Examination of Witnesses (Questions 200-219)
RT HON
JOHN DENHAM
MP AND IAN
WATMORE
29 OCTOBER 2008
Q200 Chairman: He actually said:
"I know, it would be very easy to take you all into my confidence.
Look, I will be honest ..."—which was an interesting
statement! And he went on to say that if he had been there at
the time he would have argued for science to remain within BERR.
Mr Denham: The answer I would
give to that is I think that science, although it gained hugely
from investment and from David Sainsbury's influence in BERR,
there were some weaknesses, I think, in having that arrangement
over which I think DIUS has an advantage. One is, if you take
our universities, which are hugely important institutions, the
separation of education policy, teaching policy basically in universities,
from research policy means that no university could engage with
one government department over the whole of its activities—in
innovation, research and teaching. Now universities can do that
so we have a better fit. Secondly, I think that because now science
is clearly located in a department which brings together many
of the elements that we need for competitive and prosperous policies
from research, from innovation to skills there is coherence and
a join between them that was not there previously, leaving aside
any question of squatters' rights!
Chairman: I have every confidence in
you, Secretary of State!
Q201 Dr Blackman-Woods: The vision
for Science and Society has been criticised somewhat in the press
for presenting a view of science from your department that sees
it totally as a public good. Is that a fair summary of the government's
position?
Mr Denham: No, we have a consultation
taking place to develop a new Science and Society strategy. The
critics who were in the press and were kind enough to quote a
speech that I made to the RSA earlier in the year, I think it
is a false choice between the document we have produced and the
views that I expressed there. We have tried to do a number of
different things. We are genuinely trying to create a society
where there is an excitement about science, its importance is
recognised and where that is reflected, not least in the number
of young people who study STEM subjects at school and university.
But we are also trying to have a society that is mature in its
handling of science, so not a society where by having scientists
in science saying, "Therefore you have to trust the scientists,
scientists are always right" we have to have a society that
is confident about understanding what science is telling us; confidence
about understanding that scientific method rarely gives you certainty
and what it does tell you. What we are trying to do is how do
you get those two things? How do you generate a genuine enthusiasm
for an engagement with science as well as a society which is mature
in the way in which it understands scientific issues and handles
scientific information and advice, and that is what we are trying
to do. Although the letter that came in from a number of professors
of social science was quite critical we took the view that whether
they said it was not worth a contribution to the debate or not,
we thought it was and we were pleased that they took the trouble
to write.
Q202 Dr Blackman-Woods: But would
you accept that what they are setting up in terms of their criticism
is that there was not really a clear role for social sciences
in terms of critiquing that vision and that in fact the vision
did not make it clear at all what role you were suggesting for
social sciences in explaining the role that science plays in society?
Mr Denham: When you do a consultation
document for people to come back and say, "We cannot respond
to your consultation document because we do not agree with you"
is not really the most productive engagement. Let me make the
point, they do not think that social science was dealt with adequately
and that is an issue we will take on board. The Chairman knows
that we now talk about the research budget rather than the science
budget—it was one of the small but symbolic changes that
this Committee prompted us to make as part of one of your earlier
reports. So we do value the role of social science and indeed
the arts and humanities in contributing to the formation of policy
across the piece. We will look at their particular criticisms
when we come to produce the final document.
Q203 Dr Iddon: John, the government
set up three new major institutes for research—OSCHR, TSB
and the Energy Technologies Institute. At the same time the government
dedicated six themes where research money should be dedicated
and there has been a significant shift of research money in the
Research Councils from responsive mode to programme research as
a result of that. Is the Haldane Principle not shattered?
Mr Denham: No, it is not shattered,
Chairman. I set out in a speech to the Royal Academy of Engineering
earlier this year what I thought about the Haldane Principle and
I was very happy to restate the core principles of the Haldane
Principle, but I pointed out three areas where I think inevitably
in the modern world ministers will have a greater degree of engagement.
The first was in major projects; so, for example, the Camden Medical
Research Centre would not happen if you just said to the MRC it
is up to you to make it happen or not. You had to have engagement
with ministers across government. The same would be true about
Daresbury and Harwell. The second area is that I think it is legitimate
for ministers to say, "Look, there are some very, very big
questions in our society that we need research to help us answer:
for example, climate change; the implications of an aging society
and the other cross-cutting areas." I think that is one of
those areas where, provided ministers are open about it and upfront
about it, that is a reasonable contribution for us to make. It
does not mean that we determine in any way the individual decisions
about what gets funded within those programmes and indeed if you
look at the cross-cutting programmes the contributions of the
additional Research Council budgets were decided by the Research
Councils themselves. But I think is reasonable for us on behalf
of the people who elect us as a government to say that we need
a part of our science effort organised to tackle these major problems.
The third thing I think we were right to do—and I set out
in that same speech about the Haldane Principle—was that
if you have an overall responsibility for science policy there
are times when you will need to raise questions and initiate things.
So, for example, as this Committee recognises, my decision to
get the Wakeham Inquiry underway, which was taken before there
had been any public criticism of the STFC at all, it was just
me looking at what they were proposing and saying, "This
is going to raise lots of questions about the state of physics."
So it was not for me to step in and say, "You cannot do this,
STFC" it was my job to say, "This is going to kick off
a debate about the state of physics," and we then found the
mechanism for Bill to come in and do his report. Similarly—and
again before there had been publicity—the decision to ask
Tom McKillop to lead some work on Daresbury was in response to
looking at a situation and saying, "What we might be getting
here is not quite what we perhaps had in mind." It is not
for us to come in and say, "You must do this particular thing
in this place at this particular time," but we should at
least initiate a process which will guide government policy on
the development of Daresbury. So Haldane, I think we are respecting,
but I am being very honest that in practical government terms
in those areas of big projects of strategic priorities we have
an input to make.
Q204 Chairman: But Wakeham in his
report about the state of physics did in fact urge the government
to redefine the Haldane Principles given the changing circumstances
and I think in response to Dr Iddon's question, are you intending
to do that?
Mr Denham: I think this is something
we should return to on another occasion. My view is that in that
speech I made earlier this year it was done in order to redefine
the Haldane Principle and to actually say, quite upfront, there
will be major issues like a government decision to have international
innovation centres, which will have ministerial involvement, or
the International Research Centre in Camden. Government will legitimately
say, "We must ask our science base to address some of the
big societal challenges that we are facing." So I felt I
had done and, if I am honest, I thought Bill Wakeham's report
was excellent and the one bit I was disappointed with was that
he did not feel that that restatement was adequate for his purposes.
I would be more than happy to carry on this discussion but I have
tried to be very clear about how I have interpreted Haldane.
Q205 Dr Iddon: In this place yesterday
we had a very interesting round table discussion involving many
scientists from the physics community and a lot of politicians
were there too, and the question of responsive mode grants came
up. You must be aware, John, as we are, that there is a huge criticism
across the scientific community, not just with physicists, that
responsive mode grants are contracted to such a degree that looking
ahead it might be difficult to provide the researchers for programmes
if we do not encourage them to apply for their own grants. I am
talking particularly of young scientists. What do you have to
say to the scientific community this morning in response to that
criticism?
Mr Denham: It is of course for
the Research Councils to balance those contesting priorities and
to nurture the health of the research base. I think it is an issue
in broader higher education policy, which is where a lot of research
lies, which we will need to return to off the back of the work
that people like Nigel Thrift have done for us when we do the
HE framework next year. So I am not sanguine about it but I do
think that this is a job that the Research Councils need to take
responsibility for managing.
Q206 Dr Iddon: We have over 150 universities
now and yet 76% of the research money goes to just 19 universities
with that money focused on research of international significance.
Do you think that balance is right? Let me also add that recently
I met some of the Million+ Group people who are arguing for a
sum of money set aside so that they can kick-start research in
their universities, and of course in some of those universities
there are excellent pockets of research. Do we have the balance
right with so much money going to the top 19 universities?
Mr Denham: I would say broadly
speaking yes. In other words, I think that broadly speaking the
distribution of research funding strikes the right balance between
the ability of a university over time to improve its research
perform, develop a greater critical mass and, as it were—not
that we ever take any notice of league tables—move up the
league tables. Together with the fact that you need probably institutions
with sufficient concentration of the highest quality research
across a range of disciplines to be really competitive and an
effective collaborator at an international level. So if you ask
me I would say yes, broadly. That is not the same as saying I
think that that is a system which should be absolutely rigid and
does not allow people to progress. As far as the Million Plus
campaign goes I think there are two issues. W are sceptical about
the idea that you top slice a budget which is distributed on the
basis of quality criteria and so we just distribute it on a different
basis. But do those institutions have a strong case that they
play a very, very important role, particularly in applied research,
the translation of knowledge, knowledge transfer and the Open
University, yes, I think they do and I think that is something
we have to consider. It was part of the reason why the HEIF money
was put on a formula basis and moved away from a competitive basis,
to ensure that institutions were incentivised to encourage that
sort of activity. So I do not think it would be fair to say that
we do not recognise the issue at all.
Q207 Dr Iddon: The Arts and Humanities
Research Council in particular has been hard hit with cuts in
its research budgets; what do you have to say to the people who
did apply for AHRC funding?
Mr Denham: I probably cannot find
my figures directly but I think I am right in saying that if you
look over a three or four year period there was a pretty significant
increase in the funding of the arts and humanities.
Q208 Dr Iddon: It is the smallest
of all the separate research councils.
Mr Denham: But there had been
none the less a significant increase. So we value the work that
they do; it is important to look at the expanding research budget
and how people have fared over time, not just in one settlement.
AHRC received an increase in its funding in CSR 2007 of 12.4%.
That was a 43% increase in the previous spending review.
Q209 Mr Boswell: They have actually
been cutting their grants back though.
Mr Denham: One of the things that
the research councils have to manage—and if you look back
historically they have taken different strategies—is the
extent to which they increase grants rapidly at a period of time
when they have more money, without a view to the sustainability
of it in the future. I think that is quite important. If you looked
at the AHRC from 2004 onwards and said, "Has it had over
that period of time a significant increase on its previous base?"
then undoubtedly the answer is yes.
Q210 Dr Iddon: Your department has
received a pretty decent settlement in the present Comprehensive
Spending Review round, but nevertheless the UK's position in the
2008 Times Higher Education-QS World University Rankings has deteriorated.
Do you think that your settlement will be able to turn that position
around?
Mr Denham: It is always very funny
to be in the middle of a first year of a settlement and to be
talking about the next settlement. My job, Chairman—let
me be quite upfront about this—is to argue the case and
we will have to see how I do. One of the reasons for raising the
question—and I have said this publicly—of where do
we want to be in 15 years' time rather than where do we want to
be in three years' time is that I think it focuses the mind quite
well on the challenge of making sure that we do well. Let us not
overstate that. I think the main change was that three universities
that were Level 4 were distinguished slightly because one of them
moved up a bit—and we do not take any notice of league tables.
We are pretty strong scientifically as a country but, yes, we
have to make sure that we maintain that. There is no doubt that
the doubling of the science budget under this administration has
been the biggest single factor in achieving that. There used to
be an organisation, as you know Dr Iddon, called Save British
Science, which fortunately was wrapped up quite some years ago
because of the extra investment in science.
Q211 Chairman: Secretary of State,
the Committee were in China and Japan last week and I think what
has prompted this particular question—and indeed the concern
of the Russell Group—is that the investment which is going
in from the developing world, particularly China, into basic research—not
just simply translational research—is so massive that unless
we actually match that by the time of the next Comprehensive Spending
Review we are in danger of moving backwards; I think that was
the challenge. We appreciate the resources that have gone into
science, but nevertheless the case for maintaining basic science
over the next Comprehensive Spending Review is perhaps more important
than it was over the last ten years. Do you agree with that?
Mr Denham: You cannot expect me
to anticipate what may happen but let me just say, Chairman, you
have heard my views on these subjects and my job is to argue the
case.
Chairman: We are sure you will do so.
Finally, the issue of financial downturn looms and Rob Wilson
is the man to ask the questions.
Q212 Mr Wilson: Secretary of State
we are now in a recession and that is going to have a number of
implications; employers, for example, are going to start cutting
training budgets if they follow examples from other recessions
that have happened in the past, and that is probably going to
mean fewer people able to get into further and higher education.
In addition, this is the first recession that we have had since
tuition fees were introduced and people who find themselves out
of work, unless they have significant savings, might find that
their options of going to university may be fairly slim to retrain,
particularly with the ELQ budget having been cut substantially.
Perhaps you can give us your thoughts on that?
Mr Denham: I think there are a
number of different strands there, Chairman. It is right to say
that, as everywhere else in government, we respond to the slowdown
by saying that we are prepared to do whatever is necessary to
make changes where things are necessary to respond. We have shown
evidence of that in the last week or so by being prepared to propose
quite radical changes for a period of time to Train to Gain and
the way that it is delivered to small and medium-sized enterprises;
being prepared to flex both the Firstness Rule, in terms of the
qualifications people already have, and the Fullness Rule, so
that we can offer through FE colleges and training providers a
suite of things like business improvement techniques, product
designs and things like that, which are shown to have a very immediate
effect on the profitability and productivity of companies. Making
that change and being prepared, if necessary, to devote the growth
in the Train to Gain budget over the next two years to that SME
sector is a very good example of our willingness to flex and to
change the rules. You will know, Mr Wilson, that your party wishes
to abolish that entire budget, but we will not pursue that particular
issue. We are also working, with the support of many business
leaders and trade union leaders, on a broader message about training
budgets and people will have noticed an advert in the papers last
week from Sir Mike Rake who heads the UK Commission on Employment
and Skills and a number of others making the point that the evidence
from previous slowdowns is that companies that do cut back on
their training budget are less likely to succeed. There is an
important role there because let us not forget that the majority
of money in this country which goes into training comes from employers
and not from my department. We often talk about we pay for training
and they do not; the majority of money comes from employers. Clearly
one of the reasons that we are engaged in a communications effort
about this is to win the argument with employers that this is
not the time to be cutting back on training. So we are prepared
to change the way we use our own budget but we also have a very
important message for the employing community as well. The one
area that I am sceptical about is your assertion that this will
reduce FE or higher education numbers when there is not evidence
of that from the past and those budgets and our funding for those
is in place. So I do not think that will be the change there;
our real issue is to make sure that we maintain, so far as we
possibly can, the volume of training that takes place, particularly
in the business sector.
Mr Watmore: Chairman, could I
just add one thing because this is a very important topic? When
I was in business we used to have the rule that those that continued
to invest in the talent of their people and the innovation of
their products are the ones that come out the other side with
greater competitive differentiation. John and I discussed this
earlier this summer when the economy clearly was in some sort
of deterioration and we said that if it is true for business it
is true for the country, and if this country continues to invest
both nationally and in individual enterprises, public and private,
in the talent and innovation agenda, it is most likely to pan
its way out of the downturn in a stronger and competitive position.
We kind of touched on that last week in my session where what
we were saying—and as the Secretary of State said in making
the case for further investment in science and higher and further
education and training and skills—is we have to make that
case both through the public communication channels and through
the very hard evidence base that supports that because it is fundamental
to the case for maintaining and increasing our budget of this
department because we see ourselves as the department for the
talent and innovation agenda for the country, and I think that
is a very important part of our strategy going forward.
Q213 Mr Boswell: I think that is
a very welcome statement which will be welcome to most of us.
May I follow it by asking you—perhaps jumping back to the
earlier discussion we had about the financing of HE—there
is something of a past pattern of engagement on HE in times of
economic difficulty as an alternative to an uncertain job market.
Do you recognise that as a possible development and, if you do,
are you in a position to either resource it or apply for resourcing
it as a response to that?
Mr Denham: It is something on
which we are going to have to keep a very close eye and see whether
it influences the choices that people are making. It also makes
quite a big difference how people apply it. Some people may choose
to study part-time, for example, so the impact may not be on full
time figures. All I can say, Chairman, is that it is something
on which we need to keep a very close eye.
Q214 Mr Wilson: If I can just move
on now? It has become apparent from the weekend reports that the
Chancellor knew before the rest of us that there were problems
with the Icelandic banks. Did he or the Treasury inform you, or
HFCE, about the dangers that were developing and was the information
passed on to universities?
Mr Denham: We are not involved,
so far as I am aware, in any way at all in the investment decisions
of universities; these are things which are matters for them as
autonomous institutions. They are large organisations and there
is a reasonable expectation that they employ appropriately qualified
people to take these decisions and so far as I am aware we as
a department have no involvement in this area at all.
Q215 Mr Wilson: But do the government
and the Treasury not have the duty to pass on the information
they had about the dangers that were developing?
Mr Denham: Questions about what
other parts of government do, which are way outside my brief—
Q216 Mr Wilson: They certainly did
not pass it on to you.
Mr Denham: If I am perfectly honest
I would not normally expect that type of broad Treasury advice
to the investment community to go through a government department
like mine, particularly if one is concerned about institutions
which are legally autonomous, separately incorporated institutions,
which are responsible for their own affairs. I think it would
be a very slippery slope if I started to pretend as the Secretary
of State for Innovation that in some sense I had a responsibility
or ought to have responsibility for the decisions that those organisations
take, and the same would be true for FE colleges, which are also
incorporated organisations. We are not talking about an owned
subsidiary of the department.
Q217 Mr Wilson: Lots of universities
have been affected, as you know. Is your position still that the
government is not going to assist them in any way?
Mr Denham: The position at the
moment is that we have made sure that they are included within
the range of organisations with whom the Treasury is in touch
as the Treasury responds to the position in Iceland; but it is
not—and this is very important—our job as a department
to be second-guessing the positions of these individual institutions
that are responsible for their own affairs. Nor have we been asked
to, I have to say, and no doubt those who might have asked us
to would not because they would know very well that they would
not want to have a situation where the Secretary of State was
expected to be responsible for the investment decisions of universities—they
would hate it.
Q218 Mr Wilson: Can I ask you two
quick questions. The first is about large capital projects. Are
they going to still proceed on schedule in light of what is happening
with the recession, or are you, as the Chancellor has indicated,
trying to bring them forward?
Mr Denham: In general they are
going to proceed. Let us distinguish between different things.
Again, most of these things actually take place to some extent
at arm's length from DIUS. If you look at big capital projects
they are run by universities or they are funded by research councils,
for example the Camden Centre. In those areas our general expectation
is that they will proceed as planned. One is always in capital
programmes looking at the changes that can take place—the
options for bringing things forwards, other things possibly becoming
delayed for planning or technical reasons or whatever. Our intention
is to maintain the capital programme.
Q219 Mr Wilson: That is clear. One
final question, I want to confirm something that you said in answer
to Tim about changes to the grant earlier. Did you say that there
would be about 30,000 to 40,000 losers?
Mr Denham: No, I did not say that
because no one is going to lose.
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