New arrangements for STFC
4 Mar 2010
Lord Drayson launched a review of the structure of STFC on 16th December 2009 as he welcomed the results of the STFC prioritisation. He said at the time “It has become clear to me that there are real tensions in having international science projects, large scientific facilities and UK grant-giving roles within a single Research Council.”
Since then, Lord Drayson has worked with Professor Michael Sterling, STFC Council Chairman, to draw up new arrangements for STFC. These are designed to ensure that STFC has greater stability in planning long term for the development and use of UK and international large facilities, and to eliminate, as far as practicable, financial shocks within spending review periods.
Lord Drayson and Professor Sterling have gathered views from a broad base, both to confirm the nature of the problem and to explore possible solutions. Lord Drayson met with the Institute of Physics, the Royal Astronomical Society, and the Royal Society. In addition, Professor Sterling met the Heads of Physics Departments and has taken soundings from key stakeholders that have a significant interest in the outcome, including the Wellcome Trust. Finally, there has also been a considerable number of submissions from influential individuals and groups from within the research community.
A notable consensus emerged on the structural issues requiring resolution and on the basic principles for the required solutions. In particular, there was broad agreement that reducing the pressures from the international subscriptions and UK-based facility operations would substantially remove the risk that unexpected pressures would lead to disproportionate pressure on the STFC’s grants portfolio.
This review of STFC has taken place against a difficult economic background, and in anticipation of a tough spending review. Consequently, it is important that STFC adheres to its new balanced budget going forward, and to have realistic expectations for its settlement in the next spending review.
Lord Drayson’s measures address the two most significant short term pressures on STFC: sharp and sudden variations in exchange rates arising from international subscriptions, and the funding of demand-led large domestic facilities. In making his announcements, Lord Drayson drew attention to the considerable support provided by BIS to STFC in recognition of adverse exchange rate movements this year and last, some £40 million in total.
International subscriptions
For the remainder of this spending review, 2010/11, the Department expects to continue to provide STFC with a level of protection similar to that which has been provided this year and last in respect of the additional costs of international subscriptions due to exchange rate changes.
From the next spending review onwards (beginning financial year 2011/12) BIS is looking at options for managing the currency risks better. BIS is working closely with the Bank of England on how to reduce the exposure of the STFC.
A new arrangement will provide STFC with longer-term protection from the risk of exchange rate fluctuations in its share of subscriptions for the largest international facilities (ESA, CERN, ESO, ILL and ESRF). This will allow STFC to plan ahead confidently, without the fear that sudden movements in the value of sterling could adversely impact its priorities in other areas of research.
Domestic large facilities
From April 2011 a new arrangement will see RCUK working with STFC to agree the availability and support requirements for large domestic facilities, Diamond, the Central Laser Facility and ISIS, at the beginning of each spending review period, with indicative planning covering the subsequent spending period, a total of some six years. The funding for the delivery of these agreed requirements will be allocated separately to STFC by BIS starting from the beginning of the next spending round, 1st April 2011, and will be managed independently from the remainder of its budget allocation. This will further increase STFC’s planning ability and will separate the funding of these facilities from STFC’s grant-giving function.
This approach will also strengthen the engagement of the wider science community in the forward planning for these large domestic facilities better to align facilities’ capabilities with scientific needs.
Summarising his announcement, Lord Drayson said:
“The better management of international subscriptions to organisations such as CERN through measures to manage exchange rates, and longer-term planning and budgeting for large domestic facilities such as Diamond, will allow STFC’s grant-giving functions to be managed with a higher degree of predictability over spending review periods. The community has come out strongly in support of grants remaining with STFC, so that they can deliver investment continuity from facility design through to exploitation, and I accept this argument.”
