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NERC Investment Committee

Terms of reference

(Agreed November 2006)

Purpose and Role

1. The purpose of the NERC Investment Committee (NIC) is to provide a body through which NERC Council can delegate some of its investment decision making powers in order to provide more time for Council to consider strategic matters. Decisions relating to investments above the limits delegated to the NIC will continue to be made by NERC Council; decisions relating to investments at a low level (see delegation table) will continue to be made by the Chief Executive without reference to the NIC.

2. The role of the NIC is to:

  • deploy funds, within its delegated powers, to further achievement of NERC strategy
  • tactically deploy funds to manage End Year Flexibility more precisely
  • provide a rapid response forum capable of seizing opportunities as they arise

Delegated authority

3. NERC Council authorises the NIC to make investment decisions, in pursuance of strategic objectives, within the following parameters:

Investments

  • Individual activities up to a total value of £5m over the life of the activity
  • Ability to vire funds between previously approved activities up to £1m per annum per activity
  • Ability to vire funds up to £5m from resource to capital within NERC's overall funding envelope.

4. Investment decisions outside these parameters or which bring about a significant change in the level of risk involved in NERC being able to meet its strategic targets as set out in its published strategy will be referred to NERC Council for decision.

Membership

5. The NIC will consist of the following members:

  • Chief Executive (Chair of the NIC)
  • Chair of SISB
  • Director, Science Delivery
  • Director, Finance & Operations

Working methods

6. The Science and Innovation Strategy Board will provide advice to the NIC on investments within the scope of its delegated authority.

7. The NERC Executive Board will provide advice to the NIC on any relevant matters within its own Terms of Reference.

8. The NIC will be scheduled to meet four/five times per year but may only actually meet as required by circumstances and in response to need. Meetings may also take place virtually. The quorum for the NIC shall be the Chief Executive and at least two other members (or alternate members), but the Chief Executive must always be present for the quorum to be fulfilled. A record of decisions and actions will be taken, together with a short statement on the rationale for the decisions that are taken or the advice that is provided.

9. Alternate members (including for the Chair of SISB) are allowed where exceptional circumstances do not allow a NIC member to attend a discussion. Alternate members should be nominated and briefed in advance and fully empowered to act. Wherever practicable the same alternate member should attend NIC discussions.

Review

10. The NIC will be reviewed in September 2007 by the NERC Council Audit Committee.

11. The NIC will review its delegated authority levels on an annual basis to confirm that they remain fit for purpose and allow it to operate effectively. Council approval will be sought for any changes required.

Table of financial delegations
£k Ability to commit resource from an existing allocation Ability to commit capital from an existing allocation Ability to allocate Resource / capital from open funds
Chief Executive
[1][3]		 Full Full 1,000
Director-FIS
[1][3]		 20,000 [4] 25,000 200 [2]
All other NEB Directors [1] 3,000 [4][5] 1,000 Nil
NERC Investment Committee [3] N/A N/A 5,000


Notes:

  1. The commitment limits of the executives are recorded in their management statements.
  2. The exception to this limit is the need to allocate funds to the legal / uninsured loss provision, eg D-FIS monitors the actual and possible future costs of the Bangladesh case and allocates funds appropriately.
  3. The CE, D-FIS and NERC Investment Committee may re-profile allocations between years, forwards or backwards, provided that there are good management reasons to do this and that the movement does not jeopardise the spirit of any Council agreement. Executive management should, of course, make best endeavours to forecast accurately and then spend in relation to agreed allocations, but slippages do occur, sometimes outside management's control, and it is generally more important to spend the money well than to spend it quickly. Overarching pressures to limit end year flexibility will limit acceptable slippage.
  4. This applies to the raising of purchase orders and sales contracts, and is not currently included in Research Centre Directors management statements. Any sales contract over £1m has to come to Swindon Office for validation already, and if over £3m has to be signed by the CE or D-FIS. All purchase orders over a delegated limit (typically £250k, have to be referred to the Research Councils Procurement Organisation) and if resource related and over £3m have to be countersigned by CE or DFIS.
  5. For Director of Science and Innovation (DSI) and the specific context of Research Grant award letters and Research Contracts, the delegation limit applies to individual awards. It is not the value of the entire grant round. Approval doesn't have to be exercised on a grant by grant basis, DSI can approve blocks of individual grants with individual values less than £3m, subject to overall resource allocations as set out in the planning tables.