NOC Independence FAQs
On 1 November 2019 the NOC becomes an independent self-governing organisation, independent of NERC/UKRI. This set of FAQs is to inform our stakeholders about this process.
What is the reason for change?
The reason for the change is to enable the NOC to continue to flourish as a world-class research organisation by giving it the independence it needs to have the freedoms to meet the challenges and opportunities facing it.
What is the legal status of NOC today?
Unusually by international comparisons, and counter to what many people assume, the NOC was not a legal entity. It was fully embedded in (effectively as a department of) the UK’s main environmental science funding body - the Natural Environment Research Council (NERC). In turn, NERC is part of the UK’s main science funding agency – UK Research & Innovation (UKRI), which is the legal entity (a non-departmental public body).
How will new arrangements differ from those of before?
This rather complex arrangement for where the NOC is positioned has become progressively unsatisfactory for both NERC/UKRI and the NOC. NERC was both the main funder of the NOC and also responsible for managing it. It also meant that the NOC was very constrained in its freedoms to operate because it has to follow many rules and systems designed mainly for running a large science funding agency, or even Government departments - not for running a world-class research institution – one which is operating globally, has over 600 staff (employed by UKRI), bidding for and delivering complex multi-partner projects, and operating large research infrastructures like research ships. Under the new arrangements, the NOC became a separate legal entity, able to manage its own affairs whilst continuing to receive substantial funding from NERC and other public-funding sources, but not owned or managed by NERC.
What type of organisation is the NOC post independence?
The NOC’s mission remains first and foremost as a scientific institution undertaking and supporting the UK scientific community to undertake large-scale oceanographic sciences. The NOC is not going to become a commercial entity. In fact, the way it is being set up as a legal entity prohibits that. The NOC will be publishing a new strategy shortly that will set this out clearly.
What legal form will the NOC have?
In legal terms, the NOC will operate as a non-profit-distributing charitable company (a Company Limited by Guarantee). As a charity, the NOC’s role as being first and foremost a scientific organisation will be protected into the future. As a charity the NOC will need to demonstrate that its primary purpose is to deliver public benefit (NOC’s primary charitable purpose described in its charitable objects will be advancement of science and education). Like many charities, the NOC will own and operate a trading subsidiary to enable it to generate additional revenue from a wider range of commercial sources to help support its charitable purpose of undertaking and enabling scientific research and education.
Is this an unusual legal model that the NOC will be experimenting with?
No, not at all. In fact, it is the standard model today for research institutions. When new research institutes are established in the UK today, they almost invariably use this model or something very similar. Two recent examples are the Francis Crick Institute, which undertakes bio-medical research, and the Alan Turing Institute, which specialises in big data analytics. Moreover, the model is being used more widely in the UK to empower organisations which are publicly funded with the freedom to operate, invest, and take their own decisions (close to the frontline of operations). For example, many State-funded secondary schools are now being established as Academy Trusts. In legal terms, these are Companies Limited by Guarantee with charitable status (like the NOC model), where the primary charitable purpose is education.
Who is on the Board of Trustees of the NOC?
A new Board of Trustees has been recruited and has helped guide negotiations with NERC. The Chair is John Hirst, who is also Chair of the British Standards Institute and former Chief Executive of the Met Office. The Board of Trustees contains a broad base of scientific, commercial and other skills and experiences pertinent to the NOC’s mission. NERC will have an observer on the Board and a representative of the chair of the NOC Association of Marine Science National Capability Beneficiaries will also have a seat as an observer on the NOC Board. Details of the new NOC Board of Trustees →.
What are the additional freedoms the NOC was seeking from the change?
As a legally independent self-governing institution, the NOC will have the freedom to:
- develop (over time) suitable employment terms for its own staff;
- exploit its intellectual property much more flexibly;
- grow and keep its own financial reserves to reinvest in promising new areas and help manage year-to-year fluctuations in its substantial competitive research income.
Who will fund the NOC?
NERC will continue to be the main funder of the NOC. The purpose of the change is not for NERC to withdraw funding, but rather to give the NOC the freedom that NERC also needs it to have to be able to continue undertaking leading oceanographic science and provide the underpinning capabilities that the UK science community needs to be successful. Hence, the NERC funding arrangements are not expected to change significantly – but the relationship between NERC and the NOC will be on a much clearer basis rather than the current mixed owner/funder model.
The NOC is a big organisation - who carries the financial risks?
Over time the risk will progressively transfer to the NOC as it employs its own staff and takes on new contracts in its own right. In line with standard transactions of this type, NERC will retain liabilities that were incurred whilst the NOC was still part of NERC, whilst the NOC will take responsibilities for new liabilities it incurs as a new organisation. This cannot happen overnight, however, and in the first instance, the NOC will be able to take on new risks due to the freedoms it will have to manage risk – such as taking out insurance and carrying reserves.
What funding will NERC provide?
Future funding has been agreed between NERC and the NOC, with just under half of the present £60m annual income provided for through long-term National Capability in ocean science. NERC National Capability funding specifically supports (a) long term programmes of science, e.g. sustained ocean observations, modelling, mapping, technology development, (b) managing oceanographic data and samples, (c) providing research infrastructures and facilities accessible to the entire scientific community, and (d) NOC being a source of independent scientific advice, a national focus for ocean sciences, and providing international representation and visibility in key international fora. The NOC will also remain eligible to bid for competitive research and innovation funding from NERC and UKRI as it does today.
Who now employs NOC’s scientists, technicians and other staff?
The NOC as an independent legal entity will continue to be able to employ its own staff. NOC staff who were employed under UKRI employment contracts have been transferred along with their existing & protected terms and conditions to NOC CLG as of 1 November 2019. Following this date, NOC will recruit new staff in line with new contracts of employment and terms and conditions
What differences can I expect to see with the new organisation?
In practice very little will change from the outside perspective on day one. The NOC’s mission remains the same, and it will continue to deliver on all its existing commitments. Over time, those who work with the NOC should experience the benefits of the NOC being able to operate with greater freedoms, flexibilities and self-determination than it has had whilst part of a Research Council.
Who now owns and operates the research ships RRS Discovery and RRS James Cook?
NERC will continue to own the research ships, but they will be operated by the NOC under a bareboat charter from NERC. The NOC will provide the crew and the specialist team of seagoing technical experts and the nationally pooled marine equipment. The funding of science using ships, and the programming of the research ships (the Marine Facilities Programme) will continue to be undertaken by NERC. The NOC will not have priority access to the ships. Nevertheless, entirely separately from NOC independence, NERC Council decided in 2014 (and implemented from 2017) that it could no longer afford to fully fund the Marine Facilities Programme with full inflation protection. Consequently, over time, there will be an increasing projected gap in funding between the level of National Capability funding provided by NERC and the costs of maintaining the 2017 levels of capability. The NOC has therefore been tasked by NERC to address this funding gap by seeking third party usage of the ships and marine equipment to help bridge that gap - such as through ship charters or equipment hire. NERC through its Cruise Programme Executive Board, chaired by the NERC Director of Research (and including senior representatives from the science community and NOC), will have the final say in approving, or otherwise, ship and equipment hire. It is in the interests of the marine science community to support this effort in order to sustain a level of ship and marine equipment capability that would otherwise be unaffordable if relying on NERC funding alone.
Will data managed by NOC through the British Oceanographic Data Centre still be freely accessible?
Yes. The mission of BODC, which is part of the NOC, is to make oceanographic data freely available and it also supports the international ocean data exchange system. NERC funded data remains owned by NERC, and a condition of National Capability funding to BODC is that the data continues to be made available in line with the NERC data policy.
What will happen if my organisation had an existing contract with the NOC?
Prior to 1 November 2019 all contracts with the NOC were in the name of the legal entity, which was UKRI. The NOC expects to continue to deliver these contracts to completion, and the aim is to novate the great majority of contracts where possible from UKRI to NOC. In the period up to ‘go live’, the NOC and NERC engaged with partners regarding the novation of contracts.
How is this change likely to be affected by Brexit?
Brexit and the precise form it will take is a current source of uncertainty and risk. These are the same whether the NOC remained part of NERC or became independent. Some of the shorter-term risks to EU funding will be managed by the UK Government’s commitment to underwrite EU contracts won before the date of exit – so there would be no ‘cliff edge’ even in the event of a ‘no deal’. In the longer term, the whole purpose of the change is to equip the NOC with the freedoms it needs to manage the challenges and opportunities ahead. NOC will likely be in better shape to deal with the post-Brexit situation than if it had remained in NERC. A key element of the freedoms sought are to enable the NOC to be able to attract, develop and retain top scientific talent from across Europe and the rest of the world.