The following draft has been prepared by committee member Jim Salinger

The deadline for this submission is fast approaching and  if any members would like to have an input please send it direct to

j.salinger@... and j.renwick@...

Ideally before  5pm Tuesday 24 Nov ,  but I think we have an extension to next week, so by the end of the week is OK , thanks.

bobmcd@...  Bob McDavitt, newsletter editor

SUBMISSION TO THE CROWN RESEARCH INSTITUTE TASKFORCE

FROM THE METEOROLOGICAL SOCIETY OF NEW ZEALAND

BACKGROUND

The Meteorological Society of New Zealand (MetSoc) is an independent group of weather and climate scientists and enthusiasts with the stated aim to encourage an interest in the atmosphere, weather and climate, particularly as related to the New Zealand region. It has a widely based membership of 200 from all parts of the meteorology and climate science including scientists, university staff, consultants, policy analysts, and private sector companies. We organise conferences on weather and climate which covers current topics in the meteorological science – the most recent being one on “Oceans and Climate” held at the University of Auckland in August 2009. Proceedings of these meetings are published in our well respected quarterly newsletter.

INTRODUCTION

MetSoc has vigorously written and commented on the state of the New Zealand science system over many years in the media in relation to weather and climate science and forecasting. This submission has been deliberately kept brief, which may have assumed assumptions about CRIs and the 1992 CRI Act. The lack of correct execution of this Act may be a primary reason why outcomes have not been attained.

1.  THE SCOPE AND CORE PURPOSE OF CRIs

The scope and core purpose of the CRIs is laid out in the CRI Act, which was a visionary piece of legislation in the function of CRIs is to “Develop and maintain research capabilities and to undertake research.”  There is thus an emphasis on researching the New Zealand environment, research collaboration, high scientific achievement and improvement of science infrastructure are all decisively important for CRIs main function of increasing the country’s research capacity to benefit New Zealand and protect the New Zealand environment.  

Many non-financial indicators have not been achieved because instructions to the CRIs such as NIWA have been from government shareholding ministers via CCMAU has placed a great emphasise on financial performance. This is even seen in today’s recession where a return of 9 percent is an expectation. Science relies on close collaboration and cooperation between CRIs and Universities.      The fact that many of these non-financial indicators have not been achieved is quite simple. Confused messages from government to CRIs through CCMAU and presumably shareholding Ministers has placed an overwhelming emphasis on financial performance. We believe that the core of the problem is the imposition of a corporate model with corporate financial returns for science would be a calamity.

Applications for public funding have a 10% chance of success (if we include the screening out that the parent organisation is instructed to carry out by FRST). This is an extraordinarily low rate of success by any international standard (NIH, NSF in the USA run at about 25%). The level of scientific achievement has suffered because of over a decade of the absurdly competitive funding environment. CRIs have tended to use their most senior scientists to write the bids, which has been very damaging on productivity.

We believe that there is a need for a clarification of the purpose of individual CRIs as there are significant differences. For example, NIWA gets about 70% of its income from crown or local government sources (PGSF, local authorities, MFish), while ESR gets about 90% of its income from other government departments (Health and Police). GNS does not have the same relationship to a “sector” as does AgResearch. Such differences can surely be taken into account by individual negotiations on each strategic plan with the shareholding Ministers.

2.  GOVERNANCE AND ACCOUNTABILITY

Climate research is long term (5-20 years+) to understand the drivers of climate, change change and its impacts, so it must move towards a strategic end point. However, the Crown must make clear its needs. The 2007 OECD report on New Zealand’s innovation policy, recommended that we should reduce our over reliance on competitive bidding and give CRIs core funding of one half to one third of revenue.  We also wonder whether in the government appointed CRI Boards made up of lawyers, accountants, entrepreneurs, professional directors and occasional scientists are an appropriate mix to account for the demands under the 1992 Act and specifically the appointment of non scientists to lead the CRIs. This is a strange anomaly when compared with scientific institutions elsewhere.

3.  PERFORMANCE MEASURES INCLUDING USE OF FINANCIAL PERFORMANCE MEASURES

CRIs must have performance measures, but whether the rote adherence to project management of science where projects must produce “profits” and “dividends” is appropriate, when there are a raft of non-financial indicators that are indicative of good performance according to the 1992 Act.

Performance also includes job creation, indirect rates of return on investment, social dividends, regional development and facilitation of the application of the results of research and technological development. These performance measures would create a huge behaviour change in CRIs to a more public good role which was always envisaged in the Act.

The need to meet the requirement of the Act for an adequate rate of return on shareholder funds led to some curious demands. In the 90’s CCMAU set a reasonable return at the level of 5-year government bonds. This turned out to be higher that the returns being made by the meat, wool and forestry industries served by some CRIs. The recent imposition of 9% dividend on assets would be well in advance of all primary sector industries, and probably of most companies in the current recessionary environment. It would seem sensible to set the requirement more in line with the industries the CRIs are suppose to serve rather than setting up unreasonable “stretch” targets.

4.  FUNDING

The conflict suggested in the question will be solved by accepting the 2007 OECD recommendation to increase core funding of CRIs to one half to one third of revenues, so that there is more stability for the careers of people with essential new skills.

5.  ALIGNMENT

Currently, despite the obstacles,  there is very substantial collaboration between CRIs and many other agencies. But  there should not be more collaboration. Competition stands in the way with financial pressures on the CRIs. Survivability revolves around competition, and the returns they must achieve are often not compatible with co-operation. The inevitable result of collaborating with another agency rather than going it alone are that there is less profit. That’s not to say that synergies with others may not obtain funds that might not have been achieved alone.

CONCLUSION

1. Requirements are adjustments as suggested in this submission to place the correct incentives so that CRIs will be “to produce research and innovation which will accrue to New Zealand’s economy, environment and social development.”
2. There is not a requirement for large restructuring of CRIs, which would be very disruptive to staff morale and productivity. However, there could be amalgamations.

Jim Salinger

On behalf of Meteorological Society of New Zealand

23 November 2009