:

—  excellent scientific research, monitoring and survey, not obtainable elsewhere within the UK market at competitive quality, timeliness and cost;

—  an integrated, well-managed national capability to provide reliable and independent policy advice to government, and other interested organisations; and

—  a focus for international cooperation; for technology expensive projects; and for co-ordinating distributed major programmes solving complex scientific problems.

  RCIs differ from HEIs in that they can direct staff—and, critically, sizeable teams of staff if necessary—to address national and international issues and, if needs be, emergencies. For example, BGS was able to provide advice during the Foot and Mouth crisis. NERC's Centre for Ecology and Hydrology (CEH), together with the RCIs of BBSRC, was able to direct staff to mount the Farm-Scale Evaluations of GM crops. POL is responsible for providing the tides data that allow the Environment Agency to decide when to raise the Thames Barrier. CEH is currently, with research partners in Scotland, preparing for the Countryside Survey 2007, a key activity linked to the Government's sustainable development strategy. BAS scientists have played a seminal role, with the Royal Society for the Protection of Birds, in developing the international Agreement on the Conservation of Albatrosses and Petrels (ACAP), which aims to halt the recent rapid decline in iconic seabird numbers as a consequence of long-line fishing in the South Atlantic and Southern Ocean.

  NERC's wholly-owned RCIs in particular have the longevity to maintain key series of observations over the long term (several times the period of most academic grants), allowing the discovery, for example, of the ozone hole by BAS scientists and the observation of the earlier arrival of spring by CEH scientists. This long-term monitoring can be accompanied by the necessary infrastructure and staffing for data management. Although HEIs also carry out monitoring activities, they are often contributing to schemes managed by RCIs.

  NERC has also set up Collaborative Centres, often in association with universities, on a time-limited basis to give it the ability to direct a rapid increase in activity in under-developed areas of science according to national and strategic need. The Tyndall Centre for Climate Change Research and the UK Energy Research Centre (UKERC) are both examples of centres set up (jointly with other Research Councils) in response to fast-growing research needs requiring intense and co-ordinated research effort.

  NERC's RCIs work closely together not only with the academic community but also with each other. For example, BGS and BAS collaborate on NERC's deep ocean drilling project, and CEH and BGS work together on flood management and other issues. NERC's facilitation of such collaboration between its RCIs increases the capability of NERC as whole.

  The identification of NERC's RCIs with specific areas of science gives them a high profile both nationally and internationally, and this together with their longevity helps them to establish international agreements and alliances with partner institutes in other countries.

RCI support for skills and training

  All NERC RCIs maintain the skills necessary to conduct long-term survey and monitoring and to do the research needed to extract high-quality science and policy-related evidence from such work.

  RCIs play an important role in maintaining the national skills base by hosting students studying for postgraduate qualifications. They have valuable expertise, study/field sites and facilities, which complement those available in HEIs. As well as training students based in the RCIs, they are often CASE partners for students based in an HEI and are able to provide valuable training in field skills, exposure to a different working environment, and unique experiences such as studying in the Antarctic. CEH is one of the centres popular with students because of the high quality supervision, facilities and training opportunities provided.

  Institute-based NERC scientists are offered specific training courses such as Communicating Science to the Public and Scientific and Technical Writing which cover increasingly important communication skills. They are also encouraged to attend courses in leadership and management skills, since people- and project-management are widely recognised as vital for the delivery of NERC science, especially in multi-disciplinary/multi-location projects.

RCI Facilities and Services

  Scientific facilities can be considered as science infrastructure with value added. This added value comes from people, who provide expertise and support in the technology, science, operation and administration. This added value can be provided by RCIs, HEIs or other organisations, depending on the circumstances, and NERC supports facilities at the location that can provide overall the best and most cost-effective service. This results in a complex mix of facility locations and staff employment. RCIs are often particularly able to provide a base for expensive facilities which can then also be made accessible to HEIs, for research and training, justifying the significant capital investment. Investment in specialist facilities at RCIs, with shared use, is efficient because it helps to avoid duplication.

  NERC's two ocean-going research ships, and supporting infrastructure (including the National Marine Equipment Pool), are based at the National Oceanography Centre, Southampton, which is a NERC Collaborative Centre. NOCS is one of the world's leading centres for research and education in marine and earth sciences, for the development of marine technology and for the provision of large-scale infrastructure and support for the marine research community.

  The provision of infrastructure and facilities in the Antarctic and Arctic presents major technical and logistical challenges. BAS runs NERC's polar infrastructure and facilities, including its two ice-strengthened ships and fleet of "polar" aircraft. BAS further supports the interests of the UK Government under contract to the Foreign and Commonwealth Office and the Government of South Georgia and the South Sandwich Islands by maintaining a UK presence on South Georgia through the support and operation of harbour facilities and an applied fisheries research programme.

  NERC's two airborne research facilities are based at airports that can provide the necessary facilities for the aircraft, staff and equipment.

  Four smaller facilities are located at NERC centres:

(i)    the NERC Isotope Geosciences Laboratory at BGS;

(ii)   the Remote Sensing Data Analysis Centre at the Plymouth Marine Laboratory (PML);

(iii)  the National Facility for Scientific Diving at the Scottish Association for Marine Science (SAMS); and

(iv)  one of three nodes of the Life Sciences Mass Spectroscopy Facility at CEH Lancaster.

  The remaining NERC facilities are located at universities or, in one case, at the Rutherford Appleton Laboratory of CCLRC.

Knowledge Transfer activities

  NERC as a whole, including its RCIs, is concerned to ensure that its science reaches those who are able to use it, whether in policymaking or business. It is developing its knowledge transfer (KT) activities, and has recently provided the OSI with a KT Delivery Plan Update ("Creating the Environment for Knowledge Transfer"). The latter document gives examples of KT arising from NERC science, many of them from RCI research.

  As stated in NERC's submission to the Committee's inquiry into Research Councils' KT activities, NERC's centres provide a unique opportunity for all aspects of knowledge transfer, including a national capability to provide reliable and independent policy advice to Government, often at short notice. An example is the provision by NERC scientists of a wide range of inputs to the deliberations of the Exeter Conference on "Avoiding Dangerous Climate Change", sponsored by the Prime Minister in advance of the UK's Chairmanship of the G8, in order to place the UK in an informed position on a topic it had identified as an international priority. Another example is CEH's lead role in the farm-scale evaluation of GM crops, referred to above. The skills and capabilities that exist in our research centres play a vital part in the UK economy: a recent survey estimated that the value added of national output that BGS contributed to was in the range £34 billion-£61 billion, between 5-8 of the UK value added. Links with key users are extensive: for example, POL is a partner with the UK Meteorological Office in the National Centre for Ocean Forecasting (NCOF), whose mission is to establish ocean forecasting as part of UK "infrastructure". BAS supports UK Government interests in the South Atlantic and Antarctica through the scientific advice it provides to the UK Delegations at the annual meetings of the Commission for the Conservation of Antarctic Marine Living Resources and of the Antarctic Treaty Consultative parties.

  NERC and its centres have developed a systematic approach to identifying and exploiting their intellectual property (IP), which they are able to proactively manage for the benefit of the UK as a whole. Although HEIs also commercialise NERC-funded research, NERC is less able to guarantee that this will happen or that it will have the same benefits, because it does not own the IP.

RCI public engagement

  NERC regularly assesses its centres' public engagement activities, which are wide-ranging and include:

—  Maintaining informative websites/on-line information sources.

—  Producing accessible publications and learning resources.

—  Writing journal and newspaper articles.

—  Issuing press-releases.

—  Working with film/broadcasting companies on documentaries/news reports.

—  Giving media interviews, talks and lectures.

—  Participating in science festivals.

—  Organising courses, events and exhibitions for the public including teachers and schoolchildren.

—  Engaging with local schools and communities.

—  Answering emails, letters and phonecalls from the general public.

—  Holding open days and offering work-experience opportunities.

  These activities are more easily handled in a strategic way by NERC utilising its institutes. This complements what is provided by academics in an HEI environment. In RCIs, there is the necessary critical mass, and the necessary identity, to attract the public and invite attention from the media. BAS, BGS and CEH are particularly well known, and this is undoubtedly good for public interest in environmental science.

Q2.   The balance between Research Council expenditure on RCIs and on grant funding;

  The balance between institute and non-institute funding (ie in the academic sector) is a key strategic and tactical decision for NERC Council to make and it frequently reviews this issue. The balance is determined by examining the health of the scientific disciplines in these two sectors and the level of the ongoing need for institute-type activity in sub-disciplines in relation to NERC's current and future strategic science needs.

  It is important to emphasise that NERC's RCI and HEI communities are strongly interconnected with a significant degree of collaboration. Whether research is being done at an institute or in an HEI, NERC is concerned to fund excellent science. As stressed previously, RCIs provide distinctive and essential expertise, services and facilities that are often more difficult for HEIs to provide even in collaboration with other HEIs. RCIs and HEIs often work together on directed programmes and through explicit collaborative schemes, such as the Antarctic Funding Initiative (AFI).

  NERC's RCIs are funded from two separate lines. RCI "core funding" comes from NERC and the balance from a range of other sources including RC grants (won in competition with universities), government departments and their agencies, the EU Framework Programmes and the private sector. The balance between all these sources of funding varies between Research Councils and between RCIs within each Research Council. Each RC has to decide what the balance of risk and advantage is between funds going to HEIs and those devoted to RCIs.

  NERC is currently refining its funding allocation and budgeting process so as to improve the cycle of strategic objective setting, commissioning research and evaluation of outcomes, all informed by stakeholder input. This continues the implementation of the recommendations of the Randall Report, mentioned under Question 1, regarding the introduction of more flexible funding methodologies.

  The proposals submitted by RCIs for their "core funding" from NERC (for their main institute research programmes) are subject to international peer review and evaluation of quality and fit to science priorities. Funding decisions are made on the basis of three factors: evaluation of the science quality of proposals; fit to NERC's current and long-term priorities dictated by NERC's science strategy; and the requirements for financial and scientific sustainability of NERC and its institutes. Value for money and the "risk-reward" balance are also considered.

  It is important that assessment of proposals for RCI funding is appropriate for their distinctive mission. NERC recognised this in changing in 2003 to a funding framework with ten categories; several of which relate explicitly to the mission of RCIs. Assessment is made against criteria designed for each category, which means that NERC takes funding decisions for its institutes (and for grants for the academic community) in the light of appropriate criteria.

  Final decisions on funding to RCIs are made by NERC's Council based on the peer review assessments and the advice of its Science and Innovation Strategy Board. Decisions take account of past performance as well as future plans. NERC's centres are subject to a comprehensive science and management audit process as they approach the end of each period of agreed funding (about every five years), and they also provide information (output and performance measures) to NERC on an annual basis.

Q3.   The rationale behind the different approaches adopted by the Research Councils to supporting RCIs and the case for greater harmonisation of practice;

  NERC is pleased that the Costigan Report found our institutes to be governed according to best practice. We were advised that alternative governance models for two centres (BGS and CEH) might be possible and should be explored to highlight any advantages.

  NERC's four wholly-owned institutes are managed and governed by NERC with all staff being employed by NERC. As stated in answer to Q2, these centres also have other income streams, supporting commissioned research (CR). CR research strongly powers KT, both in policy and business areas, and therefore strengthens this important element of centres' work, but it also implies an increased level of responsibility and risk/uncertainty to NERC as CR income ebbs and flows over the years. This issue is addressed further below.

  In addition to its wholly-owned centres, NERC also supports a number of collaborative centres whereby other organisations are provided with contracts from NERC to deliver a science and facility programme. At a minority of these collaborative centres there are also some NERC staff who are managed locally but where NERC is the legal employer. Most are run by universities but two are companies limited by guarantee (CLG) with charitable status.

  NERC has kept the governance models for its institutes under regular and detailed review and has made significant changes over recent years (eg the creation of the CLGs). NERC feels that the current diversity is beneficial in allowing various different mechanisms for KT and academic collaboration to flourish. However, we are keen to work with other Research Councils to achieve a greater harmonisation of approaches in supporting RCIs, based on benchmarking and best practice.

  It is important that NERC's strategic goals are aligned with those of government departments such as Defra. This is facilitated by a number of mechanisms including co-membership of NERC Council and Defra Science Advisory Council by the Defra Chief Scientist and NERC Chief Executive. Improvements could be made in this element of joining-up activities to ensure that NERC institutes are fully aware of Defra's needs for science evidence and can continue to respond to them.

  Questions have been raised, for example in the context of the CEH reorganisation, about how an overview of the evidence base for public policy can be maintained when both Research Councils and government departments bear the responsibility for this evidence base. RCIs can be subject to change because of changed Research Council research priorities and possible loss of CR income despite having to maintain the institute skills base and infrastructure.

  When arrangements were originally made to fund RCIs from both Research Council and departmental funding lines (in the late 1970s under the Rothschild principles) there was an expectation that about a third of the total costs of RCIs would be met by departments. The figures supplied in the table on "Individual RCI funding" indicate that this amount is now about 16% for CEH and constitutes less than 10% of the total cost of RCIs. There is no indication from departments that they value CEH work any less than very highly. These figures indicate that the risks associated with running RCIs are perhaps falling rather more heavily than Government originally intended on the Research Councils themselves.

  Research Councils and government departments need to work together to develop an improved mutual understanding as to their sharing of risk if unintended damage to the evidence base for public policy is to be avoided by their separate funding decisions. A successful move in this direction has been made by the creation of the Environment Research Funders' Forum, ERFF, a few years ago. ERFF brings together the UK's major public sector sponsors of environmental science, aiming to make best possible use of funding. ERFF concentrates on activities that: clearly add value; could not be done by a single member acting alone; and have the potential to advance environmental research in the UK and internationally.

Q6.   A review of progress on current reorganisations involving RCIs, including the Centre for Ecology and Hydrology, the National Institute for Medical Research and the Roslin Institute.

  A major challenge for NERC is to ensure that its RCIs continue to provide the benefits referred to in answer to Question 1. For the longer-standing RCIs in particular this means that as NERC's (and external) requirements change, centres must change accordingly in order to remain responsive, fit-for-purpose and cost-efficient. As reported above, NERC regularly reviews its centres; it has in the past implemented reorganisations including a re-positioning of the marine centres and earlier changes to CEH. NERC recognises the difficulties that often accompany restructuring and wishes to ensure that these are minimised.

  NERC Council made a decision in March 2006, after a period of public consultation, to re-structure the Centre for Ecology and Hydrology so that it is scientifically and financially sustainable in the long term. It decided to provide extra resources to CEH compared with those announced in the consultation proposals, bringing NERC's core funding for CEH to £16.3 million per year (2004-05 prices). NERC Council's decision included an increase to both CEH's core science budget allocation from NERC and CEH's "external" income target (to be found from non-NERC sources and NERC research grants—bringing the total budget for CEH to just under £30 million per year (2004-05 prices)). These resources have been used to boost biodiversity elements of CEH's long-term survey and monitoring. CEH now has the resources to meet its core business for NERC (monitoring and survey of national and international significance) and for delivering on key areas of public policy interest, such as: flood risk, weather extremes due to climate change, halting the decline in biodiversity, sustainable land management under CAP reform and assessments of renewable sources of energy.

  CEH has identified the four (existing) sites on which its future research program will be based, two out of four co-located with HEIs at Bangor and Lancaster and the other two on "science parks" at Wallingford and the Bush Estate, Edinburgh. Over the next three to four years, staff will be focussed onto those four sites, and five other sites (Banchory, Dorset, Monks Wood, Oxford and Swindon) will be closed. About 100 scientists and 60 support staff will be made redundant during this transition, leaving over 440 staff in CEH in future.

  A Transition and Integration Project has been established to implement the CEH restructuring with a newly appointed Project Manager. The progress has been according to plan thus far but it is still relatively early on in the restructuring process. Staff and Unions are fully involved in the process.

  Further information on all these centres can be found at www.nerc.ac.uk.

  NERC Research Centres (established, wholly-owned by NERC, not time-limited; staff employed by NERC)

  British Antarctic Survey (BAS)

  British Geological Survey (BGS)

  Centre for Ecology and Hydrology (CEH)

  Proudman Oceanographic Laboratory (POL)

  NERC Collaborative Centres

Established centres (not time-limited)

  National Oceanography Centre, Southampton (NOCS)—Joint Integrated Centre; assets and staff shared between NERC and university

  NERC Centres for Atmospheric Science (NCAS)—distributed centre based in several universities including Leeds, Cambridge and Reading; assets owned by universities; a few NERC staff

  Plymouth Marine Laboratory (PML)—Plymouth (not university-based); CLG with charitable status; some staff employed by centre, some by NERC

  Scottish Association for Marine Science (SAMS)—Dunstaffnage, near Oban; CLG with charitable status; some staff employed by centre, some by NERC

  Sea Mammal Research Unit (SMRU)—based in the University of St Andrews (assets owned by university, NERC staff on secondment to the university)

Time-limited centres, five-year contracts with possibility of renewal, based in HEIs, staff employed by HEI

  Centre for Population Biology (CPB)—Imperial, London

  National Institute for Environmental eScience (NIEeS)—Cambridge

  Tyndall Centre for Climate Change Research—UEA, Manchester and others

Earth Observation Centres

  Centre for Observation of Air-Sea Interactions and Fluxes (CASIX)

  Centre for the Observation and Modelling of Earthquakes and Tectonics (COMET)—Oxford

  Centre for Polar Observation and Modelling (CPOM)—UCL

  Centre for Terrestrial Carbon Dynamics (CTCD)—Sheffield

  Climate and Land Surface Systems Interaction Centre (CLASSIC)—Swansea

  Data Assimilation Research Centre (DARC)—Reading

  Environmental Systems Science Centre (ESSC)—Reading

2004-05 AUDITED FINANCIAL DATA

Total portfolio (resource & capital)

	Expenditure (£ million)
Total expenditure	317.4
Total expenditure at HEIs	98.9
Total expenditure at RCIs (excluding CCLRC)	89.7
Total expenditure with CCLRC and other organisations	128.8

  1.  Total expenditure with CCLRC and other organisations includes all non-HEI or direct RCI expenditure (therefore includes HQ costs, non-cash, international subscriptions, scientific facilities including the new research ship build costs etc)

  2.  HEI expenditure taken from 2004-05 Annual Report (SB awarded outside NERC—updated version)

  3.  Collaborative centres embedded in HEIs are included under HEI expenditure, ie all collaborative centres other than PML and SAMS. RCIs here refers only to BAS, BGS, CEH and POL.

Expenditure on research (resource not capital)

	Expenditure (£ million)
Total expenditure	232.8
Total expenditure at HEIs	75.3
Total expenditure at RCIs (excluding CCLRC)	75.3
Total expenditure with CCLRC and other organisations	82.2

  1.  Total expenditure taken from p.45 Annual Report—I&E table

  2.  HEI expenditure taken from revised SB outside NERC table (all HEI spend excluding training); includes all collaborative centres except PML, SAMS.

  3.  Collaborative centres embedded in HEIs are included under HEI expenditure, ie all collaborative centres other than PML and SAMS. RCIs here refers only to BAS, BGS, CEH and POL.

Expenditure on training

	Expenditure (£ million)
Total expenditure	23.7
Total expenditure at HEIs	23.6
Total expenditure at RCIs (excluding CCLRC)	0.1
Total expenditure with CCLRC and other organisations

  1.  Taken from revised SB outside NERC table

Individual RCI funding—research expenditure (resource not capital)

NERC Research Centres and Surveys

	BAS £ million	BGS £ million	CEH £ million	POL £ million
NERC	33.6	19.8	18.4	3.5
Govt departments	1.3	4.5	5.1	1.0
Other research cont	0.5	14.8	6.5	0.7
Other income	2.2	3.3	1.1	0.3
Total	37.6	42.4	31.1	5.5
NERC funding excludes capital.
NERC Collaborative Centres