Science, Innovation and Technology Committee
Tuesday 14th July 2026
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09:32
Speaker 1
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Speaker 1
Order, order and welcome to today's meeting of the science, Innovation and Technology Select Committee. And I want to thank our witnesses and indeed, our members and our staff for being here in London and the high summer temperature today. And if there is a need for a a temperature break, please let me know. Now, this is the final session of this parliamentary term. And we are discussing a topic which is a real priority for the committee. It's something that's come up repeatedly through multiple inquiries, and that is how the UK can encourage the emergence of diffusion and absorption of innovation across the UK economy.
So we are really delighted to welcome two witnesses at the forefront of delivering the government's ambitions in this area. Tom Adeola, the Executive Chair of innovate UK and later this morning we'll be talking to Lord Willetts, chair of the Regulatory Innovation Office. But I want to, um, I want to start by welcoming Tom, who came, um, just over a year ago to our, uh, pre appointment, um, session. And Tom, when you came then you were very definitely a man with a plan. I know you said you were going to spend your first month getting under the skin of the organisation, and then a second month clarifying and simplifying its purpose.
And the month three, given getting the structure to deliver on that purpose. So how was the plan gone?Um, what have been your main achievements in your first year?
So we are really delighted to welcome two witnesses at the forefront of delivering the government's ambitions in this area. Tom Adeola, the Executive Chair of innovate UK and later this morning we'll be talking to Lord Willetts, chair of the Regulatory Innovation Office. But I want to, um, I want to start by welcoming Tom, who came, um, just over a year ago to our, uh, pre appointment, um, session. And Tom, when you came then you were very definitely a man with a plan. I know you said you were going to spend your first month getting under the skin of the organisation, and then a second month clarifying and simplifying its purpose.
And the month three, given getting the structure to deliver on that purpose. So how was the plan gone?Um, what have been your main achievements in your first year?
09:34
Speaker 2
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Speaker 2
So if I go back to that sort of first 100 day plan that I had with reference to trying to understand the organisation, then simplify and clarify the purpose and then write the plan in terms of the forward strategy in time for Ian Chapman's arrival at the end of August. I think in the first six weeks I visited all of the catapults around the country, so I think I did over 20 visits in that first six weeks to really understand where innovate UK money was spent. So the catapults being a third of the annual budget, really got under the skin of understanding the organisation, meeting all of the different departments and uh.
Divisions of innovate. Uh, and then ultimately worked on that simplifying part of the purpose. So it's, it's, it was an extremely complicated organisation to understand from the outside. And I wanted to make sure that we could clarify and simplify to get the organisation pointing all in the same direction. So, you know, a bit of a reflection I had coming in was that it it had it was a great organisation with lots of personally motivated people who are all motivated in the right way in terms of improving, uh, the lives.
And a lot of UK, uh, economy and its citizens. But it was also felt like an organisation of cats, um, ultimately doing their interpretation of what they thought innovate was there to, to achieve. So simplifying that purpose was key. So, uh, doing that and then writing out a plan to take the organisation forward, simplifying the purpose to be about essentially shifting from funding projects to supporting companies. Our role is to accelerate innovation for the benefit of the nation and ultimately create a UK where breakthrough ideas can become industry.
Through breakthrough ideas, where we have the research base, the industrial strength and the talent pipeline that gives us the right to win, and in particular, given that the industrial strategy had been launched, focusing in on aligning ourselves with the industrial strategy sectors so that we had a sense of focus, clarity of areas that the government had told us to zero in on, and then start to look with reference to how could we improve our relationships at both end of that funnel. So with research coming in, I certainly believe, uh, that we have pound for pound, the world's best research base, uh, in the world, but also at the other end, we have the second biggest private capital market in the world.
So at the moment, and certainly in my experience running my own startup, there was a disconnect between deep tech and the private capital markets. So I felt that if we could clarify and simplify that purpose, create pathways from beginning to end, we could essentially bridge that knowledge gap and ultimately create a means by which we could, uh, catalyse more private capital into the innovation ecosystem. So that was, that was the sort of basis of the plan and vision that I'd set up.
Divisions of innovate. Uh, and then ultimately worked on that simplifying part of the purpose. So it's, it's, it was an extremely complicated organisation to understand from the outside. And I wanted to make sure that we could clarify and simplify to get the organisation pointing all in the same direction. So, you know, a bit of a reflection I had coming in was that it it had it was a great organisation with lots of personally motivated people who are all motivated in the right way in terms of improving, uh, the lives.
And a lot of UK, uh, economy and its citizens. But it was also felt like an organisation of cats, um, ultimately doing their interpretation of what they thought innovate was there to, to achieve. So simplifying that purpose was key. So, uh, doing that and then writing out a plan to take the organisation forward, simplifying the purpose to be about essentially shifting from funding projects to supporting companies. Our role is to accelerate innovation for the benefit of the nation and ultimately create a UK where breakthrough ideas can become industry.
Through breakthrough ideas, where we have the research base, the industrial strength and the talent pipeline that gives us the right to win, and in particular, given that the industrial strategy had been launched, focusing in on aligning ourselves with the industrial strategy sectors so that we had a sense of focus, clarity of areas that the government had told us to zero in on, and then start to look with reference to how could we improve our relationships at both end of that funnel. So with research coming in, I certainly believe, uh, that we have pound for pound, the world's best research base, uh, in the world, but also at the other end, we have the second biggest private capital market in the world.
So at the moment, and certainly in my experience running my own startup, there was a disconnect between deep tech and the private capital markets. So I felt that if we could clarify and simplify that purpose, create pathways from beginning to end, we could essentially bridge that knowledge gap and ultimately create a means by which we could, uh, catalyse more private capital into the innovation ecosystem. So that was, that was the sort of basis of the plan and vision that I'd set up.
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09:37
Speaker 2
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Speaker 2
So I think ultimately I got that, um, the strategic plan. Agreed. Uh, UK level Cross-department launched the new strategy in March, which was well received by the ecosystem and reorganised the whole organisation. So I reset my entire senior leadership team, reset the organisation to be in place for April the 1st, the beginning of the new spending review period. So I wanted to ensure that the organisation was in a position to turn the words of the strategy into action. From the beginning of our our new funding period.
09:38
Speaker 1
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Speaker 1
Thank you very much. That's a that's a great summary. And we'll be going in more detail into metrics and performance in a moment. But I just want to focus on what you said about Reorientating and. And in March, the vision for the innovate UK for itself as a tech due diligence engine for the UK's deep tech ecosystem. So there's a prioritisation on deep tech, which you reflected their prioritisation is very essential, you said, so that the organisation had focus, but by prioritising deep tech, what are you not doing?
09:38
Speaker 2
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Speaker 2
I think going back to um the focus, the focus is very much in the industrial strategy sectors. So outside of that we we aren't going to be focusing in areas that aren't within that. So in particular we're sort of taking an 8020 approach. So 80% focus on the industrial strategy sectors where we believe that we have the right to win because we've got the research based talent pipeline and industrial strength. So in particular, for example, we've chosen six of the eight sectors financial and professional business services we believe are well catered for by the market.
But where deep tech takes us into those sectors, I say AI and quantum, we will support those companies through into those sectors. So we are taking quite a focused approach in areas where we believe there's a pathway for success for companies.
But where deep tech takes us into those sectors, I say AI and quantum, we will support those companies through into those sectors. So we are taking quite a focused approach in areas where we believe there's a pathway for success for companies.
09:39
Speaker 1
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Speaker 1
I think, if I understand you, what you're saying is that the industrial strategy is a consequence of the industrial strategy. That means focusing on deep tech. So what is not deep, deep tech?You know what. So so you're saying I'm trying to just understand with prioritisation there's always sort of winners and losers. So who are the losers here.
09:40
Speaker 2
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Speaker 2
Well I would say so. Straightforward business model service orientation type businesses. Right right. Rather than businesses which are based on some form of research innovation, be it an innovation of technology, uh, or an innovation in methodology about doing something which has, which has a research based route and provides a point of differentiation, which means that in a global market, there is essentially something that gives a UK company an edge, right?
09:40
Speaker 1
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Speaker 1
So it's not. So it's it's a focus on that on technology, but it's not a particular kind of technology like engineering, you know, focus technology, which we might call a hard tech. And particularly because one of the sectors is the creative industries. So can you give me an example of deep tech in the creative industries?
09:41
Speaker 2
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Speaker 2
Yeah. So, uh, with reference to the creative industries, we've gone around and tried to speak to a lot of the organisations in that sector. I think we've spoken to over 150 over the course of the last year. And actually, when you end up having the conversations we're trying to work out in a sector which actually is quite long tail in its structure with a lot of small businesses, what is the right intervention that we can have, which can meaningfully change the trajectory either for the sector or some of the companies within it.
So having a conversation with the likes of the BBC, it's quite interesting where you end up. So conversation with the BBC, you end up with actually the technology they're interested in is satellite applications. So being able to understand what is in an image that they might see of what's happening in different places in the world. AI with reference to how they can compete with the new epgs being generated. EPG electronic program guides for the likes of Google Now, which are essentially disintermediating the ability to go into TV channels because they're serving the customer directly on TVs and then quantum with reference to being able to serve.
Uh, and know that the content is being delivered to end at the right and simultaneous time. So in that conversation, you end up with a position where you say, right, okay, there are common challenges which exist across the broadcasters where differentiating deep technology can potentially increase margin. I have to say, ability to allow more creativity to flourish.
So having a conversation with the likes of the BBC, it's quite interesting where you end up. So conversation with the BBC, you end up with actually the technology they're interested in is satellite applications. So being able to understand what is in an image that they might see of what's happening in different places in the world. AI with reference to how they can compete with the new epgs being generated. EPG electronic program guides for the likes of Google Now, which are essentially disintermediating the ability to go into TV channels because they're serving the customer directly on TVs and then quantum with reference to being able to serve.
Uh, and know that the content is being delivered to end at the right and simultaneous time. So in that conversation, you end up with a position where you say, right, okay, there are common challenges which exist across the broadcasters where differentiating deep technology can potentially increase margin. I have to say, ability to allow more creativity to flourish.
09:42
09:42
Speaker 2
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Speaker 2
Yes, but the AI, uh, element of that is the bit that is the core focus. So it's taking deep tech in AI. If you think about our current, our current platforms in, in media, haven't got the type of, uh, capacity to, uh, invest in deep tech against their competitors. So how can, how can we put, can. Deep tech to help those businesses flourish.
09:43
09:43
Speaker 2
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Speaker 2
It's ultimately. I think in the creative sector, it's when you get the arts and technology that converge, that provides the opportunity for new business areas and the ability to expand margin. So I think the the aim in the creative industries, you know, essentially through the likes of Createch, etc., is to create pathways for new companies to emerge to, uh, give the. UK a. Potential internationally competitive position. So especially in an area era where essentially there's dominance from, uh, demand aggregators, we effectively have to help UK companies understand how they can use technology to compete against a global, um, significant businesses.
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09:44
Speaker 3
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Speaker 3
Thanks, chair. Morning, Tom. Can I ask just to follow that up?Um, the industrial strategy, which I cheered is very high level and it covers, you could argue basically most of the economy, creative industries, financial services, it's successive governments have in the past tried to identify technologies. Um, I mean, I've seen at least four attempts. David Willetts and I had eight great technologies. Then Greg Clark had seven. And in the science and tech framework of 21, we had five.
I'm not clear, and I don't think the chair is or the committee is clear whether what the technologies are, unless it's basically AI and quantum applied in all the others. And what are we doing on agri tech to feed the world on space tech for defence, on those other key technology sectors, which around the world people wonder if we're still backing them.
I'm not clear, and I don't think the chair is or the committee is clear whether what the technologies are, unless it's basically AI and quantum applied in all the others. And what are we doing on agri tech to feed the world on space tech for defence, on those other key technology sectors, which around the world people wonder if we're still backing them.
09:45
Speaker 2
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Speaker 2
Uh. I believe the frontier technologies that we have are, are key, are key technologies where we have the research base, which is, which is developed really core strength. So in particular, quantum, as you mentioned, um, you know, there's been a commitment for another 2.5 billion in that space. And we innovate, have launched, uh, procure, which is the a, an. Important part of a development pathway through to procurement from government of quantum compute. And I think the quantum space and the sector is actually the model coming into innovate that I'm keen to replicate in the other areas.
So as you mentioned, the industrial strategy is broad. The challenge I've set our growth sector leads in each of the industrial sectors is to really sort of narrow in on spaces and areas where we have the research base and industrial strength that gives us the right to win, and that actually ends up being like narrower than our our core headline position.
So as you mentioned, the industrial strategy is broad. The challenge I've set our growth sector leads in each of the industrial sectors is to really sort of narrow in on spaces and areas where we have the research base and industrial strength that gives us the right to win, and that actually ends up being like narrower than our our core headline position.
09:46
Speaker 3
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Speaker 3
I understand. So that's a very sort of internal metric. As a trade envoy selling the UK in a global race for investment, people are asking, what is the UK doing in hot sectors like space, in agritech, in engineering, biology, in, in the non AI pieces. I mean there will be an AI element of them. But does innovate UK have a a clear strategy that I as a trade envoy can sell?Or is it now basically. No.
We've taken the government's industrial strategy sectors and we're pushing deep tech into them. That's it.
We've taken the government's industrial strategy sectors and we're pushing deep tech into them. That's it.
09:47
09:48
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09:48
Speaker 2
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Speaker 2
So, uh, the SRO for agri tech is, um, Anne Ferguson-smith um, who's the executive chair of BSc. We have our own, uh, grove sector leads within agri tech, who then basically, uh, are running the agri tech programme on the bucket three element of it, which is the scaling companies element. So from the Ukri position, there is a programme now in each of the industrial strategy sectors, innovate UK is the deputy in each of those programs. Apart from advanced manufacturing, where I am the uh senior responsible.
09:48
Speaker 3
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Speaker 3
Officer, again, a very clear sort of internal answer. But we've had the agri tech people in here and they've said, we're not sending a clear enough global signal. So I just I put that down, but let me let me turn to the. Metrics really, you'll have seen we've published Flying Blind, basically arguing, this is all great strategic stuff, but what's the key metric?How do you drive it across government?And everyone has said the same thing from the Secretary of State down.
Basically, the key metric is turning public money into private investment, into growth. So can you tell us now a year on what your return on investment targets are, how you allocate them across the organization?In terms of that, answering that metric point, I mean, however you do it internally.
Basically, the key metric is turning public money into private investment, into growth. So can you tell us now a year on what your return on investment targets are, how you allocate them across the organization?In terms of that, answering that metric point, I mean, however you do it internally.
09:49
Speaker 2
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Speaker 2
Yeah. So the key thing that I've been trying to do over the course of this year is, is get to a baseline on the metrics. So if you like, with reference to coming in to innovate, there are three different data sources for companies that we worked with. Um, in. May I managed to reduce the three data sources down to one at the end of last month. We finally have a single company view in terms of the companies that we, we work with that we can use across the organisation.
So we now have a starting position upon which that we can start to overlay and increase the data on the company.
So we now have a starting position upon which that we can start to overlay and increase the data on the company.
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09:52
Speaker 2
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Speaker 2
That's, that's the current focus. My view is that from our position at innovate UK, we need to do better than better than that. And the focus in terms of our OKRs that I've now set as of this month is around how do we scale our companies faster so that they're, they're, they're moving through the levels at a, at a quicker rate and that they're raising, um, more investment from private markets.
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09:54
Speaker 4
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Speaker 4
Thank you very much. I just want to talk a little bit about diversity, both in types of the applicants, but also the topics that are focused on. So I notice in here that, um, some of the data we have is that 86% of applicants did not have a particular health condition or disability. Um, we had 60% were male, 32% were female, 7% didn't want to say. And we had a resounding 70% were white with the next nearest, um, category was 11% were Asian.
So the diversity of applicants is still poor. Um, so, so. So will you. How will your new operating model support improving the diversity of applicants?
So the diversity of applicants is still poor. Um, so, so. So will you. How will your new operating model support improving the diversity of applicants?
09:55
Speaker 2
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Speaker 2
The key part in in how I want to ensure that we operate going forward is to basically design in a. Inclusiveness from the get go. So, um, we have what we call the innovation fundamentals, which is trying to understand, uh, and design for regionality and for diversity from the beginning of the process and understand therefore, in terms of the data that comes out. What, what, what is our data showing and therefore what are the right interventions to move the needle at the beginning of the funnel.
So I'm, I'm always keen to do systemic work in terms of moving the numbers over and above, essentially, um, side projects. Um, so that's key to the work that we're doing whilst we still have, uh, women in. Innovation, which has basically helped to raise the issue. And I think in terms of those numbers, I think there was as, as low at the start of that, um, competition. At one 1 in 7, which has now moved to 1 in 3, and there's still a lot of work to go to improve those numbers still further.
So I'm, I'm always keen to do systemic work in terms of moving the numbers over and above, essentially, um, side projects. Um, so that's key to the work that we're doing whilst we still have, uh, women in. Innovation, which has basically helped to raise the issue. And I think in terms of those numbers, I think there was as, as low at the start of that, um, competition. At one 1 in 7, which has now moved to 1 in 3, and there's still a lot of work to go to improve those numbers still further.
09:56
Speaker 4
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Speaker 4
So which is good to hear that you're working on that one. I would also raise that it's there is lack of diversity in the topics chosen to, to fund. Um, so it's perfectly possible to have white males, but they're focusing on female specific issues. So I'm keen on you to have a look at topics as well. So where we get, um, you know, the level of research into endometrial endometriosis or adenomyosis or chronic UTIs has the same level of investment as we would have in male centric illnesses.
So, so not just diversity of successful applicants, but the diversity of where you are choosing to put your funding and what topics are you looking at that?
So, so not just diversity of successful applicants, but the diversity of where you are choosing to put your funding and what topics are you looking at that?
09:57
Speaker 2
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Speaker 2
Remember, they, I mean, if you're talking about research, the research is upstream of us. Yeah. So, um, we are focused on the scaling companies part. So we're pulling through what's coming through from the research base. Um, and therefore in some respects we are, you know, we are downstream of that initial decision, but.
09:57
09:57
Speaker 2
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Speaker 2
Yes, we can influence and we can do that feedback loop and that that links back to the part that I mentioned earlier, which is we're the end point. So by the numbers that come through in terms of the companies that come through in the areas, we can point back to research base to say there seems to be, um, a mismatch here in terms of the outputs and the outcomes versus what's coming in at the the beginning of the funnel. So I agree with you that getting that feedback loop working is, is the key part of what I want to achieve and deliver through that shift to supporting companies and understanding the cohorts of companies that are coming through.
Because I think that data was quite hidden when we were focusing on projects, like by only seeing projects, we weren't really understanding what's actually turning into impact and outcomes, which are the actual companies that succeed, succeeding and following through, and why that is.
Because I think that data was quite hidden when we were focusing on projects, like by only seeing projects, we weren't really understanding what's actually turning into impact and outcomes, which are the actual companies that succeed, succeeding and following through, and why that is.
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Speaker 5
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Speaker 5
Thank you chair. Good morning Tom. I'll start with saying how much I enjoyed your launch event at Old Street. I thought it was a real buzz there. I want to just explore a bit the relationship that you have with Ukri and Dcit. I think when you were before the committee, before you stressed the importance of that relationship. Can you tell us a bit about how that practically works?
10:00
Speaker 2
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Speaker 2
Yes. So, um. Lord Patrick Vallance is my, um. Boss, if you like. And then Ian Chapman as head of Ukri. So I think, you know, I, I met with both, um, Patrick and Ian before taking on this role and I think what was, what was important to me at that time was that we had an alignment in thinking in terms of strategic choices and thinking about driving economic growth for the UK. I meet quite regularly with Patrick.
Um, in fact, I met with him yesterday morning. Um, and I, I feel that I have good clarity on um, his priorities and, uh, and his focus. Likewise, I have a very strong relationship with Ian. I think that that point around, um, aligning with industrial strategy sectors, uh, and clarity of what innovate is there to do. So with reference to his reset the Ukri mission around advancing knowledge, improving lives, driving growth, innovate is very much in that driving growth element. Um, and we have aligned ourselves in terms of structure to sort of match the programmes coming through.
So we, we have someone that matches up against, uh, each of the research programmes. And now in having those regular conversations at Ukri level, we're already making strategic changes that connect some of the research that's happening out of the research councils with the work that we're doing. So, um, in advanced manufacturing, just from the programme boards I've had, there have been slight changes in Epsrc, uh, competition. And uh, our end to ensure that there aren't any orphan projects which don't have a pull through from innovate based on what might come out of the research based calls.
And I think that that's hugely important. So there's, there's a much closer connection of working through with my exec chair colleagues across the group. And with the new programme boards, there's much stronger matrix working across the piece. So in advanced manufacturing, I have colleagues from Esrc who are working on, uh, business. Intelligence around advanced manufacturing sector. Um, and like Bbsc working on their inputs into what we're trying to do and stfc on the space agenda. Um, that was mentioned previously by George.
Um, in fact, I met with him yesterday morning. Um, and I, I feel that I have good clarity on um, his priorities and, uh, and his focus. Likewise, I have a very strong relationship with Ian. I think that that point around, um, aligning with industrial strategy sectors, uh, and clarity of what innovate is there to do. So with reference to his reset the Ukri mission around advancing knowledge, improving lives, driving growth, innovate is very much in that driving growth element. Um, and we have aligned ourselves in terms of structure to sort of match the programmes coming through.
So we, we have someone that matches up against, uh, each of the research programmes. And now in having those regular conversations at Ukri level, we're already making strategic changes that connect some of the research that's happening out of the research councils with the work that we're doing. So, um, in advanced manufacturing, just from the programme boards I've had, there have been slight changes in Epsrc, uh, competition. And uh, our end to ensure that there aren't any orphan projects which don't have a pull through from innovate based on what might come out of the research based calls.
And I think that that's hugely important. So there's, there's a much closer connection of working through with my exec chair colleagues across the group. And with the new programme boards, there's much stronger matrix working across the piece. So in advanced manufacturing, I have colleagues from Esrc who are working on, uh, business. Intelligence around advanced manufacturing sector. Um, and like Bbsc working on their inputs into what we're trying to do and stfc on the space agenda. Um, that was mentioned previously by George.
10:02
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Speaker 2
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Speaker 2
We're just very different to the rest of the UK. So Ukri is, is pointed at the research base and pretty much the university sector. And we are pointing out towards, uh, the business world, um, and investor community in terms of that pull through. So we have to bridge to, um, the research base in the university sector, and we have to utilise the rest of UK. I mean, I genuinely think that that connection is a core competitive advantage for the UK. And if we can get that bridge working correctly as we're entering what I think is a, an important era for the UK because it's a deep tech focused one in terms of the the dominant and emergent and exponentially growing technologies are around AI, quantum engineering, biology, etc., areas where we do have genuine research strength in the UK and hence we don't have an excuse for not being much more joined up and connected.
And if we use that correctly, that can genuinely be a point of difference. That can bring in private capital much more quickly into what we're doing. And already some of the conversations I've been having with, um, pension funds, there has been a sense of the cogs turning and the understanding of, okay, what's this UK thing?We didn't know we had it before. We didn't know there was an innovate UK. We don't really know what our our research strengths are.
Now we can understand the, the amount of money that's being injected by government into the research base, how that's de-risking whole new sectors where we do have strength and the potential to win and how we potentially could, um, use and co-invest in a meaningful way that aligns with our goals and our risk appetite.
And if we use that correctly, that can genuinely be a point of difference. That can bring in private capital much more quickly into what we're doing. And already some of the conversations I've been having with, um, pension funds, there has been a sense of the cogs turning and the understanding of, okay, what's this UK thing?We didn't know we had it before. We didn't know there was an innovate UK. We don't really know what our our research strengths are.
Now we can understand the, the amount of money that's being injected by government into the research base, how that's de-risking whole new sectors where we do have strength and the potential to win and how we potentially could, um, use and co-invest in a meaningful way that aligns with our goals and our risk appetite.
10:04
Speaker 5
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Speaker 5
You're hearing from people they weren't really aware of some of those opportunities that are available. I mean, I find that quite shocking in some ways. Um, you also said to the committee before you wouldn't be afraid to speak truth to power. Minister Vallance is fairly plain speaking person. What have you had to tell him?That he might not have been welcoming?
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Speaker 2
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Speaker 2
I had I've had lots, lots of good conversations with him and, um, I, I, I love plain speaking conversations. No, look, as somebody who's come from private sector and the startup sector coming into work, um, adjacent to, to government, the pace of change is, is challenging. And processes and systems are difficult. So I think certainly where, um, we reach, um, a treacle based inertia in different areas of the types of change that I want to deliver. That's where, um, Patrick Vallance can be helpful in, in helping give clarity of focus, uh, to the machine, uh, to help the machine.
10:05
10:05
Speaker 2
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Speaker 2
Uh, yes, yes, I, I definitely think so. Um, I mean. Ultimately, I think as, as I sort of came into innovate UK, innovate UK is an organisation which has grown quite considerably over the years. Um, I think it's very easy. It would have been very easy to come in and say, right, I'm just going to focus in this direction and, and leave the machine to by itself. And I'm just going to create this new thing on top and get my own people and do do bits, which don't affect the underlying machine and the rump of the machine.
But fundamentally, I believe that you have to, uh, you have to fix the machine and, and ensure that machinery is working efficiently to deliver value. So for me, that has meant doing a lot more under the bonnet work than I was potentially anticipating, uh, in part because, you know, going back to objectives and metrics. A cascade of objectives and metrics through the organisation. So that has been harder and taken longer than I would have expected to, to try and basically push through the layers.
Um, and similarly, business intelligence hasn't flowed up and down in the way that I would have expected for an organisation of this size. What that does mean is that's what creates the inertia through the layers. Because once you go a couple of layers down, people work to policy and doing the best at their job based on the policy, uh, terms and conditions that they have for doing that job rather than what's the objective we're trying to achieve for the organization as a whole. So in trying to tilt that over this coming year, so the first year was about resetting the strategy.
This year is about operationalizing the strategy so that by the end of this year, next April, all of our programmes and competitions will be strategically aligned. You know, essentially the competition is launching now were designed eight, nine months ago. So it takes a while for that to throw through the process. And if we can do that, then the whole organisation can start to move more quickly. Um, and it still is the case that you go a couple of layers down in the organisation down in D.C., down in other parts of the machinery, you have to explain things all the way from scratch again, and you need the power of a minister to help you and help people understand what the core objectives are.
And you need that reinforcement and and top cover.
But fundamentally, I believe that you have to, uh, you have to fix the machine and, and ensure that machinery is working efficiently to deliver value. So for me, that has meant doing a lot more under the bonnet work than I was potentially anticipating, uh, in part because, you know, going back to objectives and metrics. A cascade of objectives and metrics through the organisation. So that has been harder and taken longer than I would have expected to, to try and basically push through the layers.
Um, and similarly, business intelligence hasn't flowed up and down in the way that I would have expected for an organisation of this size. What that does mean is that's what creates the inertia through the layers. Because once you go a couple of layers down, people work to policy and doing the best at their job based on the policy, uh, terms and conditions that they have for doing that job rather than what's the objective we're trying to achieve for the organization as a whole. So in trying to tilt that over this coming year, so the first year was about resetting the strategy.
This year is about operationalizing the strategy so that by the end of this year, next April, all of our programmes and competitions will be strategically aligned. You know, essentially the competition is launching now were designed eight, nine months ago. So it takes a while for that to throw through the process. And if we can do that, then the whole organisation can start to move more quickly. Um, and it still is the case that you go a couple of layers down in the organisation down in D.C., down in other parts of the machinery, you have to explain things all the way from scratch again, and you need the power of a minister to help you and help people understand what the core objectives are.
And you need that reinforcement and and top cover.
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Speaker 3
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Speaker 3
Thanks very much, chair. Just before I start, could I. A make a declaration of of interest in relation to my entry in the register for this meeting?But also I was so eager to question the Secretary of State last week, I forgot to make the declaration last week. So if I could correct the register for that as well. Um, as somebody who's involved in a well, I'm unpaid chairman of a company that develops software and technology, um, last week we had a rather inelegant discussion with the Secretary of State about this buckets thing.
Within the, within the buckets. Do you have any idea what your budget is?
Within the, within the buckets. Do you have any idea what your budget is?
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Speaker 2
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Speaker 2
With reference to um the spending review period. Um there's an essence of obviously at UK level as, as um as we understand and profile, you know, the allocations were made in December over the four years. So. And in terms of the profiling of how we will build programmes over the period, the profiling might not exactly match um how we, we, the spending has been set year by year by year. So I know, uh, for example, a couple of the areas we've got more of a hockey stick spending profile than a, than a straight.
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Speaker 3
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Speaker 3
I thought he was switching across. Not news to me. Can I just then explore further George's point about KPIs?Bucket two has a 3 to 1 leverage ambition on it. Is that a pie that you would recognise and can hit?Yes. Right. But I thought we said we didn't. You said to George that you didn't have any kind of targets that were.
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Speaker 3
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Speaker 3
With specific measures there in. To stimulate this this leverage. Yes. Right. And will that include, um, I mean, obviously all you've got essentially is the power to spend money in a way that you think might stimulate that investment. But there are other barriers to that investment that you might recognise.
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Speaker 2
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Speaker 2
Are a key part. From my perspective. Strategy is enabling others to understand our position, ecosystem and how to work with us. And off the back of the of launching the strategy so far, I've started to have much more interesting conversations with other parts of the ecosystem, and in particular, uh, the banking and private capital sector with reference to them understanding how they will work with us. And to that, to the point of that tech due diligence piece. So already there, for example, having quite an interesting conversation about potential new financial instruments that could be generated off the back of the work that we're doing.
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Speaker 3
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Speaker 3
Okay. Another question that occurred to me as well was how you measure additionality, right?How you know, you're not doing you're not funding things that would have happened anyway. Um, and I think the Nao has been critical in the past of UK measures of additionality. Have you given any thought to I mean, obviously everybody's kind of focused on value for money. You're getting for £1 billion to, to spend on this stuff. How do you how do you measure that?
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Speaker 2
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Speaker 2
That's a core challenge that I've set all of the growth sector leads is that as we are looking at the sectors and as we're looking at the interventions that we're trying to make, they have to be interventions where we are well placed and and are going to be adding value to each of those sectors. And hence, as I mentioned earlier in in financial and professional business services, the market, it's well served by the market. There is it's difficult to see our position in that. And our position will come through from, uh, the frontier technology.
So AI, quantum advanced connected technologies, that will be the means by which we have something to add that potentially might hit those sectors, but that's effectively in a passive type way. And I think what's what's core on the additionality point, I think that's it's something that's often missed here is that we have to ensure that the companies that we work with generate the right type of momentum to, to, to generate value and keep going. And I think with reference to the companies that we work with, ultimately there is the, the Post-project evaluation, which I think innovate does a lot of, but which takes too long.
So you're talking about two years before you understand, uh, at a deep economic level, the additionality point. But there's the in-year monitoring that we need to do to be able to understand where we're having impact and be able to basically, uh, move accordingly.
So AI, quantum advanced connected technologies, that will be the means by which we have something to add that potentially might hit those sectors, but that's effectively in a passive type way. And I think what's what's core on the additionality point, I think that's it's something that's often missed here is that we have to ensure that the companies that we work with generate the right type of momentum to, to, to generate value and keep going. And I think with reference to the companies that we work with, ultimately there is the, the Post-project evaluation, which I think innovate does a lot of, but which takes too long.
So you're talking about two years before you understand, uh, at a deep economic level, the additionality point. But there's the in-year monitoring that we need to do to be able to understand where we're having impact and be able to basically, uh, move accordingly.
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Speaker 3
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Speaker 3
Oh, okay. Then I guess final question for me, if I may, um, obviously UK re overall, it's its share of R&D funding has fallen. Um, I think it's money's ploughed into other organisations. Aria and what have you and yet they seem to be spending all their allocation. Do you think there would be a case for shifting being a bit more fluid shall we say, with money that is unspent?Could you do more with more?
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Speaker 2
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Speaker 2
I think I think the key that we have to do is make sure that we are um, are showing. The work that we're doing and that we are having impact. And I think the key, the key thing I said when I came here was that I felt that innovate was to input focused and not enough outcome, and impact focused. And if we show the outcome and the impact, then I think we we state the case for how money should be allocated to us. I think it, you know, we have to do our job.
We have to present the case. We have to show our impact. We have to make it a straightforward decision for our government stakeholders as to where to allocate money based on their priorities. And I think as long as we're doing that job well, um, I think we, we help government make their decisions.
We have to present the case. We have to show our impact. We have to make it a straightforward decision for our government stakeholders as to where to allocate money based on their priorities. And I think as long as we're doing that job well, um, I think we, we help government make their decisions.
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Speaker 1
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Speaker 1
Okay. Thanks very much. And just to follow up on that, so, so UK. Ari says it's spending 7.4 billion on innovative companies over the spending review. So 4.4 billion of that is going to you, which means that three to innovate UK. So there's 3 billion on um supporting innovative companies that doesn't come through you. And you said in discussion with Daniel that you were in accord, in agreement with Ukri. So are you you're happy with that split.
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Speaker 1
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Speaker 1
Okay. Sorry. No, I'm just, I'm just, you're going to prove your case, but in terms of the existing split, you know, the, the, so the knowledge exchange translation support for local innovation, those are going through UK. Those are those aren't coming through you that you're happy with that split. Yeah. Um and um we heard from Ian Chapman in um correspondence to us. I think there's, I think it's effectively it's not entirely clear, but there's effectively a sort of 1% levy going to be asked of other research councils to, because of stfs to financial planning.
Um, mistakes basically. So that and the cuts which are, which are have to be made is innovate UK going to be asked to pay that 1% top slice as far as you know.
Um, mistakes basically. So that and the cuts which are, which are have to be made is innovate UK going to be asked to pay that 1% top slice as far as you know.
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Speaker 2
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Speaker 2
We have you know, we've sat down obviously as CFC is not not my area. Yeah. Um, but as an organisation, um we sat down, looked through um the situation and with reference to um the right. Thing to do to support and defer, defer some of our activity to support the needs of CFC in this moment. We've, we've taken that consensual view to do so. So.
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Speaker 3
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Speaker 3
Tom, could I just shift the lens on the regional clusters of R&D?Um, something we asked you about a year ago and with the new Prime minister arriving, um, with a strong theme of Manchester tourism and tourism, I think this is going to become more important. You've been pretty clear. I think that the focus really is on deep tech, which you've defined as AI and quantum and the sort of deep digital technologies, the transformational technologies. Um, what does that mean for those clusters around the country?You know, the South Coast marine technology cluster, the Exeter defence cluster, the southwest semi cluster, the Liverpool tropical disease, Glasgow space.
Newcastle data, Edinburgh. Well it sounds a very Shoreditch.
Newcastle data, Edinburgh. Well it sounds a very Shoreditch.
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Speaker 3
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Speaker 3
I appreciate that, but there's no money man. Numbers that anyone can read and take reassurance on. We've just established that. Well, anyone who's looking at, say, the tech space, you said in September, which will be just over two years since the government there'll be some delivery plans. But at the moment there's no clear signal. We heard this from the sector of what the government is doing to support agri tech coming out of Norwich, Lincoln and other areas. Aberystwyth all around the country.
So I'm wondering, I want to ask about clusters. Where are you on reassuring people that this 4 billion is going to be invested by innovate in the clusters around the country?You saw our flying blind report, which which was highlighted.
So I'm wondering, I want to ask about clusters. Where are you on reassuring people that this 4 billion is going to be invested by innovate in the clusters around the country?You saw our flying blind report, which which was highlighted.
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Speaker 3
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Speaker 3
Understood. Can I then ask about the strategy of innovate for clusters?Because it does sound quite focused on which I understand you're going big on quantum AI. I hear in that Shoreditch, London, maybe Cambridge, Oxford, Edinburgh. But does innovate have a strategy to support regional R&D that's driving those mini Manchesters all around the country?
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Speaker 2
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Speaker 2
So with reference to our strategy, our focus is on on. The key industrial strategies, as I mentioned, which are research based and industrial strength. Um, the quality of our research up and down the country is pretty consistent. Um, the commercial opportunity and access to capital is not. So I think with reference to, if you're going to look at a UK wide model in terms of driving value in economic growth, the Golden triangle is not enough, right?It's not enough.
It's not enough deal flow.
It's not enough deal flow.
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Speaker 3
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Speaker 3
We accept that. Sorry to be to push you, but do you have any specific plan reassurance that as you allocate the 4 billion, you've got a an allocation model that you will identify places, clusters that are punching above their weight that you could help support more private sector investment in. We get the thesis, but do you have a plan for it?
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Speaker 2
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Speaker 2
In, in advanced manufacturing, we obviously have the Midlands base in terms of all of the work that's being done. Um there around mobility, uh, and the work that's being done on aero now I, and also as we think about different spaces, and even when you, when you, when you're talking about quantum and AI, the AI hardware plan is not a London based plan. AI, fabulous chip design. And the work that's being done there isn't a London focused initiative.
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Speaker 3
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Speaker 3
Can I change that then?Have you done any mapping of R&D clusters not within your particular programmes, but as entities that are driving the UK innovation economy to map which ones are punching above their weight with small R&D public, but attracting a lot of private. Which ones really need your support?
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Speaker 2
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Speaker 2
Understanding where we have strengths and tracking those strengths are are a key thing that absolutely we need to be evaluating on an ongoing basis, especially as as we start to support cohorts of companies coming through the system, we need to understand that they match what we believe our strengths are around the country, and that there is a if, for example, in the North East, um, there's a view that we have advanced manufacturing strength, but we're not seeing representation in the cohorts of companies coming through our programmes. Then that, that, that, that shows that there's a mismatch between what we think is right.
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Speaker 3
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Speaker 3
And we understand the theory. I suppose I'm wondering where you are in terms of actually mapping, having an innovate UK view of there's a cluster here which is driving really key regional growth opportunities, innovation, investment, which needs a bit of our attention, needs us to support it. Or here's one that we're over supporting because it's not doing very well. And here's one we're supporting, but I'm not hearing that you have a framework for that.
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Speaker 3
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Speaker 3
Okay. Let me just be clear. You say second order for those clusters. It's first order. And again, as a trade envoy selling our clusters as investment opportunities requires us to be able to say, look, take the Edinburgh quantum cluster. It's receiving this funding from government as part of its quantum strategy. That creates a really interesting co-investment opportunity. But without being able to point people to those maps and allocations, it's just theory. It's a.
So that's why I'm pushing on when we might be able to get a map of where, through your processes internally, you've allocated money to these clusters.
So that's why I'm pushing on when we might be able to get a map of where, through your processes internally, you've allocated money to these clusters.
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Speaker 1
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Speaker 1
Okay. Um, so we do need to move on. We've got to look at catapults. I think I shared George's concern and that, you know, focusing on companies. Yes, but companies are part of local ecosystems, you know, and driving those local ecosystems to deliver more companies and more growth. It requires, as I, as I report said, a better understanding of regional data. Are you are are you committing to to the committee that you will get that better understanding of regional data and share it with us?And that will be the time frame for that will come out of will be autumn this year.
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Speaker 2
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Speaker 2
My starting position with catapults and the challenge I set the catapults coming in was to show how they aligned with industrial strategy and with our mission in terms of scaling companies. So those were the two core, um, strategic. Challenges I set them and essentially providing evidence along that. So I visited all the catapults and effectively the work that we're doing now is ensuring that alignment is crystal clear and that we can do a stronger job on the, the scaling companies relationship. So that's the work that's happening with, with all of the catapults as we're going through and ensuring that, do we have the right, right mix of catapults to match up with our industrial strategy needs?And certainly, I think previously all of the catapults were sort of measured against each other in sort of, um, with metrics to measure them, uh.
Against each other in a way which did not make sense. So because all the catapults were very different, operating in different sectors, and now catapults effectively sit within the, the programmes in the industrial strategy sectors, which actually tensions them in a much better and stronger way. With reference to, um, the types of activity and interventions. Uh, you are doing in that space. So high value manufacturing catapult sitting within advanced manufacturing, so tensioned against the different initiatives. Uh, and interventions to support the manufacturing industry so that that's given it much more, uh, clear focus in terms of the work that we need and the outcomes that we need from the catapults to deliver for the UK's underlying objectives.
Against each other in a way which did not make sense. So because all the catapults were very different, operating in different sectors, and now catapults effectively sit within the, the programmes in the industrial strategy sectors, which actually tensions them in a much better and stronger way. With reference to, um, the types of activity and interventions. Uh, you are doing in that space. So high value manufacturing catapult sitting within advanced manufacturing, so tensioned against the different initiatives. Uh, and interventions to support the manufacturing industry so that that's given it much more, uh, clear focus in terms of the work that we need and the outcomes that we need from the catapults to deliver for the UK's underlying objectives.
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Speaker 6
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Speaker 6
Brilliant. Thank you. So that's how they orientate orientate each others against our core missions and looking across those different sectors, looking at the catapults and how they work with businesses and other local actors themselves. Um, you know, we know that the UK's position is patchy across different sectors, even within sectors. It's very patchy and diverse. There are some businesses with high innovation activity, others that probably are very, very disengaged lower. But there are opportunities there.
How do you feel the catapults are working in kind of dealing with that very diverse and patchy reality on the ground?
How do you feel the catapults are working in kind of dealing with that very diverse and patchy reality on the ground?
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Speaker 2
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Speaker 2
I think I think it's actually different in different places. So I do think that like certainly my, um, reflection was that with some of our catapults, there is. Strong work with primes, for example. And then, uh, like access projects working at this level, but the bit in the middle is the bit, which is a struggle. So that's the part around scaling companies, which I talked about, which we need to do much stronger work to get higher utilization rates on, um, the national assets that we've got around the country and a much stronger pathway in a sense of delivery value for companies that are trying to scale where working with the catapult therefore moves their trajectory and actually meaningfully accelerates those companies.
That's the bit where I feel that the work that we're doing now with the catapults is really targeted on delivering in in that element.
That's the bit where I feel that the work that we're doing now with the catapults is really targeted on delivering in in that element.
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Speaker 6
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Speaker 6
Brilliant. And do you see, uh, kind of a, a part of the, of industry where, you know, they're not these really large big operators who have got big transformation plans. They're not these small emerging startups who are growing into the new spaces, but they sit somewhere in the middle, embedded across our industrial, uh, well. Towns and cities as well as, as well as the big areas that need to transform, that need to adapt and change. How do you see catapults meeting their needs in helping us move our whole system in these key sectors?
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Speaker 2
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Speaker 2
Yeah, I think I think that's a that's a big challenge. And I think there's something around, um, the. Connectivity between those businesses and the catapults that isn't quite happening in the right way. Um, the centres aren't the obvious choice for those companies looking for transformation. But also a lot of those companies aren't understanding the need for transformation. Um, and I. I think that there's still quite a lot of work to be done. And it's, it's on its own.
Clear to me, certainly in terms of that, um, Mittelstand, which we don't really have in the UK, um, that drive, that driving force of nature. And I think that the bit that we are trying to focus on at innovate are the sort of companies that really want to scale, understand and can have that transformational bit, um, there, there are some projects that we manage for other government departments then focused on the adoption element of innovation, but as innovate, our core needs to be on pushing the companies that can actually have a meaningful shift on the economy and can and can really accelerate.
And we need to, to join those two. So the bit that we're working on at the moment is what does the shape of some of those That we're working on at the moment is what does the shape of some of those programs look like to bring those companies in and take them through that journey?
Clear to me, certainly in terms of that, um, Mittelstand, which we don't really have in the UK, um, that drive, that driving force of nature. And I think that the bit that we are trying to focus on at innovate are the sort of companies that really want to scale, understand and can have that transformational bit, um, there, there are some projects that we manage for other government departments then focused on the adoption element of innovation, but as innovate, our core needs to be on pushing the companies that can actually have a meaningful shift on the economy and can and can really accelerate.
And we need to, to join those two. So the bit that we're working on at the moment is what does the shape of some of those That we're working on at the moment is what does the shape of some of those programs look like to bring those companies in and take them through that journey?
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Speaker 2
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Speaker 2
Um, I think, I think, uh. We've done some work already. So some of the conversations I've had with one of the catapults where they brought in now a new innovation accelerator program in particular to look at some of those companies and drive those awareness by also bringing in corporates to be the sort of demand, pull axis and sort of try and get a much closer connection between the startups and demand pull with asset, and infrastructure in place. So there's a sense of like, I'm coming here because I have the demand, I have capability that can help me and I have access to kit.
And if we can get that as a virtuous cycle, that can actually improve things. So we've got a couple of pilots now working in that space to try and see whether that activity can really kick start those businesses.
And if we can get that as a virtuous cycle, that can actually improve things. So we've got a couple of pilots now working in that space to try and see whether that activity can really kick start those businesses.
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Speaker 6
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Speaker 6
As you've just described that. To me, that sounds like it's reinforcing that existing position, whereas small startups are getting the benefit where the big, large, highly engaged incumbents are getting the benefit and where those who are currently disengaged and fairly invisible may well remain disengaged and fairly invisible.
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Speaker 2
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Speaker 2
Um, I think the, the goal needs to be like, in terms of that outreach to bring some of those companies into thinking about basically taking part in some of this. That's where coming back to that, that point, close activity with the regions is going to help us basically bring some of those companies that can have that potential into the funnel.
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Speaker 2
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Speaker 2
So we in order to bring businesses into the funnel, we need to have outreach. We've got business connect, which basically convenes, um, local stakeholders, uh, businesses, innovators, investors to basically try and pull parts of the ecosystem together and drive awareness of the programs that we're delivering. That, that is within our, our gift that we can do. We also have business growth, which, um, are people on the ground that work with businesses at a local level. And we have those people all around the country and in certain regions, the delivery partner for that actually is, is Greater Manchester, for example.
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Speaker 7
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Speaker 7
Tom, I just want to nail you down and bring together a bunch of these ideas. We've talked about the importance of clusters in different regions. You know, this committee is absolutely focused on regional economic growth. We've talked about your review of the catapults. We've talked we've talked about access to finance and access to customers. Do you envisage that some of the catapults may move their locations in order to, uh, to support cluster development?I'm thinking in particular of the digital one sitting in King's Cross where.
Shoreditch is not. Shoreditch has one roundabout Silicon Roundabout. Milton Keynes has many and just as many tech startups. Yet received. I'm just using a specific example because we've been so. So, you know, and get no support really from the digital catapult. So there are other examples of other places across the country, not just Milton Keynes, that again, have huge startups, have an access to finance problem and aren't being supported by catapults that are placed in London or in other places.
So are you envisaging some of this work actually moving, catapults, moving their work into the places that need it, in the clusters that you are developing?
Shoreditch is not. Shoreditch has one roundabout Silicon Roundabout. Milton Keynes has many and just as many tech startups. Yet received. I'm just using a specific example because we've been so. So, you know, and get no support really from the digital catapult. So there are other examples of other places across the country, not just Milton Keynes, that again, have huge startups, have an access to finance problem and aren't being supported by catapults that are placed in London or in other places.
So are you envisaging some of this work actually moving, catapults, moving their work into the places that need it, in the clusters that you are developing?
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Speaker 2
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Speaker 2
Um, so I would say. Well, digital. Catapult has several, um. Places around the country that it operates from. So including Northern Ireland and um, up in Newcastle. So in terms of locations, I think with reference to catapults where they're located, uh, just our focus currently in the review and the starting position is do we have the right mix of catapults as a starting position?Yeah. Um, I think the next part after that is like, are they absolutely, are they doing their activity where, where it needs to happen?And how does that, how does that infrastructure work around the country?So, um, you know, we do have, I think, really inspiring, uh, places where we have our catapults from Ammersee and Sheffield where we're developing new energy on top of what was old energy in terms of the site of Orgreave.
And we have, um, new port, which for the now renamed semiconductor catapult, which is generating new technology through AI and uh. The offshore renewable energy catapult in Blyth. So on the at the site of the old docks. So I think and now in terms of innovate UK, we're supporting Hartree in terms of development of AI supercomputer, uh, in Danbury. So we, we have over the course of the catapults, history made deliberate and specific choices around where those elements are and how they both support sectors, but also support, um, like.
And we have, um, new port, which for the now renamed semiconductor catapult, which is generating new technology through AI and uh. The offshore renewable energy catapult in Blyth. So on the at the site of the old docks. So I think and now in terms of innovate UK, we're supporting Hartree in terms of development of AI supercomputer, uh, in Danbury. So we, we have over the course of the catapults, history made deliberate and specific choices around where those elements are and how they both support sectors, but also support, um, like.
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Speaker 7
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Speaker 7
Very common presentation. Um, and I think this, this committee would agree that their catapults of varying quality and delivery, um, you are, you are open to being quite radical in closing some down, opening up new ones and new areas and, and making sure that it that it works. Can I just push you on is part of your um. Uh, your evaluation of catapults. There are access to finance on a regional spread and how much they're getting finance into investment opportunities into it.
And also, how do you link that to government procurement projects and their access into government procurement.
And also, how do you link that to government procurement projects and their access into government procurement.
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Speaker 2
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Speaker 2
If we take access to finance a bit first, I think that's access to finance is a role which actually is is not done very well across the piece currently. And I think as a national body, it innovate. Actually, that should be one of our our core functions, which is to basically generate that, that ability to access national and international finance through our ability to basically bring companies together from around the country. So if you're a.
10:51
10:51
Speaker 2
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Speaker 2
So at the moment, catapults as a source of access to finance isn't really, um, one of their, their, their core functions that they do, I think through catapults, basically presenting and bringing in cohorts of companies, that element will open up the door for access to finance to be able to emerge. So at a regional level, for example, the thing that we're doing is closing the gap between us and the British Business Bank by generating a pipeline of companies that are due diligence for British Business Bank.
10:51
10:52
Speaker 2
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Speaker 2
Yeah. But what I'm saying is that from the catapults perspective, catapults are a delivery mechanism of innovate UK. So a company story might be from research through to getting a grant through to working with a catapult. These are all elements which basically tick the box in terms of tech due diligence, which then leads to potential access to finance. So I think the velocity piece that we're generating is as innovate UK will enable the company then to basically be able to, to get connection to access to finance.
I think.
I think.
10:53
10:53
10:53
10:54
Speaker 2
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Speaker 2
One of the key things that I've been trying to do whilst I've been here is to, to understand the friction points around procurement and how that can basically be opened up. And this again, speaks to the tech due diligence piece. So if we can do that role properly, we can essentially hopefully kite mark and jump companies.
10:54
10:54
10:55
10:55
Speaker 7
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Speaker 7
Your transport catapult is working with HS2. So this is an area where it's doing that. So but but not all catapults do this. So transport catapult is working with the HS2 contracts. It is pulling new and innovative ways of measuring bridge uh, bridge and infrastructure um, vulnerabilities, uh, all, all sorts of things. That one is actually linked to government procurement, government contracts, right?If you are part of the catapult is working very closely with that, but that's the only example I know of a catapult working with a big government procurement project to ensure that we're getting the most innovative companies in there.
Is that something all catapults should be doing?Is that something you're looking at in the review?Um, coming.
Is that something all catapults should be doing?Is that something you're looking at in the review?Um, coming.
10:57
10:57
10:57
10:57
10:58
10:58
10:58
10:59
10:59
10:59
11:00
Speaker 5
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Speaker 5
Thank you chair. It's quite a jump going from start up Private World into a. Policy bound organization that sounds like it's reluctant to change to your vision and your discussion of operationalizing strategy and changing working to policy, to working to mission. In the second year, you've you've expressed quite a lot of frustration, I feel, in some of the some of the topics that we're looking at. What are you going to do in your second year?
11:01
Speaker 2
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Speaker 2
Uh, well, in my second year now, the key thing. For me is we have to turn the words into actions. And fundamentally, for me, I have like developing the relationships with the ecosystem part. So at both ends so that we are getting, uh, the funnel working in terms of, uh, breakthrough ideas into, uh, the innovate UK stream and then building the relationships with all of the other parts of the ecosystem in terms of telling that story and that narrative to, to bring to life the tech due diligence piece.
So relationships with all the investors, private capital markets, the policy makers, regulators, procurement in particular, to be ready to start to catch the companies that are coming through. So if I think about it in terms of, um, shortly after arriving again, looking at quantum, which is the market segment where I think we've done a good job of being quite connected as a system from spotting interesting research in the labs to, uh, funding that research, innovate UK, then creating the petri dish for companies to emerge government within Sifs, investing in some of the strategically important companies coming through.
That was a pathway which got to a point. But then I think a couple of months after joining Oxford, Ionics got bought by Ionq American Company. I spoke to both CEOs a day after that happened and asked, quite bluntly, Chris, balance, and why did you take this deal from the Colo?Um, he took it for the right business reasons, but there was no UK alternative. So from my perspective, we've done all this hard work to get to that point in developing the sector.
There's about at least about four companies raising over 100 million at that time, but we hadn't laid the groundwork for what comes next in terms of preparing UK domiciled money, preparing potential procurement and commercial pathways. So the risk there is that.
So relationships with all the investors, private capital markets, the policy makers, regulators, procurement in particular, to be ready to start to catch the companies that are coming through. So if I think about it in terms of, um, shortly after arriving again, looking at quantum, which is the market segment where I think we've done a good job of being quite connected as a system from spotting interesting research in the labs to, uh, funding that research, innovate UK, then creating the petri dish for companies to emerge government within Sifs, investing in some of the strategically important companies coming through.
That was a pathway which got to a point. But then I think a couple of months after joining Oxford, Ionics got bought by Ionq American Company. I spoke to both CEOs a day after that happened and asked, quite bluntly, Chris, balance, and why did you take this deal from the Colo?Um, he took it for the right business reasons, but there was no UK alternative. So from my perspective, we've done all this hard work to get to that point in developing the sector.
There's about at least about four companies raising over 100 million at that time, but we hadn't laid the groundwork for what comes next in terms of preparing UK domiciled money, preparing potential procurement and commercial pathways. So the risk there is that.
11:03
11:03
Speaker 2
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Speaker 2
Yeah. So the risk there was that potential of like of fundamentally subsidising R&D for the US economy, which I don't want to do in this current year. The. Therefore, the focus is preparing that groundwork for the what comes next. And I like to think that a year on already, you know, Oxford. Circuits was funded to the tune of 260 million, co-led by UK institutions. Right. So there was a UK alternative for that business.
And we now also have a procurement pathway for quantum compute. So turning that model and and and we also have US companies looking to basically base themselves in here in.
And we now also have a procurement pathway for quantum compute. So turning that model and and and we also have US companies looking to basically base themselves in here in.
11:05
Speaker 5
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Speaker 5
The UK. So sorry to we're running out of time I think. So I really want to know when we're going to know. Apart from the one example you're talking about there across the rest of the areas, when are we going to know if your new approach is working?When are we going to see results?And what are you going to tell us this time next year that you have actually achieved and done, as opposed to seen and explored and understood?
11:06
11:06
11:06
Speaker 2
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Speaker 2
Um, uh, by the end of this coming year, all of our programs will be strategy aligned. We'll have clear, um, metrics about what's happening in each of those spaces alongside our, um, objectives and key results. We'll have a clear lookbook of all the companies passing through and how they are performing based on work that they've done with us. Um, and I would be in a clear position to be able to present the perception of innovate UK from a market perspective, our position in the rankings and also the performance of companies that have had, um, a.
And support by us.
And support by us.
11:07
11:07
11:08
11:08
11:09
11:09
Speaker 1
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Speaker 1
Thank you very much. Um, we appreciate that we've run over time quite significantly, but thank you, Tom, for your, your comprehensive, uh, your answers. I think we've got a clear, um, sort of understanding of your longer term strategy. Um, and we're looking for a great. Admiration for much of the work that has been done. Uh, looking for more in terms of metrics. And if you like deliverables. And we expect to see that in the delivery plans, which are going to be publishing.
But for the moment, let me thank you greatly for your contribution. You can see how interested the entire committee has been in your work as a key part of our work, uh, as well commercializing Britain's great research base. So we look forward to seeing more of that in the future. Thank you very much. And order. Order and. Welcome to this, the second panel in today's evidence session of the science, Innovation and Technology Select committees. A little bit delayed, but we're very well very, very, very pleased to welcome, uh, Lord, Lord, Lord Woolwich to us as we look at the work of the Regulatory Innovation Office in driving the commercialisation of UK's fantastic science base.
Um, in order to increase growth and prosperity and security. And I'm now going to ask George to opening open the questions.
But for the moment, let me thank you greatly for your contribution. You can see how interested the entire committee has been in your work as a key part of our work, uh, as well commercializing Britain's great research base. So we look forward to seeing more of that in the future. Thank you very much. And order. Order and. Welcome to this, the second panel in today's evidence session of the science, Innovation and Technology Select committees. A little bit delayed, but we're very well very, very, very pleased to welcome, uh, Lord, Lord, Lord Woolwich to us as we look at the work of the Regulatory Innovation Office in driving the commercialisation of UK's fantastic science base.
Um, in order to increase growth and prosperity and security. And I'm now going to ask George to opening open the questions.
11:12
Speaker 3
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Speaker 3
Thanks, chair. Um. Morning, David a huge. Night in this committee. And you know, personally, my interest in this regulatory leadership. I think it's great news that we've created the Regulatory innovation Office. And with you as a, if I may say, a Whitehall warrior, a veteran of navigating the corridors to drive it through. And we've heard in a lot of our sessions, real interest from industry investors that the UK does have an opportunity to, to set some agile, digital, fast regulatory leadership through sandboxes, test beds in the global race.
And that that is a compelling USP. And as a trade envoy, I should declare an interest. I'm keen to sell that internationally. So I wanted to ask firstly, um, about Rio as an organization, um where it sits in the ecosystem. Um and you've obviously as a distinguished minister, you know, that ecosystem. Well, um perhaps we start there, but particular questions committee's got around its structure. It's a directorate within de CIT, not a freestanding statutory body.
And just keen to get your take on how you see it working.
And that that is a compelling USP. And as a trade envoy, I should declare an interest. I'm keen to sell that internationally. So I wanted to ask firstly, um, about Rio as an organization, um where it sits in the ecosystem. Um and you've obviously as a distinguished minister, you know, that ecosystem. Well, um perhaps we start there, but particular questions committee's got around its structure. It's a directorate within de CIT, not a freestanding statutory body.
And just keen to get your take on how you see it working.
11:15
Speaker 9
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Speaker 9
Yes. Well thank you and thank you very much for the invitation to answer questions from this committee. The we sit in decent. Our task is pretty simple, really, as set out in the Labour manifesto, which is where there was a pledge to create Rio to remove regulatory barriers to innovation and new technologies, whilst of course, ensuring that they are properly regulated and. And safe. And we're in de sit because that's where the government expertise on new technologies lies.
The overall lead in government on regulation is DBT, and we work closely in partnership with DBT. We spend. We have a real focus on particular technologies set as priorities by ministers, including drones, engineering, biology, a few others. Uh, I personally work closely with regulators on the case for moving forward rapidly with those technologies. There are about 30 officials in Rio. You're right. We're a unit within de CET. Um, and I report to ministers, particularly on a day to day basis.
Baroness Liz Lloyd um, and we find.
The overall lead in government on regulation is DBT, and we work closely in partnership with DBT. We spend. We have a real focus on particular technologies set as priorities by ministers, including drones, engineering, biology, a few others. Uh, I personally work closely with regulators on the case for moving forward rapidly with those technologies. There are about 30 officials in Rio. You're right. We're a unit within de CET. Um, and I report to ministers, particularly on a day to day basis.
Baroness Liz Lloyd um, and we find.
11:18
11:18
11:19
Speaker 3
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Speaker 3
Um, colleagues have got particular questions on particular sectors. If I may just ask, dropping down a level in terms of how you. You have structured sort of those aims ambitions. Is it look in the in these we've talked earlier about, you know, when you were minister, you had eight great technologies. Greg Clark, I think, had seven, had five in the science and technology framework. Um, we've been pushing for clarity from the government on which of the technologies in which we're trying.
We've heard a lot about quantum and AI. Do you have a sort of look, I work to ministerial diktat. These are the three or 4 or 5 technologies. And in those do you have any sort of aims ambitions. Is it is it that industry says, oh this is the best regulator in the world or is it investment?And how do you measure whether you're succeeding.
We've heard a lot about quantum and AI. Do you have a sort of look, I work to ministerial diktat. These are the three or 4 or 5 technologies. And in those do you have any sort of aims ambitions. Is it is it that industry says, oh this is the best regulator in the world or is it investment?And how do you measure whether you're succeeding.
11:21
Speaker 9
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Speaker 9
Well, when, when we were set up in October. Seven, nine in in October 2024 and of course, I joined as chair in April 2025, Patrick Vallance set out for initial priorities, which were drones, AI in healthcare, engineering, biology and space launch. Did a lot of work on those in the first year. And we keep a kind of watching brief. We have two new priority areas, which are robotics. And secondly, the civil defence interface, which could be a lot.
We are asked, first of all, find some particular areas there and what we. To narrow that down and make it viable and useful, we're essentially looking at uncrewed systems in air, on land and on sea, where there is a real overlap between civil regulation and military regulation. Those are our new two priorities. And then as we go into the autumn, we will be consulting ministers. We'll have some suggestions and ministers will set for us. I expect some other areas which they want us to work on as a priority.
We don't completely exclude a really tricky problem in some other area, but we have to have priorities. And those four and the new two, what they are.
We are asked, first of all, find some particular areas there and what we. To narrow that down and make it viable and useful, we're essentially looking at uncrewed systems in air, on land and on sea, where there is a real overlap between civil regulation and military regulation. Those are our new two priorities. And then as we go into the autumn, we will be consulting ministers. We'll have some suggestions and ministers will set for us. I expect some other areas which they want us to work on as a priority.
We don't completely exclude a really tricky problem in some other area, but we have to have priorities. And those four and the new two, what they are.
11:23
Speaker 3
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Speaker 3
Thank you. Last question about the Regulatory Horizons Council. When I was minister, they they I described them as the sort of reconnaissance unit out sapping and looking at where technology is throwing up new challenges. Um, can I ask how they fit in?Um, to your, your landscape and I should just declare an interest as a UK trade envoy. I'm selling our sandboxes hard and I am advising a quantum fund and a space debris charity who are looking at UK leadership in, in that sector.
11:24
Speaker 9
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Speaker 9
Well they are they are very important kind of part companion of what we do. I think of them as the think tank and a lot of what we add in the Rio team is the more operational stuff. And and I think they do excellent work. And as an example, just recently, I mean, literally in the last week, their report on in vitro gametogenesis, which is basically how embryology is advancing, is an attempt. It opens up an incredibly fraught ethical debate because of technological advances in embryology.
How might the human Fertilisation and Embryo Embryology Authority and the Act be updated?It absolutely does not tell people what has to happen. It identifies some really tricky areas and that kind of thought leadership can be very important and valuable.
How might the human Fertilisation and Embryo Embryology Authority and the Act be updated?It absolutely does not tell people what has to happen. It identifies some really tricky areas and that kind of thought leadership can be very important and valuable.
11:26
11:26
Speaker 1
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Speaker 1
And thanks very much for your for your patience. David and I do need to declare actually two, um, interests. Firstly, I did work on the development of the Regulatory Innovation Office in opposition, and it's great to see it come to life. And secondly, I did work for six years for Ofcom for leading regulator. So I have some experience of Regulator of Regulation. And I suppose my first question yes or no question. Oh I'll give you a sentence to answer with regulation, good or bad for innovation.
11:27
11:28
11:29
Speaker 9
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Speaker 9
Well, if you look at the latest progress report, the regulatory action plan, which also came out just earlier this month, you will find a set of cross-government measures of performance, which we at Rio contribute to, um, our. Our task basically, and what we, what we track is how we're doing on, on process and real business impact. So to give the committee example from engineering biology, novel foods, um, we are working with the food with the FSA on process improvements, things like speeding up approval times. And actually we're aiming to halve the approval time for new foods.
11:29
11:30
11:30
11:31
Speaker 9
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Speaker 9
Well, as I was saying, when you then get into the, when we work with individual regulators on individual problems, we then do um, track. Our performance. So the example I was giving the FSA and us, it's not us on our own in partnership with the FSA, we are saying we'll halve approval. Times for new foods. And we then track what that means in the business environment. We want to see more businesses entering and more businesses has been a near doubling of businesses applying to bring new foods into the British environment since we announced we were working with FSA in halving approval times.
So it does enable.
So it does enable.
11:32
11:33
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11:34
Speaker 9
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Speaker 9
Well, we have the you know, the normal costs of officials and operating within it. We do have two funds which we operate the Regulators Pioneer Fund, which has a budget of currently this year, about 8 million. And the AI Capability Fund, which has got a budget of about 4 million. And Patrick Vallance has announced a 70 million fund for us to deploy over the period of the CSR. But that is those are. And they'll probably go in expanded operations using those two funds.
11:35
11:36
Speaker 9
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Speaker 9
We are not a super regulator with the power to give instructions to regulators. We work with them with strong ministerial backing. I think it was a former chief whip who asked whether he used a carrot or a stick, said, you'd be surprised how much you can achieve with a sharpened carrot. And and I would describe.
11:36
11:36
11:37
Speaker 1
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Speaker 1
Well, I appreciate that response, David. But I also think that if you a great to hear you've got a sharpened carrot, but we need a metrics to understand how well you are wielding it, because in Cross-governmental, influence can be challenging. And there is inertia, as I'm sure you're aware of. I am going to go, I have some I want to go. On engineering of biology, but I'm going to go to Emily now because I know you have a question particularly on.
Yeah.
Yeah.
11:38
Speaker 7
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Speaker 7
So, um, what I want. To understand is both regulation and standards drive innovation can drive innovation and how much you're working with BSI and also particularly IPL in terms of making sure that we're protecting our intellectual property and how that links to our soft power as the UK, as being somebody who a country that people look to for regulation and standards, particularly in new technologies.
11:38
Speaker 9
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Speaker 9
Yeah. And, uh, the answer is we do. You're absolutely right. And we do work with the BSI and also other government bodies such as NPL on standard setting. And in fact, my personal view is that stand, the longer we allow standards to develop before going to the formal stage of regulation, the better for many of these new technologies. And I do in my conversations with BSI and NPL, absolutely urge them to. And they know they've got to do this, participate actively in international standards, setting bodies, and they do do that.
And it is absolutely a key role where we can, um, uh, where we can take an international lead. If I can give you one particular example, influenced by the RHC, actually, the crucial insight that nuclear fusion is not nuclear fission. And we should not approach it as just taking the nuclear regulations.
And it is absolutely a key role where we can, um, uh, where we can take an international lead. If I can give you one particular example, influenced by the RHC, actually, the crucial insight that nuclear fusion is not nuclear fission. And we should not approach it as just taking the nuclear regulations.
11:40
11:40
11:41
Speaker 1
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Speaker 1
Thank you very much. Um, so, um, looking at. What the RIO has achieved and has done, we come across an awful lot of sandboxes. Could you just say a word about how you use sandboxes?And I think. For example, a particular one of the engineering Biology sandbox fund, which works with the Food Standards Agency, how do you what is the sandbox and how do you use it to drive to remove regulatory barriers, which I think is the key objective?
11:42
Speaker 9
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Speaker 9
And that is a a good example. And again, it's incidentally an example also of how we can use our funds and raise attention for an issue. FSA has been so busy on post-Brexit working up a regime for the regulation of foods. We have helped by bringing. And they were at capacity by putting in some money. We funded a sandbox which has got them focused on novel foods. Um, and that enables us.
11:43
11:43
Speaker 9
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Speaker 9
A sandbox is where you can suspend some regulations, right. And, and companies can work in partnership with the regulator on case studies, how their particular product or service fits into the regulatory regime and where possible, the regulator will, will suspend some regulations. However, there are significant constraints on the regulations they can suspend. And of course, the bill announced in the King's Speech is going to give, regulators greater power to suspend regulations temporarily so that the sandboxes can try out a wider range of new technologies.
11:44
Speaker 1
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Speaker 1
So yes. So that so that's sort of, um, time of sandbox enables you to try out technologies without existing regulation applying. So you've got an engineering biology sandbox. Engineering biology is a huge area. It's an enabling technology that can transform everything from, from what we eat, but also how we deliver, uh, treatments. How we build, you know, new materials for, for building houses. Um, it's a, it's a huge area. Um, engineering biology is looking at, um, e I remember being very, very concerned to see that engineering biology is looking at um e coli as a delivery mechanism for certain novel new treatments.
I mean, great science, you know, obvious regulatory concerns. So, so how does your engineering biology sandbox address, you know, the whole regulation for the engineering biology, you know, sector, uh, to, to support and enable, you know, what can be transformative new applications.
I mean, great science, you know, obvious regulatory concerns. So, so how does your engineering biology sandbox address, you know, the whole regulation for the engineering biology, you know, sector, uh, to, to support and enable, you know, what can be transformative new applications.
11:46
Speaker 9
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Speaker 9
Well, the truth is that the sandbox is to be effective. And indeed for Rio to be effective, we, they have to have a particular focus. And this one with the FSA is on novel foods. It's not more widely. What we have done also on engineering, biology. And I co-chair an engineering biology fund, though I'm not allowed, quite rightly, to be involved in any of its, uh, decisions now. But what, what we do with engineering biology is we have convened following actually a recommendation from the House of Lords, uh, science committee.
If I may refer to that, we have now brought together. The trouble is, it's a general purpose technology, as you say. And if you regulate by application, there are a host of different regulators involved. We have brought them together in a single coordination group with a no wrong door approach, with a.
If I may refer to that, we have now brought together. The trouble is, it's a general purpose technology, as you say. And if you regulate by application, there are a host of different regulators involved. We have brought them together in a single coordination group with a no wrong door approach, with a.
11:48
11:48
Speaker 9
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Speaker 9
That means that if you are an engineering biology company and you, um, approach, uh, FSA or MHRA, uh, but actually the, the problem you face turns out to be with HSE. Uh, then you will be able to be pointed in the right direction. And that is real example. Actually, we had a company that was, uh, trying to use drones to deliver slug pellets. And anyway, we have so we have a, which ended up with the HSE. So we have a coordination function to ensure that you, that which what if you've got an engineering biology product, the group of relevant regulators will get together and you'll be pointed in the right direction.
11:49
Speaker 1
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Speaker 1
And that's that is reassuring. David. I still gives me some I'm not clear how we get principles based regulation. It seems like, as you say, you need to be specific, you know, for for your sandbox sandboxes. But I would I feel quite strongly that a lot of regulation we've seen is a bit, you know, whack a mole, you know, what's the issue will regulate for that issue?How are we going to get principles to regulation, principles based regulation for new and emerging technologies?
11:50
Speaker 9
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Speaker 9
Well, I have to say whack. Whack a mole is one of the things we do. It is not the only thing. I don't mind whacking the occasional mole if there's a real exciting British startup that has got a particular problem, we should bloody well be available to help them. But also, you're right, we have to have a general approach. And you do find it's things like getting together groups of regulators in one area trying to agree, speeding up.
11:51
11:51
11:52
Speaker 9
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Speaker 9
Yes, and of course, DBT has overall responsibility. But let me give you an example to bring this line. So one of our new priorities is robotics. There are and the HSE has an important role, particularly in the use of robotic systems in factory environments. The HSE starts with the philosophy you set out of. If you accompany. Just prove to us that you're safe and then it's fine. There's a belief out there in the company sector that HSC requires your.
You put your robot in a cage to protect humans from working alongside the robot. In reality, there is no such HSC requirement. But what happens in the absence of any guidance and the HSC just saying, come to us and prove it's safe. There's a sort of folk wisdom develops about what you should or should not say to get HSC approval. So people think you have to have a cage. We are working currently. One of the other one of the projects is working with the HSC to see if we can flesh out in some way, give a give some guidance that goes a bit beyond the pure doctrine of we're after safety, show to us you're safe so that companies don't waste time and effort thinking they've got to construct a cage when in certain circumstances they may not need to.
So there is this balance between practical advice and sitting back and just letting the companies come to you.
You put your robot in a cage to protect humans from working alongside the robot. In reality, there is no such HSC requirement. But what happens in the absence of any guidance and the HSC just saying, come to us and prove it's safe. There's a sort of folk wisdom develops about what you should or should not say to get HSC approval. So people think you have to have a cage. We are working currently. One of the other one of the projects is working with the HSC to see if we can flesh out in some way, give a give some guidance that goes a bit beyond the pure doctrine of we're after safety, show to us you're safe so that companies don't waste time and effort thinking they've got to construct a cage when in certain circumstances they may not need to.
So there is this balance between practical advice and sitting back and just letting the companies come to you.
11:54
Speaker 1
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Speaker 1
It wasn't quite what my question was. There was an excellent answer. Um, so do you have a role in developing principles based, say, a principles based regulation for engineering biology would be that you can't use vectors which are which may be dangerous, you know, or not. Maybe that's not the right one, but do you have a role in developing a sort of principles based regulation for these emerging areas?You seem reluctant to to to answer that question.
11:55
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11:56
Speaker 9
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Speaker 9
Yes. And we can that's and we are. And that's actually a more vivid issue, I think with probably with robotics than with engineering biology, where HSC is mainly in the lead. If we think there is a gap where some new regulatory function is required, we would identify it. Um, we tend to find, however, that our most when sticking with your example of engineering biology, our biggest role is helping companies understand principles already set out in legislation. So for engineering biology, we have contained use versus deliberate release.
That's what the legislation says. We're not there to change the legislation. We do sit down with actual companies and with real regulators saying, what exactly does contained use mean?What does deliberate release mean?If your organism will die in contact with the atmosphere, does that constitute a contained use, things like that. So we try to help apply. Principles often set out by Parliament.
That's what the legislation says. We're not there to change the legislation. We do sit down with actual companies and with real regulators saying, what exactly does contained use mean?What does deliberate release mean?If your organism will die in contact with the atmosphere, does that constitute a contained use, things like that. So we try to help apply. Principles often set out by Parliament.
11:58
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12:00
12:00
12:01
Speaker 6
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Speaker 6
Enjoying that chair. The philosophy of how you identify and control risks is like all over that brilliant. Um, moving to space, if we may. Uh, you've supported the Civil Aviation Authority. Um, uh, in their planning support for the UK space sector. And I think the wording was, uh, developing a more flexible regulatory framework by early 2027. So I guess the starting question would be, do you know if they're on track for that?And how will you support them in implementing those plans?
12:02
Speaker 9
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Speaker 9
I was involved in space as one of our priorities. Uh, after ceasing to be chair of the UK Space Agency, I've become chair of Saxavord, the UK Space Launch Facility. And as it in turn is affected, obviously by space launch regulations. I am no longer involved in Rio's space regulation work, which I think is the right thing in the in the circumstances.
12:03
Speaker 6
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Speaker 6
Excellent. Well, I'm looking forward to no earlier than the 10th of August myself. Um, brilliant. Taking that out to perhaps a more abstract level then, um, as we look across government at that kind of specialisation, technologically, um, you know, what support are you aiming to give or have you given to other parts of the department to help them kind of increase their competence in specialising for these key sectors?
12:04
Speaker 9
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Speaker 9
Yeah. Um, and the, well, we're. Fortunate in, in just about every area we work in Dsit has got some kind of technology team. Our issue is that sometimes, however, individual regulators do not. And they. And they say to us kind of. They're so busy with the day job, how can we expect them to be thinking about new and new technologies as well?And they're, um, it's a good example of my answer to your earlier question about how we function.
We can use our relatively small discretionary pots of money where we think there's a genuine capability problem to boost capacity. Um, what we can also do through our partnership with DBT and the Treasury in, in things like ministerial steer letters, which I think are an underused and really powerful tool, put stuff about new technologies and the importance of getting the regulatory regime for them right into the ministerial steer letter. And indeed, the you will find in the. Partner of transport ministerial letter to the CAA, which came out a couple of months back, a much stronger statement than ever before about the role of the CAA and its importance, both in drones and in space launch.
So that's where. That is a good example, actually, of the sharpened carrot, a bit of money and a clear pressure in the steer letter.
We can use our relatively small discretionary pots of money where we think there's a genuine capability problem to boost capacity. Um, what we can also do through our partnership with DBT and the Treasury in, in things like ministerial steer letters, which I think are an underused and really powerful tool, put stuff about new technologies and the importance of getting the regulatory regime for them right into the ministerial steer letter. And indeed, the you will find in the. Partner of transport ministerial letter to the CAA, which came out a couple of months back, a much stronger statement than ever before about the role of the CAA and its importance, both in drones and in space launch.
So that's where. That is a good example, actually, of the sharpened carrot, a bit of money and a clear pressure in the steer letter.
12:06
12:07
Speaker 9
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Speaker 9
Overall yes. I know there is this debate of whether and perhaps you were hinting at it earlier, whether there should be a sort of N plus one super regulator that tells all the other regulators what what to do. I think that could I think that would be very high risk. And you could end up with all the all the powers in this one super regulator, an incredibly complicated system. So I what I find is that by and large, and it sometimes it takes longer than with others, you can build up a constructive relationship with regulators where you press them consistently, you bring to them evidence, including introducing them to real life British technology start ups and going through the regulatory barriers they face.
Plus the steer letter. I think we can make progress.
Plus the steer letter. I think we can make progress.
12:08
12:08
12:09
Speaker 4
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Speaker 4
Thank you. I was interested about your concerns about the super regulator. Well, we have the ICO, which is a horizontal regulator that seems to be doing reasonably good work. So they do exist and can work. I want to talk about a little in in health care, and I just need to, um, say. That I used to work for the digital regulation service, which was faced with nice, but I liaised with MHRA, QC, HRA and also NHS England. And I noticed that you're doing an awful lot of work with MHRA, such as regulatory sandboxes and, and looking at how they can fund MHRA to explore new AI enabled methods.
But I do believe there is a gap. Um, these systems this all this is very good up until we agreed to procure post these systems live within a healthcare setting. Now we do have clinical safety standards such as DCB 0160, which is the healthcare organization to ensure that these systems remain safe and effective on a day to day use. I know MHRA talk about post-market surveillance, but I can tell you now that's very ad hoc. Um, and so my concern and I used to work a lot on real world monitoring because, you know, a clinician will tell you that liability sits with them because they have a duty of care to make sure that their systems that are deployed are safe and effective for the use and for the patient.
So what work are you doing with CE QC, who does have a role here to ensure they use technology effectively and safely and safely?Are you working as closely with CQC to clarify their role as you are with MHRA?
But I do believe there is a gap. Um, these systems this all this is very good up until we agreed to procure post these systems live within a healthcare setting. Now we do have clinical safety standards such as DCB 0160, which is the healthcare organization to ensure that these systems remain safe and effective on a day to day use. I know MHRA talk about post-market surveillance, but I can tell you now that's very ad hoc. Um, and so my concern and I used to work a lot on real world monitoring because, you know, a clinician will tell you that liability sits with them because they have a duty of care to make sure that their systems that are deployed are safe and effective for the use and for the patient.
So what work are you doing with CE QC, who does have a role here to ensure they use technology effectively and safely and safely?Are you working as closely with CQC to clarify their role as you are with MHRA?
12:11
Speaker 9
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Speaker 9
That is a very good question. I mean, from from memory we have, oddly enough, we do have one specific partnership with CQC, which is, I think, the use of AI to help in their inspections of care homes. And I think that's collecting and interpreting, uh, data for the work that they do. Um, and I think, um. That's one specific thing more widely. We have got our AI in healthcare Commissioner Alastair Denison's work, which is due to report very soon.
And although that is mainly targeting, giving advice to MHRA on things like ambient AI, you know, je scribes in GP offices, things like that, I think there is also some CQC work there, but I would accept we have been much more MHRA focused than CQC.
And although that is mainly targeting, giving advice to MHRA on things like ambient AI, you know, je scribes in GP offices, things like that, I think there is also some CQC work there, but I would accept we have been much more MHRA focused than CQC.
12:12
Speaker 4
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Speaker 4
I would strongly recommend that you do because these systems drift, but also the environment in which they are deployed changes which impacts on outcomes, as well as how clinicians use them and interact with them. And of course, we're dealing with updates as well, which I know MHRA are doing some work on. Um, I think there's a significant gap there, um where safety can, can, can be a real issue and we need to prevent that. And I would look at auditing and so on and so forth.
Um, another question that raises concerns for people is privacy of patient data. And of course, there's been a lot of commentary about the role of Palantir within the NHS. And I can give you one use case and not to do with Palantir when following an update, personal data was displayed on a screen and the and the radiologist saying, why is that?Information suddenly appeared?And do these people have access to that personal data, which they shouldn't. So, um, you have supported the use of AI assisted tools in healthcare settings, which is good.
What advice have you given about the need to balance innovation with technical protections to safeguard patients data and preserve their privacy, and that it stays with the NHS?
Um, another question that raises concerns for people is privacy of patient data. And of course, there's been a lot of commentary about the role of Palantir within the NHS. And I can give you one use case and not to do with Palantir when following an update, personal data was displayed on a screen and the and the radiologist saying, why is that?Information suddenly appeared?And do these people have access to that personal data, which they shouldn't. So, um, you have supported the use of AI assisted tools in healthcare settings, which is good.
What advice have you given about the need to balance innovation with technical protections to safeguard patients data and preserve their privacy, and that it stays with the NHS?
12:14
Speaker 9
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Speaker 9
Yeah, I mean, that is a responsibility of bodies such as ICO and MHRA. We strongly support that principle. What we have been doing is funding research on synthetic data, which is another way of protecting patients. If you can generate through AI artificial data for clinical trial design, then individual patient records are not necessary and we are funding an experiment to see if you can use AI generated synthetic data to do some of these clinical trials.
12:15
Speaker 4
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Speaker 4
That's useful for development and for piloting. And I have really issues with synthetic data because that's too clean, often doesn't have the dirtiness of real data about it. But once deployed and these systems are being used and updated and being used on real patient data, what safety and security and methods are you advising with regards to post deployment?
12:16
12:16
12:16
12:16
Speaker 9
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Speaker 9
Yes. That is a product which is trying to, uh, investigate ways. Ways in which AI can be used. It's a good example of practical use. So one, for example, was the classic use of AI, radiology. And what how AI can assist radiologists and all those AI airlock projects were absolutely informed by the principles set by and have to be applied by the other regulators of patient privacy and protection.
12:17
Speaker 4
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Speaker 4
Thank you. And final question, what work does our Rio have planned to ensure that regulators models for assigning funding or taking regulatory decisions are set up to ensure that patients feel the benefits of scientific innovation?And again, I would push that this is not just an MHRA role, it would be CQC as well.
12:18
12:18
12:18
12:19
Speaker 9
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Speaker 9
We have not it's not a Rio. Done. General guidance. Patrick Vallance, Lord Vallance announced uh, I think during London Tech week that and this would be a first that we will be running an AI exercise, trying to see how you can use AI models to predict drug safety. And again, in some ways it's, um, uh, it's to. Try to displace or reduce the need for actual patient trials, the extent to which you can use AI to predict the consequences of new drugs.
And we will be doing a sandbox on that.
And we will be doing a sandbox on that.
12:20
Speaker 1
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Speaker 1
My question was really targeted on you said you gave Alison reassurances about the the use of private personal data. When AI was being deployed, but those AI models will have been trained on data. And you don't know whether that was or do you know whether that was British personal data, American data, public data. Do you have.
12:21
12:22
12:22
12:23
Speaker 9
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Speaker 9
Well, the main regulator is the CAA and we've worked with them with our aim, with the aim of raising the priority of the use of drones. And we've made progress on things like the atypical, atypical air environment to some extent, HSBC is involved as well when it comes to using drones in certain circumstances. Um, and we have I regard it as one of our successes working in partnership with CAA. We've now got, for example, an excellent company that is using drones to inspect pylons to check the state of the, uh, their physical.
Security. It's a very good example of how we at Rio can work because we. One of the main causes of industrial accidents is falls from a height. And there's no reason why the CAA, with their focus on airspace, should be factoring into their decisions that one of the most dangerous activities for working people is climbing up and inspecting tall structures. So if you use drones to inspect pylons, rather than expect people with ladders and climbing equipment to inspect pylons, there is a significant gain to overall safety of British citizens.
And one of the ways we can operate is talk to regulators saying, don't overregulate the use of drones to inspect pylons, because this is actually a net gain in the safety of British citizens, if we can use them, and they are now being used, um, and very successfully.
Security. It's a very good example of how we at Rio can work because we. One of the main causes of industrial accidents is falls from a height. And there's no reason why the CAA, with their focus on airspace, should be factoring into their decisions that one of the most dangerous activities for working people is climbing up and inspecting tall structures. So if you use drones to inspect pylons, rather than expect people with ladders and climbing equipment to inspect pylons, there is a significant gain to overall safety of British citizens.
And one of the ways we can operate is talk to regulators saying, don't overregulate the use of drones to inspect pylons, because this is actually a net gain in the safety of British citizens, if we can use them, and they are now being used, um, and very successfully.
12:25
12:25
Speaker 9
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Speaker 9
Well, we've now got, um, drone delivery of blood samples by Appian, which began in London, to be frank with his committee. Uh, I have been frustrated, hasn't been able to roll out more widely across the NHS. And we are trying to help speed it up. And you discover one of the painful lessons you learn is you get something working at Guy's and St Thomas's for Appian, and you discover that then they have to go through another clearance process to do basically the same thing in a different health authority, which is why we need the NHS innovation passport.
So the answer is we could go faster, but we have now got drones doing that. We've now got drones operating out of Darlington for Amazon, doing consumer delivery. Um we've got um we've got beyond visual line of sight operations for pylons. And we for the first time managed to get beyond the one operator per drone rule to get a one operator for, for drones model. So we are making progress, but we need to go further and faster.
So the answer is we could go faster, but we have now got drones doing that. We've now got drones operating out of Darlington for Amazon, doing consumer delivery. Um we've got um we've got beyond visual line of sight operations for pylons. And we for the first time managed to get beyond the one operator per drone rule to get a one operator for, for drones model. So we are making progress, but we need to go further and faster.
12:26
12:27
Speaker 9
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Speaker 9
That is a very fair challenge. Um, often. In all, and not just in drones, often across these areas, there are massive opportunities for public service, um, of higher quality and more efficient. And as I say, when you, when by the time you looked at blood and the state of the national grid, you absolutely find these are services, um, that. That these, these innovations help public services.
12:27
12:27
12:27
Speaker 12
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Speaker 12
I wanted to ask you a little bit about robotics, but before we get there, I also wanted to just ask you about your initial, uh, statement that regulation is good for innovation. Um, I mean, regulation is by its very nature restraint. That's what it's there to do is to restrain. And presumably your, your very existence as an organisation is a recognition that while you can get regulation right, current UK regulation is not great for innovation. Right.
12:27
Speaker 9
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Speaker 9
Yeah. I don't think that I think the the balance of regulation. Has been and is too restrictive of innovation and new technologies. That's what Rio exists to do. Um, but in fact robotics is a good example. This distinction between new technologies, some of them are born free and some of them are born in captivity. So some of these technologies enter an environment that is already heavily regulated like MHRA, so you can always get it better.
Others, like some applications of robots. There is no regulatory regime. Basically that applies for some humanoid robots. And there you find what the innovators, the technology startups want is some kind of basic guidance. In a way, what we what we don't have, if you're a very, if all. You're left with, which is sometimes what happens in America is essentially civil liability down the track, something goes wrong and you'll be sued. You can do that. That is a massive barrier to entry, because that just means deep tech companies with very deep pockets that have already got billions can say, we'll operate.
And then if there is a lawsuit and we're found guilty, we'll write a check for a few billion and move on. Um, leaving British startups exposed like that is not does not help them. So what they all say to us is there needs to be something, but please, can we help shape it so it's sensible and proportionate and not panicky.
Others, like some applications of robots. There is no regulatory regime. Basically that applies for some humanoid robots. And there you find what the innovators, the technology startups want is some kind of basic guidance. In a way, what we what we don't have, if you're a very, if all. You're left with, which is sometimes what happens in America is essentially civil liability down the track, something goes wrong and you'll be sued. You can do that. That is a massive barrier to entry, because that just means deep tech companies with very deep pockets that have already got billions can say, we'll operate.
And then if there is a lawsuit and we're found guilty, we'll write a check for a few billion and move on. Um, leaving British startups exposed like that is not does not help them. So what they all say to us is there needs to be something, but please, can we help shape it so it's sensible and proportionate and not panicky.
12:27
12:27
Speaker 9
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Speaker 9
Yeah. And we've had, we've made the, the um use of. Loans as uh deliver. Systems, uh, payment robots. Absolutely. And you find everything from a risk averse culture within a regulator through to sometimes just a primary legislative barrier. I think it's the 1835 Highways Act that forbids carriages on pavements. And nobody quite knows if a robot delivery system is a carriage or not. So. Yeah, absolutely. You need our job is to promote new technologies and regulation.
And on.
And on.
12:28
Speaker 12
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Speaker 12
Robotics specifically, then do you have a I mean, obviously this is a technology which is rapidly advancing. And as you said, it's moving towards a kind of humanoid form. Um, uh, do you have any kind of regulatory aspiration?I mean, so for example, could you see us being pared back to Asimov's Three Laws of robotics?Is that where we need to be or is there is there a case for wider regulation?
12:28
Speaker 9
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Speaker 9
That would be a good example of of properly principle based regulation. Reality, what you do find is other people, other regulators do get involved. And we and as I said, we've been set. Robotics in the last few months. We are now working with the HSE on robots, robots in factory environments, partly because of this issue I was touching on earlier. Actually, companies would find it quite helpful to get some guidance rather than just tell HSC, just saying prove it safe.
We are working on home robots with the OPS to try to work out what future rules there could be there. Um, and there are regulatory issues down the track. I mean, to give you a speculative well, this is a real life example in that care robots where some countries, the countries with the biggest demographic challenges, Japan, Korea, uh, Italy. Are ahead of US care robots, little old ladies rapidly becoming psychologically dependent on care robot with whom they build up a relationship. Because it's a time constraint.
It'll just keep on exchanging with them. Um, what about the Financial Conduct Authority?If you program your home care robot to sell particular financial products to the little old lady, um, so there's a whole host. To what extent can the human care quality regulator apply to a home care robot?Um, this is where organizations like RHC can help. I'm absolutely not asking for lots of detailed regulations, but it's better to start thinking about them than not.
We are working on home robots with the OPS to try to work out what future rules there could be there. Um, and there are regulatory issues down the track. I mean, to give you a speculative well, this is a real life example in that care robots where some countries, the countries with the biggest demographic challenges, Japan, Korea, uh, Italy. Are ahead of US care robots, little old ladies rapidly becoming psychologically dependent on care robot with whom they build up a relationship. Because it's a time constraint.
It'll just keep on exchanging with them. Um, what about the Financial Conduct Authority?If you program your home care robot to sell particular financial products to the little old lady, um, so there's a whole host. To what extent can the human care quality regulator apply to a home care robot?Um, this is where organizations like RHC can help. I'm absolutely not asking for lots of detailed regulations, but it's better to start thinking about them than not.
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12:28
12:28
12:28
Speaker 9
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Speaker 9
We, um, we have, uh, real life companies either approaching us direct or brought to our attention, especially through some of the key representative bodies like tech UK. Uh, and then we will, if we think there's an issue that needs to be tackled, we'll approach not just the relevant regulators, but we also convene, we have great, we have fantastic convening power as a ministerial support. Absolutely. Invite NPL or BSI or whatever to join those discussions.
12:28
12:28
12:28
Speaker 5
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Speaker 5
Thank you. Chair. Um, it's nice you appear to be enjoying your role and it sounds very fascinating job. So it's. Yes. And an opportunity. Some great things. Um moving on to defense. Defense investment plan. We're talking about the fastest innovating military in NATO. We've now got the UK Defense Innovation Agency. Where's your main role going to be. Is it going to be taking innovation out of defense and putting it into civil civilian world?Or is it going to be helping defense innovate?
12:28
Speaker 9
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Speaker 9
Yeah, um, I don't think it would be taken entirely out of defence into the civilian world. What we are, we are focusing on, we're focusing on essentially autonomous systems, uh, in the air, particularly drones, uh, on the ground, robotics and marine, particularly autonomous and submersibles. And there we are encountering, first of all, some of the classic issues where there's a civil radio regulator and a military regulator, and you're a company developing a dual use drone or submersible. And the two regulatory systems, and we may well carry on having two regulators.
I don't I'm not taking a view on that, but then can be better aligned. And it can be easier to move between the two of them. That's one thing we're looking at. We are finding some of the lessons already from civil use of civil regulation of autonomous systems apply in the military. If you have if someone has got an unmanned small boat or a submersible, but the safety rules are still written as if there are humans there, and then require everything from a fire, a fire safe, enclosed space.
Oddly enough, as soon as you just come with it, you find some of these regulations that are being applied, including in the military, are written assuming there still is a human there. When there isn't. And. Yeah, there are some other there are some other examples. We're absolutely including the capacity to test military systems more in the UK. Um, sometimes you have to go to the Baltic states to test some of these, and we bloody well should have a regulatory regime that permits you, for example, to crash one drone into another, which all the regulations hate.
But let's face it, it's quite an important military function. It is quite hard currently to get regulatory permission to do testing involving that. We are trying to help make that kind of regime more pro-innovation.
I don't I'm not taking a view on that, but then can be better aligned. And it can be easier to move between the two of them. That's one thing we're looking at. We are finding some of the lessons already from civil use of civil regulation of autonomous systems apply in the military. If you have if someone has got an unmanned small boat or a submersible, but the safety rules are still written as if there are humans there, and then require everything from a fire, a fire safe, enclosed space.
Oddly enough, as soon as you just come with it, you find some of these regulations that are being applied, including in the military, are written assuming there still is a human there. When there isn't. And. Yeah, there are some other there are some other examples. We're absolutely including the capacity to test military systems more in the UK. Um, sometimes you have to go to the Baltic states to test some of these, and we bloody well should have a regulatory regime that permits you, for example, to crash one drone into another, which all the regulations hate.
But let's face it, it's quite an important military function. It is quite hard currently to get regulatory permission to do testing involving that. We are trying to help make that kind of regime more pro-innovation.
12:29
12:29
Speaker 9
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Speaker 9
We have had our, I think a first meeting with them. Uh, to be frank, this is a responsibility. This task I think was set for us about eight, ten weeks ago. And I've had a first round of meetings. And we are, as I say, we started identifying some specific issues brought to us by companies, but there's a lot more to do.
12:29
12:29
12:29
12:29
Speaker 1
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Speaker 1
And thanks very much, David. As Martin said, it's clear you're enjoying your role. And it's also clear that it is a wide role. I mean, the regulatory environment is absolutely huge. Uh, together with the new emerging technologies, so, so many of them and the entire defence space as well. So I suppose just a sort of in terms of final questions, you know, what, what are your priorities for the year ahead?So for this, this coming year.
12:29
12:29
Speaker 9
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Speaker 9
Well, we report to ministers. We have got. They have just set us two new priorities the robotics and the military. They will set us further priorities in the autumn, I expect, and we will work with them. Um, and, uh, I mean they are it'll ultimately be their decision. I do think the wider issue of autonomous systems AI, where human agency is required and where human agency is not required, is a very important topic. And at the moment, to be honest, the legislation and the regulatory regime seems to have human decision taking rather randomly distributed some kind of rigorous thinking about where autonomy is okay, and where there has to be a human decider, I think would be a really important hot topic.
But ministers will tell us what to do.
But ministers will tell us what to do.
12:29
12:29
Speaker 3
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Speaker 3
Two brief points, if I may. Could I ask as following that question on priorities as trade envoy selling our regulatory leadership agility sandboxes is a key. Plus, when I went to Israel, it was the only thing they really needed from us. So could I ask that you gently pointed out to the UK office for investment that that there is a sales offer here, that we should be selling your this this work?And could I ask about Europe?There is a debate running in the corridors that we need to be sort of lessening our regulatory freedoms.
I think you've excited the committee by setting out some areas where we're using our agility to help the European defence, to help European technology. Could I invite you just to comment on whether it's possible to have our freedoms and eat them, as it were, have our cake and eat it?Yes.
I think you've excited the committee by setting out some areas where we're using our agility to help the European defence, to help European technology. Could I invite you just to comment on whether it's possible to have our freedoms and eat them, as it were, have our cake and eat it?Yes.
12:29
Speaker 9
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Speaker 9
Um, that is that is a very there's a lot of high level politics in this because of course, um, dynamic. Is an understandable, uh, priority for the government. Uh, however, we don't want dynamic alignment to, uh, eliminate. All our advantages in innovation and technology. In fact, for me, as a shameless old Remainer, one of the few benefits I can see from Brexit is that we can regulate a bit more sensibly what I think we can say to the EU is it's in the EU's interest, given that with 27 members, eight decisions say If Britain is their R&D tech.
Regulation, innovation testbed and they can. Allowing us. Encouraging us to carry on doing some of this stuff before the elaborate process of an EU regulation being framed actually helps them get their EU regulations better.
Regulation, innovation testbed and they can. Allowing us. Encouraging us to carry on doing some of this stuff before the elaborate process of an EU regulation being framed actually helps them get their EU regulations better.
12:29
12:29
Speaker 1
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Speaker 1
So that's um I think that's a. Really important point with regards to the EU. And there's a, they have a lot of regulation in AI and in, in, in um, um, life sciences, etc. again, you've got a big um. Job that you're undertaking, you talked about your priorities for this year were sort of 2 or 3 very precise, very interesting technological areas. But do you have priorities in terms of your organisation and resources?How many people work for Rio?
12:30
Speaker 9
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Speaker 9
About 30 people, slightly over 30. And they work very hard and effectively. I mean, we don't um, I think what we can do is aim to work more closely with DBT, which has overall responsibility. So if you take, for example, the ministerial steer letters and that for me personally is another area where I would like to see us prioritize getting as much Pro-innovation pro new tech into the ministerial steer letters. The D, b, t is the overall custodian of policy in those letters.
Um, we work with them already. This is when individual sponsor ministers write to regulators and sometimes under successive governments they can be long lists of nice things with absolutely no prioritization and no sense of drive. We want to get more about innovation and new tech into them. We can work with d t to make that happen.
Um, we work with them already. This is when individual sponsor ministers write to regulators and sometimes under successive governments they can be long lists of nice things with absolutely no prioritization and no sense of drive. We want to get more about innovation and new tech into them. We can work with d t to make that happen.
12:30
12:30
12:30
Speaker 1
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Speaker 1
Great. And now we have a new prime minister, um who has said in his. Well we don't have any Prime Minister yet announcing it here, but we will be having a new Prime Minister very, very shortly. Um he has said that his target is to make the UK the world's leading innovation nation something this committee supports very much. What advice, in a few words, what advice would you give to Andy Burnham to achieve that?
12:30
12:30
12:30