A new UK research funding agency Contents

4Learning opportunities for the UK research and innovation system

102.Having addressed the need for a new UK research funding agency, what it should focus on, how it should operate, and where it might fit into the landscape, this final Chapter considers UK ARPA’s implications for the research and innovation system. The evidence outlined in Chapter Two identified a number of perceived gaps in the research and innovation system including: risk aversion; difficulty securing funding; limited strategic focus; limited commercialisation and translation of research; and limited scope for interdisciplinarity. The proposals for a new UK research funding agency suggest it would aim to, at least in part, address these gaps. However, we also heard that the existing system should, where possible, seek to address these gaps itself.

103.Firstly, this Chapter considers the value of multi-year funding settlements to the UK research and innovation system before looking at gaps in the existing system which itself could address, in addition to the scope for improving equality, diversity, inclusion and accessibility.

Multi-year funding settlements

104.The current CEO and Chair of UKRI, Professor Dame Ottoline Leyser and Sir John Kingman, sent a clear message regarding the importance of having a multi-year funding settlement. Dame Ottoline told us that although it was “not impossible” to “work with short-term settlements”, a “long-term budget settlement” would “provide a lot more opportunity to plan longer-term commitments in a thoughtful and robust way”.251 She continued:

One area that we are particularly concerned about is the large infrastructure commitments; they are very lumpy and very difficult to manage on one-year budgets, and, because of that, one needs to be able to integrate those kinds of costs over multiple years.252

She told us that, amongst the “huge number of benefits” that a “longer-term settlement” would offer, it would help UKRI support “the Government’s ambition to build back through an inclusive knowledge economy that will support levelling up”. Further, it would help stimulate the private sector, which accounts for “two thirds of our R&D spend” and is currently experiencing “serious Covid shock”.253 Sir John agreed, adding that he believed “the case for a multi-year settlement is well understood in Government”.254

105.The Government—in the Spending Review 2020—later announced:

CaSE welcomed this “multi-year settlement for UKRI” in particular the “substantial increases over the next three years” which it argued would help with “protecting and growing the UK’s world class research base”.256

106.We welcome the multi-year funding settlement for UKRI set out in the November 2020 Spending Review, which not only provides much-needed certainty to UKRI and the wider research community, but it should also help UKRI support public and private sector contributions to the post-coronavirus pandemic recovery. We urge the Government to maintain multi-year funding settlements for science and encourage it to build on this through additional multi-year settlements in future Budgets and Spending Reviews to aid the UK’s post-pandemic recovery.

Addressing gaps in the UK research and innovation system

UKRI’s strategic focus

107.Dame Ottoline suggested that that a multi-year funding settlement for UKRI could help facilitate a longer-term, strategic approach. She told us that she was “keen to build the horizon-scanning function of UKRI much more strongly”.257 She added that she was “very comfortable” with UKRI being “core to the industrial strategy” and argued that “having brought together UKRI into a single umbrella organisation” that there was a “tremendous opportunity” for it to contribute to large-scale national challenges such as “supporting prosperity, high-quality public sector services, and economic growth more generally” and “drive productivity, levelling-up and a healthy and well-supported society”.258 This could help address the problem—identified by ABB, a global technology company—related to “the fact there is little certainty of long-term funding for particular areas”.259

108.It should be pointed out that UKRI manages the Industrial Strategy Challenge Fund (ISCF) and the Strategic Priorities Fund which are both intended to focus on strategic priorities. However, the National Physical Laboratory told us that while they were “originally set up with universities in mind”, they “have not been fully adapted to support the involvement of the wider UK research and innovation landscape”.260 Further, despite the existence of these funds, Professor of Engineering Policy at University College London, Brian Collins, told us that “an uplift of money to support strategic research aimed at nationally significant objectives is undoubtedly needed”.261 He cited the recommendations of the Government Chief Scientific Adviser’s November 2019 report to support this.262 He went on to say that “it is not self-evident that a new agency is needed in order to justify and achieve that objective”, adding that “a programme office that handles and coordinates nationally strategic programs” would suffice.263 Finally, British Telecom argued that the ISCF’s capacity to deliver on its strategic objectives is hampered by the fact that its ‘challenge directors’ “do not have the autonomy or mechanisms to hand to direct strategic R&D programmes as industry would understand them”.264

Freedom to take risks

109.As alluded to at paragraph 97, there was a view that UKRI should be able to operate with more freedom and autonomy. UKRI’s former CEO Professor Sir Mark Walport told us: “I hope that, over time, UKRI gains greater freedom”.265 Specifically, he highlighted the ISCF’s ‘challenge directors’, whose role was based on the US DARPA model. He told us that they became frustrated due to a lack of freedom “to run their programmes” in addition to a lack of pay.266 Former Science Minister Lord Willetts has made similar comments. He has argued that “many of the freedoms envisaged for [US] DARPA could and should be extended to UKRI” but said this would require “a bold move towards pay and financial freedoms to liberate it truly and enable it to take decisions and risks with the agility of the DARPA model”.267 Although Sir Mark argued that UKRI would be “perfectively capable of running ARPA-like programmes”, he also acknowledged that UKRI’s “future success” will be “critically dependent” on its “freedom to operate”, adding that “on those freedoms there is still quite a way to go”.268

110.The current CEO and Chair of UKRI, Dame Ottoline Leyser and Sir John Kingman made similar appeals for greater freedom. The latter argued that the ISCF portfolio “needs to be managed in a dynamic way” and that UKRI should be able to “take grown-up decisions about deprioritising, or even stopping, some elements of the portfolio to allow us to fund those that are the most promising” and to fund them “more ambitiously”.269 Dame Ottoline agreed, stating that UKRI had “done extremely well over the last couple of years” in bringing its budgets “within a 1% tolerance limit” as well as doing a “very high-quality job in managing the large amounts of money” it is entrusted with. She added:

I hope that building on that relationship will give us the opportunity to develop greater flexibilities in the way we allocate our money so that we can work more dynamically in the way John described.270

This aligns with written evidence from PraxisAuril—a professional association for Knowledge Exchange practitioners—which asked why existing parts of the system could not be given “more freedom to take risks”.271

Less bureaucratic processes

111.We heard that existing parts of the system could gain greater freedom to take risks through reductions in bureaucratic constraints. Sir John Kingman told us that now that the Government was “thinking about the right way to construct ARPA”, that it was an opportune time for it to “think carefully about the panoply of controls that apply to UKRI” and the “best framework” available to:

balance the perfectly legitimate need for public accountability around the absolutely massive sums of money required for topics that are hugely relevant to all sorts of Government priorities, with the need for us to operate in a way that is agile, so that we can move at the speed we ideally need to be able to move at.272

Evidence from the Welsh Government Office for Science agreed and argued that:

As [UK] ARPA is designed to be less bureaucratic there may be some learning opportunities for other agencies. The current funding councils have a smaller risk appetite; if ARPA is successful this could change.273

Similarly, the University Alliance suggested that discussions about a new UK funding agency could prompt the Government to “look at ways of addressing bureaucracy issues within UKRI”, while Bournemouth University told us that the “excellent” proposal that UK ARPA will “work on a low bureaucracy, high trust model” should be the “norm for all UKRI funds”.274 Others made similar points.275

112.Sir Mark Walport agreed, suggesting that the Government had monitored UKRI too closely:

Being completely frank with the Committee, one of the challenges for UKRI has been, because it is new and a lot of money is associated with it, that there has been a desire across Government for quite a lot of micromanagement of UKRI’s activity.276

This view was shared by the former Science Minister Lord Willetts, who has argued that UKRI has been subject to “heavy-handed and intrusive supervision”, which has made it difficult to “manage its budget efficiently”.277 Current UKRI CEO Dame Ottoline Leyser took a similar view, explaining that “when starting a new programme”, if it is “novel and contentious” she requires a “whole raft of extra sign-off measures, through Government” which “leads to a slowing down of the process”. She told us that if UKRI was able to “make long-term very stable investments”—the multi-year funding settlement in the 2020 Spending Review could, arguably, help this—and it was able to “work very freely and fluidly” without “being asked endlessly whether something is novel or contentious” then it could perform ARPA-like activities in-house.278 Currently—as per the UKRI Framework Document—‘novel’ or ‘contentious’ work requires escalation to BEIS and HM Treasury.279

113.The 10 September 2020 policy paper—Reducing bureaucratic burden in research, innovation and higher education—published by BEIS and the Department for Education suggested that the Government was aware of the need to address bureaucratic constraints affecting UKRI.280 It put in place a “root and branch review programme” which sought, in part, to simplify “criteria for organisations to be eligible to apply to UKRI” and implement a “streamlined, two stage application process for standard grant rounds”.281

Interdisciplinary research

114.Although the purpose behind creating UKRI was, in part, to better facilitate interdisciplinary research—indeed, the Strategic Priorities Fund explicitly aims to do this—there was a view that it has struggled in this respect.282 It was acknowledged that this may be due to UKRI still being a “young organisation”.283 Professor Richard Jones told us that “in principle” UKRI should be able to do it but that it “might be too early to see whether it is able to”.284 The University of Birmingham agreed. While it welcomed the prospect of the new UK funding agency supporting interdisciplinary research, it also argued that because UKRI “brings together under one agency the previously discipline-specific research councils, as well as the UK’s innovation agency [Innovate UK]”, it is well placed to do this, adding that “[i]t is critical that this focus and mission is not distracted or eroded”.285

115.Dame Ottoline was clear that the “extraordinary breadth and depth of reach across the system” that UKRI provides is “exactly what we need now” given that research and innovation is “very heavily interdisciplinary these days, and requires those disciplines and sectors to be working together closely”. She told us that “the creation of UKRI is an opportunity to connect things up”, adding “[t]hat is my top priority”.286 Relatedly, she said that she was “very keen” to tackle the “big issues” that the UK faces—such as ‘Net Zero’ by 2050—which “require interdepartmental, multi-departmental, cross-governmental thinking and policy join-up” and that UKRI was well-placed to do this.287

116.While the Government is thinking about the best way to establish a new UK research funding agency and acting on its pledge to reduce unnecessary bureaucracy in the UK research and innovation system, it is a good time for it to reflect on the bureaucratic constraints that apply to the funding bodies operating under the UKRI framework. It is right that UKRI is held accountable for the public money it spends, but the temptation to micromanage it must be considered alongside its need to operate in an agile and efficient way—for example regarding decisions on which projects should be started or stopped—and its potential, through the coordination of interdisciplinary research and innovation efforts, to strategically tackle the large-scale national challenges facing the UK. The Government’s policy paper on reducing the bureaucratic burden in research is a step in the right direction.

117.The Government should carry out a review, commencing before the end of the next financial year (i.e. 2021–2022), to explore how UKRI can operate with fewer bureaucratic constraints and more freedom and flexibility in how it allocates funds, while ensuring that it is held accountable for its expenditure. Specifically, it should consider (i) the implications of modifying or removing UKRI’s requirement to seek Ministerial approval, on a case-by-case basis, for anything deemed ‘novel’ or ‘contentious’, (ii) the extent to which the Industrial Strategy Challenge Fund’s ‘challenge directors’ have been unnecessarily hampered by bureaucratic constraints in their work and whether this can be addressed, (iii) UKRI’s capacity to tackle the UK’s strategic challenges through its coordination of public and private sector research and innovation, and finally (iv) how effectively UKRI facilitates interdisciplinary research and the scope for improving it.

Equality, diversity, inclusion and accessibility

118.While the evidence welcomed the potential opportunity for the new UK research funding agency to bring a “fresh approach” to the related issues of equality, diversity, inclusion and accessibility, it was argued that the current system could benefit from more diversity.288 The Royal Academy of Engineering pointed to evidence which linked diversity and improved financial performance and innovation and creativity.289 The Association of Research Managers and Administrators told us that there was a “need for more female leadership” and that there were “concerns regarding progress on this”.290 Similarly, PraxisAuril argued that there was “a growing awareness of the need for diversity in innovation”, with “much more to be done on supporting diversity beyond gender”. They claimed that “this is a gap which affects our R&D landscape”, and that the system should “support ideas from many different backgrounds and cultures”.291

119.Dame Ottoline endorsed this view. She argued that research and innovation benefits from diversity:

There are a number of ways to look at [equality, diversity, inclusion and accessibility] policy. The way I view it is that high-quality research and innovation needs diversity. You have to have people with different ideas and different backgrounds coming together to create the kind of environment where extraordinary things happen. It is disagreement that is almost the fuel of creativity. Building cultures and environments where disagreement is valued as an engaging thing, where, if someone disagrees with you, you are pulled in to discuss the disagreement rather than pushed away by anxiety about a confrontation, is key to underpinning the whole process.

She indicated that ensuring that the current system allowed for this would be a priority for her, adding that: “I am very keen to think about that more broadly across the UKRI system”. It is worth pointing out that UKRI has committed to “expanding its data collection analysis capabilities” and that the “next diversity data release is scheduled for 2021”.292 This commitment followed the publication of data that showed inequalities between men, women and ethnic minorities. Specifically, the “median award value for female awardees is approximately 15% less than the median award values of males (£336,000 vs £395,000)”. Further, “the median award value for ethnic minority awardees is approximately 8% less than that of white awardees (£353,000 vs. £383,000)”.293 When asked, Dame Ottoline was unable to say when UKRI would publish its equality strategy.294

120.There is scope for improvements with respect to equality, diversity, inclusion and accessibility in the current research and innovation system, as illustrated by the 2014–15 to 2018–19 data from UKRI. The system benefits from having people with different ideas, different backgrounds and different characteristics working together. We therefore welcome UKRI’s commitment to expanding its equality, diversity, inclusion and accessibility data collection and analysis capabilities. UKRI should set out, in the Government’s Response to this Report, when it will publish its equality strategy. The strategy should outline how UKRI intends to improve the effectiveness of its equality, diversity, inclusion and accessibility processes and policies and how the effects will be measured and demonstrated.

255 HM Treasury, Spending Review 2020, Cm 330, November 2020, pp 78–79

256 “CaSE responds to 2020 spending review”, CaSE press release, 25 November 2020

259 ABB (RFA0003)

260 National Physical Laboratory (RFA0019)

261 Professor Brian Collins (RFA0103)

263 Professor Brian Collins (RFA0103)

264 British Telecom (RFA0101)

271 PraxisAuril (RFA0084)

273 Welsh Government Office for Science (RFA0068)

274 University Alliance (RFA0080), Bournemouth University (RFA0032)

275 King’s College London (RFA0053); Norwich Research Park (RFA0099)

279 Department for Business, Energy and Industrial Strategy, UKRI Framework Document (May 2018), para 12

280 Department for Business, Energy and Industrial Strategy and Department for Education, Reducing bureaucratic burdens on research innovation and higher education, September 2020

281 Department for Business, Energy and Industrial Strategy and Department for Education, Reducing bureaucratic burdens on research innovation and higher education, September 2020 , section 3

282 UKRI, Strategic Priorities Fund, Accessed 7 January 2021; University of Oxford (RFA0079); School of Advanced Study (RFA0063)

285 University of Birmingham (RFA0035)

288 Association of Research Managers and Administrators (RFA0067); PraxisAuril (RFA0084)

289 Royal Academy of Engineering, Diversity and inclusion in engineering survey report 2015 (2015), p 25

290 Association of Research Managers and Administrators (RFA0067)

291 PraxisAuril (RFA0084)

Published: 12 February 2021 Site information    Accessibility statement