FURTHER CLARIFICATION OF KEY POINTS

1.   Strategic arrangements between Defra and Research Council Institutes

—  Key for Defra is the continuing ability for Research Council Institutes to deliver high quality, fit for purpose applied research to underpin the development and delivery of policy and in the case of emergencies.

—  Defra's short and long term policy needs have been changing and will continue to change. Given the unique nature of much of the research capacity in the UK, we are very conscious of the need to factor in sustainability and risk issues into decisions regarding our funding of the research base.

2.   Implementation of RIPSS

—  Defra fully supports the agenda set by RIPSS (The Research Council Institute and Public Sector Research Establishment Sustainability Study).

—  RIPSS states that if a government department procures 15% or more of a research council institutes turnover then we should be jointly accountable for developing joint scientific and investment strategies. We procure more than 15% of the turnover at IGER, Rothamsted and IAH.

—  RIPSS is essentially about having transparent and effective relationships and in line with this we have communicated our strategic planning of R&D through our Evidence & Innovation Strategy and 10 year Forward Look.

—  We have not been able to agree a position with BBSRC on one of the recommendations.

—  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.

3.   Full Economic Cost (FEC)

—  Defra has, and is committed, to paying 100% FEC. Research Councils currently only pay 80% FEC, requiring contractors to find the extra 20% required to meet their FEC of the research.

4.   Defra's engagement and procurement of science from Research Council Institutes

—  Defra supported the need to establish a sustainable Centre for Ecology and Hydrology. Defra acknowledged to NERC the risks in the restructuring and delivery in a number of science areas. Defra welcomed the amendment made by NERC Council to strengthen biodiversity and climate change research in areas that we highlighted were of key importance to us. This resulted in a reduction in the planned number of redundancies from 200 to 160.

5.   Specific detail on Moratorium

—  Table 1 shows the committed spend and that which has been deferred, due to the moratorium, for 2006-07 at BBSRC Institutes.

—  Committed spend at IGER this financial year, notwithstanding the moratorium, is greater than the total Defra spend at IGER in 2005-06 (£6.36 million).

6.   Defra's £200 million+ pressures at the beginning of 2006-07 comprises:

—  £95 million expenditure deferred from 2005-06 into 2006-07 to mitigate End Year Flexibility restrictions and other new pressures which arose in 2005-06.

—  £65 million surplus Capital Charge budgets no longer available to fund programme expenditure due to Treasury's new tighter fiscal rules governing public expenditure.

—  Up to £50 million new pressures emerging at the beginning of 2006-07, which includes the £23 million to help stabilise the RPA SPS 2005-06 payments.

November 2006

LIST OF ACRONYMS

BBSRC	Biotechnology and Biological Sciences Research Council
CSA	Chief Scientific Adviser
E&I	Evidence and Innovation
E&IS	Evidence and Innovation Strategy
ESRC	Economic ad Socail Research Council
IAH	Institute of Animal Health
IGER	Institute of Grassland and Environmental Research
NERC	Natural Environment Research Council
R&D	Research and Development
RCIs	Research Council Institutes