Select Committee on Public Accounts Minutes of Evidence


Examination of Witnesses (Questions 60-79)

DEPARTMENT OF TRADE AND INDUSTRY & SCIENCE AND TECHNOLOGY FACILITIES COUNCIL

WEDNESDAY 9 MAY 2007

  Q60  Derek Wyatt: I am really keen to understand what it is they are doing that we are not doing and better understand whether in their science centres—ours seem to be independent of university but sort of attached—there is something going on beyond the American, Australian, British model that somehow makes science so attractive and the commitment of the state of India and China so phenomenal. We have done well as a government and I applaud what the Chancellor of the Exchequer is doing, although you are saying it is very difficult to understand the economic impact of some of these things. You said we are second and I just want to understand we are definitely second and India and China are not threatening us in this area.

  Sir Brian Bender: We are definitely second at the moment on areas like citations and so on, on objective measures that other scientists would accept. Secondly, this Report self-evidently only concerns a particular type of large facility and quite a lot, in fact a large part of the Government's investment in science over the last few years has gone into the facilities at universities including facilities in infrastructure. Thirdly, as you will have seen in India and possibly also in China, those governments are putting massive resources into scientific facilities in those countries and we are not at all complacent about the speed with which they are catching up.

  Professor Sir Keith O'Nions: Just to take that point. In terms of international competitiveness—and let me stick with scientific excellence because it is even more difficult to look at economic impact internationally—and scientific excellence, the UK is second only to the US. Germany is performing quite strongly and keeping track of us. China is actually coming up quite rapidly and if 1.3 billion people achieve the level of per capita income that we have, we must expect them to be a very strong player. India is now off the runway. France is limping a little bit in terms of that league table. Just to give you a picture.

  Q61  Derek Wyatt: The impact of some of these things that we are creating here is 10 and 15 and 20 years away, but I suppose my real concern is that in that time the number of people who will study science may decline further. Despite your optimism about this particular year, that is not the case at A level currently and if you go to 2010 when we review how much we should charge students, the top 20 are already lobbying us to let them charge what they like and they are talking about £6,000 or £8,000 or £10,000 a student. You can see that a decision would have to be made on science, that we have four chemistry departments, Exeter University and Sussex University were two of them, but I cannot remember the other two. The state would have to say: "Hold on, the future wealth of the country is based on Public Accounts and we cannot allow a free expression of an open system, we will somehow have to do something to the science". What I am interested in is that India has already got there in that area.

  Professor Sir Keith O'Nions: You are into a very big area of government policy and obviously it extends massively beyond the remit we have here.

  Q62  Derek Wyatt: I know, but are you confident we have enough scientists coming through the system who will make good use of these facilities?

  Professor Sir Keith O'Nions: No, I am not. I am confident that all of the evidence that we have suggests that we will be well enough staffed for the facilities that we are building at the moment. Realism says that when you ask whether we are totally confident on present trends that our supply in 20 or 30 years time from indigenous sources of those who are seven years old or eight years old today and in 20 years time will be the scientists of the future will be adequate, the answer has to be no. If you go to the US, they will make exactly the same comment.

  Sir Brian Bender: Looking back to one of Dr Pugh's questions, another player in all of this are the Regional Development Agencies which are working with the universities to help boost science and innovation in different regions of the country. So, for example the Manchester region, coming back to the North West, now has world-class university facilities and scientists in certain disciplines. Driving further at that and also partnering India and China and other countries has to be part of the answer. The Civil Service and ministers are not complacent about the area that you are asking about.

  Q63  Derek Wyatt: If I were Pfizer or Abbott's Laboratories, which are two American companies which have big bases here, in fact Abbott's are in my constituency and Pfizer is just down the road in Sandwich, why would I want to come here?

  Sir Brian Bender: Last year, Amgen, a big American biotech company, made a significant inward investment here and I happened to see the UK Managing Director the next day and I asked him why. He said it was because of the brains, because of the quality of bioscience in British universities. So in the case of the pharma industry and the biotech industry, we are right up there and indeed in some respects ahead of America. The issue is how to ensure that we have the quality of science, particularly in the universities, which will continue to act as a magnet for investment, and part of the policy of UK Trade and Investment now is to try to link in much more with the science base of the country.

  Professor Sir Keith O'Nions: There has actually been a large growth in trained scientists in the UK over the last decade, both at the undergraduate, the graduate and the post-graduate level. The growth however has been almost totally in the biosciences and the biological sciences and, rather interestingly and welcome, much of that growth has been with women entering the biosciences. It is unsurprising that a Pfizer or an Amgen is seeing a very high quality output and is responding to it by investing here. Where we have not seen growth in output, despite the number of undergraduates that has increased remarkably, is in mathematics, physics, chemistry, engineering, computing science. That is where we are flat in output numbers but there has been a big growth overall in scientists and in the biological sciences.

  Q64  Mr Mitchell: Forgive me for taking the populist line, even if it comes naturally to me. I find it extraordinary that paragraph 1.17 of the Report says: "Such analysis of economic impacts as is currently undertaken relies heavily on assertions of potential for direct industrial use, industrial use through industry-university collaborations or knowledge transfer". Surely, practical applications and the spin-off for the economy should be paramount in deciding on these projects?

  Sir Brian Bender: I was with you until your last sentence Mr Mitchell. The spin-off to the economy should not be paramount. In making the investment decision in science, the paramount aspect should be the quality of the science, but taking account of what the spin-off will be. As we said in response to earlier questions, there is much more we need to do to harden up the analysis of the economic impacts and some of the broader impacts, particularly of having trained scientists using these facilities and that is the sort of area where the National Audit Office were justifiably criticising us.

  Q65  Mr Mitchell: When it comes to the evaluation of one project against another, both of them costing a lot of money, surely the economic impact and the economic benefit for the economy should be the paramount in choosing.

  Professor Sir Keith O'Nions: Yes and no. It needs to be properly considered and balanced against other outputs of that investment. Let me take the absurd comparison. Let us take Diamond, which is the type of facility that we know the pharmaceutical industry will use and have used and let us look at building the Halley base in Antarctica. In terms of economic output, "diddly-squat" from Halley base floating on the ice; Diamond, yes, pharma wants to use it. Actually the justification is strong in both cases because measurements of the physics of the atmosphere from Halley base discovered the ozone hole; physics of the upper atmosphere there will be a very key part of climate change.

  Q66  Mr Mitchell: But there is no return for the British taxpayer.

  Professor Sir Keith O'Nions: Are you interested in climate change or the ozone layer? I am sure you are.

  Q67  Mr Mitchell: I am sure there is a lot of information about climate change; it is coming out of my ears.

  Professor Sir Keith O'Nions: What I am saying is that perfectly good investment on key issues like that is recognised as an appropriate part of the investment, as would be the synchrotron. Yes, economic impact is extremely important but not to preclude investments in things that may have enormous public good benefits.

  Q68  Mr Mitchell: Even some of the benefits from Diamond look somewhat hypothetical to me. Here is a document the expedition captured this morning: 10 things we could not have done without synchrotrons. Number one is the development of the anti-flu drug, Relenza, but when we come down to number seven it says that following the crystallisation of pure cocoa butter in real time the results showed the optimum conditions for chocolate manufacture. This is stretching things incredibly far.

  Sir Brian Bender: It was an industrial benefit that the chocolate manufacturer paid for.

  Professor Mason: The important point there is that for the particular chocolate manufacturer in question, it was of huge economic benefit because otherwise they would have had to produce something totally different.

  Q69  Mr Mitchell: You have the project so you are going to have to produce some benefit from it even it is minimal in terms of solidifying chocolate.

  Professor Sir Keith O'Nions: That list there is to indicate the breadth not necessarily the priorities. In terms of things that impressed me most, it is much more around drug discovery, health benefits and things that aerospace have done on composites and so on, but chocolate and how well it melts in your mouth is an unexpected benefit.

  Q70  Mr Mitchell: So you would not accept the point that economic spin-offs should have a higher weighting in consideration of these projects.

  Professor Sir Keith O'Nions: Quite.

  Professor Mason: May I put another gloss on this? You have to consider the timescale of the economic benefit and we were talking a few minutes ago about the investment that China and India are making in these areas and the importance for our economy of maintaining our position at the forefront in the knowledge stakes. China and India have no better idea of the quantitative economic spin-off from their facilities than we do, because nobody has solved that problem yet, but they still invest because they understand—

  Q71  Mr Mitchell: Why I am asking is because of Sir Brian's point that the starting point should be what the right science is. Why should that be the starting point? The starting point should surely be the benefits to the British economy. Our problem has always been that we have been very good at pure research, at winning Nobel prizes, at developing this and that and we have not been any good at the practical applications of science.

  Sir Brian Bender: The primary purpose of the investment in science is basically the scientific infrastructure of this country, whether it is for the public good, whether it is defence, whether it is environmental or whatever, and then we need to get other tools that will maximise the wealth creation and technological—

  Q72  Mr Mitchell: My point is that it becomes a self-perpetuating thing. We are good at pure science, therefore we invest money in these kinds of projects encouraging pure science, therefore we encourage more people into pure science, and the practical applications lag behind. We never see the benefits.

  Professor Mason: That is an incorrect analysis because what we actually are investing in is not necessarily pure science: we are investing in the intellectual capacity of our country, attracting the best brains to our country and from that flows economic benefit. A wise man once said: "If you think knowledge is expensive, try ignorance".

  Q73  Mr Mitchell: When I was a university teacher I was giving exactly the same sermon as you are giving me now, but it is a matter of practice surely, talking about intellectual benefit, that the Germans and the Japanese have been much more cunning in the applications of science and that is our main problem.

  Professor Mason: That is a charge you could level at the UK in the past and I agree with you. What we are saying here is that we are changing that and it is not a matter of pure science or economic benefit: economic benefit comes from pure science. What we have to do is maximise the benefits that we get from that, rather than only looking at the economic benefit because the economic benefit always accrues.

  Sir Brian Bender: A lot of work has been done in the last few years, spearheaded by some work that Richard Lambert did, to make it easier to have patent applications; the number of patent applications filed by universities has increased significantly over the last few years. Secondly, almost every university has a kind of commercial officer to go round, look at the research being done and look at where it could be commercialised. Thirdly, the DTI does provide some funding for knowledge transfer partnerships to try to get various economic players, businesses and universities together, again to get the knowledge out there into business areas. It is not an either/or, but the primary purpose of the investment in science is actually for the science base. The challenge is how to make sure we get enough wealth creation from it.

  Q74  Mr Mitchell: You made the point about Halley VI, because Halley V is about to sink beneath the waters with all those polar bears and penguins dragged down with it. What is the economic benefit? I can see the benefit for science but somebody else is going to finance that, a country with more money than we have.

  Professor Sir Keith O'Nions: Let me offer you a statistic. On the initial point that you made as to whether in the past we were good at pulling world-class science through to economic benefit, there is rather good evidence that we were lagging. Things have improved a great deal in the last half a dozen years. Let me just give you one measure and there are many measures: university spin-outs over the last three years. The top 25 university spin-outs that have reached IPO have a market capitalisation of £1.5 billion, which is now getting to be serious money. If you normalise that to the United States, population size, money going in, it starts to bear pretty good comparison with the United States and university performance, but it is deeper than that. I just give you one example. The Medical Research Council licensed a drug called Humira that it discovered and that was £120 million income. If you look at the trend, it is getting respectable and going in the right direction. I just hope that most of what you have heard is convincing you that economic impact is actually a very high priority.

  Q75  Mr Mitchell: I am interested in the argument over location. Why not get the regional development agencies bidding for location? You put a gloss Sir Brian on the location of the Diamond by saying it was an argument between Cheshire, which Dr Pugh was representing, and Oxfordshire. Is not the truth of the matter that Wellcome said they would pull out unless it went to Oxford?

  Sir Brian Bender: At a certain point they were very much in favour of Oxford, there is no doubt, but of the five reasons I gave, that was the fifth and there were four others also in Lord Sainsbury's letter. Certainly the RDAs do have an important role in the investment in science and innovation in the English regions and that is a key part of their role.

  Q76  Mr Mitchell: Why should they not finance these organisations to attract them to their area?

  Sir Brian Bender: If you are talking about these really big facilities, then most of them are not that mobile: clearly the computer is; Halley obviously is not; for the synchrotron it was only really a choice between two locations. The RDAs undoubtedly do have a role in the scientific infrastructure and innovation capability in each region and part of the aim of the department and the Government is to get them even better at that.

  Q77  Mr Mitchell: Why is the scientific community not more involved in prioritising? The Report says there is a gap there and surely if we are talking about pure science, the best people to evaluate priorities are the scientific community.

  Professor Sir Keith O'Nions: We would accept that the NAO and you do have a point there. I do not have difficulty with the research councils themselves making those priorities, but there is an argument that we fully accept that this should be more transparent at the time and probably more consultative in terms of reaching those priorities. We accept that. This is not making too many excuses, but remember the roadmap is a relatively new exercise, something which was pioneered in the UK, we are still finding our way, it is clearly the right way to do it and that is a tuning we accept we should make.

  Q78  Mr Dunne: A question on Mr Mitchell's and Dr Pugh's point about the location. Can you confirm that, based on the scientific evidence that you gave us earlier, a decision was held up to start that project by approximately a year by the Secretary of State seeking to make a political decision about the location rather than one based on scientific evidence?

  Sir Brian Bender: I have no knowledge of exactly what happened at the time beyond the criteria I described. There was a delay before the decision was made and then the reasons given were the ones that I outlined earlier that were in Lord Sainsbury's letter to the Public Accounts Committee. I do not know whether there is anything you can add to that.

  Professor Sir Keith O'Nions: I can add nothing.

  Q79  Chairman: Who was Secretary of State at the time?

  Professor Sir Keith O'Nions: Stephen Byers.


 
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