The Impact of Spending Cuts on Science and Scienetific Research - Science and Technology Committee Contents

Memorandum submitted by ADS (FC 65)  


  (i)  ADS is the trade body advancing UK AeroSpace, Defence and Security industries with Farnborough International Limited as a wholly owned subsidiary. A½D½S brings together the combined strengths of the long-standing Association of Police and Public Security Suppliers (APPSS), the Defence Manufacturers Association (DMA)  and the Society of British Aerospace Companies (SBAC).

  (ii)  Aerospace, Defence, Security and Space industries are major UK business sectors based on high-value engineering. With a turnover of £20 billion a year, UK aerospace companies continue to invest c. £1.8 billion in research and development and sustain 223,000 UK jobs. Aerospace turnover was evenly divided between civil and defence sales in 2008 with exports making up a considerable share of income, accounting for 69% of UK aerospace sales.

  (iii)  The UK has a 17% global share of the civil aerospace market, 10% of the defence market and is well placed to provide the equipment and necessary expertise to take the lead in the increasingly significant security and space sectors. UK companies also have a significant share of the global aftermarket (service)  sector, including maintenance, repair and overhaul of both fixed-wing and rotary-wing aircraft providing significant components of the UK industry.

  (iv)  As well as being substantial generators of activity in their own right, the four sectors also stimulate GDP and employment in other parts of the economy. For example, the Space sector whilst supporting 70,000 jobs, also generates an additional £1.6 billion a year through R&D spill-over effects.

  (v)  There are many cross cutting Government strategies that have an impact on the UK aerospace industry including the Advanced Manufacturing Strategy, Low-Carbon industrial strategy, High-level Skills Strategy & Leitch review, the Defence Industrial Strategy and the developing Space Innovation and Growth team process.

  (vi)  Industry and Government developed a joint strategy for the sector which was published in 2004 as the Aerospace Innovation and Growth Team report (AeIGT). This publication identifies the key strengths of the UK industry and identified what was needed to ensure the UK maintained and grew its global position. Both technology and skills investment were identified as being of paramount importance. These conclusions have been reviewed and underpinned by the development of a National Aerospace Technology Strategy report and the development of a set of Technology Roadmaps, which link collaborative research programmes to business opportunities worth $3.15 trillion.

  (vii)  The overall trend is for strong order growth over the next 20 years, Airbus forecast that 25,000 new passenger and freighter aircraft valued at US $3.1 trillion will be delivered between 2009 and 2028. Getting the right levels of investment in UK research programmes is fundamental to UK based companies winning work on future programmes and securing high-skilled manufacturing jobs.

  (viii)  UK aerospace companies are world leaders in the rotorcraft (helicopter)  market which is forecast to be worth £30 billion, up to 2027. Whilst the Defence Industrial Strategy does include rotorcraft and identifies the need to retain skills onshore to provide through life support for the Armed Forces, there is no specific rotorcraft strategy designed to support the development of the UK civil market.

  (ix)  Unmanned Aerial Systems is another key market for the aerospace sector estimated to be worth $20 billion up to 2020, due to emerging developments in security and surveillance. A key element to UK companies winning work in this market in addition to sustaining the right investment into technology development programmes is ensuring a supportive Air Traffic Management framework which permits both flight and testing of unmanned systems.

2.   The process for deciding where to make cuts in SET spending

  (i)  We would strongly recommend that the process addresses a number of key issues.

  (ii)  No cuts made where current spending is fully recognized as supporting nationally-agreed strategies, already underwritten by government, industry & academia.

  (iii)  If there are cuts, these should be outside recognised institutes of excellence (ie We should protect the "best" since this is more likely where the innovation will come from).

  (iv)  Reduction in duplication across academia in both education and research. There is scope to make cuts without affecting UK research capability—for example, research could be tested to verify its applicability to nationally-agreed strategies.

  (v)  Increase proportion of funding opportunities where academia only get the money if they really team with industry.

3.   UK Aeronautics Research Institute proposal

  (i)  The Aerospace and Defence KTN are brigading government, industry and academia to develop a proposal for a UK Aeronautics Research Institute. This will deliver leadership in aeronautics research excellence and address fragmentation that exists in the UK today.

  (ii)  Aeronautics expertise is currently scattered across a large number of university departments. This dilution of academic excellence threatens to degrade UK capability and disable strategic inward investment from industry. In a number of cases, technology "push" from publicly funded research is currently disconnected from applications.

  (iii)  The absence of such a body means there is no national organisation mechanism to undertake a programme of underpinning research of national strategic importance which can safeguard strategically important facilities and sustain and grow National capabilities in composites, flight physics, electronics and many other areas.

  (iv)  Other nations such as France and Germany have maintained large, powerful, publicly funded research institutes in the Aerospace sector (eg DLR and ONERA), which has given them greater influence on the European stage, eg in shaping the Framework Programme.

  (v)  The proposals are still being developed but the objective is that an institute would reduce complexity and encourage greater industry and university collaboration. The ease of working through a central point of contact in comparison to separate negotiations with multiple universities is attractive to industry and academia. In addition, the institute would provide a stronger link between academic research and the market-driven National Aerospace Technology Strategy. The NATS roadmaps span more than a decade but research grants usually last a few years. The institute would provide continuity to research programmes and a stronger link between academic research and commercial applications.

  (vi)  Currently, the UK is strategically disadvantaged with respect to influencing EU Aeronautic Strategy for two reasons.

  (vii)  The UK is not represented on influencing bodies such as the Association of European Research Establishments (EREA).

  (viii)  We are unable to attract anything more than 50% EU funding in the absence of a Public Research Institute.

  (ix)  There is a real opportunity to address these gaps and deliver greater linkages between academia and industry and to increase the ability of the UK to achieve greater EU support for research funding. The objective is not to duplicate or competitively undermine the excellence already established within Industry, Academia and RTOs, but to create coherency between these individual entities, thus ensuring UK Aeronautics remains globally competitive and sustainable. Initial proposals will be finalised in February 2010.

4.   What evidence there is on the feasibility or effectiveness of estimating the economic impact of research, both from a historical perspective (for QR funding)  and looking to the future (for Research Council grants)

  (i)  In the development of defence equipment and technology the Government through the MoD has a direct influence on aerospace through both procurement and research investment. There has been much public discussion about the need for a Strategic Defence Review and A½D½S supports this process. Since our armed forces cannot do their job without defence equipment provided by industry it is essential that a renewed and refreshed Defence Industrial Strategy is an integral part of the SDR process.

  (ii)  Defence equipment like health and IT procurement programmes is a direct means by which Government investment has the ability to channel investment into skilled jobs, technology and innovation, whilst at the same time delivering world-class equipment to our Armed Forces.

  (iii)  A recent report by Oxford Economics produced an analysis of how a range of sectors contribute to the national economy. The report concluded that relative to other parts of the economy, the defence industry generates significant benefits consistently across a range of comparators. These include: returns to the Exchequer, impact on GDP, number of jobs, skill development, research and development investment and export potential. Across all these criteria, defence is judged the third most attractive sector out of 27 included in the study.

  (iv)  Defence equipment also provides export opportunities as equipment that is tried and tested in the UK is more likely to attract export customers. Defence exports in the UK account for 55,000 jobs and additionally encourage innovation and contribute returns to the Exchequer.

5.   The differential effect of cuts on demand-led and research institutions

6.   The implications and effects of the announced STFC budget cuts

  (i)  The UK has an excellent academic base, however international competition is intensifying. Full economic costing is making the UK a more expensive place to do academic research, and protracted negotiations with some Universities over intellectual property rights are hampering the pace at which new programmes can be launched.

  (ii)  Research Councils are increasingly receptive to the needs of industry, and initiatives such as EPSRC Strategic Partnerships are welcomed and should be encouraged.

  (iii)  The benefits of a strong Aerospace industry have been recognised by other nations. The global nature of the industry enables companies to make choices as to where they invest, including in innovation. The UK must remain vigilant and agile to respond to the increasing threat of very attractive propositions being tabled overseas. It is inevitable that manufacturing will follow where innovation takes place.

  (iv)  The technology and innovation created by aerospace research often transfers between civil to defence applications and vice versa. For example composite materials developed in civil aerospace are used in defence applications, defence technology has a role in security applications. The same is true of skills and process improvements. There is an opportunity to achieve more efficient investment in government supported research through bringing together joint defence and civil programmes. The Technology Strategy Board which has a coordinating role in investment is the natural body to bring these different objectives together. Advancing this goal does require the full engagement of academia also.

  (v)  The network of Advanced Manufacturing Research Centres have an important role to play in creating new designs, products, processes and skilled employees for both aerospace and wider applications, as many technologies from the sector spill over into other sectors.

  (vi)  The proposed Manufacturing Technology Centre (MTC)  in the Midlands, along with the Advanced Manufacturing Research Centre (AMRC)  in Sheffield and the Advanced Forming Research Centre (AFRC)  near Glasgow, will provide a powerful network linking companies, industrial sectors and universities and spanning a range of high integrity, high productivity process technologies. At several levels, the network will provide an infrastructure capable of supporting future public and privately supported manufacturing technology research.

  (vii)  Industry experience with the Advanced Manufacturing Research Centre (AMRC)  an initiative led by Sheffield University and Yorkshire Forward has been very positive. The centre which opened in 2004 operates as a department of the University around a partnership of some 40 industrial companies. The focus is on machining processes, composites and automated assembly.

  (viii)  The programme has already been expanded with a £10 million additional investment earlier this year, by Yorkshire Forward with support from Rolls-Royce. The Rolls-Royce Factory of the Future, has delivered a four-fold expansion of the AMRC on the same Sheffield site. Further plans are also being formulated to further expand facilities with two further buildings providing a 40% increase in floor space.

  (ix)  The compelling characteristics of the model are pace and scale underpinned by industrial leadership and a very non-traditional and results-led approach from the University.

  (x)  This successful model has been built upon and scaled up to bring a broader range of technologies whilst preserving the benefits of specialisation within each Centre. In 2007, industry achieved agreement with Scottish Enterprise and Strathclyde University to launch the AFRC—a Centre that will focus on advanced forging and forming processes with an initial capital input from Scottish Enterprise of £17 million. Land preparation is now complete, construction has started and the Centre will open during 2010.

  (xi)  The Manufacturing Technology Centre (MTC)  represents an ambitious step towards completing the first stage of a UK network. The proposal is to bring together three Universities—Nottingham, Birmingham and Loughborough along with The Welding Institute and a more broadly based, cross sector industrial partnership. The scale of the Centre reflects the very rapid growth seen in Sheffield and an intention to straddle a broader range of process technologies including high integrity joining, net shape fabrication and automation.

  (xii)  The programme is now at an advanced stage with the East Midlands Development Agency and Advantage West Midlands. A final formal decision on funding is expected during Q3 2009 with MTC research projects being launched during the second half of 2009 and the facility to be opened early 2011. The MTC was "announced" as part of the Government's manufacturing strategy in September 2008.

  (xiii)  A½D½S expects that industrial support for the manufacturing research network will be strong and international. As with the AMRC in Sheffield, we believe that industrial membership of the new Centres will grow rapidly once the facilities are open.

  (xiv)  A number of leading industrial companies are already committed to centres within the emerging network (including Rolls-Royce, Airbus, Boeing and BAE Systems)  with significant interest from a wider group of cross sector industrial partners.

  (xv)  At an industrial level A½D½S believes that there are strong overlapping interests in high integrity, high productivity manufacturing technologies that will continue to attract a range of industrial sectors—including automotive, heavy vehicles, nuclear, oil and gas and aerospace.

  (xvi)  In summary the benefit of these centres to industry include.

  (xvii)  Access to world-class research facilities and academic staff supporting fundamental and applied research in manufacturing technology.

  (xviii)  Strong market pull and industrial leadership from partners, especially the larger Original Equipment Manufacturers.

  (xix)  Leverage knowledge from cross-sectoral collaborative partnerships between leading academic institutions and major industrial companies.

  (xx)  Rapid "technology pipeline" from concept—demonstration—exploitation, bridging the gap between University research (MCRL 1-3) & industrial application (MCRL 7-9).

  (xxi)  We cannot allow any spending cuts to impact on the above activities, as this will further disadvantage the UK.

7.   The scope of the STFC review announced on 16 December and currently underway

8.   The operation and definition of the science budget ring-fence, and consideration of whether there should be a similar ring-fence for the Higher Education Funding Council for England research budget and departmental research budgets

  (i)  We recognise the need to review all governmental spending in the current economic climate. However, we must also recognize the need for the UK to be ready and able to support and maximize its potential when the upturn comes.

  (ii)  We would strongly advocate that the scope of the review addresses an improved use of available funding, rather than carte-blanche cuts. An independent review of the benefits accrued, and the direct linkages to nationally-approved strategies would be preferable criteria for the review.

  (iii)  Ring-fencing budgets would be acceptable, if determined against the above criteria.

9.   Whether the Government is achieving the objectives it set out in the "Science and innovation investment framework 2004-14: next steps", including, for example, making progress on the supply of high quality science, technology, engineering and mathematics (STEM)  graduates to achieve its overall ambitions for UK science and innovation

10.   Whether the extra student support, which the Government announced on 20 July 2009 for 10,000 higher education places, delivered students in science, technology, engineering and mathematics courses

  (i)  We fully support all initiatives that will encourage increased uptake of STEM subjects throughout education. It is too early to determine whether these initiatives have been successful, although the initial results look promising. However, we would also caution that the ongoing proclivity to continually launch new initiatives is not helpful. We would strongly recommend that we use this opportunity to fully assess the full spectrum of initiatives, and rationalize them to ensure a more comprehensive possibility of success.

  (ii)  We are in grave danger of confusing the landscape—let's simplify, get better value-for-money, and be successful—the success should be measured on output, not input.

January 2010

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