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A cash crisis has forced the Medical Research Council to freeze all
recruiting of staff for this financial year. THe MRC’s research units will
not be able to replace staff who leave until April 1991, and tougher financial
restrictions are looming for 1991-92.

In a letter to the directors of the units, the MRC’s secretary, Dai
Rees, says that a ‘worsening’ cash shortage has forced him ‘to implement
a package of measures across all heads of expenditure for a period up to
March 1991, aiming to reduce and/or defer expenditure’.

The letter says that all vacancies within the units should be left unfilled
unless ‘written offers of appointment have been made’. In addition, directors
are being asked to keep expenditure down and to defer spending on new equipment
until the next financial year.

The letter comes on top of restrictions on MRC grants made in July.
The MRC then asked the 83 successful applicants in the last round of awards
to defer taking up the new grant award for as long as possible.

Without the cuts the MRC will overspend its budget by 3.5 million Pounds.
Nick Winterton, who heads the MRC’s secretariat, explained that about 60
per cent of the MRC’s costs are salaries.

The Treasury provided the MRC with an increase of 5.4 per cent in funding
for the current year. In its financial plan the MRC has assumed a pay settlement
of 8 per cent, whereas the average level turned out to be 9 per cent.

The MRC has no control over pay awards that are made to university staff
and non-clinical staff in the National Health Service. ‘I don’t think the
MRC was unique in having underestimated the level of inflation marginally,’
said Winterton.

‘We are asking directors to live within their budgets. If a director
has been prudent they should not have a problem .. The whole purpose is
to rein back some expenditure .. we are trying not to damage units’ programmes
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Aaron Klug, director of the MRC’s molecular biology unit in Cambridge,
said that the Treasury ignored what he called the ‘sophistication factor’.
He said that the cost of many chemicals and enzymes had increased faster
than the rate of inflation because of their increased sophistication. He
said this point had ‘never been agreed by the Treasury’.

Rees’s letter to the directors warns: ‘There is no evidence to suggest
that the inflationary pressures and other constraints will slaken in 1991-92;
indeed, it seems likely that they will tighten.’

He says that the council will not decide the final figures until its
meeting in January. However, he warned that directors expect to increase
their recurrent expenditure by no more than 2.5 per cent and there may be
a partial freeze on recruitment next year. He says that money for capital
equipment and repairs next year is ‘likely to be extremely limited’.