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A House of Lords call for the Government to thrash out with universities a method of ensuring that institutions recover the full cost of taking on research work from Government departments has been rejected.

In its response to a probe into international investment in United Kingdom science by the Lords' science and technology committee, the Government says that it has encouraged universities to recover the full costs for contract research "but believes that institutions themselves are best placed to negotiate the most favourable terms with customers".

The committee had recommended that the Committee of Vice Chancellors and Principals should "devise a standard formula for costing and pricing research contracted from a university by a government department and a means of enforcing it", in consultation with the Treasury.

The Government response also notes that the CVCP plans to issue guidance later this year to universities on the costing and pricing of research. The Government welcomes discussions of best practice in negotiating contracts but "considers that compulsory schemes are not in the best interests of all parties".