Post-Butler developments — a geological survey in transition
|From: Allen, P M. 2003. A geological survey in transition. British Geological Survey Occasional Publication No. 1. Keyworth:British Geological Survey.|
Chapter 6 Post-Butler developments
Although the Butler report was not released until July 1987, it had been seen by the NERC and the Advisory Board for the Research Councils in March and considered at a meeting of the latter on 1 April. It is from then that the decision-making process began. Gaining the Minister’s approval to publish was straightforward, but the next step was much more difficult. The decisions of Government were whether or not to accept the report and what actions to take as a result of it. It was by no means evident that the Government, with its developing policies on privatisation and its determination to reduce the size of the public service, was predisposed towards accepting the report, and the fate of the BGS hung in the balance for a substantial period of time.
The key issues within the report were the source of funding for the Core Programme and whether or not the BGS should be taken out of the NERC. The Department of Education and Science could deal with neither of these on its own, because most of the options that could be considered involved other departments, including the Treasury. The decision-making process began with the preparation in April of the NERC response to the final draft of the Butler report. In general, the NERC welcomed the report, but there were significant reservations. They did not accept the recommendation to establish a Board for the British Geological Survey. Instead they favoured a Programme Board to manage the Core Programme. Neither did they believe that Butler’s Science Programme should be managed within the BGS. Council had already, that year, taken the decision to remove the Isotope Geology Unit from the BGS and make it a free-standing research facility within the NERC. In the light of that sort of thinking Council would certainly regard a Science Programme to be out of place in the BGS. There were other, relatively minor matters of disagreement, but there were two major ones. The NERC did not accept that the BGS should be removed from within NERC and they did not accept that the Director of BGS should be the Government’s principal advisor on geological matters; this was a duty of the newly created Director of Earth Sciences.
The NERC position, therefore, was already set when Professor Briden, the Director of Earth Sciences, announced that there would be open meetings to discuss the report in Keyworth and Edinburgh immediately after its publication in July. He invited written comments on the report from staff who were unable to attend them. Independently of these, there were divisional and unit meetings throughout the BGS to discuss it. The reaction of staff in general was to accept the report, but there were pockets of resistance. There was no unanimity in the Overseas Directorate, and the Geochemistry Directorate was unhappy about withdrawing from the NERC. The unions were not entirely happy either, harbouring some unease about the consequences of leaving the NERC and adopting the Ordnance Survey model. A small group of members of the strategic planning team and staff side, under the chairmanship first of Brian Kelk and then Richard Howarth, when Brian Kelk was ill, was set up by Innes Lumsden, who was then the Director, to coordinate the BGS response to the report. At the first coordinating meeting, held in Keyworth on 15 July, it was agreed that a letter should go out to all MPs as a matter of urgency and that a press statement on the BGS reaction to the report should be put out. An official statement prepared by the coordinating group contained no sign of any hesitation about accepting either the criticisms levelled at the BGS in the report or its recommendations. It was not, however, put out.
After the July publication, Sir Clifford Butler wrote to the President of the Geological Society suggesting that geologists in the community at large should have an opportunity to discuss the report. An open meeting was arranged by the Geological Society at Burlington House in London on 9 November. Professor Bernard Leake was now the President of the Society. He had been a NERC Council member until 1984 and chaired the 1982–84 Visiting Group to the BGS. During the campaign against the NERC Corporate Plan he had expressed his support for the BGS position, condemning any attempt to centralise power at NERC HQ and accusing the NERC of mismanagement of the BGS. He was particularly upset that the 1985 Corporate Plan did not seem to acknowledge his Visiting Group report. He had not forgiven the NERC for not allocating the extra resources to the BGS that he had asked for to enhance the Geological Mapping Programme and to clear off the publications backlog that the Visiting Group had identified.
The meeting was attended by about 100 Fellows of the Geological Society and non-Fellows. Among them were academics, industrial geologists, members and former members of BGS and NERC staff, including three retired Directors of the BGS. There were also representatives of Government departments and the Cabinet Office. Professor Leake, Sir Clifford, Professor Briden, Geoff Larminie (Plate 4), who had taken over as BGS Director from Innes Lumsden in September, and Professor Howel Francis, an ex-member of BGS staff, gave presentations from the platform before the meeting was thrown open to discussion.
Professor Leake opened the meeting by outlining the deteriorating financial and organisational circumstances that had progressively led to a run-down of the Survey’s ability to conduct systematic geological surveying and manage the National Geosciences Database, a situation with which he was familiar through his chairmanship of the 1982–84 Visiting Group. Sir Clifford then presented a summary of his report. Professor Briden spoke next. He tried to downplay what he called the constitutional issue (whether or not the BGS should remain in the NERC), but his main message was that the publication of the Butler report was only the start of a process. Government had still to be convinced that the country needed a geological survey and it was vital that those present at the meeting took every opportunity to provide evidence of support for the BGS that the government would accept. He was well placed to know what was going on in discussions in Whitehall and this was a warning that all still could be lost.
Geoff Larminie, whose first task on appointment in September had been to prepare a paper with Professor Briden on a proposed BGS Core Programme, for consideration by the Department of Education and Science, gave an outline of the proposed programme, costing it at £22.7 million a year. He said, in no uncertain terms, that these monies must be dedicated, non-transferrable, untouchable by anyone but the BGS for ten, preferably 15 years. It was ambitious, by any standards, but was clearly the start of a bargaining process.
The issues that were put to the meeting, then, were whether the country wanted and needed a geological survey; what resources were required to do the job and how adequate funding on a stable basis was to be obtained. The mood of the meeting was good. It was clear that the geoscience community in general supported the report, and the chairman’s summary, published in the Proceedings of the Geological Society shortly after, included a statement that this message should be taken away from the meeting by those representatives of Government present. Taken in conjunction with powerful support from the Royal Society, this meeting demonstrated the virtually unanimous approval of the Butler report in the geoscience community.
The Briden-Larminie paper for the Department of Education and Science, drafted in September, was refined over a period of several months. Its progress was overseen by a group of officials from the NERC, BGS and the Department of Education and Science. By November, the key issue had come down to funding the Core Programme. Practically every other recommendation became subservient to this one. Butler had identified a need for a total of £18 million for the Core Programme. Of this, £15 million, he proposed, should come by direct grant in aid; £3 million would be from core commissions. At the time there were two of these. The Offshore Survey had been funded largely first by the Department of Energy, then later by the Department of Trade and Industry (DTI). The Regional Geochemical Survey was funded by the DTI. Butler had accepted both as legitimate core activities, regardless of their source of funding. Briden and Larminie refined the definition of the Core Programme given in the Butler report and addressed some of the shortcomings in Butler’s costings, but they also added Airborne Geophysical Surveys, which made a significant difference to the basic costs, and considered accelerating the Regional Geochemical Survey by introducing an element of co-funding for it from the Science Budget. They calculated a requirement for £22.7 million at full economic cost (FEC). (Accounting in NERC is based on the concept of full economic cost, which is calculated by adding to the total salary costs for the scientists employed in NERC a sum to cover all overheads. The amount added in the 1980s was usually more than the value of the salary costs.) Their breakdown was:
Onshore surveys £11.2 million
Offshore surveys £3.2 million
Geochemical surveys £1.0 million
Hydrogeological surveys £0.9 million
National geophysical surveys and monitoring £2.9 million
National Geosciences Data Centre £3.5 million
The National Geosciences Data Centre (NGDC) was the newly developed facility for containing the BGS data holdings and managing the sale of data and information. It was intended that it should ultimately become self-funding, though no time scale was attached to this.
The NERC Corporate Plan gave a planning figure of £7 million Science Budget, and about £3.5 million had been identified as core commissions from the departments. Plugging the gap between this identifiable total of £10.5 million and the requirement for a fully viable Core Programme now became the preoccupation of all who were involved. It was generally agreed that a Core Programme of less than £16–17 million FEC was not viable. If it were to become as low as £10 million it was thought that the BGS, as an institution, would not be viable.
The matter of whether the BGS should be in or out of the NERC was sidelined until the funding issue could be resolved.
Towards the end of the year the Chief Scientific Adviser to the Cabinet Office, John Fairclough, asked the Department of Education and Science for information on the funding issue for consideration by the influential Economics (Science and Technology) (Official) Committee of the Cabinet Office (E(ST)(O)). He also came to visit the BGS on 14 January 1988. The paper for E(ST)(O) was prepared by Department of Education and Science officials from the Briden-Larminie paper, but it covered a far wider canvas than the content of and level of funding for the Core Programme. Various questions were put to members of the BGS Directorate by the Director, for him to provide input into the draft paper. There were questions of detail and philosophy on the functionality of the BGS, questions about the relative proportion of a future work programme that would be devoted to capturing new data, re-interpreting old data and offering advice or selling data. Options for a scaled-down Core Programme were also considered. Issues such as whether systematic surveys could be replaced by survey on demand and whether it was necessary for the whole country to be surveyed were raised, not for the first or last time. Both of these were to be raised again and again through the 1990s. Inevitably the paper also had to present arguments concerning the privatisation or dismantling of BGS as well as about funding sources for the Core Programme. The final paper was submitted to the March 1988 meeting of the E(ST)(O) committee.
The first quarter of 1988, when this paper was being prepared, was decision time. One option for funding the Core Programme was to persuade the departments who benefited from it to transfer some of their funding to NERC to cover part of the cost of the programme. It was clear even in March that the departments were not enthusiastic about doing this, even though they had strong views, expressed to the Department of Education and Science, on what should be in the Core Programme. Although this option continued to be pursued until later on in the year, the conclusion reached by the Department of Education and Science after the E(ST)(O) meeting was that they were most likely to succeed in raising funds to cover the gap through a bid for a Public Expenditure Survey (PES) award, prepared by the Department of Education and Science. The Public Expenditure Survey was the name given to the annual process by which Government departments put in their bids to the Treasury for the funds they required to carry out their activities in the year ahead. The research councils were included in this process and often used it to bid for additional funds for special projects. Their bids went first to the Advisory Board for the Research Councils and then to the Department of Education and Science. The Department itself was responsible for bidding to the Treasury for the total Science Budget that was allocated to the research councils. If the Department were successful in acquiring the new money, it would be delivered to the BGS through the Science Budget but it would be regarded as separate from it and effectively be ring-fenced for this use only. The Department’s view was that, this being so, the BGS would have to remain located within NERC even if special arrangements were made, such as ring-fenced funding overseen by a Programme Board. Thus, the solution to the funding problem brought with it a solution to the problem of governance.
At the debriefing at the Department of Education and Science, following the March E(ST)(O) meeting, attended by Mr Hugh Fish, the Chairman of the NERC, Professor Briden, Geoff Larminie and Cabinet Office representatives, it was made clear that the main issues of funding had not been resolved, but the idea of dividing up the BGS work programme into Core, Responsive and Research programmes was apparently agreed. The Director, therefore, announced to staff that the work programme for 1988/89 was going to be planned on that basis.
The papers prepared up to this point were then used by the Department of Education and Science as a source for drafting the PES bid. The closing date for the 1989/90 financial year was in May 1988. The Core Programme was to be funded by a combination of a direct grant of Science Budget from NERC, additional monies from the PES award and core commissions. The idea of persuading any departments to transfer any of their funds to the BGS was abandoned. The two programmes that were regarded as core commissions, the Offshore Survey and the Regional Geochemical Survey, were to be left as such. However, indications were given as early as December 1987 that the Department of Trade and Industry was prepared to arrange a Rothschild back transfer to the BGS/NERC to cover the continued cost of the Geochemical Survey.
The PES bid went forward, but even after it the question of closing down or privatising the BGS did not go away. As late as August Geoff Larminie was required by the Department of Education and Science to prepare a paper on the case for and against privatising the BGS. He could find little to say in its favour.
Near the end of August, Kenneth Baker, the Secretary of State for Education and Science, wrote to John Major, Chief Secretary at the Treasury, to explain his PES bid. He stressed that it was unusual in that it was a bid made on behalf of several departments, but the main purpose of the letter seems to be to say that he was considering revising downwards the figure he had asked for in the submission he had made in May. John Major was not impressed. He concluded that the Core Programme was of low scientific research priority and unless other colleagues (presumably from other departments) were prepared to finance it from their own provisions it (the Core Programme) ought to be closed down so that money could be switched to research of higher priority. The rest of the BGS should continue on a fully self-financing basis. Had this happened, the BGS would have been put in a very difficult position. Funding the BGS Core Programme did not come high in the NERC’s spending priorities and it is unlikely that much more than £5 million a year would have been forthcoming from that source. At this level of funding, strategic science would have withered to a point below viability. The Commissioned Programme may even have been separated out and hosted in a privatised body. This is exactly what had happened in Sweden in the early 1980s. The part of the Swedish story that was known in 1985 was reported in Butler’s report; yet here the BGS was facing a potential reenactment.
There is no documentation in BGS files to indicate what happened to change John Major’s mind, because on 7 November Kenneth Baker, gave a written answer in the House in response to a question from Michael Latham, in which he reported the award of the PES money to the BGS. It is worth repeating both question and answer in full as quoted from Hansard in BGS Office Notice 23/88.
- Mr Latham: To ask the Secretary of State for Education and Science whether he is yet in a position to announce his decision on the proposal that the British Geological Survey should cease to be under the auspices of the Natural Environment Research Council; and whether he will make a statement.
- Mr Kenneth Baker: Yes. As Sir Clifford Butler’s report recognised, the British Geological Survey is an important national resource whose primary function is to meet national surveying needs. It will remain within the responsibilities of my Department and as part of the Natural Environment Research Council. But changes and developments are needed. I accept the concept of a core programme of surveying as recommended by Butler; and within this, the centrality of the National Geosciences Data Centre. Further work is needed to define that programme, having regard to the priority needs of users both in the private and public sectors; and to examine the Survey’s future financial and funding arrangements, including such matters as charging for goods and services. Pending completion of this further work, I am making available for the Survey, through the NERC, an additional £3 million in 1989–90, with planning additions of £4 million in 1990–91 and £5 million in 1991–92. These planning figures will be subject to review in the normal way through the Public Expenditure Survey.
This new money was to be added in the first year to the £3.2 million Science Budget identified in the NERC Corporate Plan. There is some confusion about the actual amount that the NERC was intending to give to the BGS that year. A planning figure of £7 million was identified the previous November. This was reduced to £5 million later. The confusion is about whether these high figures included the costs associated with the development of the Keyworth HQ, which was not then finished. They probably did, because £1 million was added to the designated £3.2 million for the closure of the Gray’s Inn Road office in London.
In a NERC Establishment Bulletin (36/88) issued immediately after the announcement, Professor John Knill, the NERC Chairman, announced that NERC had decided in principle to set up a Programme Board to determine priorities and monitor performance of the Core Programme. It was to be in place by January 1989.
Kenneth Baker’s announcement contained the message that the BGS was to be subjected to a further review to look into matters relating to charging for goods and services. The inference was that this award was only part of the settlement and that, subject to a good report from this review, there would be more. One of the first tasks of the new Programme Board was to frame a second PES bid.
The BGS had always sold its maps and memoirs and, since 1984, had charged for dealing with small enquiries. There was also a well-established Commissioned Research Programme. The issue that emerged from Butler, and which figured large in much of the correspondence with the DES that followed, was the one of making the National Geosciences Data Centre self-financing. Indeed in the E(ST)(O) paper it was stated that the BGS should aim to increase earnings both from the UK private sector and abroad (via NGDC and ‘profits’ from contracts), provided the Core Programme was not harmed. The consequent increase in income could allow the NGDC to pay for itself. It was clear to everyone who had looked into it that the huge resource of data and materials held by the BGS was under-exploited, but the question of how to generate a greater income from it had not been properly addressed. Thus, when the November announcement had been made the Charging Review began.
The Charging Review team was made up of officials from the Treasury, Cabinet Office, the Department of Education and Science and the NERC/BGS. The only member of staff from the BGS to take part was Dennis Hackett, the BGS Secretary. This was the least transparent of the review groups to look into the affairs of the BGS during this period, its report having been submitted as a private paper to the Secretary of State for Education and Science. The Review Group carried out the most intense scrutiny of the Survey’s finances that there had ever been. It first met in January 1989 and came to Keyworth on 2 February 1989. This was a day of familiarisation for the review group, divided between presentations by BGS staff in the morning and a full meeting of the group in the afternoon. One of the Treasury members was Colin Farthing, who raised, again, the idea of abandoning strategic geological surveys in favour of surveying on demand to be paid for directly by customers. When this whole affair was over and an award made that was much lower than that requested, it was joked that ‘BGS asked for millions and were sent a Farthing’.
The Charging Review Group finished its work in May and its report accompanied the PES bid that had been prepared by the BGS Programme Board. For the Board, this was a baptism of fire. In the first few months of its existence it was tasked to plan a Core Programme for implementation on 1 April and draft a PES bid for enhancement funding for its highest-priority activities. Unlike the first, which was a general bid for funds to support the Core Programme, prepared by the Department of Education and Science, the strategy for this PES bid was very specific. There were five elements to it: to gain funds to enhance the National Geosciences Information Service (NGIS, the renamed NGDC), to accelerate the Onshore and the Hydrogeological Surveys, to restore the Geophysics Programme after funding had been transferred out of it to supplement other, higher-priority parts of the Core Programme, and for a building programme. A total of £21 million was requested, spread over three years, of which £3 million was for new building. Among the proposed building programme was a map and book store that would enable the BGS to sever its increasingly expensive links with the Ordnance Survey, who, at that time, rented space to the BGS to store all its map stocks. The bid was approved by Council on 18 May and went to the BGS Programme Board on 24 May.
Among the many detailed comments and recommendations that would enable the BGS to improve its income-generating capability, the Charging Review concluded that the Survey could not be supported solely by levying charges on its user community. It agreed that a contribution from the Science Budget was justified. The generally supportive report led to Government making a second PES award, this time of £6 million over three years. It was announced by the Secretary of State on 15 November with the words, ‘… to put BGS on a sound long-term footing through a once-and-for-all investment in the National Geological Information Service (sic) … to stimulate the generation of outside income which can be reinvested in core surveying activities’. The full details came in a written answer to a Parliamentary Question recorded in Hansard on 22 November:
- Mr Hanley: To ask the Secretary of State for Education and Science if he will make a statement on the funding of the British Geological Survey.
- Mr MacGregor: Last year, pending further work on defining the British Geological Survey’s (BGS) Core Programme and its future financial and funding arrangements, an additional £3 million was made available in 1989–90 with planning additions of £4 million in 1990–91 and £5 million in 1991–92. I have now considered the outcome of this work conducted by the BGS Programme Board and by a group of officials, from relevant Government Departments and the Natural Environment Research Council (NERC), and have concluded that the Survey has the potential to generate more of its income from the users of geological information, and that this should be the source of any funds needed to accelerate the rate at which it conducts its core surveying.
In order to facilitate this process, I am providing additional investment for the National Geosciences Information Service, to allow better access to, and marketing of, the survey’s geological information and its interpretation. I am therefore making available to the survey, through the NERC, a further £1 million in 1990–91, £2 million in 1991–92 and £3 million in 1992–93. With these once and for all additions, the Science Budget income to the BGS should provide a secure base for the development of the Survey’s activities in the years ahead.
It was clear that this was all that the BGS was going to get. Once and for all meant just that. After each of the two three-year periods covered by the two PES awards, the final annual sum was added to the BGS baseline funding, making a total, at the end of four years, of £8 million. In both cases, agreement only came after the receipt by the Secretary of State of a satisfactory report on the performance of the BGS.
The only question that now remained in the mind of the BGS management was whether success for the BGS would mean that the NERC had the freedom to reduce its Science Budget allocation to the BGS in the light of the increased earnings. It appeared from the way that the Department of Education and Science had dealt with the first bid that the award would be ring-fenced, but, ever distrustful, BGS sought reassurance. The question was publicly answered in a speech by Robert Jackson, the Science Minister, at the ceremony on 11 July 1990 when the Keyworth site was renamed the Kingsley Dunham Centre. The full text of the speech was published in the winter 1990 issue, volume 16, number 4, of British Geologist, the magazine of the now-defunct Institution of Geologists. He said that funds generated (from commissions) for the core activity would be additional to the Science Budget funding of the Core Programme and not in substitution to it. He further said that this would also apply to funds received from the EC.
It was a major victory for the BGS. Additional funding had been secured, effectively to implement the 1985 Strategic Plan, albeit modified by the Butler report, the Briden/Larminie paper and the Programme Board. The fragmentation of the Survey had been prevented. The only one of Butler’s original recommendations not to be realised was removal from the NERC — a move which, in the light of all subsequent developments, had lost much of its relevance, anyway.