Examination of Witnesses (Questions 140-159)|
MP, SIR BRIAN
24 APRIL 2006
Q140 Chairman: A third of £1
billion will go then?
Alan Johnson: That is not necessarily
Q141 Dr Harris: It is possible, given
what has been said, that the total spend at the moment of £1.3
billion cannot be guaranteed to be maintained?
Alan Johnson: I would be very
surprised if there is any reduction on the current £1.3 billion.
What we are saying is we will have a fund of at least £1
billion to start off with. As Keith says, the crucial point is
that the Department of Health aspect of this will now be ring-fenced.
Professor Sir David King: I want
to underline that because one of my jobs is to see that R&D
funds in government departments are well spent. First of all,
I very strongly welcome the Budget Statement on this issue for
a variety of reasons. One is it means that, as I understand it,
what will emerge is not necessarily a merger of the two budgets
but that the two budgets will be treated in much the same way
as Research Councils. At the moment we have a Medical Research
Council within the Office of Science and Innovation in DTI and
we will see a similar structure emerging if not under a single
head, which it may be, but, nevertheless, it means that money
will be operated like a Research Council. That is rather different
from the previous mode of operation. I do think this has significant
Q142 Dr Harris: I agree with you,
but I am still trying to chase the not insubstantial sum of £300
million. If you are ring-fencing £750 million, which is the
Department of Health R&D budget, and you are retaining spending
plans, which are welcome and increased of £550 million from
the MRC, then why does that not enable you to say that there will
be at least, or near enough, £1.3 billion? As soon as you
say £1 billion it looks like you are ring-fencing out £300
Alan Johnson: I would guess the
problem here is we need to look very carefully at the Department
of Health and how they spend that money. I do not think it is
so much a DTI issue as a Department of Health issue.
Q143 Dr Harris: I agree with you.
Alan Johnson: If we are going
to ring-fence it, what does that mean? Ring-fencing is not a small
measure to take, once it is ring-fenced it is ring-fenced. Probably
the reason why we have said at least £1 billion and not said
at least £1.3 billion is the need to make absolutely sure
that some of that money which is classified as research spend
in health at the moment is right to go in the ring-fenced bit.
Q144 Dr Harris: If we were honest
we would say what many people recognise that a significant amount
of NHS R&D is used to prop up service and is not being well-used
for R&D, and that is part of the basis, but you do not want
to destabilise the NHS by sucking it all out into proper R&D
spending. That would be an honest way of putting it and you might
have a bit of heat from that in the first instance.
Q145 Chairman: Secretary of State,
do you agree with that?
Alan Johnson: We are honest. The
only point I am making here is I would be very surprised if it
was less than £1.3 billion, but I think you have to keep
some contingency plans there for when you look very closely at
turning what is now a budget which has some discretion over it
into a ring-fenced budget. I would not go into the areas that
you are going into at all, Dr Harris, but I think that is a proper
way to frame this, it is to say that there will be a least £1
billion. We are not saying there will be £1 billion, we are
saying at least £1 billion. At least £1 billion could
be £1.3 billion or it could be more.
Q146 Dr Harris: You have to go into
the areas I am going into, with respect, because there is an expectation
of £1 billion. Everyone in the NHS recognises that NHS R&D
has not been ring-fenced functionally for R&D, that is what
Sir David has just said. I do not think it has been clear that
that is a problem which this is part of a solution to. I think
it would be made clear if it was stated. Perhaps we are not going
to make much more progress there. There is a plan to identify
what the governance should be of this overall budget, if I can
call it that. What do you think are the advantages of the MRC
type model of governance for this fund?
Professor Sir Keith O'Nions: It
very clearly says in the Budget Statement, after identifying these
two ring-fenced budgets, that Haldane principles will be upheld
in the deployment of that budget. The Haldane principle is quite
hard to find, it goes back to 1917 when Lord Haldane, something
of a machinery of government anorak in modern speak, devised that.
The key thing is that this is arm's length from government and
would, in effect, be enshrined under the Science and Technology
Act which defines the Haldane principle. That Haldane principle
is enshrined in the last Budget document. It says there has got
to be a Research Council structure or something that is identical
to it under the Science and Technology Act to deliver that. It
is not a matter of do I think it is a good model, it is the only
model we have got within legislation as it is.
Q147 Dr Harris: That is very helpful.
Why do you need this review of what the governance arrangement
should be if you have got the Research Council type arrangement
which you like so much, and which has Haldane and a whole series
of other things, unless you can identify for me some benefits
of the way the NHS or the Department of Health handles the R&D
budget? Can you give me any?
Professor Sir Keith O'Nions: At
this stage it probably depends on where the boundary of R&D
in the Department of Health lies. It may well be that some of
their spend is not ideally suited to Haldane principles. Quite
a lot of DTI's spend in business and so on is not under Haldane
principles. I do not think it is sensible at this stage, until
this has all been reviewed over the summer and into the autumn,
to say automatically, "Every penny that is spent across that
whole piece all comes under the Haldane principle" because
I do not know the R&D budget well enough. It would almost
be like saying, "Every penny you spend on innovation in DTI
has to be a Haldane principle", which would not be the case.
Q148 Dr Harris: It is not just Haldane,
the Research Council modelwhich I support and I have been
very strongly, by the same token I am not blaming the Government
for decisions of Research Councils because they are independentis
well liked and also the MRC has an international profile. There
is worry that obviously if there is going to be a governance arrangement
half-way between the way the DH works and the way the Research
Council works that some of the good things about the MRC's way
of doing things may be lost. Can you reassure on things beyond
the Haldane principle?
Professor Sir Keith O'Nions: I
am not running the review so I cannot give you any reassurance,
but I would be exceedingly surprised if you could come to a conclusion
where that sort of structure was inappropriate for a large part
Q149 Chairman: Sir Keith, are the
terms of the review published?
Professor Sir Keith O'Nions: No,
I think they are a couple of weeks away. They are being determined
by a team within the Treasury.
Q150 Chairman: Who is leading that
programme, Sir Colin Blakemore?
Sir Brian Bender: No, David Cooksey
is dealing with it.
Q151 Dr Harris: He has been appointed
to lead the review, but his precise terms of reference have not
Professor Sir Keith O'Nions: The
nature of the consultation will be published in a couple of weeks,
as I understand it. There is a team in the Treasury, I will not
name the individuals here because I will get some of them wrong.
Certainly there is an individual from OSI as part of that team
and there is an individual from the Department of Health and a
couple of Treasury officials supporting those.
Q152 Dr Harris: The CCLRC and PPARC
are proposed to be merged, well they are not definitely going
to be merged, this is a proposal unlike the OSI thing where you
decided you were going to do it and you did it, that does not
apply to this. Concerns have been raised about the fact that you
should not separate the grant givers from the people who know
and understand the machinery because the two are heavily linked
and that is precisely what the current proposal does. Are you
alive to those concerns?
Professor Sir Keith O'Nions: Very
much so. The current proposal is basically saying, "We believe
there is a case for some merger of those activities and asks the
question as to where should the grant-giving functions go".
Then there is a consultation which is on-going. It has not come
to a conclusion, it is a consultation. The motivation and driver
for that is the nearly £600 million a year that we spend
on large facilities in the UK, both indigenous ones and through
subscriptions, usually more and more and more is spent with Europe.
We are a large player by international standards, in that, we
have the good fortune to have a budget regime for science. There
is real scope for getting even greater benefit from that investment,
particularly when you take account of the establishment of a Harwell
science and innovation campus and a Daresbury science and innovation
campus, also announced in the Budget. Again, it is part of the
agenda of money invested in the science base, getting involved
more and more in knowledge transfer and innovation. When you put
that together there is really a case for putting this £600
million into a single body. Once you do that, because there are
overlapping responsibilities for international subscriptions between
PPARCparticularly in particle physics, high energy physicsand
CCLRC, you draw out you have got two Research Councils and then
you say, "What do you do with the grant giving, for example,
in astronomy?" That is part of a consultation. I am absolutely
alert to the notion of the dangers of separating the grant-giving
from the expert knowledge of how it should be spentbut
different people have different suggestions. The consultation
will flush this out. I am not going to say here, but I think you
would probably guess, how I would vote. It is a legitimate consultation
and I am well alert to the important points there.
Q153 Dr Harris: One issue is the
issue of separating the facility from the people who use it and
know it best in terms of peer reviewing applications for use of
those. Another issue is the fact that EPSRC timescales are three
years and PPARC's per force are usually much longer and the cultures
are different. Can you give me any reasons that you have heard
as to why giving the grant-giving powers of PPARC to EPSRC on
the contrary might be a good idea?
Professor Sir Keith O'Nions: People
have different views. Some people simply make the observation,
"That is how the National Science Foundation in the US do
it, that is where astronomy is supported there. High energy physics
and particle physics is in the Department of Energy", therefore
it must be a good thing.
Q154 Dr Harris: It is not very convincing.
Professor Sir Keith O'Nions: I
am not necessarily convinced by those arguments. The important
thing established in this Budget is that over a ten-year period
there is a tacit acceptance that the fundamental structure of
our Research Councils is about right. They are large in number
relative to any other country. No other country has as many as
this, but they are efficient and effective. The Budget is proposing
two changes, one of which I think has a huge prize, potentially,
the linkage with health for the medical research, and the other
of which has a significant prize in innovation at the large facilities
end. Beyond that, that is the way in which the ship is going to
sail for most of the Ten Year Framework.
Q155 Chairman: Why did you not speak
to the people involved in the Research Councils before these announcements
were made? They came as much of a surprise to them.
Professor Sir Keith O'Nions: This
is part of a Budget and you will understand, at least as well
as I do, the purdah that surrounds Budgets. This is not something
that says, "This is what it is going to be". This is
a consultation. The community has all the opportunity to give
a view on the appropriateness or inappropriateness of these structures
exactly as it does on the Research Assessment Exercise and so
on. If there had been a decision on a new structure with new chief
executives, and jobs were changing, and so on without consultation,
then that would be a real issue. But this is a consultation. Whether
you should consult as to whether you are going to have a consultation
I think is a moot point. This is part of a Budget.
Q156 Chairman: You must have been
aware of this when the new Chief Executive of PPARC was appointed,
that you were going to perhaps seriously interfere with proposals.
Professor Sir Keith O'Nions: You
say "must" and I will be totally honest with you. It
was not in my mind at that point. People within the Research Councils
themselves for some years, not unanimously, have pointed out the
oddity of the present situation. The thing about the appointment
of the new chief executive, and particularly Keith Mason who is
the Chief Executive of PPARC, is this is an outstanding appointment.
I would hope that within this new structure these outstanding
people continue to contribute. There is a very big piece of territory
there for them. I would not expect them to feel threatened and
I do not believe they do.
Q157 Dr Turner: I am still not entirely
clear, Sir Keith, about what problems you are trying to address
or resolve in, for instance, putting CCLRC and PPARC together.
Would the final outcome, if it is a merger, be treated as and
function as a Research Council because it sounds as if it will
be a slightly different body?
Professor Sir Keith O'Nions: It
will be different. I think these large facilities are different,
they require a long-term view. Dr Harris made the point that EPSRC
only gives grants within five years and that basically they have
very few commitments into the future. Investments in these big
facilities are very long-term things. Just to give you the list,
within the UK we have the biggest science investment in Diamond,
the synchrotron at RAL. This a UK investment which is going to
run for several decades. We have the neutron sources; we have
the lasers; then jointly we have the international contributions
to CERN, particle physics, the European synchrotron in Grenoble,
a whole host of things. We have got a big budget relative to many
countries and we are the envy of them. But there are two things
we have got to do. One, we have got to be able to prioritise because
the things people would like to do exceed any reasonable expectation
of budget growth. If we double the budget over another 10 years
we would not be able to do all the things we would wish. You have
got to prioritise, you have got to know what is right for the
UK, but more and more we have got to get more knowledge transfer,
more innovation and more benefits for business out of these large
facilities. We have not been in that world before; they have never
been put together with the notion of, "What extra benefits
will we get from those investments?" that is the change.
Q158 Dr Turner: Will you ring-fence
the current grant awarding budget that PPARC operates because
it would be very easy for them to get sucked into large facilities,
would it not?
Professor Sir Keith O'Nions: Let
me be clear, the science budget is ring-fenced and the Secretary
of State has given assurances on that. It would be foolhardy across
eight Research Councils to take one or all of them and say, "This
is your budget forever more". Had that been done we would
never have been able to accommodate the huge growth in biomedical
sciences. There has to be shifts of budgets between Research Councils.
The advice I give to the Secretary of State has got to be, "My
advice is that you spend the budget in this way and these will
be the optimum outputs we will get from this investment for the
benefit of the UK". To ring-fence anything in a Research
Council long-term I think would be foolhardy and I would never
give that advice to the Secretary of State.
Q159 Chairman: That was a very, very
clear answer, if I might say, Sir Keith. Can I ask you finally,
Alan, the National Institute for Energy Technologies, which was
again mentioned within the Budget, what stage are your plans at
for that? How would this research institute interact with the
other Research Councils?
Alan Johnson: The stage we are
at is busily getting commitments from funders like BP, E.ON and
Shell, that they want to be become involved in this, and getting
everything in place. We have got the basic structure. The concept
is at an early stage and there are many of the details to work
through. We have got the basic idea here, that we can do something
quite exciting to attract more private sector investment into
energy research. David might want to say a word on this about
how we would interact, but I certainly think it is an enhancement
to the Energy Research Partnership. Indeed, I think the Energy
Research Partnership in many ways has driven this. There are lots
of details to go on this, but I think it is a very exciting development.