25TH REPORT: PROPOSAL TO ESTABLISH THE
EUROPEAN INSTITUTE OF TECHNOLOGY[5]
Letter from Ian Pearson MP, Minister of State
for Science and Innovation, Department for Innovation, Universities
and Skills to the Chairman
Thank you for your letter of 5 July 2007 and
for the Committee's report on the proposal to establish the European
Institute of Technology. I am pleased to attach the Government's
response.
14 August 2007
GOVERNMENT RESPONSE
The Government thanks the Committee for the
detailed work it has undertaken in its examination of the Commission
proposal to establish a European Institute of Technology (EIT).
The Government agrees with the Committee's view that Europe needs
to address the relative weakness in its capacity to realise its
great innovation potential. Although the EIT proposal cannot by
itself be the panacea to Europe's relative weakness in this area,
the Government believes it could over time usefully complement
existing EU instruments. The Government's objective during negotiations
has been to work constructively to achieve an outcome which will
deliver tangible benefit. We believe that this approach has helped
to secure substantial improvements to the concept of the EIT.
2. The conclusions and recommendations of
the Committee align closely with the position adopted by the Government
during the course of negotiations. We endorse the Committee's
observations on the challenges that lie ahead for the ElT, namely
the importance of the composition of the Governing Board and the
need for rigorous evaluation and monitoring of the EIT and KICs.
The Government has consistently stated its position that the EIT
should have a light touch governance regime, which allows maximum
autonomy for the individual Knowledge and Innovation Communities
(KICs), while maintaining transparency, quality assurance and
accountability.
The note below sets out the Government's response
to the individual recommendations in the Committee's report.
LIST OF
RECOMMENDATIONS AND
GOVERNMENT'S
RESPONSE
Budgetary provision for the EIT
Recommendation 1. We recommend that EU funding
for the EIT should be reduced to a level commensurate with the
gradual phased approach which is now envisaged for its implementation;
and that the year by year profile of the total budget should properly
reflect that phased approach. (3.18 and 4.33)
3. Following the Conclusions of the
European Council of 21-22 June 2007, which called for rapid agreement
on the European Institute of Technology, the German Presidency
secured a "General Approach" on its compromise text
at the 25 June 2007 Competitiveness Council. The compromise text
provided for a budget envelope of €308.7 million, unchanged
from the Commission's proposal. The source of this budget would
need to be agreed in subsequent negotiations with the European
Parliament. While the Government expressed its support for the
significant improvements made to the overall legal text, it opposed
the retention of this level of direct contribution from the Community
budget, especially since the number of KICs had been scaled down
compared to the Commission's original proposal. Despite similar
concerns expressed by other Member States, none joined the UK
in opposing the compromise text.
4. The European Parliament has still
to complete its first reading of the proposal. While it appears
to accept the total proposed budget figure, it shares Member States'
concerns with the lack of clarity in the source of the budget.
The Government will maintain its position in Council that a mutually
acceptable solution for financing the EIT must be found before
any agreement can be made between the European Parliament and
the Council on the substance of the proposal. The Government favours
redeployment of funds from within Heading 1A, and strongly opposes
any moves to re-open the Financial Perspective ceilings as part
of the negotiations on funding the EIT or other projects.
Recommendation 2. We recommend, further, that
the practice of funding such a major project as the EIT from a
reserve budgetary source (from the margins of heading 1A of the
Community budget in the case of the EIT) should not be regarded
as acceptable except in the most pressing emergencies or other
unforeseen circumstances. (3.19 and 4.34)
5. The Government agrees with the Committee.
It is unfortunate that no provision was made for the EIT in the
Inter-Institutional Agreement for the 2007-13 Financial Perspective.
During negotiations we strongly disagreed with the budgetary approach
adopted for this proposal, reasoning that a project should only
be agreed when a budget has been properly justified and when clarity
on the sources of funding has been established. During Council
negotiations the Government consistently opposed any use of the
margins, which are reserved for unforeseen needs and which should
only be used for existing programmes. The Government also made
clear that the margin of Heading 1a is already under considerable
pressure from other projects. Using this margin as a source of
funding is inconsistent with the principles of budget discipline
and sound financial management. However, the political momentum
behind the project was such that other Member States opted to
support the Presidency compromise text as a whole, including on
budgetary aspects.
Composition of the EIT Governing Board
Recommendation 3. We recommend that the EIT
Governing Board should include an appropriate representation of
Members with business experience so that it can ensure that the
EIT's activities are focussed on technological developments which
are commercially viable, as well as innovative. (3.22 and 4.35).
In the Government's view, a high calibre
Governing Board is key to the success and reputation of the EIT.
The Board will have responsibility for setting overall strategy,
guiding the EIT through its formative phase and carving out a
distinctive niche for the EIT in the European research and innovation
landscape. We agree with the Committee's recommendation on the
importance of the Board having Members with direct business experience.
The Commission will be responsible for implementing this objective,
by virtue of its role in appointing Board Members on the basis
of proposals from an Identification Committee. The Government
will monitor the appointment process to ensure that it is transparent
and results in a high quality and well balanced membership.
The EIT's priorities
Recommendation 4. We recommend that references
to suggested topics for EIT work, such as renewable energy and
climate change, should not be included in the final text of the
EIT regulation, since this could be interpreted to imply that
the Governing Board will have an insufficient degree of autonomy
in setting the EIT's priority. (3.27 and 4.36)
7. The Government sympathises with
the Committee's view that the Governing Board should have sufficient
autonomy in setting the EIT's priorities. Equally, the Government
considers that it is reasonable for the Council and European Parliament
to give a broad political steer on the key challenges facing the
European Union, which the EIT could help to address. The Government
believes that the compromise text strikes an appropriate balance
in this regard, by means of the inclusion of a non-binding reference
to climate change and renewable energy in Recital 21 of the text.
It will remain the role of the Governing Board to draw up strategy
and specify fields of activity.
Monitoring the effectiveness of the EIT
Recommendation 5. We recommend that there should
be a firmly based commitment in the EIT Regulation to a process
which ensures that a rigorous evaluation, focused on the business
impact of the work of the KICs at local level, must be carried
out and assessed in Council before the initial scale of the EIT
can be significantly expanded.(3.31 and 4.37)
8. The Government shares the Committee's
view that the EIT requires rigorous evaluation, especially as
this is an untried concept. The provisions in the "General
Approach" text, especially those contained in Article 16,
will ensure that the activities of KICs are subject to systematic
monitoring and periodic independent evaluation, the outcomes of
which will be made public. While the focus of the EIT is necessarily
on raising the level of the EU's innovation capacity as a whole,
the Government firmly expects successful KICs to be able to point
to examples of local and regional impacts, for example the creation
of spin-off companies and other innovation activity. The Government's
success in securing agreement on a two-phase approach means that
a further legal decision by Council and European Parliament will
be necessary before any expansion in the number of KICs can take
place.
Recommendation 6. We recommend that the key
element of the EIT's annual reports and external evaluations should
be an assessment, in commercially relevant terms, of the success
of each KICs activities at local level (3,32 and 4.38)
9. In addition to the comments made
in response to Recommendation 5 above, the Government notes that
annual reports and external evaluations will need to cover a range
of issues. These would include, for example, progress made in
promoting entrepreneurship and business skills in doctoral courses
run by KIC partners and the depth of links between academic and
business partners. While the Government believes therefore that
commercialisation activities at the local level could form a valuable
part of evaluation reports, we would expect them to focus on the
impact of KICs in contributing to the improvement in wider European-level
innovation performance.
5 14871/06. Back
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