Introduction

The Government welcomes the Committee's report on Research Council Institutes.

This response has been coordinated by the Office of Science and Innovation on behalf of the Departments of Trade and Industry and Environment, Food and Rural Affairs and includes input from Research Councils UK. This document sets out the Government's response to the Committee's recommendations and certain specific points made in the report.

Relevant reports

1. (Recommendation 1) We readily agree that there should be no blueprint for governance of RCIs simply because of their status and that appropriate arrangements should be tailor-made in each case. (Paragraph 10)

Importance of RCIs to Government

2. (Recommendation 2) We conclude that the UK RCI sector makes a highly valued and unique contribution to national scientific capacity. (Paragraph 24)

RESPONSE FROM THE GOVERNMENT

The Government welcomes the Committee's comments and is pleased that the Committee acknowledges and recognises the valuable contribution that the UK RCI sector has made, and will continue to make, to national scientific capacity. The recent reviews of governance have reinforced the view that each RCI should have governance arrangements that are appropriate to its specific circumstances, but follow best practice.

The OSI role is to allocate funding to Research Councils so as to support the whole range of their activities as set out in the agreed Delivery Plan for each Council. Individual Councils then allocate funding to their Institutes, amongst other activities, in the light of their overall priorities. The Management Statement agreed between each Council and the Department of Trade and Industry makes the Chief Executive of each Council accountable and responsible for the oversight of any Institutes controlled by the Council. This includes a responsibility to ensure the proper maintenance of the infrastructure of such Institutes. The science that is undertaken at particular Institutes may sometimes necessitate different governance arrangements.

INPUT FROM RCUK

The Research Councils endorse recommendation 1 and point out that BBSRC is reflecting this approach in implementing the options identified by the Follett review.

The Research Councils welcome the Committee's recognition of the contribution made by the UK RCI sector, and of the appropriateness of supporting a variety of different institutes which have valuable and distinctive roles, and which emphasise excellence, strategic relevance and economic impact.

Comparison with universities

3. (Recommendation 3) We have received no evidence to support the view expressed by Lord Sainsbury in January 2006 that basic research should increasingly be done in universities, rather than separate research institutes. We believe that links between RCIs and universities at all levels should be actively encouraged but that each case should be judged on its merits and the form of each institute should follow the needs of the science. (Paragraph 32)

RESPONSE FROM THE GOVERNMENT

The Government's policy is that science requirements should ultimately determine the organisational model in any particular area, and that links between RCIs and HEIs should be actively encouraged. It welcomes the Committee's endorsement of such links.

It is the case that spending on research in HEIs has increased over time in relation to that in RCIs in the UK as a whole, but the ratio of HEI to RCI spending by Research Councils with RCIs has not changed markedly in recent years. The Government would expect the Research Councils to keep under regular review how to achieve their objectives in a manner which maximises their overall impact and value for money, in terms of balance between HEI and RCI provision. It considers that there is, and for the foreseeable future will remain, a need for specialist and long term research capability in dedicated centres in some research areas.

INPUT FROM RCUK

The Research Councils wish to encourage close working relations between their RCIs and universities wherever this will deliver added value to the UK research base. To an extent, the distinction between universities and institutes is becoming less marked, as some universities increasingly focus on particular areas of activity.

BBSRC operates a number of different models for HEI/RCI interaction. For example, the facilities at the Institute for Animal Health are not readily replicated in the university sector, but the Institute has extensive collaborations with research groups in universities.  In other research areas, BBSRC adopts a different approach: the Roslin Institute-Neuropathogenesis Unit will become embedded in the University of Edinburgh in 2008, but will maintain a distinct focus of research; similarly the Institute of Grassland and Environmental Research (IGER) will become embedded in the University of Wales Aberystwyth and maintain a focus on land-based research. In both of these developments BBSRC is actively encouraging links which will continue to deliver world class science.

The MRC Council has recently amalgamated its Radiation and Genome Stability Unit, Harwell, (together with the Gray Cancer Institute, London), with the University of Oxford to form a new centre for research in radiation biology and oncology. This centre will address research challenges including delivering radiation in more sophisticated and precise ways, using new imaging techniques to restrict radiotherapy to tumours, and finding new ways to make tumours more sensitive to radiation. In addition, the MRC's Human Genetics Unit (Edinburgh) has recently become part of a wider MRC/University of Edinburgh Institute of Genetics and Molecular Medicine.

Research Council Funding

4. (Recommendation 4) We believe that the best science should be supported by the Research Councils regardless of whether applications originate from universities or institutes, and that RCIs should not be barred from applying for responsive mode grants. (Paragraph 37)

5. (Recommendation 5) We recommend that RCUK review its policy on eligibility of scientists in RCIs to apply to any of the eight Research Councils. To encourage interdisciplinary research, we recommend that there should not be a limit or bar to RCIs being able to apply to any of the Councils for funding. (Paragraph 38)

6. (Recommendation 6) We are concerned by the experience of the Tyndall Centre in securing an extension to its funding and we expect the Research Councils to seek mechanisms to ensure that similar issues involving interdisciplinary research might be handled more effectively in the future. (Paragraph 39)

INPUT FROM RCUK

All Research Councils are committed to supporting the highest quality single discipline and interdisciplinary research.

BBSRC, MRC, NERC and STFC, the four Councils with their own Institutes, all enable researchers at their institutes to apply to their managed programmes. BBSRC, NERC and STFC also allow researchers at their institutes to apply for responsive mode funding. This provides flexibility for RCIs, helps benchmark research standards and facilitates multidisciplinary working.

BBSRC, NERC and MRC also provide reciprocal access to managed mode and responsive mode funding for researchers in the institutes of at least one of the other two Councils. BBSRC and NERC have agreed that there should be no cap on the amount of funding for which researchers in each other's RCIs can apply. BBSRC and MRC have also agreed to remove all restrictions on applications from staff from each other's institutes. The Research Councils are currently considering extending this approach.

Councils' decisions on whether to renew support for research centres such as the Tyndall Centre are based on the quality and match to priorities of the research being proposed. This is true for all Councils. The experience of the Tyndall Centre does not reflect a lack of commitment by the Research Councils to support interdisciplinary research. Councils recognise the challenges of supporting multidisciplinary research effectively and recognise that developing and nurturing truly multidisciplinary research, involving natural science, engineering and social science, is especially challenging because of the breadth of these communities. Research Councils continue to seek improved ways to do this.

Over the years, Councils have stimulated a significant increase in interdisciplinary research and training through joint programmes and activities in areas such as stem cells, e-science, aging and energy, e.g. in 2005 BBSRC and MRC agreed to renew joint funding to the Stem Cell Bank. Most recently, in 2006, the Research Councils introduced a revised protocol for assessing and funding responsive mode grant applications that cut across the remits of more than one Council. The revised protocol provides clearer guidance to applicants and establishes new co-funding arrangements between Councils eliminating double jeopardy. In evaluating proposals, Research Councils do their utmost to ensure that suitable assessors are involved from each of the relevant disciplines and that proposals are subject to a single review process.

Government funding for RCIs

7. (Recommendation 7) We recommend that the OSI examine mechanisms for identifying and providing guaranteed funding for nationally important datasets and long-term monitoring activities in order that this vital information will continue to be available to inform future research and policy. This would be particularly important in the case of closure of institutes where responsibility for such work may have to be transferred to a new body but it may also help to maintain the sustainability of existing RCIs by giving security of funding for part of their operations. (Paragraph 45)

8. (Recommendation 8) We recommend that the Government examine the proposal that departmental research budgets, once set, should be ring-fenced for the spending period. (Paragraph 45)

RESPONSE FROM THE GOVERNMENT

OSI operates a robust mechanism in the Performance Management System for the Research Councils, which supports the allocation of the Science budget to deliver priorities set out in each Council's Delivery Plan. Each Research Council undertakes regular review of the science relating to national capacity and of the performance of their Institutes.

Research Councils will, amongst other things, need to identify their plans for national datasets in their Delivery Plans. At a high strategic level these priorities will be discussed and agreed during the allocations process to ensure that all research of national importance is given the correct priority in future planning and strategy. Research Councils have to make a wide range of decisions about how best to invest their funds. Decisions about datasets and monitoring capabilities are no different in this respect and the Government does not regard these as needing a special scrutiny between Spending Reviews.

INPUT FROM RCUK

The Research Councils recognise the importance of long-term datasets, biological samples and monitoring activities, including those held and maintained in RCIs. Where responsibility for such material resides with more than one Government Department a more joined-up approach to their management would be helpful.

RESPONSE FROM THE GOVERNMENT

Departments' R&D budgets will be considered in the context of the Comprehensive Spending Review

Conclusions on funding

9. (Recommendation 9) We consider that the balance between core funding and responsive mode funding available to RCIs works well at present and that there is no evidence that inappropriate levels of support are given to RCIs in preference to universities. We are also strongly of the view that core funding is the best way to ensure that an institute remains viable and capable of delivering its mission. We are concerned that the financial difficulties which have been experienced for some time by certain BBSRC and NERC institutes indicate that not all stakeholders are prepared to acknowledge the part they have to play in ensuring the sustainability of this part of the research base. (Paragraph 48)

INPUT FROM RCUK

The Research Councils agree that the balance between core funding and responsive mode funding currently works well, and that the relative levels of support given to RCIs and universities are appropriate.

BBSRC regards core funding as an effective way of ensuring the viability of an RCI and that Institutes need to have consistent, long-term funding to enable them to plan effectively to deliver their science in a sustainable way. This is one of the underlying principles underpinning RIPSS. BBSRC's approach has been to agree four to five year funding streams of Core Strategic Grant following on from the four yearly Institute Assessment Exercise and agreement by BBSRC Council. For the future BBSRC is considering developing Strategic Programme Grants for Institute science, of four to five years duration and with a clear focus on specific areas of research. This will contribute to the sustainability of BBSRC's Institute research base and enable Institutes to focus their research effort.

NERC's new approach to funding streams will distinguish much better than before between "National Capability" and "Research Programme" funding to its RCIs. Arrangements for the National Capability funding will help to provide longer-term stability for activities such as environmental monitoring, and in general.

NERC agrees that all relevant stakeholders should fully acknowledge the contribution they should make to ensuring the sustainability of the RCIs on which they call for evidence or advice.

RCI management

10. (Recommendation 10) It is a major advantage of individual institutes that they take responsibility for strategy in unfashionable high risk areas of science but they cannot be expected continually to reallocate ever diminishing resources to maintain capacity without recognition of the vital role they are playing in doing so (Paragraph 54)

INPUT FROM RCUK

The Research Councils agree that the RCIs provide a way of delivering high risk areas of science that researchers may otherwise find unfashionable. Research Council Institutes make significant contributions to strategic national capacity in a number of areas of research, such as animal health and welfare and sustainable agriculture and land use. Often this involves maintaining expensive facilities; BBSRC's approach is to ensure as far as possible that sufficient, predictable funding is in place so that this capacity is maintained for facilities which remain strategic priorities.

However, the need to maintain capacity in these areas of science must be considered against the need to support new scientific opportunities. An effective RCI should have the capacity both to maintain and to shift resources as required irrespective of their on-going research programmes; a recent example was the ability of IAH Pirbright to move large numbers of staff to work on Foot and Mouth Disease. Staff at NERC's British Geological Survey were similarly called upon to provide advice during the FMD crisis. However, there are clear resource implications in this, and it must be the responsibility of all major funders to ensure that the skills they need to draw upon are maintained, even if the expertise is not used in current science.

The MRC Toxicology Unit is in Leicester, not Nottingham (paragraph 56).

Research Councils and strategy

11. (Recommendation 11) Given the range of different institutes encompassed under the umbrella title of "RCI", we agree that general moves towards harmonisation of practice would be impractical and non-beneficial. (Paragraph 61)

12. (Recommendation 12) We recommend that the Research Councils review their mechanisms for developing and encouraging best practice in relation to RCIs, both on the part of the Councils and also between the institutes themselves. (Paragraph 63)

13. (Recommendation 13) We recognise that reviews are a necessary part of ensuring that public funds on research are spent in a cost-effective and transparent way. In organising reviews, however, the Research Councils should have regard to adopting processes which maximise efficiency and minimise the cost to RCIs, both in terms of financial cost and staff time. (Paragraph 67)

Role of RCUK

14. (Recommendation 14) We believe that RCUK could play a greater role in the harmonisation of best practice of the work of the Research Councils in relation to their RCIs through establishing similar mechanisms to those used for knowledge transfer in the wider Research Council context, and we recommend that these possibilities be explored. (Paragraph 70)

INPUT FROM RCUK

The Research Councils welcome the recognition by the Committee of the need for different RCI delivery models, and agree that entirely harmonised approaches to managing and funding RCIs would be inappropriate. Establishing time-limited collaborative centres, for example, is one means by which Councils can direct a rapid increase in activity in under-developed areas of science according to national and strategic need.

The Councils are committed to exploring further the opportunities for encouraging the sharing of best practice between Councils. For example, the directors of NERC's marine research centres have demonstrated in developing the Oceans 2025 programme proposals that there is considerable scope for RCIs to coordinate their activities.

RCUK promotes the sharing of best practice between Councils and will continue to pursue opportunities in this area by building upon the existing exchange of information and expertise via a number of RCUK groups including the RCUK Operational Management Group, the Human Resources Management Group, the Equality and Diversity Advisory Group, and Performance Evaluation Group.

Research Councils consider that the differences between their governance models and the research communities of which Institutes are a part means that individual Councils are best placed to review the performance and effectiveness of individual RCIs.

BBSRC's policy is to maximise efficiency and to minimise the burden on institutes, when reviewing them. All reviews are instigated for clearly articulated reasons and the procedures used are discussed with the institutes and regularly refined in the light of experience.

MRC is revising its procedures for undertaking Institute/Unit reviews, in particular to ensure that the Unit's work is fully aligned with the MRC's overall strategy, both broadly and within the field in question; and also to ensure that all aspects of the Unit's work (including knowledge transfer and public engagement) are assessed effectively and efficiently.

NERC is in the process of changing its RCI review procedures. One aim is to reduce the amount of staff time involved, partly by focusing most effort on areas most in need of review (outcomes of the "Research Programme" funding element) and considering National Capability separately in a more appropriate way.

Government influence

15. (Recommendation 15) Government departments must undertake to give as full and as early notice as possible to RCIs of their likely research requirements over a three to five year period in order that the institutes may be able to fulfil the nationally-strategic role expected of them. (Paragraph 73)

Co-ordination

16. (Recommendation 16) We recommend that the OSI take the lead in examining the benefits of establishing similar bodies to the Environment Research Funders Forum in other areas to ensure that Research Councils and Government departments and others work together in devising strategies for the work to be undertaken by RCIs and the public sector research base. (Paragraph 76)

17. (Recommendation 17) We recommend that the OSI be given formal responsibility for developing a mechanism for better two-way dialogue between the Government departments and the RCI sector and their parent Councils in order to improve co-ordination of the strategic direction of RCIs and to protect national scientific capabilities in strategically important areas. (Paragraph 77)

The RIPSS agenda

18. (Recommendation 33) 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. (Paragraph 149)

RESPONSE FROM THE GOVERNMENT

The Government agrees that Departments should undertake to give as full and as early notice as possible to RCIs of their likely research requirements over a three to five year period. This is entirely consistent with the implementation of RIPSS. It is for departments, providing more than 15% funding to an RCI, to provide adequate provision for the long term delivery of scientific excellence by the Institutes they support. Each government department has a responsibility to put strategic plans in place and to communicate to RCIs the research requirements and this will be addressed as part of their planning processes within each Spending Review

There are already a number of specific Funders Fora that address relevant issues including Research Base Funders Forum, Research Establishment Sustainability UK, Environment Research Funders Forum, the UK Collaborative for Development Science and other groups on specialist research areas. A list is at Annex 1. This list, and the fact that Funders Fora in specific areas are led by those who have primary responsibility for those areas, suggest that it is for the relevant funders themselves, rather than OSI, to take the initiative in identifying where such fora are appropriate and how they are implemented. OSI would and already does facilitate dialogue between Research Councils and Government Departments. This includes OSI being proactive in encouraging Departments to fulfil their responsibilities under RIPSS, although it is necessary to recognise that ultimately Departments retain the responsibility to reach their own decisions, within the normal collaborative processes of Government.

Defra's view

19. (Recommendation 18) We believe that Defra's attitude in relating RCI funding to short-term contracts in universities shows a fundamental lack of comprehension of the role of RCIs as represented by the OSI and the rest of the science community. As we have repeatedly observed, it is the stable long-term funding which allows RCIs to achieve their potential and keep focussed on their missions. It is deeply disturbing that such a key player as Defra fails to perceive this and believes that the RCIs should be identical to universities in terms of their long-term planning. (Paragraph 92)

The way forward

20. (Recommendation 19) We recommend that Defra catalogue all the science programmes and infrastructure made available to it by RCIs, both on a regular basis and in emergencies, and clarify how this capacity need could be met from elsewhere in each case. (Paragraph 95)

21. (Recommendation 20) We recommend that Defra review its processes for giving adequate notice to RCIs of changes in policy requirements and thus in research contracts. We recommend that this be done as part of a three to five year strategy to allow institutes and the BBSRC to plan their response and to ensure that the RCIs are able to supply the science that Defra needs. (Paragraph 95)

INPUT FROM DEFRA

Given the nature of Defra's remit in tackling long term science-related challenges and in responding to emergencies, it recognises the need both to invest in appropriate strategic research, infrastructure, skills and capacity as well as in ensuring the delivery of evidence in the shorter-term to support the development, implementation and maintenance of current policy priorities. This is outlined in Our Approach to Evidence and Innovation: http://www.defra.gov.uk/science/how/documents/EvidenceAndInnovation.pdf

Defra has already developed a risk-based approach to the allocation of research funds across its activities (an approach praised in the recent OSI Review of Defra Science). It intends to strengthen the methodology around how it strategically manages its investment in critical capacities and capabilities as a core component of its future strategy for evidence. This work programme will assess the capabilities of such capacities and consider the extent to which they could be met from elsewhere. Defra will also take a further look at the issue of managing changes of direction in the least disruptive ways possible. In relation to recommendation 19, and given the nature of the RCIs, certain capabilities within them will be assessed through the exercise recommended.

Defra fully recognises the need for engagement between it and BBSRC to ensure each is aware of the other's needs and capabilities. A balance must be struck between ensuring that research is performed which supports Defra's evolving policy needs, and that the RCIs have a suitable level of certainty. To this end Defra is already engaged in frequent dialogue with the RCIs regarding its policy requirements at working and corporate levels.

Moreover, to explore possible improvements in this area a joint Defra-BBSRC planning forum will take place in summer 2007, the first of what will become an annual event. The main aim of this event is for the two organisations to develop a greater understanding of each other's needs in terms of policy-related research and issues of capacity and sustainability. In particular, both BBSRC and Defra will explore practical options for improving communication of changes in policy requirements and their effect on future research contracts.

INPUT FROM RCUK

The Research Councils fully support these recommendations from the Committee. A major difference between RCIs and University departments is the availability of non-research income streams (e.g. teaching) to maintain skills in the absence of research funding. 

BBSRC Institutes have indicated to Defra that it is important to maintain the skills base and it is of less importance whether a particular research project is maintained if the staff can be moved to other contracts of more immediate interest to the funder.  Such change management requires consultation and planning between Defra and the RCI.  Redundancies resulting from short-term funding decisions may permanently remove specific skills from the research base. A specific current example is the loss of expertise in bee research from Rothamsted Research.

Defra science funding is heavily weighted towards informing policy development rather than the delivery of established policy goals: a more balanced approach, supporting both aspects, would provide a longer-term perspective and put Defra support for institutes on a more sustainable basis.

22. (Recommendation 21) We recommend that Defra make it an absolute priority to reach agreement with BBSRC on the implementation of RIPSS and to report back to the Committee by the time of the Government's response to this Report on the steps they have taken to secure agreement. (Paragraph 96)

23. (Recommendation 22) There clearly is value in having direct interaction between a government department and the RCI sector and we look to Defra to put its relationship with the RCIs on a proper footing in order that the full benefit of this linkage may be realised. (Paragraph 97)

INPUT FROM DEFRA

Defra fully acknowledges that it has a responsibility to support the sustainability of the research base in areas of relevance to its current and future activities, as defined by RIPSS, and fully appreciates the contribution of the RCIs to meeting its needs.

Close and frequent dialogue between Defra, the BBSRC and its RCIs is vital to ensure that both the sustainability needs of the research base, and the evidence needs of policy-makers, are fully and properly met. Such frequent engagement already occurs at a range of levels between these organisations, and since this inquiry released its report, a further and productive high-level meeting has been held. Defra is committed to further dialogue with the BBSRC and its RCIs, to try to reach agreement on the ways of best protecting research capability whilst also retaining the flexibility for Defra to respond to changing policy needs; meeting public policy imperatives and dealing with emergencies. This new level of engagement involves the establishment of a joint annual planning forum which will enable the two organisations to develop a greater understanding of each other's needs and discuss practical ways forward for ensuring these are met. The first of these forums will be held in July.

While we are investing greater effort into improving our strategic relationship with the BBSRC we have excellent relationships with both NERC and ESRC who are satisfied with Defra's approach to strategic dialogue and planning.

INPUT FROM RCUK

BBSRC fully supports the recommendations. A fully compliant response from Defra is vitally important to ensure the sustainability of research associated with the UK landscape, land-use, environmental impacts, climate change and animal health and welfare. BBSRC welcomes the agreement that, from December 2006, the Defra Deputy CSA and staff will meet with the Directors of IGER, RR, IAH and BBSRC Office Science and Technology Group on a six monthly basis. BBSRC and its RCIs are awaiting the outcomes of the further productive and high level meeting mentioned above, in the hope this will be a stepping stone towards Defra contracting with the Institutes on a stable medium term basis.

BBSRC and the Roslin Institute

24. (Recommendation 23) We recommend that the Research Councils develop methodologies to track the immediate career paths of scientific staff employed at RCIs which are restructured and then use this data to inform future decision-making processes on restructuring. (Paragraph 102)

INPUT FROM RCUK

The Research Councils recognise the value of obtaining destination data regarding all staff leaving their RCIs. NERC and MRC already have systems in place (involving exit questionnaires). As the Committee recognises, such measures can only be voluntary and the approaches used need to ensure that it is practical for former staff to provide the information.

NERC and the Centre for Ecology and Hydrology

25. (Recommendation 24) We recommend that all Research Councils adopt a best practice approach to consultation on restructuring which is as open as possible with those affected within the institutes. (Paragraph 109)

26. (Recommendation 25) We are strongly of the view that when restructuring of an institute is mooted by a Research Council, steps should be taken to identify key science programmes which must be preserved. It should be a priority aim in developing business plans that all such science highlighted in this way is helped to find a placement within the UK science base in order that national capacity is not lost as a casualty of the restructuring of an RCI. We recommend that the Research Councils organise their future strategic plans on this basis and also invite views on such nationally important capabilities when undertaking consultations on the restructuring of particular institutes. In the case of CEH, we recommend that NERC prepare and publish an analysis of key skills and capabilities at CEH prior to the reorganisation, together with an indication of how these will be affected by the changes and, where applicable, how they will be replaced elsewhere within the UK. (Paragraph 112)

27. (Recommendation 26) We urge NERC to provide us with regular updates on progress with CEH restructuring in order to inform our future deliberations on this subject. (Paragraph 115)

INPUT FROM NERC

Detailed analysis of science delivery is uppermost in NERC's mind in circumstances of restructuring RCIs. Identification of areas of high scientific priority is under close scrutiny by NERC on a continual basis as research is commissioned across its centres and programmes.

As part of the consultation on CEH restructuring, NERC published the CEH Business Plan 2005/06-2009/10 on its website. This explained the rationale for the proposals and outlined the science areas that would be retained. In July 2006, CEH published its Implementation Plan, which described how it would implement the Business Plan agreed by NERC Council in March 2006 following consideration of the consultation responses. The Implementation Plan set out a vision overview and science plan, and the supporting infrastructure and management structure together with details of the Transition and Integration programme, budgets, and risk management.

NERC acknowledges the potential for restructuring to result in unintended losses of national science capability, if key skills were to be lost. However this is also under close and constant scrutiny to avoid as much as possible such unintended consequences. For staff who are unable to move or stay with CEH NERC is providing support to find other appropriate roles. Monitoring of this is being carried out to examine any key skills that might be lost to the UK as a whole, as a consequence of the restructuring. CEH has carried out a detailed analysis of key skills and capabilities needed for delivery by CEH of its key science and have matched staff to these. Where CEH requires additional skills it is recruiting actively to fill any gaps.

NERC will provide the Committee with regular updates on progress in CEH restructuring.

MRC and the National Institute for Medical Research

28. (Recommendation 27) Having built up expertise and the scientific base at NIMR, it is important that this is used to the nation's benefit and simple closure of Mill Hill would be unacceptable. (Paragraph 133)

29. (Recommendation 28) We should like to see the MRC use the information amassed during the process so far to develop a new plan for fostering a revitalised NIMR and increasing its translational research with stronger links with UCL, using the sites at both Mill Hill and the former NTH or another site which could command the approval of all interested parties. We are concerned that the NTH site on its own is inadequate because of its size, and we believe that the MRC should seek a site of sufficient capacity to meet the existing needs of the NIMR and allow for future expansion, in order to enable the development of a world class medical research institute and include MRC technology transfer activities on one site with enhanced access to the university. (Paragraph 136)

30. (Recommendation 29) We recommend that the MRC conduct an urgent review of its project management needs and employ expertise to fill the gaps as soon as possible. (Paragraph 137)

31. (Recommendation 30) We recommend that MRC adopt a new more open strategy to regular consultation and communication with staff at Mill Hill. We also recommend that the MRC reconvene the task force, which included staff representatives, to advise them on the way to proceed and to provide a forum for scientific and other interests to be expressed. This approach is essential if alternative arrangements involving either joint use of the NTH site and Mill Hill or the identification of a new site in London become the preferred option. (Paragraph 137)

INPUT FROM MRC

The MRC has no plans to close NIMR. Its vision for the Institute includes changing its 'business' from being a stand-alone institute carrying out mainly basic research to an institute operating in an integrated partnership with UCL carrying out both basic and translational research. The translation of research knowledge into improved health will be greatly expanded and will be via both commercial and clinical avenues. This will depend on links with the excellent physical and biological science base at UCL, technology transfer expertise and access to clinical researchers and facilities.

The MRC has been having further discussions with UCL and aims to develop further the links with UCL and other partners, taking a flexible approach to the use of space. The MRC has also developed further the business case for the renewal of NIMR in central London.

MRC Council has been considering options other than the National Temperance Hospital site for taking forward the wider vision for enhancing collaboration with industry. A 3.5 acre site adjacent to the British Library (BL), owned by the Department of Culture, Media and Sport, is expected to come on to the market shortly. This site had previously been considered as a potential location for the NIMR prior to the purchase of the NTH, but had been unavailable at that time. At its meeting in March, Council expressed enthusiasm for the opportunities this presented. The availability of a site of this scale would provide opportunities to enhance significantly the vision for a renewed Institute and its integration within a multi-disciplinary university environment, primarily in providing additional capacity to extend interactions with industry and other key stakeholders and to enhance collaboration with other research funders. More work is now being done to determine the feasibility of supporting an enhanced vision, in partnership with other bodies. This exercise is being undertaken in parallel with the continued development of the business case for the NTH site. MRC Head Office is working closely with Sir Keith Peters and other NIMR staff to sustain the momentum of research at NIMR.

MRC Council has already decided that long-term continuation of NIMR on the Mill Hill site is not an option, as it would not fulfil Council's vision for the future of the Institute.

The MRC has professional project managers among its own staff. However, it is normal procedure on large projects for the MRC to bolster its own project management resources with external, professional expertise. On the NIMR project MRC has employed external management consultants and project managers through every phase. The NIMR Renewal Project was subject to a full Gateway review at the end of last year. The Gateway review team was "impressed by the engagement of the SRO and the professionalism of the project management. The review team found that plans for the next stage of the building project were well advanced and this is an example of good practice". MRC proposes to continue to use external, professional project managers, as appropriate, on this and future large-scale projects, and will continue to follow the OGC recommended processes for identifying them.

MRC accepts that it needs, nonetheless, to undertake a review of its project management capability, and will implement Recommendation 29.

The MRC recognises the importance of effective internal communication, both between Head Office and Institutes/Units, and within Institutes/Units. It accepts that in the case of NIMR, communication of both types could have been better. The MRC believes it would not be timely to re-convene the Task Force. It was disbanded in July 2004, and the project has moved on considerably since then. Through the Steering Group and the involvement of the Sir Keith Peters as the interim Director, the MRC believes it has effective means of communication between the staff of NIMR and Head Office.

General lessons

32. (Recommendation 31) We recommend that the OSI satisfy itself that individual Research Councils have the capacity to manage significant restructuring projects where these occur and that the OSI ensure that assistance is available to the Councils for project management where deemed necessary. (Paragraph 139)

RESPONSE FROM THE GOVERNMENT

The restructuring of RCIs is the responsibility of the relevant Research Council, and individual Councils are best placed to ensure that the capacity for managing restructuring is in place. The Research Councils have expertise in project management and recognise the importance of sharing best practice, particularly in relation to large and complex projects such as restructuring. For example, the Science and Technology Facilities Council has specific expertise in managing large infrastructure projects and other Councils will draw upon its advice as appropriate when undertaking restructuring projects. It will be more effective to make use of best practice in this way rather than through the specific intervention of OSI in each particular case.

Research Councils and RCI

33. (Recommendation 32) 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. (Paragraph 147)

RESPONSE FROM THE GOVERNMENT

Each Research Council which funds Institutes has important and challenging responsibilities for striking the correct balance between funding research at HEIs and RCIs to maximise the benefits from research outputs in the long term. There will be cases where it is right for RCs to make changes, and OSI looks to Councils to discharge that responsibility. It is the responsibility of each Research Council to monitor the sustainability of its Institutes, and to consider how any restructuring might be funded. If Research Councils have plans for major restructuring of their Institutes, these may be subject to discussion with OSI on the priority for making funding available for restructuring as part of the relevant Research Council Delivery Plan. OSI would consider any request for funding in the context of its consideration of Research Council Delivery Plans as a whole. OSI has asked all Councils with RCIs to keep it fully informed of any significant Institute restructuring projects they plan to undertake.

34. (Recommendation 34) 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. (Paragraph 150)

Input from Defra

Defra is, and has been for some time, committed to paying 100% FEC. This is reflected in guidance set out in Defra's Science Handbook, an internal document to which all Defra staff have access, and to which all Defra staff who commission research adhere. This is updated regularly, and amendments are made clear to all those who commission research.

Defra has always paid the rate that the RCIs state in their proposals, but our ability to pay FEC is dependent upon the RCIs (or any other research provider) quoting the correct amount required. Government policy on FEC shifted in 2005, and we are confident that after this date, all RCIs have been quoting FEC (100%) for all new projects commissioned. Any projects already underway before the new policy was introduced continue at the rate originally specified by the RCI.

This change has meant that the RCIs are now specifying significantly higher FEC rates. In the case of IAH, the Institute defined new FEC rates which were 50% larger than the previous rates they had specified to us. Defra has paid this higher rate for all new projects commissioned. As Defra does not have an increased budget to meet the increased costs, this has inevitably meant that it is purchasing a reduced amount of research work.

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

35. (Recommendation 35) 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. (Paragraph 154)

RESPONSE FROM THE GOVERNMENT

The Government supports the UK science base through funding national capability by the Science Budget and through departmental R&D budgets. The mechanisms applying to the Science Budget and Departmental R&D budgets differ

The Director General of Science and Innovation within OSI advises Ministers on the allocation the Science Budget to Research Councils against agreed priorities. OSI has requested that all RCs should identify national capability in Delivery Plans for CSR.

Sir David King is the Chief Scientific Adviser to the UK Government as well as the Head of the Office of Science and Innovation. He is responsible to the Prime Minister and Cabinet for the quality of scientific advice within Government and for advising on Government Science and Technology (S&T) policy. He is also responsible for the Government's guidelines and policy making on S&T and for their implementation. His office has responsibility for oversight of and discussions with other government departments to ensure continuity and coverage of priority areas, including national capability that is not provided in RCIs.

INPUT FROM RCUK

Monitoring the state of national research facilities and skills is clearly essential. There is a need to build a greater awareness of the national strategically important scientific expertise within RCIs and to ensure that this is not inadvertently eroded because of a lack of coherence between funders. Current examples include expertise with tropical crops, crop and livestock disease epidemiology (in the context of climate change) and the management of resistance to agrochemicals and therapeutics in target organisms.

BBSRC-sponsored institutes can also suffer from fragmentation within Government when different policy components are spread across Departments: the underlying science needs a coherent approach with a long-term strategy. For example, Defra is concerned with inorganic fertilisers in the land use setting, but not in fertiliser manufacture, even though life cycle analysis indicates that the latter is a major source of energy costs, greenhouse gas emission and environmental impact from agriculture. Such fragmentation obscures the overall priority assessment, and hinders the marshalling of pooled funding, and a joined up strategy for research into nutrient use efficiency and biological nitrogen fixation to minimise the use of inorganic fertilisers.

June 2007

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