Examination of Witnesses (Questions 156-159)
AEROSPACE TECHNOLOGY
STEERING GROUP
11 JANUARY 2005
Q156 Chairman: Mr Maciver, as you said
earlier to me, you have been here before wearing a different hat.
Perhaps you could explain to us exactly what the Aerospace Technology
Steering Group involves, introduce your colleagues and then we
will get started.
Mr Maciver: Chairman, on my left
is Lambert Dopping-Hepenstal, who is the Technology Director of
BAE systems and on my right is Colin Smith, who is the Director
of Research and Technology for Rolls-Royce. They are both here,
as I am, as members of the group. When the AeIGT was set up there
were originally four groups set up to progress the work, one of
which was based on technology and at that time we were known as
group one, which we felt was a rather impersonal title, so we
are now known as the Aerospace Technology Steering Group. We are
responsible for co-ordinating the technology element of the Aerospace
Innovation and Growth Team. It was based on the recommendations
of this group that we recommended the National Aerospace Technology
Strategy as the focus of investment and technology for the future.
My capacity is as a semi-retired former industrialist and I chair
the group.
Q157 Chairman: How far have you got along
the road to the National Aerospace Technology Strategy? How well
developed is NATS?
Mr Maciver: As Sir John was kind
enough to say a moment ago, industry has its act quite well together
on that. To be frank, I think if we had been asked two or three
years ago if there was a lot of money available what we should
spend it on, we would have had to take a step back and think about
it. During that period we have identified and developed based
on looking at the market forces and looking at the opportunities
for the future the technologies which we believe are important
to the continued success of aerospace in the United Kingdom. We
have developed very specific programmes which would support that
programme in the long-term which the intention is should be funded
by industry in partnership with Government. Developing the programme
is well advanced and, if you recall, the original AeIGT Report
was published in July 2003, and the implementation process started
in the autumn of that year, September/October. The rate at which
we could progress was limited to some degree to take account of
the Innovation Review, which was published during this process,
I cannot remember the exact date. The work with the MoD ultimately
takes the form of the MoD Technology Strategy but, be that as
it may, we have published a full implementation report. The issue
which confronted us, the original vision, was and I think, again,
Sir John explained the reasons so I will not repeat it unless
you wish to go into it further why this investment is important,
the vision at that time was we would see an increase in the funding
which went to a programme called CARAD where we believed we had
fallen behind enormously and that was where the increase in funding
would come originally from central government. With the publication
of the Innovation Review, it became very clear the programme could
only be funded by drawing on both the technology funding from
the DTI, which would make a contribution but is not enough to
fund the Government side of the programme and we would have to
access the regional authorities, both through the devolved administrations
and the RDAs. We have been working very, very actively on that
and we had a mixed result. The first test of this was the April
call for technology funding from the DTI where we have some concerns.
The programmes which were favoured tended to be the smaller programmes
and with the very nature of aerospace you are dealing with big
technology programmes. We will be making a formal input to the
DTI that what we have seen from the first attempt, while on the
face of it it looks encouraging, the type of programmes funded
we have some concerns about and, hopefully we will have a dialogue
on that. The DTI was given the task, specifically the Prime Minister
asked the Minister for Science and Innovation, to co-ordinate
funding from all sources to support the National Technology Strategy
and work has been progressing on that. In terms of the detail,
since the DTI has taken the lead they are better able to describe
the detail of that than I am. We are now at the point where we
have to demonstrate that the process, bringing together funding
from central government and the innovation source—the regions,
will fund the kind of programmes which are essential to the National
Aerospace Technology Strategy. I think I can say the industry
position is and I am trying to speak as a bridge between industry
and the DTI in this regard—they are not yet confident that
this can be done. They need to see some practical demonstration
that we can fund jointly one of the major programmes in the first
half of this year. If that cannot be done, it would either undermine
the strategy, which I think we would be very reluctant to accept,
or the mechanisms will have to be readdressed. Everybody is working
very hard to this end and a lot of progress has been made. Initially,
we did not believe that the tasking frameworks for the RDAs, in
particular, would support this kind of funding. We are now assured
it is possible, but we have yet to demonstrate that we can fund
the major elements of this programme. In a nutshell, there has
been enormous progress on developing the strategy in detail and,
from an industrial point of view, industry is ready to go ahead.
From the funding point of view, we are not yet there. I think
it is worth emphasising, industry will go ahead anyway, but they
will spend their money where they have the most effective partnership
with government, whether it is in the United States, France or
Germany. Their propensity to spend their own research money in
the United Kingdom does depend on the success of the strategy.
Chairman, I am afraid that was a rather long-winded answer.
Chairman: I think Richard would like
to follow up on that.
Q158 Mr Burden: I have to confess I am
getting a little confused about this issue of funding and exactly
how you want to see it taken forward. Are you simply saying that
government funding for this whole strategy to work is pretty crucial?
Mr Maciver: Yes, it is crucial
for this to happen in the United Kingdom.
Q159 Mr Burden: In terms of that strategy
implementation, you have put the figure of £50 million on
that. I am still not clear exactly where that figure of £50
million comes from. Is that what you think is going to be roughly
right if all the bits of the strategy come together or is it based
on something more substantial?
Mr Maciver: It is based on a great
deal of work. What we did, as I say, we went through a very rigorous
process to identify where the inherent strengths were in the United
Kingdom and where the market opportunities were. Our recommendation
was that investment on acquiring technology, proving that the
outcome of the science base can be used in aerospace, should be
concentrated on certain broad themes. Then we developed what we
regarded as the minimum programme which would make that viable.
In other words, there is no point in spending money that is insufficient
to achieve anything. We scoped the programme on the basis that
it would be broadly funded approximately by 50% by industry and
the remainder by civil sources of funding and the MoD. That required
two things: firstly, the amount of civil expenditure, which at
that time was purely DTI, was increased by the order of £50
million and, secondly, more of the MoD expenditure was spent in
partnership with industry. In memory, that total programme added
up to something over £300 million a year, as I say, half
funded by industry. The missing part was the funding, which we
are now trying to piece together, both from accessing innovation
funding from the DTI and regional support. I hope that has clarified
that.
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