UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 1 364-i

House of COMMONS

Oral EVIDENCE

TAKEN BEFORE the

Science and Technology Committee

THE COMMISSIONING OF X-RAY PHOTOELECTRON

SPECTROSCOPY SERVICES

Monday 11 July 2011

professor david delpy, professor colin whitehouse

and dr graham bushnell-wye

Evidence heard in Public Questions 1 - 90

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Oral Evidence

Taken before the Science and Technology Committee

on Monday 11 July 2011

Members present:

Andrew Miller (Chair)

Gavin Barwell

Stephen McPartland

Stephen Metcalfe

Stephen Mosley

Graham Stringer

________________

Examination of Witnesses

Witnesses: Professor David Delpy, Chief Executive, Engineering and Physical Sciences Research Council (EPSRC), Professor Colin Whitehouse, Head of Science and Technology Facilities Council (STFC) Daresbury Laboratory, and Dr Graham Bushnell-Wye, Prospect, gave evidence.

Q1 Chair: Good afternoon, gentlemen. Obviously, one of the key tasks of a Select Committee is to monitor the work and expenditure of non-departmental public bodies. In this case we received representations about the commissioning of x-ray photoelectron spectroscopy services by EPSRC. Often, we follow up such matters in writing. In this case, following an exchange of correspondence, which is published on our website, we thought the best course was to get to the bottom of the issue with an oral session. We are going to try to cover how the EPSRC commission the XPS service and how the EPSRC and STFC are dealing with the consequences of Daresbury losing the contract. First, I thank you for coming in and invite the three of you to identify yourselves.

Dr Bushnell-Wye: I am Graham Bushnell-Wye. I work at the Daresbury Laboratory and I am a group leader on that site.

Professor Delpy: I am David Delpy, Chief Executive of the EPSRC.

Professor Whitehouse: I am Colin Whitehouse, Deputy Chief Executive of the STFC with specific responsibility for the development of the national campuses.

Q2 Chair: Thank you very much. Professors Delpy and Whitehouse, what is the relationship between the STFC and EPSRC in terms of the funding of the Daresbury Laboratory?

Professor Delpy: Let me start with the EPSRC position, which is that we partner, together with the other research councils through RCUK, in developing major facilities, and obviously the campuses are part of that. Otherwise, we do not have a formal relationship with STFC on the development of the campuses. There are several facilities run at the campuses in which EPSRC and its researchers have significant investment, and obviously we collaborate in ensuring that those facilities are provided both in an optimal way and in a way that is most efficient to the academic base.

Professor Whitehouse: When the original concept of the two national campuses was proposed to Government in 2004, a key part of the model was to use the campuses to promote additional inter-research council added-value collaboration. I work closely and regularly with David in that regard and his RCUK impact group.

Q3 Chair: How do the two councils co-ordinate to ensure that the UK retains capability in key priority areas?

Professor Delpy: I think we need to distinguish the large facilities which are coordinated at an RCUK level and are not capable of being run by one council and provide access to a whole range of council researchers. The particular group of facilities we are talking about here is the mid-range facilities. These are ones that EPSRC provides from its own funding, but many of our researchers work not only in the EPSRC area but also in areas that are the remit of BBSRC, NERC, MRC and STFC. We work with those councils in ensuring that these facilities, which are the responsibility of EPSRC and come from its budget, are provided in a way best suited to those researchers.

Professor Whitehouse: I have nothing to add to that.

Q4 Chair: You explained that this particular facility, the National Centre for Electron Spectroscopy and Surface Analysis, NCESS, is funded by EPSRC. Why, historically, is that the case? Why is it not STFC?

Professor Delpy: This is one of a whole range of mid-range facilities for which EPSRC provides funding. Historically, we had about 15 facilities. We have been going through a whole process of renewal of those, which was why we went through the process of asking for statements of need and so on. So far we have funded 12 in the renewal phase, and currently we are looking at another five that we will fund depending on the finances available. These are resources that are really too small for consideration at cross-council level but are appropriate for an individual council to provide, but the academics who use those facilities do not come from just one particular research council, though the majority would come from the EPS community.

Professor Whitehouse: Just to reinforce Professor Delpy’s point, the large-scale facilities are prioritised only after very detailed negotiations across all research councils. In the particular case of the facilities we are discussing today, it has been agreed that EPSRC will fund those and prioritise them according to their own subject areas.

Q5 Gavin Barwell: My questions are predominantly for Professor Delpy, but if others wish to chip in by all means feel free to do so. Will you start by telling the Committee the purpose of the 2009 review of the mid-range facilities on which you have just touched?

Professor Delpy: We have been providing these kinds of facilities probably for the best part of 20-plus years. At the start of the last SR period in 2007 we identified that we would go through a process of examining all of the mid-range facilities for which we were currently providing funding. Some are facilities; some are services. There are a total of about 30 activities that we fund under this heading. They need to be refreshed. The needs of the research base and the types of research they undertake change, so it is appropriate that every five to 10 years-probably nearer 10 years-we undertake such a renewal and review. That was what we did in calling for statements of need from the academic base to try to identify the needs of the academic base in 2009, as opposed to probably the early 2000s, when the last set of mid-range facility investments was made.

Q6 Gavin Barwell: It has been put to us in some of the evidence we have received that essentially this was a cost-cutting exercise. To lay that to rest, what was the spend on these mid-range facilities in, say, the five years up to 2009, and what is the projected spend as a result of the review?

Professor Delpy: I do not have the numbers; I can make sure they are provided to you. What I can reassure you about is the fact that this was certainly not an attempt to cut costs. I think the total amount that we are investing in the revised mid-range facilities is very similar to what we had previously been investing in them, although the range of facilities is changing.

Q7 Gavin Barwell: That is very helpful. I think it would be very useful to see those figures because that will demonstrate that point clearly. There were various other criticisms made of the way the review was conducted in some of the evidence we received. I just want to put those to you and give you the chance to respond to them. People talked to us about the criteria for establishing priorities not being transparent. What were the criteria used by the review to judge which facilities were required as part of this refreshment and which ones no longer were?

Professor Delpy: This is based upon the statement of need. A request was made to our academic community to identify those kinds of facilities or services that they felt they needed to be provided on a national basis rather than, obviously, on the basis of a grant to an individual group. We asked the community to self-organise in terms of pulling together those statements of need, although in the calls we put out we identified the individuals within EPSRC who could be contacted in order to get more details of that. We agreed that we would fund meetings of academics who wished to get together to discuss the needs of their particular communities. In that way we wanted the community to self-organise to identify what it felt it needed rather than us to look at what we had historically provided, and hence base our judgment on that. We provided as much support to the groups as we possibly could, and some 31 discrete statements of need came in through that process.

Q8 Gavin Barwell: So the criteria were really just what the demand was out there. The facilities in most demand by your community were the ones that would get funded afterwards and those where there was less demand would not.

Professor Delpy: No. Those were statements of need. We then had to prioritise those and identify which ones we felt were of greater importance or need in terms of the UK academic base, UK capabilities and national priorities, and those which genuinely needed to be provided in this way as a mid-range facility, as opposed to some that could be provided either through more local university arrangements or perhaps through slightly larger standard grants, or programme grants, to individuals who would have that equipment or service and then provide part of it for the rest of the community. Therefore, there was a prioritisation through a statement of need panel made up of academic experts across a range of disciplines.

Q9 Gavin Barwell: Have you published the criteria by which that prioritisation exercise was carried out? Is it in the public domain how that assessment was made?

Professor Delpy: I am not sure quite how we would do that. We set out in the initial call for statements of need what we expected the community to provide in those bids. Each community obviously had a slightly different take on those. We very clearly spelt out what was expected in the statements of need, in the same way as we spell out the requirements of an individual grant. How the community has addressed each of those is, obviously, up to the individual communities in their bids. I would say that we set out very clearly what we expected to see in those statements of need, but there was not a standard form and requirement because they are very different services and facilities. Some are just databases used by the whole community; others are things like XPS, which is a service run for the academic base by others.

Q10 Gavin Barwell: Chairman, perhaps you would give me a little latitude because I want to get to the bottom of this. You get these different statements of need. You have given a general feel about what they should look like, but obviously they will vary a bit. But then someone has to make a judgment about whether this could be provided through individual grants to institutions, whereas that can be done only in this way.

Professor Delpy: Yes.

Q11 Gavin Barwell: The evidence we have has questioned how those decisions were made. How was the decision made of what could be done through individual grants to institutions and what things should remain in the mid-range classification?

Professor Delpy: That process was done by the statement of need panel which looked at the bits that came in and, as with all peer review, used its experience and judgment.

Q12 Gavin Barwell: So there were no formal criteria used to do that; it was just a judgment call based on their experience.

Professor Delpy: That is what peer review is, is it not?

Q13 Gavin Barwell: My final question is about the selection process and the membership of the review committee. How did you go about selecting the members of the review committee and ensure they were representative of the overall community?

Professor Delpy: Are we talking now of the PWG as opposed to the statements of need group?

Gavin Barwell: Yes.

Professor Delpy: Those were based upon our knowledge of the research base, both the researchers and the users of a range of facilities-people whose judgment we and the community are obviously prepared to accept as being a well-informed group.

Q14 Gavin Barwell: Again, was there any kind of published criteria to make that assessment, or was it just based, as it were, on your experience and knowledge of the field and who it would be sensible to choose?

Professor Delpy: That was based largely upon our judgment and experience, in the same way as we do in the selection of peer review panels. I would argue that we have an awful lot of experience in doing this.

Chair: We will now move on to look specifically at the XPS tendering process.

Q15 Stephen Mosley: When it comes to the tendering process, Prospect stated that there was "a lack of transparency regarding the composition, affiliation and potential conflicts of interest of the" Project Working Group "that arrived at the recommendation to award the contract to Newcastle university". Dr Bushnell-Wye, that is quite a strong statement and a serious allegation. What evidence do you have to back that up?

Dr Bushnell-Wye: It is normal practice for EPSRC, when reviewing grants at a later stage after they are awarded, to publish the membership of the review panels. In this instance this still has not been published some five months after the panel announced its decision and three months after the service was due to start at Newcastle university. In this respect we find it very much inadequate that we still do not know who made the judgment on the tendering process.

Professor Delpy: I can give a very clear answer to that. It is our practice always to publish the names of those involved in these selection panels. The PWG that we have at the moment are involved in assessing a variety of these mid-range facilities. Their expertise is used, obviously, to assess more than just a single one. Currently, I think there are a couple of outstanding reviews in which they are involved. The intention is that, when that is complete, we will publish the names of the panel involved, and that will be in October of this year. The panel has not yet completed its task of looking at the whole range of mid-range facilities.

Q16 Chair: Don’t you understand it is not surprising that there is some suspicion on the part of Prospect and the people involved in XPS that their particular part of the operation is just delayed for so long? What is so secretive? Why can it not be released now?

Professor Delpy: Because those members of the panel are undertaking other reviews for us at the moment on mid-range facilities. When they have finished that, we will publish their names, as we have done previously with all other panels in peer review, but until then it is our practice not to disclose the names while they are currently doing work for us.

Q17 Stephen Mosley: Have you had any previous situations like this where you have had a panel and the names have not been given for the best part of six months after the event?

Professor Delpy: I suspect the answer is yes. I do not have a specific example that I can quote to you now. What is unusual is the fact this has been challenged in this particular way. This is not an unusual occurrence for us. We fund a lot of very large facilities. We have some 6,000 grants. About 2,000 a year are continually coming off and new ones going on. We have peer review panels that handle grants which are far larger than this one, many of which require considerable discussion after the panel has made its decision in order to get the award up and running, especially if it is an inter-disciplinary one. Quite often there is a delay until the whole process is finished, and at that point everything is made public.

Q18 Stephen Mosley: One of the other complaints we have received is that the tender document was issued on 30 September last year and the deadline for submission was 12 November. There has been some criticism that, although the document allowed bids to come in from multiple providers, the very short time scale involved-just over a month-gave little scope for consortia to establish themselves, and there was insufficient time to be able to discuss instrument developments with manufacturers. How do you respond to that?

Professor Delpy: My answer is that we were going through a process of reviewing all of the mid-range facilities. There were several others that had existing contracts which ran out much earlier than the 2011 deadline for the XPS facility, so from the original call in 2009 our priority was to get those contracts which ran out earlier renewed. I would argue that the fact there would be a tendering was not a surprise. The initial announcement was in 2009. The groups pulled themselves together to create the statements of need. We said we would go through a tendering process.

In the end, the actual deadline we gave was adequate. It was specifically set so that, following the award of the contract to a particular group, we were able to finish off the final contract details and get them signed so there would no cessation of the XPS service. The timing was set so that we would be able to get the contract up and running by 1 April. The six weeks that were available were perfectly compatible with the OJ tendering process. The individuals and groups involved knew at least six to nine months before that that we would go through a tendering process. In the end, we got four very credible bids which the PWG was able to go through.

Q19 Stephen Mosley: Having said that, did the winning bid have the service operational on 1 April?

Professor Delpy: We had signed the contract and it was ready to operate from 1 April. When we were suddenly asked about the possibility of TUPE applying, Newcastle quite rightly decided that it needed to examine its potential exposure and commitments, so the delay was caused by that last-minute intervention.

Q20 Stephen Mosley: There is a bit of a contradiction here. I am sure everybody knew about TUPE before the submission was started and the bidding process went through. You have said, however, that on the one hand you moved it back because there were other ones who needed to come in earlier and there was plenty of time. On the other hand, you are saying that when it got to it you did not open on time.

Professor Delpy: No, and that was because we were very clear right from the outset-we still are-that in this situation TUPE did not apply. What we had with the existing service was a grant, as was the time before that. The terms and conditions of grants are clearly stated. The universities and other organisations that accept these are very clear in accepting those grant terms and conditions that at the end of the grant the funding for that activity ceases and there is no TUPE. We took advice at the outset from SSC Ltd Procurement, who are extremely experienced in this. At the outset we were very clear that TUPE did not apply. We went through the process. We have subsequently taken legal advice which confirms that TUPE does not apply. It was only when an e-mail in the first instance was received that Newcastle felt, quite rightly, that it had at least to go back and re-examine its potential exposure, if there was any.

Q21 Stephen Mosley: Given that the Daresbury contract was due to expire on 31 March of this year and the new contract was not ready to start at that period, did you ever consider-

Professor Delpy: It was ready to start on 1 April. I had signed it. It was with Newcastle for signing when the question of TUPE was raised. In the end, it was delayed by one month, and all credit goes to Newcastle that it was prepared to move this as quickly as possible to minimise the delay. In the meantime, we notified the community of the services at Cardiff and Nottingham that were available free on demand so that there was no potential gap in the provision of XPS services.

Dr Bushnell-Wye: We are still of the opinion that TUPE applies. There is a transfer of undertakings between one organisation and another with a clearly identified team that has been providing that service largely for 20 years. The service in essence is much the same under the new contract as it has been hitherto. I imagine it would be a very interesting legal case if it were to come to an investigation. It is still our understanding that the service is not operational. I do not think that that can in any way be blamed on any investigation as to whether or not TUPE applied. The reason we still believe that it is not under way is that, according to Newcastle university’s website, a user begins access by downloading a user agreement. At the moment it is still impossible to download a user agreement, so to us it is impossible to understand how that service can be in force.

Chair: We will come on to that in a bit more detail.

Q22 Stephen McPartland: Professor Delpy, I understand that from the outset you did not believe TUPE applied. What do you think, Professor Whitehouse?

Professor Whitehouse: This has been an ongoing subject of much discussion within STFC. I checked as recently as today with my general counsel at STFC. The view of the director of corporate services, who is also in charge of HR, and the general counsel of STFC is that there is still an obligation on Newcastle university under TUPE under normal circumstances to transfer the staff from STFC. That is a slightly different argument from that which Professor Delpy has presented, in that the contract terms are, as he has said, very clear to STFC. These staff are now our employees. The delay was generated by STFC pursuing the TUPE negotiations and discussions with EPSRC and Newcastle, although EPSRC was clear from the outset, and continues to be, that in its view this was not TUPE-eligible.

Q23 Stephen McPartland: Just to be clear, do the TUPE regulations apply to the staff transfer or not?

Professor Whitehouse: My general counsel at STFC believes they do apply, if the staff had wished to transfer to the activity.

Q24 Stephen McPartland: Do you agree with that, Professor Delpy?

Professor Delpy: No.

Q25 Stephen McPartland: Dr Bushnell-Wye, do you agree with that?

Dr Bushnell-Wye: I do believe TUPE applies. Perhaps part of the delay was that, while we raised our concerns that TUPE would apply, our authorities did very little to pursue it at the time. Maybe that was part and parcel of the delay in investigating whether or not the staff would be transferred.

Q26 Stephen McPartland: Professors Delpy and Whitehouse, whose responsibility is it to deal with staff redundancies at Daresbury at the moment?

Professor Whitehouse: STFC, because they are STFC employees.

Q27 Chair: If I was an STFC employee who was unsatisfied with redundancy and I lodged a complaint with an industrial tribunal, I would co-join EPSRC in my application. Has either of you taken any legal advice on this?

Professor Delpy: We have taken legal advice as to whether or not TUPE applies to the ending of a grant. We do an awful lot of these, and our clear advice is that it does not apply.

Q28 Chair: None of us wants to see science money spent in the courtroom. Will you publish that legal advice?

Professor Delpy: No; I do not think it would be required. The redundancy costs are expected to be part of the indirect costs that universities charge to us. The universities who are employers of the vast majority of people whose grant funding ceases have funding for that as part of the indirect costs we supply with the grant.

Q29 Chair: When I introduced this session on behalf of the Select Committee, I said that one of the things we do is follow very carefully issues to do with the proper spending of public money. I am sure I would be supported by the vast majority of the science community in saying it would be desirable not to have all this stuff tested in court and divert money away from the science budget and expenditure. Why can you not publish the advice you have had and share it with Prospect and STFC and see if there can be a negotiated agreement?

Professor Delpy: I will double check to see what our position is on the legal advice, but my argument is that this is a situation on which there is already a considerable amount of law and evidence. We have been funding grants in universities probably for the best part of 15 or 20 years with a standard set of terms and conditions which specify the legal requirements and obligations. We cover the costs that universities have to meet in making staff redundant at the end of a grant period; that is built into the indirect costs which they are allowed to charge. There is already an agreed process for that which has been working very successfully probably since the 1980s or 1990s.

Q30 Stephen McPartland: Professor Delpy, on the Chair’s point, you say you have legal advice that TUPE does not apply. Professor Whitehouse says he has legal advice that TUPE does apply. Does that not suggest that members of staff will object and go to that tribunal? It will end up in court and the science budget will be used to pay for legal action.

Professor Delpy: It is possible. One of the disadvantages of going for legal advice is that you always get a set of conflicting responses. What you are querying is the process we went through in setting this out at the start. As usual with the ending of a grant, we were very clear there was no TUPE responsibility. We went through the normal process that we would with the ending of any of our other grants. In terms of our position on this, we were very careful in making sure we did not overlook anything that could potentially be a risk or exposure to ourselves.

Q31 Stephen Mosley: Given that there was conflicting legal advice, did you at any point give any consideration to extending the Daresbury contract for, say, a year, maybe more or less, in order to ensure there was no hiatus in service?

Professor Delpy: Of course, the conflict came up only at the end, having gone through the tendering and agreement of the contract. I had signed the contract before I was even aware of the question being raised. The answer is that no, we did not consider it was appropriate then to go back and cease what had been a very thorough process with the clear award of a contract to Newcastle. I think that if we had pulled the plug at that point they would, quite rightly, have been able to come back to us because they had started to make investments on the basis of the decision we had made.

Q32 Chair: Professor Whitehouse, when did you tell EPSRC that in your view TUPE did apply?

Professor Whitehouse: I would have to check the precise date, but fairly early in the process EPSRC was aware there was a difference of view. I can provide you with the precise date after the meeting.

Q33 Chair: Given that STFC is dealing with some of the big projects within which, as we have seen from this example, other medium-size or perhaps, in some cases, even smaller projects exist, when previously projects have moved from one location to another, either to a laboratory managed by another research council or one managed, say, by a university, has TUPE applied in those cases?

Professor Whitehouse: I have checked that precise point today. We have no precedent for this particular transfer. There is no internal precedent in terms of TUPE applying or not. We very much wish to work with EPSRC under a lessons learned process to ensure that we have an absolutely full understanding of the way forward. There are other projects funded on the STFC campuses by EPSRC where potentially we could get into this situation in future if we do not have a full understanding without going to the courts.

Q34 Chair: I am sure that is all very well and welcome, but it is not very good news for the people who might lose their jobs.

Professor Whitehouse: I have been sitting here waiting to know precisely when the right time is. I have already said that all the staff involved are STFC employees. We have been very conscientious about our duty of care to those staff. Detailed negotiations have taken place with each of those individual members of staff and the situation is resolved with regard to each of them in this particular circumstance, but I repeat that is why I mentioned lessons learned for the future.

Q35 Stephen Metcalfe: Perhaps I may return to the tendering process and the assessment criteria. Dr Bushnell-Wye, Prospect has questioned how the criteria for assessing the XPS contract were determined by the project working group. It has questioned the associated weightings and parameters within that process, because there was some concern about whether or not those were accurate. What is Prospect actually alleging? What are the grounds for making those allegations?

Dr Bushnell-Wye: The concern is that the project working group failed to take account of the requirements expressed by the community in its statement of need as fully as it should, in that there are aspects included in the tender which really were of no interest to the community in their statements of need. This suggests, first, that parameters were included which should not have been and that perhaps the weighting of other aspects was diluted because of it, and that quite possibly one of the bidders was addressing those aspects thinking that they were important to the community, whereas from our experience of providing this type of service for over 20 years or so they were of no interest whatsoever to the community. We nevertheless addressed those in our tender, but it strikes us that both the criteria and the weighting given to those were perhaps erroneous.

Q36 Stephen Metcalfe: Presumably, that is the subjective view of Prospect. How do you know what the community wanted? I understand what you are saying about experience, but how can you be certain that is correct?

Dr Bushnell-Wye: Through the statements of need, certainly, but also in our interactions with the community on a regular basis. They are coming every other day; perhaps there is a change of user. They use the facility very intensely; they express the view that they would want it to continue in the same way; they have hands-on experience of the instrument; for example, they can determine which samples they want to examine. On the basis of some of the results they are getting, they can determine perhaps whether or not to keep that particular sample in the beam longer to increase the quality of the data they are collecting or whether to divert to another type of sample. That is the kind of interaction they want with their samples and the equipment. They treat it as a training ground for new students and post-docs who are new to the technique. The whole process is very much geared to a world-leading, cutting-edge science programme. They do not want something which appears to them to be a service where they send off samples and get back results.

Q37 Stephen Metcalfe: Following the announcement of the preferred bidder, there was a 10-day consultation period when you could have raised a formal objection. Is that correct?

Dr Bushnell-Wye: That is correct.

Q38 Stephen Metcalfe: Why did you not do that if you felt this did not reflect the community’s wishes?

Dr Bushnell-Wye: If we were going to raise an objection along the lines I have just described, we would have to understand a bit more about the process by which the project working group determined those criteria. That was not available. Similarly, if we were going to raise an objection, perhaps because of the composition of that panel, we would have to know who they were or what their allegiances were and whether there might have been any conflicts of interest. That information has still not been published and we cannot raise that objection, though in due course Prospect might consider doing so.

Q39 Stephen Metcalfe: But because you did not have enough information within that 10-day period you did not feel it was worth challenging.

Dr Bushnell-Wye: Indeed.

Q40 Stephen Metcalfe: Professor Delpy, who did determine the criteria? Presumably, it was the project working group.

Professor Delpy: It was indeed PWG, who are themselves experts in and users of XPS facilities. In the call for tender they published the high-level criteria against which all of these would be scored through a formal OJ process.

Q41 Stephen Metcalfe: You may have answered this earlier and forgive me if I did not understand. Why does the whole process have to be done in secret? Why is it you do not know the criteria and who are the members of the group? What is the rationale behind that?

Professor Delpy: First of all, we want to ensure that the individuals are not lobbied by any of the potential bidders for this tender. It is not unusual in a formal OJ tender process for it to be done in that way. We need to ensure that the individuals concerned have appropriate expertise to do that. Every one of the individuals involved was either an expert user or an expert in XPS techniques. We needed to ensure that we identified any potential conflicts of interest and handled them in an appropriate way, and SSC Ltd Procurement are extremely expert in this. We had a chairman who had received formal training in precisely these kinds of activities through his work with an industrial company. We were very clear that we had the right mix of expertise on the panel. We had very clearly identified conflicts of interest if they were to arise and handled them appropriately.

Q42 Stephen Metcalfe: But are all contracts and criteria like these discussed in secret, or even behind closed doors, if you do not want to use the pejorative word "secret"? Is it unique to you, or is every organisation doing the same thing?

Professor Delpy: The high-level criteria were published with the call for tenders.

Q43 Stephen Metcalfe: But not necessarily who had determined those.

Professor Delpy: No.

Q44 Stephen Metcalfe: Is that common practice across the community?

Professor Delpy: I am not sure if it is common practice; I could not give you an answer to that, but I do not see it as a problem. In issuing the call for tenders, if there was a significant problem in the high-level criteria published at the time and against which the tenders were submitted, we would have expected the community to identify that these were inappropriate criteria. They were based upon the statements of need that came in and created from those by the experts on the PWG.

Q45 Stephen Metcalfe: I am struggling with this idea that you have a group of leading experts and professionals who are going to be that easily swayed by companies lobbying them. If it was all in the public domain, there might be more transparency in the process and a greater acceptance that those criteria had been arrived at by a group of leading experts. I am focusing on it because one criticism sent to us is that some of the specifications of the working group were deficient. For example, it asked how long it would take to analyse a "difficult" sample but went on to say that this is a meaningless question as the time taken to acquire data depends on the exact elements present in the sample, on their concentration and on the quality of the data required by the user. What that is trying to point out, I think, is that the criteria are too wide and loose to get any sensible answer. Do you agree with that?

Professor Delpy: To be honest, I think this is an inappropriate series of questions or direction for the questioning to take.

Q46 Stephen Metcalfe: Why?

Professor Delpy: Because we have a whole process of using expert panels to identify these. I am not an expert in this; I suspect that many around this room are not expert in this. That is why we select an appropriate group of experts to do it. We ask the community to identify through their statements of need what they believe the needs are. The overall community for XPS is 200-plus, so there is a whole range of potential users for this facility with new instrumentation, as opposed to the facility that was available with the older instrumentation. That is what we have experts for. They make a judgment. In the end, you will always get some academic experts who say this is more important than that. That is why we have peer review and expert panels to make those judgments.

Q47 Stephen Metcalfe: I go back to my point. If this had been in public and was more transparent, do you not think you would have headed off some of these criticisms?

Professor Delpy: We always get technical criticisms with any grant application we turn down. Unfortunately, because of the funding we get, we turn down two thirds of the applications that come through the door. There is always a criticism of the decision made by the peer review panel. It is a judgment that we expect the experts to make in an unbiased way, and I believe that in this instance they did make the best judgments.

Q48 Stephen Metcalfe: And they prefer to do that out of the glare of the public eye.

Professor Delpy: Yes, and we always have. We publish our panels after the event.

Q49 Chair: The project working group, however, is looking at a number of mid-range facilities. How big a number?

Professor Delpy: More statements came in. From the ones that came in we identified about 31 unique statements of need, so in principle there are 31 groups of activity that we could fund.

Q50 Chair: Are these 31 separate disciplines or subsets of disciplines?

Professor Delpy: They range from this facility, where you are running an instrument to provide analysis from samples, to databases that are used by other parts of the community, particularly in the area of chemistry. There are some facilities which are run like the III-V facility at Sheffield which produce samples that the academic base uses for other experiments. There is a very wide range of different activities. They are not all facilities; some are not hard physical items or things based at one particular university.

Q51 Chair: I think the record will show that you said the project working group are experts in XPS. In how many other disciplines within the 31 projects are all of them expert?

Professor Delpy: The ones we are talking about at the moment are looking at a variety of materials-based techniques for which we provide mid-range facilities. They are material scientists, so they are users and experts in a variety of material analysis techniques.

Q52 Chair: So the projects working group are expert material scientists; they are not all experts in XPS.

Professor Delpy: Yes.

Q53 Chair: That is slightly different from what you said earlier.

Professor Delpy: I said they were either experts in or users of it. The ones who are users of XPS are probably experts in something else in the materials characterisation area.

Q54 Chair: That could be quite a wide range of people, could it not?

Professor Delpy: It is a relatively small group whom we would regard as having both the breadth and the expertise out of our researcher base.

Q55 Graham Stringer: To be clear that I understand the process, you had to distinguish between however many mid-range facilities you had. You set up a process that would enable you to compare apples and pears.

Professor Delpy: Yes.

Q56 Graham Stringer: That is the initial process. You did not publish the criteria, because it is very difficult to compare apples and oranges; we all know that. Is it correct that you relied on peer review?

Professor Delpy: Yes, or an expert panel taken from our expert database.

Q57 Graham Stringer: So, in effect, the panel was saying that the quality of science in pears was better than the quality of science in oranges.

Professor Delpy: No. The quality of the science that we find is all expert because all of it has gone through peer review. What they were assessing was the need for 31 different types of facility and prioritising those based upon our research base, the number of potential users, and the fit of those particular facilities to our priorities and the national capabilities.

Q58 Graham Stringer: Was that list of criteria published?

Professor Delpy: No, but what was published was our strategic plan and delivery plan against which the community would be making its statement of need.

Q59 Graham Stringer: This is a pretty important event. Why did you not publish that list of criteria?

Professor Delpy: Because, to be honest, you could not write a single set of criteria for such a wide range of facilities. The first thing we needed to know from the academic base was what it was they felt they needed to satisfy their particular research requirements. What we then had to do, as we always have to do, was prioritise those against the funding we had available and our own strategic priorities.

Q60 Graham Stringer: I accept that one has demand, funding and criteria, but that whole process was not transparent, was it? You did not publish all that.

Professor Delpy: Having gone through the process, we published the list of the individuals on the statement of need panel. We identified those who got through that process and were therefore on the long list and had started to work on it.

Q61 Graham Stringer: But that is slightly different, isn’t it? That is not publishing your procedures and the criteria that you use at different stages.

Professor Delpy: But that is no different from what we do in peer review anyhow.

Q62 Graham Stringer: But it is not quite peer review, is it? You are effectively choosing.

Professor Delpy: But it is not quite research either. What we are doing is providing the facilities to enable the research to take place.

Q63 Graham Stringer: Precisely. You are making tough decisions and they are not easy; I accept that. What I am trying to get at is why you do not think it is necessary to make public the basis for your decisions.

Professor Delpy: I would argue that the basis for the decisions was effectively out there, because we have identified our strategic priorities and what we believe are the national capabilities and needs. It is on the basis of those that we make our prioritisation.

Q64 Graham Stringer: I am not sure we are going to get much further, but that is a bit like saying that our national priorities for education are that every child should learn to read and write and be able to add up. Therefore, we have invested in this school. There is a big gap, is there not, between overall priorities and particularly decisions that might mean the end of a facility or greater investment in another facility? It is the reasoning, rationale, criteria-call them what you wish-that are missing from this process. I think that should be transparent. I am interested to hear the reasons why you have chosen not to publish that.

Professor Delpy: Somebody might have provided that. We did. I have just been handed a note that points out that the panel was asked to rank the facilities requested in order of UK need; to advise on the scale of the budget for the facilities in relation to our other EPSRC priorities; and recommend the model of support that we could utilise. Therefore, those were published back in July 2009.

Q65 Graham Stringer: So the ranking was published but not the detailed process, justification, criteria and rationale.

Professor Delpy: No. That is what the statement of need panel actually did against those criteria.

Q66 Graham Stringer: So, the fifth priority would say, "This is No. 5 because…"

Professor Delpy: No, probably not at that level of detail.

Q67 Graham Stringer: The second process was tendering for the XPS facility. Again, that was a closed process; the panel was not known. Were the criteria known or not?

Professor Delpy: The high-level criteria were published with the call to tenders.

Q68 Graham Stringer: I understand. I was getting confused between the two processes previously. To turn to the STFC, what planning had you done for the possibility that the funding for the EPSRC grant would finish? Had you planned for it?

Professor Whitehouse: I think all senior staff at STFC were well aware that there was a potential risk. Of course, we hoped this would be a successful bid, but there is always a risk in any bidding process that we will be unsuccessful. I have to say that at the most senior levels we were very disappointed with the outcome. Nevertheless, we moved rapidly to appropriate consultation with EPSRC and others as to how best to move forward.

Q69 Graham Stringer: What previous planning had you done?

Professor Whitehouse: As to previous planning, it is a little difficult to answer. We moved very rapidly once the decision had been made.

Q70 Graham Stringer: Does that mean there was no planning prior to the decision?

Professor Whitehouse: No detailed planning.

Q71 Graham Stringer: Professor Delpy, in your submission to the Committee when referring to the staff you talked about complications. I do not want to repeat the earlier questions. Was that to do entirely with the debate about TUPE?

Professor Delpy: Yes.

Q72 Graham Stringer: Nothing else.

Professor Delpy: Nothing else. Following the tendering process and the panel selection we drew up the contract, which of course is quite extensive. We had allowed a month to do that.

Q73 Graham Stringer: We had some contradictory evidence today about whether or not the facility was working. Is it working?

Professor Delpy: The statement you have had is at odds with the statement that I have from Newcastle, which is that as of 5 July NEXUS, which is the name of the service, is currently collecting data for two customers. There are seven further inquiries at the moment and the total is in double digits in terms of sample runs. All I can do is quote the figures I have received from the Newcastle service. They have two customers for whom they have already been collecting data and a further seven inquiries.

Q74 Graham Stringer: Would you like to respond?

Dr Bushnell-Wye: It is interesting that they are collecting the data for them. That is certainly a novel way of dealing with the service compared with the way NCESS operated where users would come and collect the data themselves. It does not appear to us that the service currently being provided by Newcastle is the one expressed in the statement of need.

Q75 Graham Stringer: On the basis of what Professor Delpy has said, would you accept that it is working, even if it is not working in the way it worked at Daresbury?

Dr Bushnell-Wye: We have to take the word of Newcastle university. If they say they are collecting data then they are collecting data, but from the website at least it does not appear to be an active service. One would expect, for example, the opportunity to apply for beam time on their facility to be available through their website, whereas it does not appear to be the case that currently you can do that.

Q76 Graham Stringer: Finally, if the STFC is right and there are TUPE liabilities, will all of them lie with Newcastle?

Professor Whitehouse: If the staff situations have not been resolved already in other ways, my legal advice is that those would rest with Newcastle.

Q77 Stephen Mosley: I put a question to which, hopefully, there can be a one-word answer, Professor Delpy. Does the EPSRC stand behind its decision to award the contract for XPS services to Newcastle university?

Professor Delpy: Absolutely.

Q78 Stephen Mosley: Has the degree of controversy surrounding this particular decision been unusual, or is it common for researchers who lose grants to be unhappy?

Professor Delpy: The answer to the latter part of the question is that they are always unhappy when they are turned down. In terms of this one, what is unusual is the fact that it has been referred to the Science and Technology Committee, which is asking us about something that I believe we routinely handle very successfully through our peer review process with experts. There will always be disagreements between experts in the research area as to what is important to one academic compared with another. I would say that the unusual element is the reference to the Science and Technology Committee. Otherwise, every year 2,000 grants come to an end and new ones begin. This does not happen with any of those. Many of them are much larger than this in terms of both finance and the number of individuals who are supported on it.

Q79 Stephen Mosley: Dr Bushnell-Wye, to what extent are your criticisms of the tender process driven by the fact that Daresbury lost the process?

Dr Bushnell-Wye: Clearly, we are very disappointed in having lost this very valued research capability. Obviously, we are concerned not just by the loss of the facility but also the impact on the staff who have been providing this service very reliably and, by all accounts, even in the judgment of EPSRC, to an exceptional standard for many years. When something like that happens it is bound to raise questions, and it would be unusual if we just sat back and accepted it. But it is not simply a case of sour grapes; we believe there are still questions to be answered regarding the way the process was operated. We are still not convinced that the service that has been funded will provide what the community have demanded through their statements of need.

Q80 Stephen Metcalfe: We have had some conflicting evidence about the various merits of the two machines involved: the existing one at Daresbury and the new one at Newcastle. Would you accept that if we are to produce world-leading research we need technically the best machine to be operating on that? Which in your view is the best machine?

Professor Delpy: Are you asking me?

Stephen Metcalfe: Yes.

Professor Delpy: First, I am not an expert, although obviously I have received considerable advice on this. I think the answer is that for the bulk of the UK community it must be right to have a machine that is new and state of the art and is used in a whole range of other XPS facilities around the world, as opposed to one that is now almost 25 years old, has been kept operating by some very skilled individuals and, in certain areas, is state of the art. But I would prefer my researchers to be using the kind of modern machinery that they will find when they go out into industry or other laboratories. As far as I know, the old one is one of only five remaining in the world.

Stephen Metcalfe: I do not know; I do not have that particular figure.

Professor Delpy: I do not have the expertise, but the machine we are talking about at Newcastle is brand new and state of the art. As you will know, there was specific criticism in the submission made to this Committee. I know that Kratos, the company involved, has written to the Committee with its own riposte to this because, obviously, you placed the criticism in the public domain. I have read the Kratos response to that. Which expert do you wish to believe? My preference for the good of the whole research community is to go for a modern instrument.

Q81 Stephen Metcalfe: Do you wish to comment on that?

Dr Bushnell-Wye: First, the Newcastle instrument is not the modern, state-of-the-art instrument that Professor Delpy has expressed; it is one of several of its type. There are more modern versions of it, for example, at Cardiff university, which offered services for EPSRC. But the important thing here is that our tender, like Newcastle’s, proposed a new facility which would be state of the art. To turn down our bid on the basis that our current instrument does not provide that is flawed, I believe. Secondly, we are not talking about run-of-the-mill but cutting-edge analysis. I think that the provision of a new state-of-the-art machine, which could provide a very adequate service to what Professor Delpy refers to as the bulk of users, alongside what we have in terms of the ultimate machine, still unsurpassed by any manufacturer, would provide the best of both worlds in catering for the cutting-edge research as well as the more routine.

Q82 Stephen Metcalfe: Professor Delpy, you mentioned industry and what it was up to. Do you see the move from Daresbury to Newcastle as a step towards providing a more commercial service than just offering services to researchers?

Professor Delpy: No. If you look at the criteria we use, providing a transfer to a more commercial service was not in any of the criteria that the PWG used. If what I can provide for the academic base is best provided through a commercial service, in terms of both its technical ability and cost to the community, that is the route I will go; if not, we will choose something else.

Q83 Stephen Metcalfe: That is not a factor but it might be a consequence.

Professor Delpy: It could be, and it could be appropriate in some instances. One could argue that perhaps JANET, the network facility for the whole of the academic base, could be provided as a core facility through a commercial supplier rather than something that is run by the universities. I just chose that as an example. I am not going down that route, so please do not commit me. I suspect there are areas where a commercial supplier would be an appropriate route, but certainly in this instance that was not a consideration.

Q84 Chair: If I may push you a little on the final question, is there any difference in EPSRC’s view towards contracts going to a Government laboratory versus a university?

Professor Delpy: No, none whatsoever. It is whoever is providing the service that best meets the needs of the academic base.

Q85 Chair: In your previous answers you observed quite rightly that there was not a huge amount of expertise in XPS on our side of the table.

Professor Delpy: You have one.

Q86 Chair: I said "our side of the table." Having said that, I do not suppose Bragg’s law has changed since I ran an x-ray lab 30 years ago. Equally, since I worked in HR, the TUPE regulations have not changed a great deal. Given what you have heard today and your understanding of the situation, should EPSRC be involved in further mediation between Daresbury and Newcastle to help overcome this difficulty?

Professor Delpy: As far as I know, currently there is no difficulty; it has been resolved. We would provide whatever assistance we could, but this is something that in the end would have to be sorted out between the current employers of the individuals and, if TUPE were to apply and they were to transfer, the future employers. It would not be appropriate for EPSRC to get involved in that.

Q87 Chair: I remind you of what I said earlier. If I were advising an employee about taking Professor Whitehouse or Newcastle university to a tribunal, I would enjoin EPSRC; I have no doubt about that. Once again, I press you to share the legal advice that you have had with all the parties. I say that to all three of you. It would make sense in the interests of the science budget for you to try to find a way of learning lessons from this episode and ensure that if there is any fall-out in relation to individuals litigation is avoided. Do you agree with that?

Professor Whitehouse: Absolutely.

Professor Delpy: Yes.

Dr Bushnell-Wye: Yes.

Q88 Chair: I put a question to all of you. Do you think there are any broader lessons to learn from this?

Professor Delpy: Clearly, in terms of EPSRC and STFC, but similarly with any of the other councils whose institutes may be providing a service, we talk to them all the time about these things. Our advice at the outset was that this did not apply. One thing I must point out is that, as soon as we got to the tendering process, we had to avoid working with STFC because it was one of the four bidders in the process. At that point we had to stand back and be as neutral as possible.

Professor Whitehouse: I just repeat the point I made earlier about lessons learned from this. We have a number of other EPSRC-funded projects on the STFC campuses. I know that David is very supportive. We do intend, wholeheartedly, to get round a table to resolve these issues so that we are protected for the future and have a full understanding.

Q89 Chair: Dr Bushnell-Wye, does Prospect agree that you would want to be part of those discussions to avoid such conflicts in the future?

Dr Bushnell-Wye: Indeed. The more discussion that takes place the less likely there will be conflict. I would certainly encourage EPSRC to engage both with its current suppliers and its community much more closely to try to ensure that the facilities it intends to fund fully meet the requirements of that community such that there cannot be any criticism subsequently. I would also hope that they do engage very closely with STFC as providers for some of these facilities.

As Professor Whitehouse has just mentioned, at the moment another service of particular interest is the chemical database service operated at Daresbury Laboratory. It has already tendered on one occasion-in fact it was the sole tenderer-but it seems that its tender has not been accepted and the process is to be gone through again. Why that should be the case is unclear. We would, however, hope there is some discussion which would allow continuity of service and employment for the staff involved. I would hope that STFC learns from this, too, that it needs to pay far more attention to all of the services it runs, not just the large-scale facilities. Some of the smaller-scale facilities very much valued by the scientific community are important to it and in many cases provide the critical data that will allow it to complete its research.

Q90 Chair: Does anyone have a final comment?

Professor Whitehouse: I make two points. First, when we started I introduced myself by stating my position in STFC. I am in charge of the strategic development of the two national campuses. As the Chair well knows having visited several times, there is a really dynamic science now with universities, STFC and very high-tech companies exhibiting the highest growth rate in the country despite the economic conditions. David is a very strong supporter and sits on the STFC campus project board. Over time perhaps we need to reconsider the impact of such facilities on a much wider community than just the science community. Finally, I am being asked by my STFC colleague to point out in relation to Graham’s introduction-I did not hear it myself-that he is here wearing his Prospect hat, not primarily his STFC hat. I hope Graham does not mind.

Dr Bushnell-Wye: No; indeed not; I support that.

Chair: We recognise which hat he is wearing today. Gentlemen, thank you very much for attending.

Prepared 13th July 2011