In response to your request for information on the BBSRC-sponsored Institute for Animal Health (IAH), Institute of Grassland and Environmental Research (IGER), and Rothamsted Research (RRes), please note the following.

INCOME BY MAJOR FUNDING SOURCES, 2003-06 (FROM BBSRC ANNUAL REPORTS)

Institute for Animal Health

£m	2003-04	2004-05	2005-06
BBSRC Core Strategic Grant	8.7	8.1	9.4
BBSRC Other (excluding major capital grants)	2.1	2.7	3.5
Defra	9.1	9.6	8.0
EC/International	1.3	1.6	1.0
Industry	1.4	0.8	1.0
Other research income	1.8	1.8	2.4
Other sources	4.6	6.0	6.8
Total revenue income	29.0	30.6	32.1

Institute of Grassland and Environmental Research

£m	2003-04	2004-05	2005-06
BBSRC Core Strategic Grant	4.9	4.5	5.2
BBSRC Other (excluding major capital grants)	0.4	0.5	0.6
Defra	7.3	8.2	7.1
EC/International	0.6	0.5	0.5
Industry	1.6	1.4	1.3
Other research income	0.3	0.8	1.2
Other sources	1.6	1.4	1.6
Total revenue income	16.7	17.3	17.5

Rothamsted Research

£m	2003-04	2004-05	2005-06
BBSRC Core Strategic Grant	9.9	9.5	11.8
BBSRC Other (excluding major capital grants)	2.4	3.3	3.0
Defra	6.2	6.4	5.1
EC/International	1.7	1.2	1.0
Industry	2.8	2.2	2.2
Other research income	1.4	0.9	0.8
Other sources	1.4	1.7	1.4
Total revenue income	25.8	25.2	25.3

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

PROJECTED INCOME FIGURES

  We do not have firm figures for future external income to the institutes. However, it is clear that Defra funding is falling, and that this trend will continue. Defra funding to BBSRC Institutes has fallen to £19 million in 2006-07 from an equivalent £129 million in 1972 and further reductions are expected as a result of policy changes, CSR 2007 pressures, the latest moratorium in Defra funding announced in August and sustainability pressures on Defra in house agencies.

  Defra has advised that funding for sustainable agriculture will fall by a further 20% by 2010-11 on top of a 12% cut for 2006-07. In real terms this equates to around a 44% reduction since 2005-06. In May, BBSRC was advised that the next budget cut for Defra Animal Health and Welfare budget would be a relatively modest £1 million—2.5% reduction in cash terms. In real terms this would be at least 20% by 2011, partly because of inflation and partly due to the introduction of a revised method for calculating Full Economic Costs which, in animal health, have risen sharply. More recently, Defra has indicated that a further review of priorities is in progress and so uncertainty continues.

  IAH, IGER and RRes are the institutes which are most affected by these reductions.

FUTURE OPTIONS FOR IGER AND RRES

  In the light of significant reductions in Defra income, and the need to optimise collaboration between the two institutes, BBSRC is currently considering three options for the future governance and operations of IGER and RRes:

(a)    a Welsh option, integrating both IGER sites with the University of Wales, Aberystwyth and University of Wales, Bangor, in which RRes would remain separate with a separate funding stream;

(b)  as option (a), but with North Wyke becoming part of RRes; and

(c)  a single core funding stream, and possibly a single institute, incorporating the current IGER sites at Aberystwyth and North Wyke (Devon) and the RRes sites at Harpenden and Broom's Barn.

  The overall aim is to secure greater stability and sustainability of strategic UK research capability in the areas of sustainable agriculture and land use.

  A small sub-group of BBSRC Council will prepare more detailed proposals for consideration by Council in December.

  To date, BBSRC council has had preliminary discussion of the Follett report on institute governance and the generic models for future governance within this document. At least one of the models is consistent with a closer partnership between institutes and universities as envisaged in Wales. BBSRC is already going ahead with the EBRC institute in partnership with the University of Edinburgh. This will bring together The Roslin Institute, the Neuropathogenisis Unit ( currently part of the Institute for Animal Health), researchers from the University of Edinburgh (Royal Dick) Vet School and from the Scottish Agricultural College.