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3. Ultimately, the value for money to be obtained from these facilities will depend on the scientific discoveries they help make and the effective exploitation of that science. Our study concludes that, though such outcomes will always remain uncertain, the current arrangements should deliver a significant contribution to the development of the nation’s scientific infrastructure. The arrangements include the development of a common plan known as the road map. This is co-ordinated by Research Councils UK – a partnership of the research councils – which addresses priorities which cut across scientific disciplines. The road map has allowed scientific priorities to be considered in a more systematic way across disciplines. Working within HM Treasury’s Green Book guidance on project appraisal and evaluation[Footnote 1], special attention now needs to be paid to strengthening the information available to support choices between large facility projects.
    
4. The projects we examined had generally been established in accordance with good practice principles and standards as set out in methodology advocated by the Office of Government Commerce for managing projects, called PRINCE2[Footnote 2]. More consistent application of that Office’s Gateway reviews to the key stages of every project, would ensure all teams benefit from wider sources of advice on areas such as project management, project costing and funding and procurement options.
    
5. It is still early to assess fully the portfolio of projects against delivery to time and budget. To date, performance against the approved capital budgets suggests some good budget management, for example on the James Cook research ship, but also projects where forecast capital costs already exceed budget even though still at an early stage. More significantly, some project teams have significantly underestimated the likely running costs of facilities once they are delivered. In addition, more work is needed by Research Councils to examine the potential impact of these facilities on the future demand for research funding, their capacity to support any new demand, or the effect of doing so on other areas of activity. Full use of these facilities will depend on research ideas competing successfully for research funding, through peer review, against other calls on limited Research Council budgets. As the new facilities come on stream, the Research Councils will need to monitor the impact on the demand for research funding and ensure lessons are learned for the appraisal of similar facilities in the future.
    
6. Our detailed conclusions are as follows:
   
   • Current arrangements identify potential projects over a sensible planning horizon, allow prioritisation across the science base, and are delivering a significant programme of new or replacement large scientific facilities. The road map approach was pioneered by the United Kingdom and has been widely commended and adopted by other countries.
      
   • Prioritisation and assessment strongly reflect the primary policy objective of advancing scientific knowledge, but economic potential and possible exploitation by industry are less fully analysed.
      
   • Current arrangements concentrate attention on availability of capital funding to build facilities but there are significant weaknesses in assessing their ongoing costs, and the impact (normally in future spending review periods) of meeting those costs on the balance of Research Council funded activities.
      
   • At prioritisation estimates of costs and assessments of benefits are preliminary, yet priorities are not reviewed if costs or benefits are significantly revised as business cases are prepared. Opportunities to maximise the overall science benefits of the portfolio of projects may thus be missed.
      
   • Procurement strategies have been adapted to the particular circumstances of each project. Future projects can benefit from better sharing of experience and lessons learned.
      
   • More attention needs to be given to specifying from the start how the success of individual projects will be assessed and measured, drawing on examples from some current and existing projects. This should enable a fuller assessment of value for money to be made once facilities are operational and inform appraisal of future potential projects.

Recommendations

1. The Office of Science and Innovation, Research Councils UK and individual Research Councils should strengthen project appraisal by:
• ensuring the production of more consistent estimates of costs and assessments of benefits at the initial point of prioritisation; and
   
• ensuring that if a project’s expected costs or benefits at business case are significantly different from those initially anticipated, its priority is reconsidered at the next available opportunity.
   
2. The Office of Science and Innovation, Research Councils UK and individual Research Councils should give greater attention to the future financial sustainability of projects. Project proposals should be based on realistic estimates of their ongoing costs, the sources of funding available to cover those costs and any implications for other activities funded by Research Councils.
    
3. Research Councils UK should ensure that the road map differentiates projects where there is a choice of location from those where no such choice is practically available. Research Councils UK and the Office of Science and Innovation should provide Research Councils with guidance to aid preparation of comparisons of different locations where a choice is available.
    
4. To improve the transparency of investment decisions, and provide a better opportunity for scrutiny or challenge by scientific and industrial stakeholders, Research Councils UK should publish the outcomes of and rationale behind the prioritisation of proposals as part of the large facilities road map. The rationale should include commentary on the implications for the overall research programme of supporting the construction and operation of prioritised projects.
    
5. The Office of Science and Innovation, Research Councils UK and individual Research Councils should:
   • ensure an evaluation of the nature and scale of the economic impacts derived from building and operating large scientific facilities, once they have been brought into service, is undertaken; and
      
   • provide guidance to project teams on assessing and presenting anticipated economic impacts of large facility proposals.
      
6. The Science and Technology Facilities Council, which will be established in April 2007, should:
   
   • promote awareness of knowledge and lessons from planning, procurement and operation of large scientific facilities by bringing project teams or members together to share experiences and training;
      
   • develop and promote a consistent means of applying the science performance management framework developed by the Office of Science and Innovation in 2005 to large facilities planning and operation; and
      
   • use its own skills base and partnerships with external providers to improve other Research Councils’ access to high-grade project management skills for large projects.
   
   
7. The Department of Trade and Industry should work with Research Councils to ensure the Government-wide Gateway review process is applied to large facility projects consistently and with a level of independence appropriate to their assessment of risk.
    
8. Large facility project teams should build on procurement lessons from previous projects to secure improvements in value for money. Across the portfolio of projects there is scope:
   
   • to undertake a deeper analysis of risks so that project teams can separate those which should be transferred to a contractor and those which should be retained;
      
   • to make greater use of incentives to encourage the timely delivery of key components or project milestones;
      
   • to extend the use of pain/gain share conditions in contracts, thereby increasing the incentives for contractors to contain costs;
      
   • to improve the packaging of work by considering the separation of those elements where there is a limited pool of potential suppliers from less demanding elements; and
      
   • for more active promotion of the work on offer to potential suppliers who might otherwise be deterred from bidding by the scientific nature of the overall project.

1.  [back] The Green Book: Appraisal and Evaluation in Central Government, HM Treasury Guidance.
2.  [back] The Office of Government Commerce expects a PRINCE2 project to have the following characteristics: a finite and defined life cycle; defined and measurable business products (or objectives); a corresponding set of activities to achieve the business products; a defined amount of resources; an organisation structure, with defined responsibilities, to manage the project. http://www.ogc.gov.uk/methods_prince_2_overview.asp