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A 'silver cloud' with a dark lining? – medical research charities in the recession

I suspect you may have seen the bleak forecast made by charity chief executives in the latest National Council for Voluntary Organisations (NCVO) survey published today.  97% of those surveyed said they expected economic conditions to be negative and 55% advised that they would be reducing their staff.

Tough times indeed.  And so this seems an opportune moment to publish for the first time, AMRC’s up-to-date evidence of how medical research charities in particular are faring.  If you have time to spare, you can find the summary results from our survey conducted in February (and interpretation) here.  The headline figure of 63% of our members saying the affect of the recession was significant or very significant certainly bears out what chief execs are saying in the NCVO study.  If nothing else, it underlines the point that charities are suffering in general.

I tend to agree withStuart Etherington from NCVO that, if the Government is really serious about charities being a full partner in the economy, then it better get its act together and develop a growth strategy with us, for us, and fast.

But forgive me if I necessarily concentrate on making a few, brief science-focused comments and observations based on our own survey:

The good news is that the forecasts for research expenditure by AMRC’s members are on a par with the last time we did this survey in 2009 – if not a little better.  Then, 63% of member charities said their future funding would stay the same and 21% said they would be increasing funding.  This year, 55% said they would be maintaining their funding at the same levels and 32.5% said they would be increasing it.

On the down side, a slighter higher number of members – 12.5% this year versus 8% last time – say they do not intend to fund new research this year or plan to reduce funding.    The economy is perhaps amplifying the diversity in the sector – particularly the difference between the top and the tail of the AMRC family –  just as corrections in any market are wont to do.  The texture of the comments provided by charities is also interesting in showing how a) pressures elsewhere are rippling across to our members (a further point is made on this below) but also b) the the very significant strategic rethink  some organisations are undertaking as opposed to a mere trimming of activity.

This year we deliberately asked our members for their first impressions of the impact of the spending review.  Three themes emerge.

The first is anecdotal only but the squeeze on public finances and cuts to services elsewhere is forcing some medical research charities who also provide care services, to consider diverting funds from research to the latter.  As I say in the survey report:

‘Interestingly, this year we are beginning to see a narrative emerge which reports that economic conditions are not just impacting income but the growth and room for manoeuvre for charities in fulfilling their objectives.  As one respondent put it: 

 ‘The impact is not limited to income, but more about how we will need to use our funds. As a charity that encompasses both care and research, we are beginning to see the impact of statutory retreat, with a significant rise in requests for support from patients and families. This is likely to require us to divert funds from research to care-based activities.’

How far and wide this trend extends only time will tell.

The second is a perception among members of shrinkage in the research infrastructure which – a bit like the proverbial air bubble in one’s recently covered text book which simply moves elsewhere when pressed – means extra pressure in other parts of the system.

Which leads me onto the third – as predicted by Dame Bridget Ogilvie in her guest blog here last autumn .  Namely, that AMRC member charities are beginning to see an increase in the number of grant applications they are receiving.  More than one Chief Executive has already expressed to me the difficulties of managing this, both in terms of administration but also in terms of ensuring they continue to derive the highest quality from the ideas being put forward.

Finally, today we have also updated our data to show the sector’s research expenditure for 2010-2011.  During that period, AMRC’s member charities spent £1.137 billion on research (excluding capital expenditure) versus £1,078 billion last year.  A slight increase therefore and a record to be proud of given the environment.  But the salutory story looking back over the longer term, is that this is the smallest increase we have seen since 2005 and the first quantitative indication of what economists might call a ‘slow-down.’

Being an optimist by nature I comfort myself with the knowledge that medical research remains the No. 1 cause that the public gives to.  But it would appear today that even this silver cloud has a somewhat dark lining.

The message to supporters and the public remains the same as it has over the past few years – your donations are vital to charities continuing to support medical research of patient benefit!

Guest Blog: Dame Bridget Ogilvie on the spending review

A change is as good as a rest they say.  So I am delighted that our former Chair (as well as former Director of the Wellcome Trust), Dame Bridget Ogilvie, took up my invitation to give us her perspective on the spending review and its implications.  Its closing sentiments about the development of young scientists will strike  a chord with many I feel…..

Dame Bridget Ogilvie

At last we know the worst now that the Chancellor of the Exchequer has spoken. It’s great news that he thinks that investment in scientific research is necessary for the future growth of the economy. So the good news is that the science budget will remain at its current level of £4.6b per annum over the next 4 years, although the research councils and universities will be required to deliver efficiencies worth £162 million a year by 2014-15. 

In addition, the Government has confirmed that they will give £220m in capital funding from the Department of Health budget to UKCMRI, the consortium which includes the Medical Research Council, Cancer Research UK, the Wellcome Trust and UCL.  Also, the Government will maintain its commitment to fund developments at the MRC’s LMB, Pirbright and Diamond facilities.In the nation’s present financial predicament, all this is wonderful news and far better than most of us had anticipated.

But….as the cost of scientific research always outruns the general level of inflation, over this time period the value of these funds for science will fall.  We must also remember the wider context of overall funding for universities falling from £7.1 billion to £4.2 billion.  Although this settlement excludes research funding, its ultimate impact remains to be seen.  However, I am sadly sure this will affect the research productivity of universities.

We know too that many research funding charities have already seen a reduction in their ability to fund.  When money for research was reduced in the 1980’s and 90’s, the Wellcome Trust’s funds were increasing exponentially which ensured that the UK remained a real force for medical research internationally.   What Wednesday’s announcement means for charities and other funders we don’t know yet, but many anticipate that it will increase the number of applications for a grant that they receive. So even with this relatively good news, the competition for funds, already severe, will get worse.

What to do?

We know that failure to support the young when times are hard has bad long term consequences. We are still feeling the effect of poor levels of research funding in the 1990’s because the age cohort beneath the present leaders is below strength which is a real worry. We also know there is an increasing tendency to give very large grants to existing leaders with consequent reduction in funds for the less established, and nowadays scientists often don’t get their independence before they are 40+.  My generation became independent 10 or more years earlier.Many excellent people leave a research career when they feel they are unlikely to become independent until after the age of 40. 

Funders rarely pay attention to the way scientific leaders lead and manage their group. There is evidence that once groups exceed 10-12 in number, productivity drops.  Therefore, leaders and funders need to address this issue not only by making sure that developing scientists get a fair share of available resources.  But also that they are properly managed and not unfairly used by their seniors to the advantage of the leaders but the disadvantage of the whole scientific community.

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