Just in case you felt bored, here’s another consulation.
(I spotted this while catching up on Paul Crowther’s amazing comprehensive STFC Funding Crisis website. How does he keep it up ? Should we officially declare him a National Treasure ?)
Anyhoo. This one is about the RCUK Large Facilities Roadmap. On the list of “emerging facilities” i.e. “things we might give money to” are four astro things – Cherenkov Telescope Array, Einstein (3G grav waves), ELT, and SKA. Get your vote in. I see that ELT got a pretty good economic impact plug. Is this a good sign ?
However, as John Peacock reminded us recently, it ain’t clear that taking money from the LFCF is a good thing. These capital investments are a loan from the Treasury, which have to be paid back. Allocations to research councils include ear-marked amounts which allow them to pay their current debts back to Treasury spread over some years. Err… I hear you say … so why give them this money at all, if it just whistles past invisibly ? Why, so Government can boast of what a fantastic large allocation they have been given ! It took us quite some time before we realised how crap STFC’s real allocation was. Well, when I say “we”, I expect Keef and Richard understood this all the time but were too embarassed to explain it.
John’s conclusion was that this is dodgy money and we should steer clear. I’m not sure thats right. Surely now we have learned about this trick we can watch the pea under the cup next time ?
The e-Astronomer 
I am reliably advised that this is entirely up to the Treasury: if the political will is there then they can adjust the terms and accounting rules to suit the specific situation.
In this case, a LFCF investment in an ESO-run E-ELT (and the LFCF rules already explicitly state that such international projects are allowed) would not result in STFC “owning” the hardware, so there are entirely reasonable grounds for them not being held separately accountable for the depreciation costs (which, presumably, will come out of the ongoing ESO subscription), just as the capital investment to join ESO did not result in the UK being made to pay separate depreciation on the VLT.
Mike – what about SKA ? I guess the entity to be created to own and run SKA is not yet clear. And Einstein, CTA ?
If you look at the draft RCUK document, you will notice that it says ‘Individual Research Councils, taking into consideration the views of their communities, decide which facilities should be included in the the Large Facilities Roadmap. Then, ‘ an initial sift of all the potential facilities that are eligible for LCCF is undertaken individually by Research Councils. Thhe final shortlist is agreed collectively by the Research Councils.’
So, assuming that Mike is right, and ESO facilities do not result in depreciation costs to STFC directly, then if we are to get the E-ELT (or even SKA, if that is your preference) on the LFCF list, then there are two principle hurdles. One: get it on the STFC shortlist – and I count about 18 facilities ointhe RCUK document which STFC could back for its science areas. This means more lobbying of the various advisory panels by the community. Two: an even bigger hurdle – persuading the other research councils to back a facility with no obvious benefit to their communities. Here we have to bring in the inspirational science and economic impact stories – but any suggestions as to how to push buttons for EPSRC, MRC, NERC etc are welcome!
Not so well plugged into any of the others, but I don’t believe that SKA has advanced to the stage where such things are finalized. I imagine it would have to be a treaty agreement, but there might be a temptation in such a modular installation as SKA to devolve complete responsibility for stations to individual nations, which could be bad news.
To address Colin’s post, I don’t think I am necessarily “right” about the depreciation, as there really isn’t a clear-cut answer when the rules can be rewritten where politically expedient. All I am arguing is that a strong case can be made that STFC should not have to pay depreciation on a LFCF investment in E-ELT, and hopefully STFC are arming themselves with such a case.
My greater concern is that, as usually happens, the Government will only come up with a percentage of the new money needed for E-ELT or SKA, making the usual (and quite reasonable) case that the rest should come out of saving elsewhere in STFC’s budget. Unfortunately, even quite a small percentage of these large projects is a very large amount of money. If the outdated and rather silly notion persists that “ground-based facilities” should be compartmentalized as an entity, finding this money could completely cripple the rest of the facilites that have been arbitrarily lumped together just because they happen to have their foundations at ground level.
If any of this is dodgy or more hype than real, is there a parliamentary subcommittee who could be prompted to ask nasty questions of the minister(s)?
Andy: I didn’t say that one should necessarily steer clear of the LFCF, just that it is essential to be clear about the total cost of ownership. In some cases, accepting money from LFCF means you have to take a hit in terms of a non-cash “funding increase” (i.e. decrease). Sometimes, this might be a price you are willing to pay – but much of the hoo-hah since the last CSR arose because many of us (me anyway) didn’t realise that STFC had accepted such commitments. It’s a bit like these competitions where you win a free holiday but find that meals aren’t included. As long as you find this out before you fly, you might want to accept the prize anyway. But better if free prizes meant what they said, and if LFCF money was indeed straightforward extra public spending on science.
As Mike Merrifield points out, for cases such as ESO it is completely clear that we don’t take a non-cash hit. Since ESO will probably run the SKA in due course, it therefore seems safe to take money for either E-ELT or SKA. But this just serves to emphasise how absurd it was that we got landed with the depreciation bill for Diamond. I can’t see why we didn’t set up a mechanism equivalent to ESO so that the UK didn’t end up owning the damned thing and having to pay the Treasury back for it.
John, I believe that CLRC/RCUK did in the past attempt to gather international partners for Diamond, which could have significantly altered its status… but nobody was interested. Trouble is, everybody wants their own national light source. And the ESRF as well of course.
The other thing to remember (linked to one of Mike’s comments) is that for “single Council” projects (e.g. E-ELT of SKA), we would be expected, under the LFCF rules, to contribute at least a third of the cost. Answers on a postcard as to where that would be found.
Maybe I can help there, Richard: a large fraction of the funding for E-ELT will come out of the ESO subscription, which comes under STFC’s budget, so I don’t think it would be that hard to make a case that you are willing to put up at least a third of the cost out of your existing budget if the LFCF will come up with the rest.
That’s a valid point Mike and of course we would try to do this. The problem is, as you know, that ESO propose to increase the subscription by 50% to pay towards ELT so we would need to find that. But I guess we could claim, as you suggest, that the proportion of the construction that was covered by the existing subscription level would be the STFC contribution with the increase coming from the LFCF. The problem then is that a bigger and bigger proportion of our spend is going out of the door in the form of international subscriptions and that’s putting pressure on grants etc. We also need to consider (and indeed explain in our bid for LFCF support) where the operating costs will come from. ESO will propose to take these from LaSilla/Paranal operations and maybe that will be enough.
Richard: I didn’t know that ESO want a 50% subscription increase. This sounds completely unrealistic: even in some fantasy alternative reality where the UK could afford it, it’s hard to imagine other major players agreeing. And presumably it would have to be unanimous?
If this is really what ESO thinks it will take to deliver ELT, then the sooner they negotiate a merger with TMT, the better.
Actually, there is a third way. CERN took out loans to build the LHC, arguing that these could be paid back from the (infinite) pool of money constituted by future subscriptions. The bulge of ELT construction sounds like a good case for a similar approach (running costs are another matter).
I heard that TMT have selected a site in Hawaii… this makes it hard for a merger now.
John — I believe that ESO has identified at least half of the capital costs of E-ELT out of their current projected income, and is looking at an increase in the subscription as one possible way of raising the remainder. As you say, there are options for ESO to borrow the money — the EU has such a mechanism, I believe — which they are also exploring, but obviously there is a trade off involved, and whether you would need to raise the subscription level and by how much would depend on how far you wish to mortgage the future.
In any case, as I understand it the plan is not to raise the baseline subscription, but to use a temporary increase as a mechanism for figuring out how to share the capital costs of E-ELT equitably around the member nations.
As Richard says, in that context it would constitute a reasonable bid to the LFCF, with the further significant benefits that there should be no nasty non-cash sting in the tail, that the research-council contribution is already in place, and that the additionality argument for topping up our involvement with ESO in return for major industrial contracts as well as World-leading science makes itself.
Mike. ESO do indeed have several different options for funding but any reasonable or likely solution involves a considerable (most likely 50%) increase in the subscription for the duration of construction at least.
That sounds about right, Richard. ESO is looking for half the capital costs of E-ELT, or a little over £400M. Member states currently contribute total subscriptions of ~£120M, so if you were to increase the subscription rate by 50% for 8 years of construction, you would raise this sum with a bit to spare. Of course, if you chose to capitalize the project over twice as long a period, you could pretty much halve this figure.
In any case, the total stays the same — with the UK contributing around a sixth of ESO’s budget, we would have to come up with ~£70M in total. It is a lot of money, but then it has to be a lot of money to qualify credibly for LFCF support, which has a guideline minimum for an item of ~10% of the research council’s budget, or ~£60M in the case of STFC (or at the very least a minimum of £25M).
And at this kind of level of funding, there would have to be some assurance of de facto juste retour (if you will excuse such a terrible multi-lingualism), offering the Government the kind of inward investment opportunity that will surely appeal over the coming few years.
The scarily large numbers that the LFCF requires also underlines how vital it is that we don’t fall into the non-cash trap, or the need to identify a third of the cost out of existing STFC funding currently committed elsewhere, which would surely completely cripple us all.
Mike. I think the non-cash issue is a loop-hole rather than a trap. Though of course it could turn from one to the other at any time.
Worse than that, it is both at the same time: the Treasury’s convenient loophole for being seen to increase a budget without coming up with any money is the Research Council’s trap!
The whole point of a loophole is that it can be turned into a trap at any moment by pulling on the string.
As far as E-ELT is concerned, ESO seem to want a freebie here. Our elected and otherwise appointed reps on their decision making bodies should be asking whether savings in their other programmes, particularly Garching, could go some substantial way towards closing this particular funding gap.
And as far as the string is concerned, who has hold of the other end? Who will spring the trap? Richard, is it you? Or the CEO, or the DGRC. Or does it go far, far further.
Dave. If you mean who decides how to treat a capital contribution to ESO from the point of a non-cash allocation, I believe that would be Treasury.
Yes that would make sense. But what this loophole, or trap is likely to turn into is a noose. All it takes is a bit more rope and tighter winding.
As I understand things from Council, ESO’s preferred funding plan for building ELT is actually the sum of all these options: about 300M€ would come from within the existing subscription level, about 300M€ from a one-time “pulse” of additional contributions, plus there would be a 2% year-on-year increase, above inflation, in the permanent subscription level over the next ten years to cover the eventual operating costs. Finally there would need to be an additional 300M€ borrowed from the EIB to be repaid after construction ended. This loan could be avoided if new member states joined ESO.
ESO is making economies at La Silla, but the plan for ELT funding does not envisage any cutbacks or economies in Paranal operations. ESO is also planning a new headquarters building extension in Garching, to accommodate ALMA personnel.
All of this adds up to an apparent belief that ESO needs to grow if it is to deliver Europe its ELT. I would be interested to know if the UK community would support that belief – do we want or need ELT enough that we should be planning to send more of our money to ESO, given that the overall budget is constrained? And where else in astronomy should that money come from?
My view has always been that ESO running E-ELT as an in-house project is wrong, and if the UK is to be involved in E-ELT a better way of doing that would be to focus existing UK, and other European capacity on the intellectual, scientific, and technical leadership of the project, managed by a project office which should probably not be in Garching. And that the operating costs should carefully controlled, and be funded from savings made, not at La Silla or Paranal, but at Garching.
The E-ELT will image earth-like planets around other stars and search for life markers, reconstruct the life histories of galaxies from the properties of their individual stars, determine the accelerating expansion of the Universe by direct measurement, and who knows what else we haven’t even thought of yet over its long lifetime. We are talking about a revolution all across astronomy rather than incremental advance. If we have any ambition to stay at the cutting edge, we need to be part of it.
As for whether ESO is the right agency to manage this project, the size of the undertaking requires an organization with experience of managing very large programmes, and there aren’t many such bodies in the world of astronomy. It is almost certainly nugatory to try to cut back the management side of the organization at just the time it will be severely tested by the largest astronomy project ever undertaken.
So, where should the money come from? Well, clearly difficult decisions will have to be made, but one hopes that STFC are prepared to tackle such difficult decisions, and make radical choices. Compare the useful scientific lifetime, breadth of science goals, industrial returns, outreach attractiveness, etc, of E-ELT to a comparably-priced planetary probe or even space observatory, and keep an open mind.
I think we have to be realistic and accept that if this project is to be funded, then it has to be funded from savings in the ground-based astronomy programme. I don’t like that any more than you Mike, but its reality.
My view counts for little, as I won’t be around to use either ELT or SKA, but from the science presentations I have seen my impression is that SKA promises fundamental new science, whereas ELT promises important but incremental advances, largely involving doing the same things we do now but at higher redshift. Thats my view, and I know it is not shared by all, but thats the side of this question that I come down on.
As far as running the project is concerned, I think there are lots of organisations who could manage the project. Mostly they aren’t doing ground-based astronomy projects at present. ESA could do it. If we were sensible and accepted that this was a global project, and there was only going to be one of these things, then AURA could do it. My objection to ESO is that there is no accountability, at least to the academic community. If you look at STScI for instance, it runs HST and it runs JWST development, but it does so under the management of AURA, in turn under contract from NASA. Likewise AURA
manages NOAO, on behalf of NSF. This academic management level is missing from our relationship with ESO, which gets cheques from the funding agencies which they can’t even negotiate over because of the treaty, and then goes away and does its own thing.
I know ESO council members read this blog, so I would be interested in how the council members see their role. To me it seems that, at least as far as the academic members are concerned, and I havn’t heard the UK members talk about this but I have heard others, they see that their role is to maximise the resources which ESO gets, rather than to maximise output, value for money, and the participation of the national and international community at an intellectual level in the running of ESO as a resource.
I think this is one of those occasions where we really have to reject the premise, Dave. Why on Earth should a decision be made about the funding of a facility on the basis of what it is standing on, as opposed to any of the things that actually matter (potential scientific return, size of community who would benefit, useful lifetime, industrial returns, outreach opportunities, etc)?
Such a “buggins turn” approach is a sure guarantee of mediocrity and lack of innovation. If STFC is to compete at the cutting edge on the World stage, it has to get beyond this out-dated concept.
Mike, I agree that scientific return should be the major driver, less convinced by “size of community” which is often not correlated. But on industrial returns and outreach I think we have a problem, when compared to the space community. Lots of people work in space related industry, OK, many of them are installing Sky dishes, but the numbers they can come up with for industrial turnover as a multiplier of public investment are very large.
Dave : in principle, there should be not much difference between space and ground based facilities on the economic impact question. Both need to contract out to, and preferably work in partnership with, high tech industries. Most of the money for building a big piece of kit goes back out to commercial contracts. But the UK space industry has a strong track record of engaging directly with the space science community, and has been good at winning high-value contracts. This is why I was interested to see the strong words about UK industry in the ELT section of the LF document. We have to talk not just about contracts, but about partnerships.
As I understand things from Council, ESO's preferred funding plan for building ELT is actually the sum of all these options: about 300M€ would come from within the existing subscription level, about 300M€ from a one-time "pulse" of additional contributions, plus there would be a 2% year-on-year increase, above inflation, in the permanent subscription level over the next ten years to cover the eventual operating costs. Finally there would need to be an additional 300M€ borrowed from the EIB to be repaid after construction ended. This loan could be avoided if new member states joined ESO.
ESO is making economies at La Silla, but the plan for ELT funding does not envisage any cutbacks or economies in Paranal operations. ESO is also planning a new headquarters building extension in Garching, to accommodate ALMA personnel.
All of this adds up to an apparent belief that ESO needs to grow if it is to deliver Europe its ELT. I would be interested to know if the UK community would support that belief – do we want or need ELT enough that we should be planning to send more of our money to ESO, given that the overall budget is constrained? And where else in astronomy should that money come from?;. All the best!!
Who needs any of it:
http://news.bbc.co.uk/1/hi/magazine/8224433.stm