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House of Commons

Wednesday 12 February 1997

The House met at half-past Nine o'clock


[Madam Speaker in the Chair]

Public Research Establishments

Motion made, and Question proposed, That this House do now adjourn.--[Mr. Wells.]

[Relevant documents: First report from the Science and Technology Committee of Session 1994-95, on the Efficiency Unit Scrutiny of Public Sector Research Establishments (HC 19), the Government's response thereto (HC 805), the fifth report from the Science and Technology Committee of Session 1995-6 and the first report of Session 1996-97 on the Prior Options Reviews of Public Sector Research Establishments (HC 643 and HC 71-I) and the Government's response thereto (HC 291 of Session 1996-97).]

9.34 am

Sir Giles Shaw (Pudsey): I am grateful for the opportunity to introduce this debate in the House on the subjects connected with the work of the Select Committee on Science and Technology. The debate is about the inquiry into the prior options reviews, which was recently concluded, and to which the Government have now responded, although the response was not available when the Liaison Select Committee met to discuss whether a debate was appropriate. It is indeed appropriate, because of the importance of the subject and the reviews that have recently been undertaken.

Prior options reviews are not part of the everyday parlance of the House and it is therefore important that we establish what we are talking about. Prior options reviews are most closely associated with the next steps reforms that the Government have undertaken in recent years. The reviews decide whether institutes should be abolished, privatised, made into next steps agencies or retained in the parent Department. Significant questions are asked. Is the function needed? Must the public sector be responsible for the function? Must the public sector provide the function itself? What is the scope for rationalisation? How will the function be managed? The reviews covered almost all the institutes and institutions, via the research councils or directly through the Government, and therefore encompassed the entire range of scientific activities undertaken outwith academia.

Each executive agency in the programme is subject to five-yearly reviews, in which the prior options questions are addressed. The reviews were not designed for scientific institutions and insufficient adjustments may have been made to fit them for the purpose. That was one of the reasons why the Select Committee felt it necessary to undertake the inquiry. The Select Committee was not wholly convinced that the inquiry would be an appropriate step, but it was clear--as the reviews took longer to report

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than expected--that the scientific community had become deeply uneasy about what was going on. For that reason, the Select Committee undertook its inquiry.

Our conclusions are important and also significant. The Select Committee has always accepted that some review of public sector research establishments was justified. After all, the bodies under review cost some £690 million a year. If the 1992 Levene Stewart "Review of Allocation, Management and Use of Government Expenditure on Science and Technology" was correct, the research laboratories of many Government Departments were ripe for review. One of the recommendations of our most recent report was that all Government research establishments should be reviewed at least once every five years.

It concerned the Select Committee that the review process was seen as hasty and repetitive and as inappropriately applied to research council institutes, which can be central to the research councils' mission. Moreover, in most cases, the institutes are reviewed regularly by their parent bodies--as is only sensible--and the research councils have a good record in closing those that are unsatisfactory.

The Select Committee was also concerned about the openness of the procedure. The Government began well by placing guidelines in the Library and by participating in a meeting to discuss the reviews which was held at, and under the auspices of, the Royal Society. However, as the reviews progressed, that openness ceased. The Government announced that

would be desirable for the Institute of Arable Crops Research, the Institute of Grassland and Environmental Research, the John Innes Centre and the Silsoe Research Centre. It was not clear exactly what this would imply, but the Government commissioned further work on the matter from Sir Peter Levene.

The terms of reference of the committee were not published. This--together with the fact that it was thought to be looking at establishments that had not yet been reviewed--led to great uneasiness. In the course of the Committee's inquiry, it became clear that Sir Peter's task was primarily concerned with pension provision and pension liabilities. Frankly, I do not understand--nor does the Committee--why a clear announcement of the nature of the inquiry could not have been made at the outset. Much unease and loss of morale could thus have been easily avoided.

Another matter that troubled the Committee was that the reports of the review teams were not published. The Government's view is that these, and the steering group reports, constituted advice to Ministers which would "not normally be published". This is one of the issues that Select Committees of whatever persuasion come up against from time to time--the blanket of "advice to Ministers". It may be the case, but there seems to be little reason for denying publication, particularly since the earlier efficiency scrutinies had been published.

There may have been concern that the Government might be criticised for rejecting the advice of the reports. Frankly, I doubt that, because my hon. Friend the Minister for Science and Technology is not someone who would be deterred by that, and he would be encouraged and would probably accept the advice. Although the Government

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have been criticised for the scale and scope of the efficiency scrutiny, they have not, as far as I am aware, been criticised for rejecting any of the advice.

The unwillingness to release the reports increased the scientific community's suspicion of the Government's motives. It also meant that the Committee could not discount the complaints that the findings of the reviews and the steering groups were being overridden. This lack of openness is particularly regrettable, given the White Paper's undertaking that advice from the Committee and expert groups working on specific issues would normally be published.

Decisions were taken on some Government research establishments before the current round of reviews. AEA Technology--which the Committee visited--the Laboratory of the Government Chemist and the National Physical Laboratory were to be privatised. On 29 January, the Government announced the result of the current set of reviews in broad outline. ADAS--formerly known as the Agricultural Development and Advisory Service--and the Building Research Establishment are to be privatised, as was already known, and as had been recommended by the efficiency scrutiny.

Some of the laboratories in the Ministry of Agriculture, Fisheries and Food and some in the Scottish Office are to become executive agencies, or companies limited by guarantee. Almost all research council institutes are to remain as they are, subject to efficiency improvements. We are promised that the director general of the research councils will have oversight of these efficiency improvements.

Mr. Tam Dalyell (Linlithgow): Is there any difference between the treatment of institutions in Scotland under the Scottish Office and institutions in the rest of the United Kingdom?

Sir Giles Shaw: I cannot answer the hon. Gentleman because the Committee did not investigate Scottish institutions, but we might well consider his question in a further assessment. This will be an on-going process, as he is well aware.

The reviews have more worrying implications. The Government's policy has been to substitute meddling from central Departments with the discipline of the marketplace. The result of those reviews seems to have been to increase the meddling from the centre, even though market disciplines are in place. The Government response to our recent report tells us that research council institutes

That is less than a third of the total involved. Much of that money is placed in the institutes as contracts from Government Departments and other public bodies--that is to say, the Department concerned has concluded that no one else from whom it can obtain the same research is better or cheaper.

Research councils have always had the independence of their charters. In 1993, the Government reformed the system so that each of the new research councils had a chairman drawn from business, and a new mission.

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The councils were given a fresh remit by the White Paper which emphasised the need to enhance wealth creation and the quality of life. That seems entirely appropriate and is an excellent example of the action that the Government have taken to restore and develop the structure within which science can compete.

In the Government response to the Committee's most recent report, the prior options reviews were justified on the ground that the Science and Technology Act 1965 gave the Secretary of State power to give directions to the research councils, and that the White Paper

That is all very laudable, and the White Paper agreed to give the DGRC responsibilities. But it also suggested that the director general would be advised by a small standing group of independent experts, selected to allow him or her to draw upon the requisite scientific, economic, industrial and management expertise. Frankly, this has not been carried out.

There is an irony in this process. In setting up the next steps agencies--with which prior options reviews are most closely associated--the Government were devolving power away from the centre of Departments and giving it to those responsible for operations who, it was assumed, would know their business best. The research councils had substantial independence before the process began. The outcome of the reviews appears to have increased central oversight of non-departmental public bodies, rather than reduced it. That is one of the prime criticisms that we make.

We are not the only ones to make that criticism. Dr. Michael Elves--a business man who knows the public sector system well--said that UK public sector science

That is a fair warning.

The existence of the Select Committee on Science and Technology will be a bulwark to prevent this kind of thing from happening again, and our recent activities have qualified us for this role. A large proportion of Government-funded science flows through the research councils and institutes, and it is well within the remit of a Committee established by this House to monitor its effectiveness and the suitability of its structure. Colleagues will recall that the Committee's first report to the House concerned the structure of the Office of Science and Technology.

The Committee's concerns go wider, and we need to develop the OST as Parliament's instrument to ensure that we can monitor and measure the pulse and heartbeat of British science. The economic health of the nation depends on that, and the very survival of our people depends on the development of scientific solutions to our human problems. The Committee's concern with reviews of this sort is that this debilitating matter has had severe effects on the morale of the science base. Prior options is only the most recent review, but it is by no means the only one that has been effected. For example, there was the 1992 review of allocation, management and use of Government expenditure, and the 1993

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multi-departmental scrutiny. Following those, it was not surprising that the latest review received a frosty reception.

The Committee must have a role in overseeing what goes on, and we must ensure and advise on the effectiveness of the instruments that the Government set up. Our research councils have served us well, and I believe that the Government's structure for science has served the nation well also.

It is our judgment that the Select Committee on Science and Technology will serve the House well. As I come to the end of my 23 years here, I am delighted to think that the Committee will continue to be a satisfactory achievement for all who serve on it.

What really makes a Select Committee work, however, is the commitment of the individual members and the wonderful contribution of the Clerks. Our Clerk served the Committee outstandingly: every good creation should have its Eve, and we certainly had one. At the end of the day, the effectiveness with which the House can use the information supplied by Select Committees will be its greatest achievement.

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