Select Committee on Science and Technology Appendices to the Minutes of Evidence


Memorandum submitted by the Centre for Urban and Regional Development Studies, University of Newcastle upon Tyne


  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.


  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).


  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.


  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.


  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.


  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.


  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.


  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

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