1.  YOUR APPOINTMENT

(a)   Who approached you about taking up the post of Chairman of the Medical Research Council? (See Q2-3 of the uncorrected transcript of oral evidence.)

  Saxton Bampfylde Hever plc.

(b)   What was the selection process? (Q5-6)

  The selection process for Research Council Chairmen/women is run by the OSI. As far as I am aware, the standard procedures and processes were followed.

2.  THE JOINT MRC/ERNST & YOUNG REVIEW (HEREAFTER, THE JOINT REVIEW)

(a)   Why was Ernst & Young chosen to assist MRC in conducting the Review? Who selected them? (Q23-26, 44-45)

(b)   You said that the selection of Ernst & Young was an informal process (Q28). Which other companies were considered? (Q27-29)

(c)   The Committee would like to see copies of correspondence and records relating to the process of selecting Ernst & Young and rejecting the services of the other companies. (Q46)

  Speed was one of the first considerations in planning the review, and this led to the selection of Ernst & Young.

  On the day the Cooksey report was published (6th December) I met with Colin Blakemore and senior executives from MRC head office. They were already of the view that given that the review had been announced the previous spring and expectations for delivery were high MRC needed to be able to concentrate on moving forward within the new vision for medical research. They proposed that decisions on the governance and strategic planning arrangements, and any other changes needed, should be taken at Council's 2-day meeting In March. Some of the change issues—such as those relating to top level governance and strategy—had been raised by the CEO before the Cooksey review, and then put on hold until the Cooksey review was over. I agreed that whatever was needed should be done without delay.

  I undertook to ask for advice from Sir Keith O'Nions of the OSI as to who would be a suitable consultant, for whom appropriate contractual terms already existed, to back up our internal team and insure the study was carried out with sufficient objectivity. The thinking was that a consultant recommended by Sir Keith would help avoid any suggestion that the study was too internally focused. Sir Keith undertook to consult within OSI as to the experience with various consulting firms and responded to me a few days later with a recommendation for Ernst & Young. although I had discussed with colleagues the merits of some other firms in the meantime there seemed little point in ignoring Sir Keith's advice.

  The Chief Executive, Colin Blakemore, the Executive Director, Nick Winterton, and I met with Ernst & Young on the 14th. The executive took forward the arrangements with Ernst and Young after the meeting.

(d)   How much did the overall process of the Joint Review cost? (Q23)

How much was paid to Ernst & Young?

  The Joint Review cost £306,135. This includes the payment of £216,412 fees for Ernst & Young, plus VAT and £51,851 of MRC staff time (including employers NI and pension costs).

  Is there a threshold fee at which consultancy appointments have to be put out to tender? How much is it?

  EU competition law requires that any contract with a value of £145k or more should be advertised In the OJEU Journal unless it is awarded under an existing framework agreement. An applicable framework agreement was in place for consultancy services from Ernst & Young.

  The final payments to Ernst & Young took into account some further work that had to be negotiated with them because:

—  Initial consultation plans proved unworkable because of the diary commitments of key stakeholders, and a slower and more time-consuming programme was adopted.

—  The work schedule, the themes addressed, and the conflicting demands on the time of MRC staff, meant that we had to ask Ernst and Young to allocate very substantially more time to writing up the final report than in the original contract.

(e)   The Committee would like details of the key dates and of attendees at the Steering Group meetings relating to the Joint Review. (Q47-49)

  4 meetings were Initially arranged:

29/1/2007 Colin Blakemore (CB), Nick Winterton (NW), John Chisholm (JC), Harry Gaskell (HG) and project team members.

15/2/2007 CB, NW, JC via teleconference, HG and project team members.

8/3/2007 CB via teleconference, NW, JC, HG and project team members.

22/3/2007 CB, NW, JC, HG and project team members.

  An additional meeting was arranged as follows:

14/3/2007 JC, HG, and project team members.

15/3/ 2007 CB, NW, HG and project team members.

What was your role on the Steering Group? (Q47)

  Like other members of the Steering Group—Colin Blakemore and Nick Winterton—I was concerned to ensure that the review would be thorough, effective, and credible. As Chairman of Council, I tended to put more emphasis on questions of high level role and governance, and I also highlighted issues which I thought Council members would want to see addressed—such as evaluation.

  When I was present in person, I acted as chair in these meetings, although the meetings naturally took the format of the team reporting their work and being questioned by MRC executives and myself.

(f)   What wore the key stages in the consultation between the Review Group and MRC staff and other stakeholders? What feedback has the Council received from staff and stakeholders on the proposed changes? (Q33-37)

  The key parts of the consultation process were:

—  All MRC Unit and Institute Directors were sent a joint letter from Colin Blakemore and me on 18th January, altering them to the review, and were invited to discuss the core questions at the annual MRC Director's Conference a week later.

—  The review team interviewed nearly fifty individuals representing MRC's UK stakeholders, Council members, and senior scientific and executive staff.

—  MRC Head Office staff were briefed on the review and invited to submit views.

—  The team also participated in a pre-arranged workshop on Translational research in February 2007, which involved over forty UK and international participants.

—  The review was highlighted on MRC's website, and people were invited to submit their views on the key questions.

—  MRC union side gave their views on the review issues at MRC's Employee Representations Forum before Council's March meeting and MRC officers have had Informal meetings with union side officers to keep them Informed.

  We have had some feedback on the changes being considered by Council from discussions with MRC Directors and senior scientists. Views on the scale of change,and the means of achieving it needed varied, but there was a lot more consistency about what MRC should not change. Common themes were:

—  That MRC needs to take care, in any change, not to lower its standards of scientific rigour and innovation.

—  That stronger efforts in translational research should not be at the expense of fundamental medical science.

—  That improvements in evaluating the outcomes of MRC's research should not lead to micro-management of research that would stifle creativity.

  Council shared all of these views, and took them into account in agreeing how it would respond to the report.

3.  CHANGES TO THE BOARD

(a)   In your oral evidence on the rationale for reducing the size of the Council, you said it was "effectiveness probably" (Q53), but did not provide evidence that smaller groups are more effective than larger groups (Q54). What was the rationale? On what evidential basis did the Joint Review assert that the most effective size for the MRC Council is 12 members?

  The review team provided evidence that smaller groups can be highly effective in governing large and complex enterprises, but did not claim to have shown that smaller is necessarily better.

  The rationale for change comes from Council's needs and circumstances, rather than any golden rule:

—  the report recommends reducing the stakeholder representation functions of Council, and instead seeking more in-depth engagement in other forums. This removes one of the drivers for a larger body.

—  the report also recommends that Council members should not normally chair Boards. Again, the idea of having a certain number who had this role (four in the past, more recently six), and then at least two others who were more independent, also forced MRC to have a large Council.

—  finally, Council expects to devolve more, and to have more in-depth discussion of a smaller set of issues. The experience of the review team, and indeed my own experience, is that smaller committees find it easier to achieve detailed scrutiny and shared ownership of complex decisions.

(b)   The Committee would like details of attendance for the last 12 months of the Council meetings. (Q55-58)

  As set out in it the MRC's Charter, Council membership should consist of a Chair, a Chief Executive and Deputy Chair, and not less than 10 nor more than 18 other members, at least half of whom shall be appointed by reason of their qualification in science. Membership of the MRC's Council can be categorised as follows; Scientific, Health Department and Lay (Finance, Industry and Law), attendance for each of these categories is shown below for the last two Council sessions. These tables do not include the Chair or Deputy Chair (who have a 100% attendance for this period), or observers who attend meetings.

*  Health Department representation changed for Northern Ireland and for Scotland during this session, which caused some disruption to attendance.

*  The January meeting was arranged at short notice to replace the scheduled February meeting. Consequently attendance was affected.

(c)   How will you ensure a high level of scientific input with a smaller council? (Q59-60)

  The detail of how Council membership will be made up, and the profile of expertise sought, is for discussion at our meeting in July. However, all our discussions have taken as a given that half of the members of the smaller Council will still be appointed by virtue of their scientific expertise. The other half will, of course, also include a few people with a scientific research background — such as people involved in industry R&D.

  Council decided that it must still include people with recent experience in running Boards. But until recently, six of the scientific Council positions were tightly linked to Board Chair roles—which are very demanding. Removing this link will widen the pool of scientists who might be willing to serve on Council.

(d)   What is the process and timescale for the appointment of the new board and criteria for selection? (Q61)

  Appointments to the Research Councils are made by the Minister of State for the Department of Innovation, Universities and Skills, DIUS. The appointments process is managed in accordance with the Commissioner for Public Appointments (OCPA) "Code of Practice for Ministerial Appointments to Public Bodies". An Appointment Panel, comprising the Council Chair, Chief Executive, an independent OCPA representative and a senior DIUS official submits recommendations to DIUS for approval by the Minister.

  An annual round of appointments to the Research Councils is organised by the Science Innovation Group (formerly Office of Science and Innovation). This usually commences in October. This round may be supplemented by competitions for individual or groups of posts as necessary.

  Appointments to the MRC's Council are usually for a period of up to four years; the maximum allowed by the Royal Charters of the Councils. Members are eligible for reappointment for further period of up to four years. Members of Council are part-time and are expected to spend some 20 days each year on Council business.

  The MRC's Council will consider a paper on Governance in the MRC, including proposals for Council membership, in July 2007. This discussion will inform the preparation of the criteria and specification for the positions proposed and will be submitted to SIG for consideration and Ministerial approval to commence recruitment.

4.  COLLABORATION

(a)   The Joint Review was critical of MRC's relationship with the other research councils (Q90). Do you think the criticism is fair? What action does MRC plan to take? What is the rationale for staying in London rather than moving to Swindon to be near the other Research Councils? (Q91)

  There have been criticisms of the MRC because of the way we used to allocate funds for research and the difficulties this has presented in the past for some joint collaborations. However there have now been a number of examples eg the successful National Prevention Research Initiative where this issue has been successfully addressed. The rationale for keeping a core of headquarters posts in London is In part related to the Importance of engagement with the other major funders of medical research who are all London based. Support functions have been ratilonalised with the other Research Councils at Swindon in order to maximise efficiency gains.

July 2007