A government response to the House of Commons’ Innovation, Universities, Science, and Skills Committee has attempted to allay doubts about the finances of the proposed UK Centre for Medical Research and Innovation. A government decision that the committee had originally viewed as irrational, if not calculated to withhold money from the project, turns out to have been a manoeuvre necessitated by accounting systems at the Treasury.
The issue was raised by the committee in its January report on the progress of the new research centre, due to be located in central London next to the British Library (BMJ 2008;336:179; doi: 10.1136/bmj.39468.733912.DB). The committee had expressed several concerns after taking evidence from representatives of the project partners—the Medical Research Council (MRC), Cancer Research UK, the Wellcome Trust, and University College London.
These included the timetable and project management arrangements and the programme of research to be followed by the centre’s eventual occupants. Their most pressing worries, however, were financial—in particular, the behaviour of the Treasury in connection with some of the capital costs of building the centre.
The Medical Research Council’s contribution is to come from the sale of other sites that are or will no longer be required and from money accumulated in its own commercial fund. However, the Treasury decided to invoke what the committee described in its earlier report as “previously unused rules” to claw back £92m (€117m; $184m) of these savings. This would have left the Medical Research Council faced with the need to prepare a bid of £180m to £200m from the government’s all purpose large facilities capital fund.
The committee thought this suspiciously irrational and demanded an explanation from the government. “Encouraging the MRC to be self-financing to a degree and then appropriating its savings, thus forcing the MRC to come cap in hand for funding, is hardly redolent of good faith. Doubts over the MRC’s ability to finance the project and science on at least the current scale must be resolved as soon as possible.”
In its response, the government tries to explain what happened. “The Treasury did not change the application of the rules with regard to the MRC’s Commercial Fund,” it says. “In discussions between the Treasury and the DTI [Department of Trade and Industry] during the spring of 2007, it became apparent that the long-standing arrangements for the MRC Commercial Fund were not in accordance with the Government’s public expenditure rules. This was due to a genuine misunderstanding.”
All has been sorted out, it claims, and the Medical Research Council “will now be allowed to gain access to a large part of the Commercial Fund accumulated cash surplus—resources that it would otherwise not have the authority to spend.” In short, the government is saying that the Medical Research Council will be able to spend its own cash surplus. There was no conspiracy and no penny pinching—just a muddle.
The government said it could not provide quarterly progress reports on the project because of the bureaucratic burden.
The House of Commons Innovation, Universities, Science, and Skills Committee’s First Report of Session 2007-2008 and the UK Centre for Medical Research and Innovation: Government Response to the Committee’s First Report of Session 2007-08 (HC 459) are at www.publications.parliament.uk.
