APPENDIX 13
Memorandum submitted by the Centre for
Urban and Regional Development Studies, University of Newcastle
upon Tyne
INTRODUCTION
1. CURDS is a university-based research
centre undertaking research aimed at improving the understanding
of urban and regional development processes in advanced economies
and employing such research to contribute to the design of more
effective policies through an active engagement with policy and
user communities1. We are pleased to have the opportunity to submit
evidence to the Committee, as in the last decade, CURDS has been
involved in UK regional innovation policy, as well as assisting
the European Commission with innovation and technology policy
development.
2. This memorandum seeks to analyse the
extent to which the 1993 White Paper Realising our potential2
has been successfully implemented, how science and technology
policy has been changed, and whether that framework remains an
appropriate form of contemporary governance. We have chosen to
focus our reply on one question raised by the Committee in the
call for evidence, regarding whether the structures specified
by the White Paper are still appropriate. Any evaluation of the
efficacy of the elements of the structure must also consider the
impacts that those elements have as a coherent system of scientific
governance.
REALISING OUR
POTENTIAL—A
SYSTEM OF
SCIENTIFIC GOVERNANCE
3. The purpose of the White Paper was to
"give a clearer sense of the vital national contribution
made by the ideas, inspiration and dedication of our science and
engineering communities, and to devise organisational structures
in which the individual can flourish and national priorities and
objectives can be more clearly and openly set and pursued"
(p. 7). From 1993 to 1997 (the latest year for which figures are
publicly available), national investment in R&D as a percentage
of output has declined from 2.1 per cent to 1.8 per cent; Government
and Research Council R&D expenditure has also declined from
0.30 per cent of GDP to 0.25 per cent (1993-97). The context to
this memorandum is that Government and Research Councils have
faced the situation of managing budget decline, rather
than having discretion and flexibility with which to approach
new challenges.
4. The structures established by the White
Paper have been affected by major governmental changes. In 1993,
the Minister for Science and science responsibility were in the
Cabinet Office with Cabinet rank. In 1995, these responsibilities
were altered; science policy was moved to the DTI and downgraded
to a junior ministerial position. Besides these organisational
changes, science and technology policy development was affected
by fundamental changes in the policy environment after 1997. Two
major innovations in government management of government stress
the point that policy-making needs to be holistic to succeed and
so delivery requires consideration and co-ordination of complementary
policy fields. This was demonstrated in the Cabinet Office Issues
across government agenda, and the introduction of the Comprehensive
Spending Review by the Treasury as a major constraint on Departmental
policy autonomy.
5. There is clear evidence that SET policy
is closely inter-related to a number of other policy fields. In
relation to education, for example, the White Paper and subsequent
policies have recognised those linkages3. However, linkages are
weakest with regard to policies with an explicitly spatial dimension
such as planning and regional industrial policy. Yet such linkages
are vital because national competitiveness directly derives from
the innovation potential of its regions, and a top-down scientific
governance system weakens UK economic performance if it cannot
direct scientific policy to create capacity for growth and development
throughout its constituent regions. This memorandum argues that
regardless of the value of particular initiatives established
via Realising our Potential, the net effect has not made
scientific policy-making better at delivering the wider aims and
objectives of governmental departments outside a narrow perspective
of SET solely for UK competitiveness.
6. The Fifth Committee Report4 argued this
structure had three main effects on Civil Service departmental
R&D expenditure. Firstly, the three criteria against which
the efficacy of SET expenditure was evaluated were national, promotion
of science excellence, technological development and Whitehall
support. Secondly, science funding agencies and panels (eg Foresight,
Research Councils), viewed SET only in terms of the supporting
national competitiveness and hence overlooking its vital role
in creating regional economic capacity through science
and innovation5. Thirdly, Whitehall research fragmentation encouraged
disproportionate expenditure cuts to meet Treasury spending targets.
These three effects characterise a discordant scientific system
dominated by commercial interests and driven by the DTI agenda.
This is unsurprising given that the White Paper explicated "the
central thesis of this White Paper is we could and should improve
our performance by making the science and engineering base more
aware of and responsive to the needs of industry" (p. 16).
REGIONAL ECONOMIC
POLICY
7. Since the abolition of the unsuccessful
Department of Economic Affairs in 1969, no government department
has had responsibility for the economic development of individual
regions. The Regional Economic Planning Councils were disbanded
in 1983; since 1997, responsibilities for the regions has been
vested in DETR whilst responsibility for economic development
and competitiveness has remained with the DTI; other elements
are scattered across Whitehall, with education and training in
DfEE, industrial and technology policy with DTI, physical planning
with DETR and social well-being with DoH respectively.
8. The purpose of science policy relates
to the overall DTI aim "to increase competitiveness and scientific
excellence to generate higher levels of sustainable growth and
productivity in a modern economy". The 1998 Competitiveness
White Paper6 argues that the key to economic success is entrepreneurship
and innovation, and it lists the proposed schemes through which
it supports business innovation. In essence the regional dimension
of science policy reduces to supporting scientific activities
on the basis of merit without regard for their location.
9. This overlooks the potential for the
public sector to contribute to the SET base of particular regions.
However, the White Paper provides a perfect case study of the
linkage between government S&T expenditure and regional
economic development (see Appendix 17). This is compounded
by the fact that the DTI has frequently been criticised by the
European Commission for attempting to impose a uniform framework
on Commission territorial policies implemented in the UK. There
has also been a hidden impact from the privatisation of public
research. Privatised corporations have tended to cut back on R&D
expenditure, close R&D sites and move from joint product development
with UK firms to the acquisition of frequently foreign technology
with negative consequences for many UK regions. Similarly, the
reduction in public support for industrial research associations
has weakened regional research capacities.
10. Responsibility for co-ordination of
economic development in the English regions has been vested since
April 1999 in the Regional Development Agencies (RDAs), non-departmental
public bodies sponsored jointly by DTI, DETR and DfEE. Their main
activity to date has been drafting Regional Economic Strategies,
for which they were repeatedly informed of the importance of developing
clusters, with a mandate not extending much beyond mapping activities
and facilitating business clubs. They all faced the difficulty
of trying to write a strategy for a knowledge-based economy knowing
that the most critical decisions affecting them are taken without
consideration for their regional needs. The most evident case
of that since the formal creation of the RDAs was a series of
events which this committee has examined comprehensively, the
siting of the new Synchrotron facility.
THE SYNCHROTRON
FACILITY—CONFLICTING
DEPARTMENTAL INTERESTS
11. The case of Daresbury indicates the
central weakness of the current framework, the absence of a
transparent mechanism for resolving conflicting priorities between
different policy-making groups. The comments from the Minister
for Science8 concerning the Synchrotron events explicates the
DTI's approach to science policy.
12. "The key criterion used in selecting
the site for the synchrotron is what is best for the long-term
health of UK science. It is clear that both Daresbury and the
Rutherford Appleton Laboratory offered viable sites for the location
of the new synchrotron. There were, however, four key areas which
pointed to RAL as the preferred location: . . . [(iv)] its proximity
to the bio-sciences expertise at Oxford University, the MRC units,
including the Mouse Genome Centre on the adjacent Harwell site
and the National NMR centre" (ibid, p.2).
13. The damaging effect of the siting decision
on the regional economy of the North West was acknowledged by
the DTI in a press release shortly after the RAL decision was
taken, announcing £25m of government support to "enhance
the science infrastructure in the North West as a consequence
of the synchrotron siting decision" (p. 1)9. However, its
corrosive impact on the scientific capacity of the North West
appears not to have been considered in the process. The NWDA strategy
notes that Daresbury is the only government research institution
of any size in the region, and that NWDA's success in encouraging
competitiveness will depend on the degree to which it is able
to persuade the Government and HEIs as much as businesses to improve
their contribution to what it terms a regional learning economy10.
14. Considering this case on the merits
of the published criteria, it is fair to accept the decision as
in the best interests of the UK as a whole. However, it is clear
that these criteria have been set in accordance with a DTI philosophy,
which unashamedly favours the concentration of the science base
in the South East. It is disingenuous to argue market logic underpins
these decisions. Heim has unearthed significant evidence from
documents released under the 30 year rule that in the immediate
post-war period the location of government research establishments
was based as much upon the irrational prejudices of particular
senior Civil Servants rather than a logical calculus of the scientific
potential of particular localities11. It only makes sense to view
the events as a culmination of several decades of purposive government
investment in science and technology, which has served to widen
economic, technological and social disparities between core and
peripheral areas of the UK. The run-down costs for Daresbury were
estimated at £25m-30m, in addition to the £25m provided
to the North West Science Review Team to rebuild the North West's
public science base. The outcome is directly detracting from NWDA's
attempts to improve the performance of its own region, at a total
cost of at least £50m to the public purse.
FORESIGHT—DISSEMINATION
OR NEGOTIATION
15. The system of governance is limited
in its capacity to take regional factors into account in the allocation
of infrastructure to promote scientific excellence. Furthermore,
the system developed by the White Paper is limited in the degree
to which it can formulate scientific priorities in the national
interest. The Foresight process is intended to shape UK scientific
priorities, but has no mechanism for examining whether different
regions should choose to pursue divergent priorities, or indeed
even whether different regions should choose to order their priorities
differently. In the North East, CURDS' involvement in the "dissemination"
of the national Foresight programme indicated at an early stage
that to have local relevance, Foresight required regional input
12. It was clear that firms, especially SMEs, in the regions,
found a national priority-setting programme irrelevant; there
was thus a need to enrol regional organisations in the Foresight
process rather than merely in dissemination.
16. If RDAs are now to develop effective
regional innovation strategies these should parallel the national
Foresight activities and actively shape the outcomes to give an
overall framework with greater relevance for the regions and provide
a place for developing more effective partnerships and integration
between business and the science base in all UK regions. The only
mechanism through which Foresight can currently influence them
is to redirect them back towards national priorities in terms
of sectors and actions. Significant concerns must be raised as
unless national Foresight can incorporate those regional priorities
and decisions, DTI's science policy will directly undermine attempts
elsewhere in Whitehall to create endogenous scientific potential
in all English regions.
THE LIMITS
OF "JOINED-UP
GOVERNMENT"
17. A stakeholder analysis of the decision-making
process further illuminates this situation. In the material supplied
by Lord Sainsbury, it appears that there are four main stakeholders
in the Synchrotron decision, CCLRC, The Wellcome Trust, the DTI
and the French Government. However, the decision process followed
rules the DTI had set. The way CCLRC represented themselves had
to follow these rules, without spatial consideration. When CCLRC
are stakeholders in a (DETR) planning inquiry they may choose
to represent the interests of their two sites separately, but
from the DTI point of view, CCLRC, a national agency was considered
as a body with a single opinion (articulated through its director,
John Cadogan and later John Taylor).
18. Therein lies the central weakness
of this system—although a wide range of stakeholders
are consulted in the scientific governance process, the way they
are allowed to represent their views is directly counter to presenting
a perspective that is more appropriate to another policy area
or department. Thus, the current system of scientific governance
could not incorporate and consider regional development arguments
and interest representations; this is symptomatic of an overly
hierarchical and rigid policy framework.
19. This is true in other policy fields;
there are significant planning implications in the concentration
of high-quality scientific employment in the region. For example,
the creation of 500 new scientific positions around Didcot increases
the demand for high-quality housing and transport in an area under
great development stress. Science policy is thus directly undermining
the attempts of SERPLAN to contain new economic development to
the east of London.
20. Secondly, with respect to cluster policies,
its divorce from scientific considerations has two contradictory
effects; without integration of clusters into a regional scientific
system, cluster policy reduces to an ex post mapping exercise
and talking shop; by locating in recognised areas of scientific
excellence, the cluster policy reinforces the inequalities accumulated
over 30 years of spending, favouring the home counties and East
Anglia.
21. Thirdly, scientific policy has affected
the recent drive to stimulate entrepreneurship. The links between
government R&D and new firm formation depend greatly on their
relation both with the market and with other key players. This
is illustrated in the UK by the differential performance and success
of Harwell and Sellafield or Dounreay; Sellafield's activities
are more specialised towards a single market, reprocessing and
storage, activities whose popularity has markedly decreased in
recent years, whilst Harwell benefits from its location in a strong
physical science innovation system.
22. It is a worthwhile exercise to gauge
the extent to which this funding continues to exacerbate these
regional scientific potential disparities. Lord Sainsbury13 acknowledged
that in UK there was a problem with persuading companies to invest
in R&D, stressing the importance of government expenditure
to support the UK scientific base. Appendix 2[10]
presents information from the Central Statistical Office Research
and Experimental Development Statistics 1997, demonstrating
the degree to which government expenditure remains concentrated
in those regions immediately adjacent to London. Thus despite
a supposed commitment to the support of innovation across the
UK, it is clear that the current government framework contains
within it the implicit assumption that innovation in the South
East is more valuable to national competitiveness than that carried
out in Scotland or Wales.
CONCLUDING REMARKS
23. The continuing disparities in scientific
funding which are an important element of inter-regional disparity
in the UK are a direct consequence of the system of scientific
governance. Although Realising Our Potential represented
a new era in the relationship between central government and SET
users, it did not overcome the problem of co-ordinating science
policy between departments. At the heart of this weakness is the
Council for Science and Technology, which only looks at Departmental
R&D, an activity which has suffered marked cuts in recent
years. The government offices would be the natural home for regional
science and technology executive officers, which could, through
the framework proposed in Reaching Out[11]
report directly to the Cabinet Office Region Co-ordination Unit.
Regardless of the actual administrative changes, there are compelling
arguments for root and branch reforms of the Civil Service to
create loud regional voices in scientific governance, which will
undoubtedly require the removal of some scientific responsibility
from the DTI.
24. Funding decisions are taken by bodies
whose latitude for action is constrained by a need for accountability
to Parliament. However, in practice this has meant that the only
views that they consider are those that their sponsor department
deems appropriate, which often excludes important stakeholders
in other policy communities. HEFCE deals with this by having funding
formulae which ensure that universities are awarded SET funds
on the mixed basis of excellence, capitation and minimum standards,
which means in practice that each region has sufficient universities
to create a vibrant science base.
25. There has been much rhetoric of the
need for government funding to work with the private sector because
of the impossibility of national governments funding internationally
competitive research facilities. What is however, true, is that
it is impossible for science to flourish and explore manifold
emergent opportunities under conditions of low and falling science
budgets. The European Parliament recently called for R&D in
the European Union to be raised to three per cent of GDP; however,
if UK R&D was raised to an average of our four main competitors,
to 2.52 per cent, then the Government would have to increase spending
by £5-6bn in the short run. This would allow the flexibility
to both support existing excellence and create new capacities
for the benefit of the UK as a whole.
NOTES
8 The Centre has been operating since 1977,
with 22 current research staff. Since the opening of the Centre,
innovation policy has been a central theme of our investigations,
and we have been involved in the ex ante formulation and ex post
evaluation of science and technology policies.
2 Chancellor of the Duchy of Lancaster (1993)
Realising our potential: a strategy for science engineering and
technology, London: HMSO
3 inter alia DTI (1996) Competitiveness-creating
the enterprise centre of Europe, London: HMSO
4 Science and Technology Committee (2000) "Government
expenditure on research and development the forward look"
Fifth report 1999-2000. London Stationery Office
5 Until the curtailment of the cost-plus procurement
system in the MoD in the 1990s, MoD contracts had two purposes,
to obtain supplies and to obtain a supplier. Government spending
on civil R&D has the same effects, but without this necessarily
being appreciated by research funders.
6 DTI (1998) Our competitive future: building
the knowledge-driven economy, London: HMSO
7 Not printed.
8 Science and Technology Committee (2000) "Letter
to the Chairman of the Committee from Lord Sainsbury Of Turville,
Parliamentary Under-Secretary of State for Science" Memorandum
of evidence 14 April 2000, London: The Stationery Office.
9 DTI (2000) "North West Science Review
team start work" DTI Press Release 294 27 April 2000.
10 Clause 8 of the 1998 Regional Development
Agencies Act; North West Development Agency (1999) England's
North West; a strategy towards 2020, Manchester: NWDA
11 Heim, C.E. (1988) "Government Research
Establishments, state capacity and distribution of industrial
policy in Britain" Regional Studies 22 (5) pp 375-386
12 CURDS & Engineering Design Centre (1996)
"North East Technology Foresight networking programme"
Stage 1 Scoping Study report, Newcastle-upon-Tyne: CURDS/EDC
13 The Westminster Hour, First broadcast
4 June 2000, 10pm Radio 4 (92-95 MHz).
June 2000
10 Not printed. Back
11
Cabinet Office Performance and Innovation Unit (2000) Reaching
out, London: The Stationery Office Back
| 
