Examination of Witnesses (Questions 160-179)
MR ROBIN
YOUNG, DR
JOHN TAYLOR
OBE, PROFESSOR SIR
GEORGE RADDA
CBE, PROFESSOR JULIA
GOODFELLOW CBE, AND
PROFESSOR JOHN
LAWTON CBE
MONDAY 11 MARCH 2002
160. Really?
(Ms Leahy) So we felt that the lessons we could get
from looking at these three research councils (as we had to focus
our Report) were probably the key.
161. I looked up the figures for all the research
councils and mine are slightly lower. The equivalent for the EPSRC
was £427 million and £19 million went on equipment.
That leaves over £400 million that is not on equipment.
(Ms Leahy) I certainly would have to look at our figures
again.
162. This is a document called the Allocation
of the Science Budget 1999-2002, a booklet published by Mr
Mandelson when he was Secretary of State. The numbers could be
completely wrong but I assume they are accurate. Research council
area, EPSRC—equipment funding £19 million; BBSRC—equipment
funding £5.7 million.
(Dr Taylor) The important thing about the EPSRC is
that almost all its money flows to university research groups.
It has virtually nothing that you could recognise as an institute.
I think the NAO quite rightly, in calling a judgment, are saying
there is very little to be learned from studying equipment. From
this point of view they do not have research institutes or major
institutes.
163. What, if anything, has NAO done to look
at the way the EPSRC funds delivering the commercialisation of
their part of public sector science, because they have a lot of
programmes that have commercial application, do they not?
(Ms Leahy) We focused on just the three research councils
that are represented here and we thought the different type of
activities they carried out and the different sorts of markets
they were in would allow us to maximise the chances of learning
useful lessons and we did not look at the EPSRC.
(Dr Taylor) It is fair to say that you did not look
at the university part of what these three councils do either,
only the research.
164. Professor Goodfellow, I wrote it down when
you said in addition to the £2.7 million mentioned on page
—
(Professor Goodfellow) 1.9 on page 14.
165. You had £14 million of consultancy
income and then another £30 million of something else, I
am not quite sure what.
(Professor Goodfellow) The numbers here in 1.9 we
are looking at £2.7 which, I agree, is sales of equity in
spin-out companies and licensing of royalties. We have another
£14 million from research contracts with industry, and I
do mean industry, and we have a further almost £30 million
with DEFRA. We also have inter-actions with the Food Standards
Agency as well.
166. It is 46.
(Professor Goodfellow) We would not count that as
commercial; it is industrial.
167. Including licensing, royalties, consultancy
income, what is your total commercial income?
(Professor Goodfellow) We call it £16.7 million.
£2.7 plus £14 million and we put in £70 million
recurrent to the institutes.
168. Are you sure you are doing that correctly?
Presumably there are contracts that DEFRA places with you which
they could place with other laboratories elsewhere in the world
or in the private sector possibly?
(Professor Goodfellow) Of course. It is all competitive
and our institutes have to win in competition.
169. Arguably it is commercial, it is hard charging?
(Professor Goodfellow) It is competitive and certain
of the grants, depending on the type of DEFRA grants, have almost
full economic cost. Some of the others do not but basically you
could add another £30 million.
170. If you include the whole lot, it is basically
46.
(Professor Goodfellow) It depends how you like to
add the numbers up. I think we have to be careful whether we are
working for another government department or whether it is with
the private sector.
171. The NAO does work for various governments
around the world and presumably that is counted as commercial
income?
(Sir John Bourn) It comes in as appropriations in
aid, yes, and it has to be run competitively.
172. I accept there are labelling issues but
other than the money you get from central government grant, depending
how you call it, there is potentially between £40 and £50
million of other consultancy income, be it from government or
private sector?
(Professor Goodfellow) Yes.
173. Professor Lawton, how much is your number?
(Professor Lawton) We receive £26 million in
round terms for commissioned research. 75 per cent of that is
from government departments, therefore, the other 25 per cent,
about £5 million or £6 million, is from industry. We
receive £4 million in European Union grants and we receive
the £2.45 million that you have down under paragraph 1.9,
page 15.
174. Sir George, would you mind saying what
is your total for MRC?
(Professor Sir George Radda) If you just take our
royalties from licensing agreements, in 1998-99 that was nearly
£3 million. In 1999-2000 it was £7.5 million and in
2000-2001 it was £17.9 million, nearly £18 million.
That was just from licensing income. In addition to that we have
industrial collaborations and they amount to just under £10
million per annum.[7]
175. Thank you very much. Mr Young, is there
any way that you as the DTI can assess what level of receipt would
represent a good return?
(Mr Young) No, not in a one-size-fits-all way method.
There is no formal process which will get an easy answer. What
we do do is meet regularly the Chief Executives and set them personal
objectives. We compare them over time and we look at the different
ways in which they could be maximising commercialisation. Remember,
receipts are not the only indicator. What we need is a menu of
indicators to discuss on a sensible basis year-by-year-by-year
with each research council what they are doing and that is what
we do.
176. Presumably you do accept the statement
in para 2.6 that more should be done or can be done to develop
further objectives and targets?
(Mr Young) I certainly do and we are working up new
performance indicators currently.
Mr Bacon: Chairman, no further questions.
Chairman
177. Thank you very much. Just a couple of questions
to wrap up. Do you take a strategic approach, Mr Young, across
a portfolio of projects or do you take a case-by-case approach
as set out in paragraph 4.10 on page 35?
(Mr Young) What we do is we ask each research council
to produce a formal risk assessment process which we discuss with
them, so we clear the generic form of risk assessment which they
are applying and leave it to them to do the case-by-case risk
assessment.
178. Sir George, you mentioned that you had
taken on somebody who was an expert from America in stem cell
research. I do not want to get involved in all this debate but
it occurs to me to ask this question. There has been a lot of
debate about this subject that perhaps it is driven by commercialisation.
There are huge commercial rewards if this works well. Vast advances
in medical science could be achieved and some people are saying
that is what is motivating this whole thing and that it what has
motivated the debate between embryo research and adult stem cell
research. To what extent can you cut yourself off from the difficult
ethical arguments? You mentioned the ethical debate earlier and
there you have got a particular issue where medical science is
involved and there is a fierce ethical debate raging and huge
commercial interests. Just give me a feel about how you are feeling
your way through this difficult moral maze.
(Professor Sir George Radda) The number one consideration
is that the opportunities of using stem cells to perform new forms
of therapy are enormous and we can certainly think about the diseases
where it could well be applicable. I do not believe at the moment
that many of the major commercial organisations are expressing
a terrible interest because they do not know how exploitable it
is going to be. The major issues are scientific and clinical opportunities
and ethical issues. The ethical issues have been addressed by
appropriate groups of people like the House of Lords' Select committee.
In fact, both Houses of Parliament have looked very clearly at
the ethical issues. We have provided information to people about
what the scientific opportunities would be. I do not think that
the debate currently is really driven by commercial considerations.
It is a long way down the road before this can be commercialised,
in my view, because there is a great deal of fundamental biology
to be done to understand the behaviour of stem cells derived from
embryos and those derived from adult cells. Until we understand
that we do not know what the commercial possibilities are. Clinical
treatment is five or ten years down the line and that is when
you begin to see what the commercial side might be.
179. If you are looking at the difference between
research based on adult stem cells and embryos, adult is going
to be far more difficult apparently and therefore less prone to
commercialisation. Is that a motivator in your work or not?
(Professor Sir George Radda) Not that they are less
prone to commercialisation. There is much less scientific knowledge
about the way that you can reprogramme an adult cell to produce
tissues of all the different kinds that you would like to produce
in this study. There is a difference in the biology in the way
that the adult cells can become kidney cells or brain cells compared
to the biology of a cell derived from an embryo. I do not believe
that any of the arguments that we have put forward were driven
by commercial considerations in this instance but instead are
driven entirely by scientific and clinical considerations.
Chairman: Thank you for that. I hope my colleagues
will forgive me for asking a couple of questions. May I thank
you, ladies and gentlemen, for some very interesting evidence.
We have had a very distinguished panel in front of us and we have
found it extremely informative. Thank you for coming here this
evening. We pay tribute to you and your staff for being such a
beacon of excellence in terms of world-class research. We salute
your work. Thank you very much.
7 Note by Witness: On checking, the income to
MRC in 2000-01 from contracts with government departments and
commercial collaborations was £13.3 million, not including
research contract and collaboration income to MRC Technology. Back
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