Ownership and governance of NERC centres

Update - 11 February 2019

A major milestone has been met on the journey towards independence for two research centres within the NERC portfolio.

The Centre for Ecology & Hydrology (CEH) and the National Oceanography Centre (NOC) are aiming to become independent charitable bodies later this year. In January 2019, the programme underwent an independent Gateway 4 Review, the 'readiness to implement' review under the standard Cabinet Office methodology. This review considered the large amount of activity which has been completed to date by UK Research & Innovation (UKRI), NERC, NOC and CEH project teams in preparation of the move to independence. The review concluded that:

The GRO Programme is on track to deliver the go-live transitions for the Centre for Ecology & Hydrology (CEH) and the National Oceanography Centre (NOC). The review team considers that successful delivery of the plan is likely, and that the programme risks are being managed well.

If final approval is received from the Minister, a date will be set for NOC and CEH to become independent research institutes (companies limited by guarantee with charitable status). In the meantime, the CEH and NOC boards are continuing to engage with NERC and UKRI to finalise the terms of the transfer.

NERC Council continues to affirm the importance of sustaining long-term funding to its research centres. This will remain the case, regardless of the changes in ownership and governance. NOC and CEH will continue to deliver independent world-class science for all funders, in collaboration with a wide range of partners. The new governance structures will make NOC and CEH more agile and financially more resilient, with more freedoms and flexibilities to deliver their science and to do so with a greater range of external partners and funders. The missions, purpose and scientific integrity of CEH and NOC will be protected and the detail of managing future and ongoing options, risks and issues will remain at the forefront of the process.

NERC and the British Geological Survey (BGS) announced the membership of the first BGS Board. The BGS Board has been created to assist BGS meet future challenges and ensure it continues as a globally leading survey, delivering services and providing infrastructure support nationally and globally. The Chair and Board will work closely with the BGS Director and the NERC Chief Executive to shape BGS's successful future.

NERC and Sir Keith O'Nions, the BGS Chair, have appointed a high quality Board of non-executive directors to support the Board Chair and BGS executive team in shaping the organisation's strategy and business plans. This will enable BGS to deliver its mission, manage commercial risk and diversify its funding.

NERC, the National Oceanography Centre (NOC) and the Centre for Ecology & Hydrology (CEH) have been working with government to consider the future governance, responsibilities and ownership arrangements for NOC and CEH.

In October 2017, the Minister of State for Universities, Science, Research & Innovation agreed that plans for CEH and NOC to become independent research institutes (companies limited by guarantee with charitable status) should move into preparation phase. We will now progress all the activities required to demonstrate readiness to transition to independent institutes.

This will include, for instance, creating non-trading companies limited by guarantee, with boards which will then engage with NERC and UK Research & Innovation (UKRI) to agree the terms of the transfer. This milestone allows us to start the detailed planning, which we will share with our external stakeholders, staff members, third party funders, other partners and suppliers as we progress. 'Readiness to implement' will then be tested at the Gateway 4 Review and the resulting business case submitted for ministerial review and approval in 2018.

Further details are in the news article CEH and NOC working to become independent research institutions.

Sir Keith O'Nions has been announced as the first Chair to lead the new British Geological Survey (BGS) Board. The BGS Board has been created to assist the BGS to meet future challenges and ensure it continues as a globally-leading survey, delivering services and providing infrastructure support nationally and globally.

NERC Council has affirmed its decision to proceed to the next stage of a process considering changes in the ownership and governance of two of its research centres, the Centre for Ecology & Hydrology (CEH) and the National Oceanography Centre (NOC).

While no decision to change the status and move the centres out of NERC has been taken, NERC will continue to take steps to test their readiness for changes in their ownership and governance.

NERC made this decision at its most recent Council meeting in mid-July.

NERC Council has decided to proceed with a process that assures them that changes to the ownership and governance of CEH and NOC respect the centres' unique roles, and ensures their long-term sustainability and contribution to world-leading UK environmental science and innovation. NERC will continue to consider the full range of options for the future ownership and governance of the British Geological Survey. There are no plans to change the status of the British Antarctic Survey.

CEH and NOC support the decision to proceed to the next stage of the process and agree that further exploration of the proposed model is the right way forward to protect and recognise their unique roles.

NERC Council continues to affirm the importance of sustaining long-term funding to its research centres. This will remain the case, regardless of changes in ownership and governance.

Council will continue to adhere to an approximately one- to two-year timescale that will ensure the centres are fully equipped if they are to make a successful transition to independent operation. Further cross-government consultation and agreement is required alongside a process of testing readiness before any final decisions are made.

NERC Council has agreed to proceed to the next stage of a process considering changes in the ownership and governance of two of its research centres. While no decision to change the status and move the centres out of NERC has been taken, the best option has been identified and steps will now be taken to test the readiness of the centres for changes in their ownership and governance.

The National Oceanography Centre (NOC) and the Centre for Ecology & Hydrology (CEH) will now begin an in-depth process to examine the benefits of not-for-profit charitable status which will protect their science and allow for potential diversification of funding. NERC will also continue to consider alternative options for the future ownership and governance of the British Geological Survey (BGS).

A change in ownership and governance of NOC and CEH is being considered to sustain their world-class reputation for science by giving them greater freedoms and flexibilities. This change would ensure both bodies continue to attract renowned scientists and deliver excellent science and innovation.

Both centres support the decision to proceed to the next stage of the process and agree that further exploration of the proposed model is the right way forward to protect and recognise their unique roles.

NERC Council continues to affirm the importance of sustaining long-term funding to its research centres. This will remain the case, regardless of changes in ownership and governance.

The Council decision to proceed to this next stage follows extensive consultation and engagement, and detailed planning at each of the centres and across NERC.

NERC chief executive, Professor Duncan Wingham, said:

This is an important step in the journey we are on to determine the optimal model for the ownership and governance of NOC and CEH to sustain into the future their unique contribution to the excellence of UK environmental science. We also want to be sure that we maintain their scientific-frontier roles as well as continue to provide government with robust, independent advice. I look forward to working closely with NOC and CEH during this next stage of this process.

Council will now move to an approximately one- to two-year phase that will ensure the centres are fully equipped if they are to make a successful transition to independent operation. Further cross-government consultation and agreement is required alongside a process of testing readiness before any final decisions are made.

At its next meeting on 3-4 December 2014, NERC Council is scheduled to discuss the next stage of an ongoing process that may see the modification of the ownership and governance of three of its research centres in time: the National Oceanography Centre (NOC), the British Geological Survey (BGS), and the Centre for Ecology & Hydrology (CEH).

NERC Council will discuss whether or not to continue to the next stage of this ongoing process to transition two of these centres (NOC and CEH) to the third sector, letting them continue to attract world-class scientists and deliver world-class science, while allowing them greater freedoms and flexibilities.

Council will continue to explore options for BGS remaining within the public sector to recognise its role in providing independent advice to Government and its distinct national role. Current thinking does not include considerations for BGS to be run by an external contractor, as was the case for the National Physical Laboratory.

It's NERC's understanding that the Government's Fair Deal for staff pensions would apply to NERC's centres if they became independent of NERC, and existing staff in the centres would continue to be members of the existing Research Councils' Pension Scheme.

NERC is reviewing the ownership and governance of four of its research centres; the British Geological Survey (BGS), the National Oceanography Centre (NOC), the Centre for Ecology & Hydrology (CEH), and the National Centre for Atmospheric Science (NCAS), with a view to giving them greater operational freedoms that will help ensure their sustainability into the future, while in addition better defining the distinct role of NERC as a research funder.

At the first project gateway in December 2013, Council decided to proceed with the review on the basis that the potential benefits of changed ownership and governance are likely to be realisable and outweigh the attendant risks. In considering alternative ownership models, including current structures, NERC has been keen to understand the views of a wide range of stakeholders (see call for evidence below), and in particular government departments (see Whitehall Reference Group below).

Council wishes to allow sufficient time to enable the appropriate level of engagement, assurance and review to inform its decision on this matter, and fully to explore all aspects of the different options for each of the centres and for NERC. At the next gateway, Council will decide whether the optimal model has been identified for each centre and for NERC. This decision is currently scheduled to take place at the meeting of Council in December 2014.

Whitehall Reference Group

NERC recognises that in its consideration of ownership and governance arrangements for BGS, CEH, NOC and NCAS there are aspects that need detailed discussion with government; for example, how NERC would ensure continued advice and emergency responses to government.

To facilitate this, NERC has assembled a Whitehall Reference Group (WRG) to enable structured input to the programme from those major central government stakeholders with an interest in the outcome.

NERC is supported on the Whitehall Reference Group by:

  • Department for Environment, Food & Rural Affairs (Defra)
  • Department of Energy & Climate Change (DECC)
  • Department for Business, Innovation & Skills (BIS)
  • Government Office for Science (GO Science)
  • Cabinet Office
  • HM Treasury

The group is chaired by the NERC chief executive and has one independent member from NERC Council, and one from the wider environmental scientific community.

Please note: this consultation is now closed and is preserved only for reference purposes.

The independent, external review of the received evidence is available below.

External advisory panel report (PDF, 216KB)

NERC is considering the merits of establishing its research centres as independent bodies, outside of the public sector.

Council considers that this change may offer potential advantages to NERC in ensuring that it can focus on its externally facing roles as a funder and champion for the environmental sciences, and to the centres in allowing them to develop freely and in line with their overall business and science objectives. Independence of the public sector does not necessarily imply profit-making; universities, for example, are private sector bodies.

NERC therefore intends to consider the ownership and governance of four of its centres, three of which are wholly owned – the British Geological Survey (BGS), the Centre for Ecology & Hydrology (CEH), and the National Oceanography Centre (NOC) - together with one that is currently operating outside NERC ownership, the National Centre for Atmospheric Science (NCAS). The question for NCAS is whether to provide it with self-owning status, which is not presently the case. NERC is not considering changes to its governance of the British Antarctic Survey. The future of the National Centre for Earth Observation (NCEO), which is another centre that operates outside NERC ownership, is being considered separately.

NERC appreciates that its research centres are recognised for the quality of their science and also their role in the wider national context for providing a range of 'national' or 'public' good services that benefit a range of government departments and public policy formation. NERC wishes to ensure that any changes to the present ownership and governance arrangements of its centres retain their excellence and national contribution.

In order to help understand whether the potential benefits outweigh the attendant risks, NERC is calling for evidence which will help determine, for each centre, whether these contributions might benefit from provision by a centre whose governance is independent of NERC, or whether there is a clear case for retaining the centre's NERC-owned status. We are particularly keen to receive evidence from organisations that have interactions or partnerships with the research centres and those who benefit from the research provided by the centres.

Council is open-minded at this stage as to the merits of the proposal and will be carefully considering the potential benefits on a centre by centre basis. Evidence received will be summarised for consideration by an independent, external review of this issue. The summary will be made public.

The closing date for responses was 30 August 2013.

Responses to this call are detailed in the document below.

Call for evidence - Responses (PDF, 12MB)