BIS’s capital investment in science projects

The Department for Business, Innovation & Skills invests in science to support economic growth and improve national productivity. Capital spending on science projects was £1.1 billion in 2014-15, and this will be maintained every year up to 2021. The department, however, needs to develop a more systematic and informed approach to investing in science projects, according to today’s report from the National Audit Office.

The Department’s £1.1 billion expenditure covers major national projects such as supercomputers and oceanographic research ships, capital for large national research facilities such as particle accelerators and the UK’s participation in international programmes such as the European Space Agency. It also covers capital funding allocated by the Higher Education Funding Council for England (HEFCE) for laboratories and research facilities in universities.

The NAO found that the Department’s processes for sifting project proposals and taking investment decisions have not been supported by good information. BIS has had to quickly identify projects to invest in when extra funding has become available at short notice but has not had a structured plan to help it do this. BIS has subsequently consulted with the research community to identify priorities for investment, but it did not have good quality information to assess and sift the resulting proposals.

More recently approved business cases have lacked key analysis, such as information on what projects could cost to run or assurance on how ongoing costs will be funded. Running costs of science infrastructure can be substantial. BIS has committed £3.2 billion of capital expenditure to 56 projects since the NAO previously reported on science projects in 2007, and the NAO estimates that these projects may cost some £2 billion to run between 2015-16 and 2020-21.

The report finds that many projects were delivered on time and within budget, with few exceptions, despite the technical risks involved with cutting-edge science projects. Of the 10 projects the NAO examined in 2007, five were delivered on budget including the HECToR supercomputer. Three exceeded their budgets by more than 10%. These included the Halley VI Antarctic research station, which was four years late and £15 million (45%) over budget because of reported difficulties with design specification. Of 20 subsequent projects which are now operational, none were delayed by more than a year and 16 were delivered within budget.

Among the projects that have been operational for some time, many are in high demand and have produced benefits to science and society. These include the Diamond Light Source, a particle accelerator, and the Royal Research Ship James Cook which has been used for climate change research. Of the operational projects we examined, one had run significantly below capacity due to lack of funding. There is no common framework for assessing whether operational projects are delivering expected benefits, and few of the operational projects have calculated the economic impact of projects.

Among the NAO’s recommendations is that BIS should set out a more structured process for proposing projects, identifying priorities and taking funding decisions.

“BIS’s capital spending on science was above £1 billion in 2014-15 and this is expected to continue until 2021. Many long-running science projects have high levels of demand and have made notable scientific impacts. However, the Department has not used good quality information to decide which science capital projects to invest in to optimise scientific and economic benefits. We regard this, and other shortcomings, as undermining of BIS’s ability to prioritise and deliver value for money on its capital funding of scientific research.”

Amyas Morse, head of the National Audit Office, 10 March 2016

Notes for Editors

£1.1 bn
Total capital expenditure on science by the Department for Business, Innovation & Skills in 2014-15

£5.9 bn
The total amount BIS announced it plans to spend on major science projects between 2016 and 2021

56
National Audit Office estimate of the number of major science projects that BIS has committed to fund since 2007

£3.2 billion 
National Audit Office estimate of the amount BIS has spent or has committed to spend on 56 major science projects since 2007. This does not include capital funding allocated by higher education funding bodies to universities. For the purposes of our report, we defined major projects as those with a capital cost greater than £2 million.

500 million 
Allocated by the Higher Education Funding Council in England to universities through its UK Research Partnership Investment Fund since 2012. This fund is designed to support investment in higher education research facilities.

15
Number of new projects that BIS selected following its capital consultation in 2014 (subject to business case approval).

  1. The Government regards investment in science as a key factor contributing to economic growth and improved national productivity. The Department for Business, Innovation & Skills (BIS) has overall responsibility for the government's spending on science, technology and engineering. It also provides funding for a wide range of scientific disciplines and industry sectors with the aim of developing and maintaining the UK's science and research capability.
  2. In 2014-15, BIS allocated £1.1 billion of capital funding to science. In December 2014, BIS announced plans for a further £5.9 billion of capital expenditure on science between 2016 and 2021. This included £800 million for new projects, over £1.2 billion for ongoing national and international projects and a £900 million fund to respond to new challenges as they emerge. It also included plans to spend around £3 billion on the underlying laboratory infrastructure in universities or research institutes. The 2015 Spending Review confirmed this level of future funding.
  3. The NAO last reported on the government's spending on large science facilities in 2007: Big Science: Public investment in large scientific facilities: www.nao.org.uk/report/big-science-public-investment-in-large-scientific-facilities/
  4. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
  5. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 810 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of £1.15 billion in 2014.

Contact

Rupi Gohlar
Direct line: 020 7798 7066 Mobile: 07917 555388 Email: pressoffice@nao.gsi.gov.uk

PN: 20/16