Science and Technology Committee (Commons)
Wednesday 21st October 2026
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09:33
Speaker 1
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Speaker 1
Order, order and welcome to today's meeting of the Science and Technology Committee. This is our second session on the machinery of government changes, which were announced before the summer recess. And today we'll be looking at ministerial responsibilities and what the changes mean for the future of science, innovation and technology policy and decision making. And we're very pleased to welcome to be joined today by Nigel Huddleston from the digital, culture, Media and Sport Committee. An early example of how we will be working across committees, and I'm sure the departments will be working across departments as well.
And we're very pleased to have ministers and officials from each of the three departments most affected by the abolition of De CITs. And many thanks for joining us today and and demonstrating that the abolition of de CET will not lead to less scrutiny of science and technology. We. Before we start our main decision session today, I wanted to turn briefly to the provision of information to our Committee by departments. Since the machinery of government changes, responses to correspondence and reports from our committees have been regularly delayed beyond agreed deadlines. I. This is something the Committee does not expect to become routine.
So could. Can you commit to underlying underlining to your respective teams the importance of timely engagement with this committee? And I see I see all the all the ministers nodding. Yes, yes. Great. Well, I will I will accept that. And thank you very much for that. And I'll ask each of you to, to introduce yourself in response to the first question presented to you. And the first question from our committee is going to be from George Freeman.
George.
And we're very pleased to have ministers and officials from each of the three departments most affected by the abolition of De CITs. And many thanks for joining us today and and demonstrating that the abolition of de CET will not lead to less scrutiny of science and technology. We. Before we start our main decision session today, I wanted to turn briefly to the provision of information to our Committee by departments. Since the machinery of government changes, responses to correspondence and reports from our committees have been regularly delayed beyond agreed deadlines. I. This is something the Committee does not expect to become routine.
So could. Can you commit to underlying underlining to your respective teams the importance of timely engagement with this committee? And I see I see all the all the ministers nodding. Yes, yes. Great. Well, I will I will accept that. And thank you very much for that. And I'll ask each of you to, to introduce yourself in response to the first question presented to you. And the first question from our committee is going to be from George Freeman.
George.
09:35
Speaker 2
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Speaker 2
Thank you, chair. Morning, all. As a veteran of a few government machinery changes, thank you for your time this morning. We've heard quite a lot of concerns in previous hearings about just the damage, the risk of disruption. Leave aside everything else. We've been, as you know, in the last year, 18 months, two years very focused on applauding the government's announced increase in funding, the focus on industrial strategy, and focused on how this actually plays out across government. You'll have seen our report flying blind, asking which money is being allocated to which geographies and which sectors so that we can track delivery.
So I wanted to ask about three things this morning. One, the disruption, two, the budgets and three, the political vision and delivery leadership. I'm going to focus to start with, if I may, Minister McDonald and Director General Jones. If I can start Minister, with the vision, the aim, the political side of this. Can you just update us on. There's no perfect structure, but what the rationale was for getting rid of the department, which in its creation had sent a signal that we were putting science, innovation and technology at the heart of government . And in particularly now, how the delivery governance is run.
You've got two ministers in cabinet, you've got a Secretary of State for D best and a focused AI minister. That can be a strength and a potentially a cause of some clash. So I'm keen to hear from you the vision and then the political implementation. And then perhaps, Alex, I can come to you on the money.
So I wanted to ask about three things this morning. One, the disruption, two, the budgets and three, the political vision and delivery leadership. I'm going to focus to start with, if I may, Minister McDonald and Director General Jones. If I can start Minister, with the vision, the aim, the political side of this. Can you just update us on. There's no perfect structure, but what the rationale was for getting rid of the department, which in its creation had sent a signal that we were putting science, innovation and technology at the heart of government . And in particularly now, how the delivery governance is run.
You've got two ministers in cabinet, you've got a Secretary of State for D best and a focused AI minister. That can be a strength and a potentially a cause of some clash. So I'm keen to hear from you the vision and then the political implementation. And then perhaps, Alex, I can come to you on the money.
09:37
Speaker 3
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Speaker 3
Great. Thank you very much, George. You're right. You've been through a few machinery of government changes yourself as well. And I think that you'd agree to agree with me that the Civil Service are incredibly adept at following those instructions. But of course, it does come with some cost. Any any restructure comes with some cost. And so I think, as you say, it's very important to set out the rationale for it. And to my mind, in in any sense, and you'll forgive me, I'm an engineer and I come from it from an engineering perspective. Form always follows function.
You have to adapt the form of government to the function that you want it to carry out. And we're fortunate in that the Prime Minister has given a very clear objective. And in fact, he gave that objective very directly to me when he appointed me to the job. And what he said to me was that he wanted to put science back in the service of industry. And that's a really strong focus on the application and commercialization of science. And I know that this is something that you wrestled with when you were science minister, too, because we recognise that the UK punches well above its weight in terms of curiosity driven research, basic science, but that much of that science is commercialised overseas.
And despite the fact that, you know, the Prime Minister made that gave me that objective, I was very clear in my a speech that I gave early on to the universities UK conference that that doesn't in any way diminish the work that we're doing on curiosity driven research. That's quite clear. The funding remains so that it's it's protected. But what we need to ensure is that those results bear fruit in the UK economy for the advantage of people in this country. And so really, it's about ensuring that that end to end pipeline of commercialisation works.
I've got a bit of experience of this. This is the the job that I used to do in industry. And it is hard, very difficult to do it. But we've got the best advantage in the UK because we have such a strong fundamental science base. So that's the that's the overriding objective. And then there may be two things that we need to. Many things we need to do. But two things sort of strike me that we need to, to, to do to be successful at that. One is, as I've said, is, is really strengthen this pipeline of scientific discovery.
But also we need to expand the industrialisation capability because that downstream science activity happens in collaboration between government and industry. And a lot of the activity happens in industry as well. And we've seen a decline in industrial research floor space in the UK over a long period of time, much of that associated with the fact that we've had a decline in large industrial, UK headquartered firms. So there is a sort of structural aspect there and government. So government needs to do is help to commercialise the science, but also to intervene in such a way as to encourage firms to invest in industrialisation capacity.
And sometimes government needs to step in to do that. And the support we've had for many governments over many years around the catapult network, I think is, is is an excellent example of that.
You have to adapt the form of government to the function that you want it to carry out. And we're fortunate in that the Prime Minister has given a very clear objective. And in fact, he gave that objective very directly to me when he appointed me to the job. And what he said to me was that he wanted to put science back in the service of industry. And that's a really strong focus on the application and commercialization of science. And I know that this is something that you wrestled with when you were science minister, too, because we recognise that the UK punches well above its weight in terms of curiosity driven research, basic science, but that much of that science is commercialised overseas.
And despite the fact that, you know, the Prime Minister made that gave me that objective, I was very clear in my a speech that I gave early on to the universities UK conference that that doesn't in any way diminish the work that we're doing on curiosity driven research. That's quite clear. The funding remains so that it's it's protected. But what we need to ensure is that those results bear fruit in the UK economy for the advantage of people in this country. And so really, it's about ensuring that that end to end pipeline of commercialisation works.
I've got a bit of experience of this. This is the the job that I used to do in industry. And it is hard, very difficult to do it. But we've got the best advantage in the UK because we have such a strong fundamental science base. So that's the that's the overriding objective. And then there may be two things that we need to. Many things we need to do. But two things sort of strike me that we need to, to, to do to be successful at that. One is, as I've said, is, is really strengthen this pipeline of scientific discovery.
But also we need to expand the industrialisation capability because that downstream science activity happens in collaboration between government and industry. And a lot of the activity happens in industry as well. And we've seen a decline in industrial research floor space in the UK over a long period of time, much of that associated with the fact that we've had a decline in large industrial, UK headquartered firms. So there is a sort of structural aspect there and government. So government needs to do is help to commercialise the science, but also to intervene in such a way as to encourage firms to invest in industrialisation capacity.
And sometimes government needs to step in to do that. And the support we've had for many governments over many years around the catapult network, I think is, is is an excellent example of that.
09:39
Speaker 2
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Speaker 2
Could I thank you? Could I just ask two quick supplementaries on that one? Science in the service of the economy. I support it, but I do hear concerns, including we had from Sir Paul Nurse and Case and others that this is a relegation of the importance of blue sky. And as you know, quite a lot of scientific progress is accidental and not planned. Can you reassure us that, you know, the core science budgets are not going to get top sliced with defence, with AI, with all sorts of other priorities. And secondly, in cabinet, who's in charge, really?
And how do those tensions get mediated? Is there a cabinet committee or where does the clutch of government really sort those tensions?
And how do those tensions get mediated? Is there a cabinet committee or where does the clutch of government really sort those tensions?
09:40
Speaker 3
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Speaker 3
Yeah, I'll answer the first part of your question. I might defer to Kanishka on the cabinet side, as obviously he sits there. I'm very grateful that you've asked that question because it's I'm keen in every every opportunity I have to provide reassurance around discovery science. I say I did it in my my initial speech to universities UK, and I'm very happy to do it here as well. And I think the Secretary of State also said the same to the Business Select Committee yesterday, and that this isn't a diminishment of scientific discovery, but it's about ensuring that we capture as much of that scientific discovery as possible in the UK.
I mean, clearly we're not going to catch all of it. There are spillover effects that benefit the rest of the world, and that's that's fine. And we should be really proud of that. But at the moment, the, the, the dropout rate of companies that are spin out of universities or managed to get early stage funding and then depart from the UK economy is, is a loss of economic activity for the UK. And so it's how do we how do we deal with that? So one, aside from the sort of high level machinery of government change, even within my brief, the bringing together of both the science and the investment portfolios actually gives a much clearer direction to the investment side that the investment, the investment activity is not really about just sort of passively responding to the very many inquiries that we get from investment in the UK, but directing our investment strategy towards commercialization, commercialization.
I mean, clearly we're not going to catch all of it. There are spillover effects that benefit the rest of the world, and that's that's fine. And we should be really proud of that. But at the moment, the, the, the dropout rate of companies that are spin out of universities or managed to get early stage funding and then depart from the UK economy is, is a loss of economic activity for the UK. And so it's how do we how do we deal with that? So one, aside from the sort of high level machinery of government change, even within my brief, the bringing together of both the science and the investment portfolios actually gives a much clearer direction to the investment side that the investment, the investment activity is not really about just sort of passively responding to the very many inquiries that we get from investment in the UK, but directing our investment strategy towards commercialization, commercialization.
09:41
Speaker 2
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Speaker 2
As well. Well, in which case, Minister, can I ask because the tension could go the other way. We've heard people saying, look, we're really worried. Big focus on AI, big focus on defence, big focus on growth. Can you in cabinet alongside the Secretary of State, how reassure us. How do those tensions get get mediated and who protects basic science? George, thank.
09:42
Speaker 4
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Speaker 4
You for that question. And the chair asked us briefly for introduction. So, Minister for Artificial Intelligence, sitting across the office for the Prime Minister and Cabinet, as well as best the business, innovation, Science and Trade Department. I noticed with interest your observation, born out of experience, that this can either be a great thing in terms of having two representations for the voice of science and technology at the cabinet table, or it can be a challenging thing. I'm very determined to make it a great thing, and the way in which that is working at the moment is that I am a Minister of state in the business department, and so the Business Secretary and I are precisely aligned in having mediated questions of how different sectors in the in the science and technology landscape are engaged, and where there are trade offs, those are made internally in the Department.
We then represent that at the cabinet table. You will know that regardless of the more recent machinery of government changes, there are clearly trade offs across different sectors. You talked about, for example, defence relative to science. And so those are mediated there. The National Economic Council and National Security Council on both economic and security aspects, engages on areas where there are also trade offs involved. But the fundamental thing I would say is that whether that is in the realm of AI or indeed in defence or in science, the task that we're focused on, both in the department based, but also specifically on AI through the opmc, is to make sure that we're getting the biggest upside from basic science right across those areas as well.
We then represent that at the cabinet table. You will know that regardless of the more recent machinery of government changes, there are clearly trade offs across different sectors. You talked about, for example, defence relative to science. And so those are mediated there. The National Economic Council and National Security Council on both economic and security aspects, engages on areas where there are also trade offs involved. But the fundamental thing I would say is that whether that is in the realm of AI or indeed in defence or in science, the task that we're focused on, both in the department based, but also specifically on AI through the opmc, is to make sure that we're getting the biggest upside from basic science right across those areas as well.
09:43
09:43
Speaker 4
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Speaker 4
Let me let me give you one specific thing. And it's clearly in the realm of AI. Historically, I have been incredibly keen that data assets right across different parts of government are used in a way to support British science, British technology and British firms by being able to coordinate across departments through the Prime Minister's AI taskforce. Working closely with the Ministry of Defence, we were able to be the first country to prioritise working with Ukraine on securing real time battlefield data, the only country so far to be able to do so for British technology firms and doing fundamental pieces of innovation, but also then commercialising that.
And so to me that is a pace and a prioritisation of progress that is distinct and I think is borne out of the structure that I've described.
And so to me that is a pace and a prioritisation of progress that is distinct and I think is borne out of the structure that I've described.
09:44
Speaker 2
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Speaker 2
Director General Alex, if I may, can I? You're a veteran as well of these. Can I ask you then about budget and the allocations? We've heard a lot of early announcements of the 86 billion, the record funding for years. I've just observed as minister that we made a record announcement in 21, and it took about three years to work through the system. First point. But I've also we've all heard big announcements on extra funding for AI, for data, for defence. Can you explain or reassure whether and how that is not going to reduce UK arise core research budget, and if there's extra money and when we are likely to hear what those allocations are, we're going into a budget next week.
We're flying blind as well. At the moment we don't know what's been allocated where, and this change could lead to some quite big changes, cuts in what we had thought were the budgets. Can you reassure us?
We're flying blind as well. At the moment we don't know what's been allocated where, and this change could lead to some quite big changes, cuts in what we had thought were the budgets. Can you reassure us?
09:45
Speaker 5
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Speaker 5
So we published, as you know, the UK strategy and set out all the allocations of the budgets. And we're working through actually implementing much of that. And some of the announcements you've seen on AI have absolutely been part of UK budget. So they've been looking at how do they within the budgets, primarily for as you know, there are three buckets discovery, research, government priorities and scale ups. And they've been looking at how you allocate from those government priorities and scale ups to make sure we are investing in AI and other technologies. So those have been met within budgets.
All departments are contributing towards defence and we're working through the details of that. So that will be something we are just working through now. As you know, much of UK research also contributes to defence, but it continues to be the case that about half of UK budget, if you include talent infrastructure, is going towards discovery research and that is that is something that, as the Minister said, we're really committed to do. One of the opportunities, I think, of the machinery of government change is to just make sure we continue to have those conversations across government, but also in the Department for growth and a department thinking about resilience to make sure as discoveries come through and we don't know where they'll come from, we're able to make the most of them.
All departments are contributing towards defence and we're working through the details of that. So that will be something we are just working through now. As you know, much of UK research also contributes to defence, but it continues to be the case that about half of UK budget, if you include talent infrastructure, is going towards discovery research and that is that is something that, as the Minister said, we're really committed to do. One of the opportunities, I think, of the machinery of government change is to just make sure we continue to have those conversations across government, but also in the Department for growth and a department thinking about resilience to make sure as discoveries come through and we don't know where they'll come from, we're able to make the most of them.
09:46
Speaker 2
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Speaker 2
So to be clear, your department gave us last year very clear information. UK rise budget on blue Sky 14 billion growth 7 billion. Sovereign missions 8 billion and talent infrastructure seven. Do those numbers still hold or in light of these announcements, are they likely to change and when will we know?
09:46
Speaker 5
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Speaker 5
So the machinery of government hasn't changed those budgets. What we are working through is the commitment across all departments to contribute towards defence, and we are working through those details. Absolutely. And we'll be able to kind of update on that more in the weeks ahead. But the machinery of government change has not changed the way we are allocating UK budgets. What it's enabled us to do is make sure we are bringing that together, particularly on the second and third buckets with, as the Minister said, some of the investments, some of the scale up, some of the trade.
And thinking about that in the round.
And thinking about that in the round.
09:47
09:47
Speaker 5
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Speaker 5
So we we don't know yet. Departments are absorbing the costs within their administrative budgets, as is always the case. So we are working through that. It's also being assessed by the Giaa to make sure we're doing this in the correct way. So we won't know that as yet, but we're working through it and it will be absorbed by admin budgets in the usual way.
09:47
09:47
09:48
09:48
Speaker 6
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Speaker 6
I need to then declare my interest if I'm in this. So I'm chair of the all party group for Life Sciences. And I also chair an artificial intelligence company focused on public protection and national security, building sovereign capability. When you publish the numbers, are you able to tell us what each of the departments is going to be spending less on as a result? Because obviously, if they're absorbing it, it means they're having to find that cost from elsewhere.
09:48
09:48
09:48
09:48
09:49
09:49
09:49
Speaker 5
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Speaker 5
So it doesn't tend to come from Cdel. And then it comes from the Dell side of things. We will absolutely be reallocating resource, which is always something that departments do. So we will be it won't be coming from some of those budgets, for example, the R&D budgets. It will not be at a cost of investing in some of those major programmes. It will be within the administrative budgets, and we will be reallocating resource in the way that we would always do to make sure we respond.
09:49
09:49
Speaker 5
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Speaker 5
We wouldn't normally go into that level of detail. We'll definitely have the details of the budgets. Let me come back to you on that. We wouldn't normally go into the detail of exactly who's working on which issue. What we will absolutely do is be setting out what the priorities are, whether there are any changes in those priorities and any implications for the wider programmes.
09:49
Speaker 1
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Speaker 1
I think you get a very strong message from the committee that we want to know how much this has cost . In our evidence to our previous hearing, we heard from experts in government and in the industry that they were concerned at the costs of reorganisation, in terms of money and in terms of attention and in terms of effectiveness. And this committee wants to know what those costs are understood.
09:50
09:50
09:50
Speaker 7
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Speaker 7
Thank you chair. It's a pleasure to join you this morning. And thank you also for joining our committee yesterday. I should start off as well by referring members to the Declaration of Interest and also highlight the fact that I'm a former employee of Google. I'm a shareholder in Google and also a former DCMs minister. So that means I've been through a few changes myself. So let me start off probably on that point, because what I want to focus on here is, is given the fragmentation of responsibilities. Now, how do we actually ensure coordination in particular when it comes to policy development and policy making?
And Minister McDonald, you gave a very good explanation, rationale for the changes. But forgive my cynicism here, but are the changes are the machinery of government changes. The changes of responsibility truly are well thought out. Restructuring of government responsibilities based on policy development and in the interest of stakeholders. Or did this really all happen because Lisa Nandy kicked off and wanted a bigger department ?
And Minister McDonald, you gave a very good explanation, rationale for the changes. But forgive my cynicism here, but are the changes are the machinery of government changes. The changes of responsibility truly are well thought out. Restructuring of government responsibilities based on policy development and in the interest of stakeholders. Or did this really all happen because Lisa Nandy kicked off and wanted a bigger department ?
09:53
Speaker 3
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Speaker 3
Well, I guess you're allowed to be cynical if you wish, but yeah, you're allowed to be cynical if you wish. But actually, I think I was quite clear in my my previous answer. The machinery of government changes have orientated around solving a long standing issue in the British science and innovation space. And fundamentally, it's one of the reasons why I'm sat here. So the Prime Minister wants to ensure that we commercialise more UK science. I have spent my career commercializing science and we bring bring those two things together. Pulling out AI particularly puts the UK in an incredibly strong position as compared with our G7 and G20 counterparts, with AI at the cabinet table bringing together science, investment and trade in the same space and then at the top level, because this is very much it's all about alignment, alignment of science policy.
And at the top level, of course, we're aligning to the industrial strategy and the defence industrial strategy. So it is it is driven very much by that that single focus. And I've reflected that certainly in all the conversations that I've had and the officials have taken that on board.
And at the top level, of course, we're aligning to the industrial strategy and the defence industrial strategy. So it is it is driven very much by that that single focus. And I've reflected that certainly in all the conversations that I've had and the officials have taken that on board.
09:55
Speaker 7
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Speaker 7
I do get that. But I remember having very similar discussions about the creation of de cit in itself, in terms of the need for the government to focus on that. So it seems now we've made these changes. We're very similar rationale and arguments to why we created de CIT in the first place. So so what's what's really fundamentally changed here?
09:55
Speaker 3
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Speaker 3
Well, it's this as I was saying, it's this ability now to manage the end to end pipeline of scientific discovery through to commercialisation. And, and I view this, you know, I view this from the point of view of, of an industrialist, essentially how we can make the best use of the science that's developed in UK universities. And, you know, you know, and you understand. Well, of course, these, this long standing issue around commercialisation and where we have had a focus on scale up. So we, you know, you get a spin out from university. And we've, we've generally, when we've tried to tackle this problem in the past, we thought, how can we take that very small company, make it into a small company or a medium sized company?
But actually, if you're managing the end to end pipeline, what, what I want to see, what we need to see is that the dozens of companies over the next ten years, that will be multi-billion turnover companies, that will be built on British science. We need to see some of those listed on the London Stock Exchange and headquartered here in Britain. So we have to take that end to end approach. And that's what the formation of the new department and the alignment of the responsibilities in in my portfolio enables us to do now.
But actually, if you're managing the end to end pipeline, what, what I want to see, what we need to see is that the dozens of companies over the next ten years, that will be multi-billion turnover companies, that will be built on British science. We need to see some of those listed on the London Stock Exchange and headquartered here in Britain. So we have to take that end to end approach. And that's what the formation of the new department and the alignment of the responsibilities in in my portfolio enables us to do now.
09:57
Speaker 7
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Speaker 7
Thank you. I mean, I think we all get the purpose and the broad intent. The devil's always in the detail. And some of these areas, and I say various governments have have gone through them. I think the point, another point I'd just like to raise before I come onto some particular issues with the DCMs side of things, and you raised this, one of the points is that engagement with really important players, both domestically and overseas in these multiple sectors, but the feedback you must be getting, and we're all hearing from some of those stakeholders, they don't know where their primary contact point now is within government.
Is it in Cabinet Office? Is it in business? Is it in DCMs? And if they don't know that causes difficulties for that stakeholder engagement, that all important engagement with industry, how can we resolve that? Are you going to be really crystal clear about who owns the relationship with key industry players?
Is it in Cabinet Office? Is it in business? Is it in DCMs? And if they don't know that causes difficulties for that stakeholder engagement, that all important engagement with industry, how can we resolve that? Are you going to be really crystal clear about who owns the relationship with key industry players?
09:59
Speaker 3
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Speaker 3
So. Well, the short answer to that is, of course, yes, I can understand. And of course, I do understand that as the machinery of government change is happening, then that leads to a realignment of relationships between key stakeholders and and contacts in government. And that takes a little bit of time to work through. But hopefully I can provide you with some reassurance that we, we do actually have that very well mapped. And, and another thing that's, I think, and you might want to come on, come in on this, but I think if you think particularly of the tech sector, the corporations that we're talking about, they are large corporations and they don't necessarily have a single point or need or want a single point of interaction with government.
They want to interact in different places. But you deal with these businesses all the time. You may wish to. Yeah.
They want to interact in different places. But you deal with these businesses all the time. You may wish to. Yeah.
10:00
Speaker 4
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Speaker 4
I think that's right. So, you know, lead responsibility for the technology sector is in the Department for digital, media, Culture and Sport. Having worked in technology, being a civil servant and now being back here, every single instance of the structure of government has businesses, including technology businesses, saying they speak to the Treasury on matters that are critical, in not least fiscal and regulatory levers they speak to historically, the business and trade department, because trade and business are critical. They spoke to sit in the historic instances. They speak to application layer relationship holders in each of the individual departments as well.
And so some of these some of these challenges are perennial challenges that you'll be very familiar with. What we've done now is made it very clear that in the specific realm of AI, it is now so fundamental as a strategic question, it is now so mainstream in terms of application. And the risks are so material that we felt that specifically on the question of AI, the strategy and vision ought to be in the office of the Prime Minister. And I would only point out one other thing that subsequent to the changes we made on AI specifically, I think the United States has now announced a very comparable task force across government.
I'm speaking to G7 counterparts yesterday. A number of them are now doing exactly the same, locating a task force based structure in the office of the Prime Minister. And so I think being ahead of the curve in trying to elevate the importance while continuing to map efficiency of engagement as what we've tried to do.
And so some of these some of these challenges are perennial challenges that you'll be very familiar with. What we've done now is made it very clear that in the specific realm of AI, it is now so fundamental as a strategic question, it is now so mainstream in terms of application. And the risks are so material that we felt that specifically on the question of AI, the strategy and vision ought to be in the office of the Prime Minister. And I would only point out one other thing that subsequent to the changes we made on AI specifically, I think the United States has now announced a very comparable task force across government.
I'm speaking to G7 counterparts yesterday. A number of them are now doing exactly the same, locating a task force based structure in the office of the Prime Minister. And so I think being ahead of the curve in trying to elevate the importance while continuing to map efficiency of engagement as what we've tried to do.
10:03
Speaker 7
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Speaker 7
Okay. Look, thank you. And Baroness Lloyd and and Director General Connally, can I just come to you now about DCMs in particular? So DCMs is now responsible in some parts again for digital transformation, digital infrastructure, cyber security, digital inclusion and online harms. But the DCMs budget is tiny compared to the 1.3 trillion of government expenditure. The discretionary spend is tiny, so how can you make sure that you have the clout and the resources to do all the things that you are expected to do and coordinate effectively with other government departments now?
10:04
Speaker 5
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Speaker 5
Thank you very much. I'm Liz Lloyd, the Minister for space, Cyber and Regulatory Reform. I sit in both Bist and in DCMs and work very closely, obviously with other DCMs colleagues, on your question of coordination, to build on the points that my fellow ministers have made. I mean, there are existing formal mechanisms of government to coordinate policy, whether that's cabinet committees, the National Security Council and so on, and formal mechanisms, which you are very familiar with of discerning collective decision making and collective responsibility. I mean, other than that, we spend a lot of time talking to one another.
I spend a great deal of time with my these colleagues. I'm sitting next to you now, and the department teams are well plugged in. So, I mean, for example, the cyber team, which was Indesit, which has transferred over DCMs, we are working seamlessly on Cyber Security and Resilience Bill, and that has continued, you know, sort of day to day in a very sort of straightforward way. And those the new coordination you would need with other departments just continues as normal. I mean, it's the same minister, the same team. So I haven't seen in that respect any kind of disjunctures.
I think the benefit is that in certain areas, for example, a sort of online media and offline media that's now in one department, I think that's very helpful. I think in some other areas, for example, the sort of youth strategy and the impact on young people and the fact that online safety and online harms is now in the same department, brings the real life experience of young people together so that you're seeing it from that perspective. And likewise on the sort of the civic space, you know, DCMs is present in many localities in huge number of postcodes, whether that's through libraries, sports, and so on.
And now as people experience the digital world in that sort of similar way, the department is responsible for the regulation and safety. And across the sort of digital experience and the interaction with the state through the government digital service. So I think that's that's where the Secretary of State and the department sees the benefit.
I spend a great deal of time with my these colleagues. I'm sitting next to you now, and the department teams are well plugged in. So, I mean, for example, the cyber team, which was Indesit, which has transferred over DCMs, we are working seamlessly on Cyber Security and Resilience Bill, and that has continued, you know, sort of day to day in a very sort of straightforward way. And those the new coordination you would need with other departments just continues as normal. I mean, it's the same minister, the same team. So I haven't seen in that respect any kind of disjunctures.
I think the benefit is that in certain areas, for example, a sort of online media and offline media that's now in one department, I think that's very helpful. I think in some other areas, for example, the sort of youth strategy and the impact on young people and the fact that online safety and online harms is now in the same department, brings the real life experience of young people together so that you're seeing it from that perspective. And likewise on the sort of the civic space, you know, DCMs is present in many localities in huge number of postcodes, whether that's through libraries, sports, and so on.
And now as people experience the digital world in that sort of similar way, the department is responsible for the regulation and safety. And across the sort of digital experience and the interaction with the state through the government digital service. So I think that's that's where the Secretary of State and the department sees the benefit.
10:08
Speaker 7
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Speaker 7
Look, thank you for that. And look, we are where we are. I'll move very quickly. On to the final question, chair, because I'm aware that there's lots of things that we need to ask you today, and probably Sarah Connolly's is probably for for you then in terms of your confidence of coordination, then. So yes, ministers formally and informally meet with each other. There's regular rhythm of meetings and discussions between civil servants. We've got the taskforce as well with coordination. So it all looks good in terms of what's on paper, but how can we ensure this really, really happens?
And I suppose another question for you, albeit slightly controversial one, and following on from the logic Minister that you just outlined there, wouldn't it have not made sense? If we're going to go to Ministry of Government or machinery of government changes, just to get rid of DCMs and merge it all into business?
And I suppose another question for you, albeit slightly controversial one, and following on from the logic Minister that you just outlined there, wouldn't it have not made sense? If we're going to go to Ministry of Government or machinery of government changes, just to get rid of DCMs and merge it all into business?
10:10
Speaker 5
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Speaker 5
So I'm Sarah Connolly, I'm the director general, Digital Foundations, which is effectively digital infrastructure and and digital policy. On your question on should the merger altogether. That's not a question for me. What I would say though, is I was part of DCMs when and moved over to Dcit and then moved back. And I would say what has been striking about this particular Mog is how quickly the connections that the minister was describing have become apparent, how easy it is for teams to start to have those conversations and to build more than the sum of its parts.
The minister mentioned in particular online safety, which I'm responsible for, and youth, as well as missing disinformation with media. Those connections are already happening very quickly and starting to to come. Teams are starting to come up with some interesting creative ideas. Similarly, I've teams doing cybersecurity that almost. On day one of the Mog started talking to colleagues who are responsible for arm's length bodies to think about how we can make those connections stronger. So it has been interesting how straightforward it has been, actually. And you asked about engagement and kind of how how confident am I that we can make it work?
Very, actually. And that is I don't remember the last day I didn't speak to Olli and Alex. I mean, we are in kind of constant contact and in a way that is slightly also the legacy of, of Dcit. We, you know, there is a senior leadership team that is now in different departments, but we are making those connections not just into the departments that we are now in, but between each other and into the centre.
The minister mentioned in particular online safety, which I'm responsible for, and youth, as well as missing disinformation with media. Those connections are already happening very quickly and starting to to come. Teams are starting to come up with some interesting creative ideas. Similarly, I've teams doing cybersecurity that almost. On day one of the Mog started talking to colleagues who are responsible for arm's length bodies to think about how we can make those connections stronger. So it has been interesting how straightforward it has been, actually. And you asked about engagement and kind of how how confident am I that we can make it work?
Very, actually. And that is I don't remember the last day I didn't speak to Olli and Alex. I mean, we are in kind of constant contact and in a way that is slightly also the legacy of, of Dcit. We, you know, there is a senior leadership team that is now in different departments, but we are making those connections not just into the departments that we are now in, but between each other and into the centre.
10:13
10:14
Speaker 1
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Speaker 1
Looking to spearhead Nigel, but thank you very much. Can I just follow up with Minister Lloyd with regard to you talked about cabinet committees coordinating work across government. My understanding is that there was a cabinet committee on digital, but that was downgraded to an executive level committee. Is there a cabinet committee coordinating digital work?
10:15
10:15
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10:15
Speaker 9
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Speaker 9
Thanks very much, chair. It's good to hear that there are internal conversations happening on. And the connections are great internally, but from the outside in. Previously, we had a single point of contact for the tech sector and now responsibility sit within several departments. We heard that when we had a previous panel talking about the machinery of government, that it's a bit challenging. So I'm just wondering whether actually what government has done has made it less accessible for tech entrepreneurs to engage with government on the right person in government. And I will address that question to Baroness Laura Lloyd, actually.
10:16
Speaker 8
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Speaker 8
So I think just to build on the points that were made, I mean, the tech sector encompasses many different subsectors, whether that's defence tech, ag tech, fintech. So the structure is that DCMs will lead on digital and technology sector as a whole. But obviously as technology is a technology, it is applicable in many different ways. So for the technology kind of first sectors, DCMs is the overall lead. But to, to, to, to build on the points, you know, if you're thinking of if you're a very large tech company and you have a data center business, you will want to engage with those parts of government that are most sort of critical to you being able to invest in your data centre.
Likewise, in terms of the work that I was previously doing and continue to do with the Regulatory Innovation Office, that covers many different subsectors. So the, you know, whoever your kind of home department is, you might want to, to, to talk to those regulators or those particular parts of government that can help unblock the regulatory barriers to you growing your business. So even though, for example, you may be a tech business and your home department or your home sort of point of contact is within the Ministry of Defence, if you want to talk about, you know, sort of what the regulatory constraints are to testing autonomous ships, that's why you would engage with the Regulatory innovation Office.
So I think the first sort of home contact is clear. And as as as Chris said, it's mapped and clear, but sophisticated tech companies know also where to go to the right parts of government.
Likewise, in terms of the work that I was previously doing and continue to do with the Regulatory Innovation Office, that covers many different subsectors. So the, you know, whoever your kind of home department is, you might want to, to, to talk to those regulators or those particular parts of government that can help unblock the regulatory barriers to you growing your business. So even though, for example, you may be a tech business and your home department or your home sort of point of contact is within the Ministry of Defence, if you want to talk about, you know, sort of what the regulatory constraints are to testing autonomous ships, that's why you would engage with the Regulatory innovation Office.
So I think the first sort of home contact is clear. And as as as Chris said, it's mapped and clear, but sophisticated tech companies know also where to go to the right parts of government.
10:20
10:20
Speaker 8
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Speaker 8
Yeah, but I mean, I would say that, for example, as was set out in the digital and tech part of the modern Industrial strategy, we set out particular frontier technologies that we are prioritising. So those frontier technologies are subsets. And for example, in terms of quantum, that is something that Chris McDonald has particular leadership on. So it is you know, it's a technology is all encompassing. So it is a slightly more complex picture than just being able to say there's one single person who's responsible for all relationships.
10:21
Speaker 9
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Speaker 9
Which aligns actually with the manifesto of the party that got into power, that tech didn't have its own pillar because actually it was embedded across everything, which makes sense. Talking about being embedded across everything. I was really, really pleased to see that there was the text for Tech First Women programme launched, which, for the benefit of everybody else, will seek to see 300 people get 300 women, get jobs within the tech sector. I know the people that have won some of the contracts for that, so I'm delighted. However, we have seen both the Women in Tech Task Force and the Invest in Women Task Force seem to lose cabinet level sponsorship.
So the Invest in Women Task Force, because we know that less than 2% of of VC capital goes into female founded companies had the backing and the support of Rachel Reeves when she was a, you know, a glass ceiling smasher and becoming the first female Chancellor of the Exchequer. We saw frequent visits to number 11. And I. Other than scrolling through their LinkedIn page, the only thing I can see is they met with Johnny Reynolds at conference. Since we've had a change in government and then on the Women in Tech Task Force created by the previous Secretary of State for science, Innovation Technology, Liz Kendall, who co-chaired it like it mattered that much to her.
And it was it was machinery of government that was making that happen. I'm delighted it's still got somebody from government working on it as a co-chair, but neither of those things that I can see have got cabinet level support. So perhaps actually Minister Narayan, you as the. And if anybody else wants to contribute, that would be great. Perhaps you could give some peace of mind that when you're sitting at that cabinet table, we are still focusing on getting more women in technology, getting more female founder tech companies invested in. Because we all know that what most people in this country think of technology, unless they're working in it, they think it's going to hurt our children and it's going to kill us or take our jobs.
So I'm just really keen to know that women are still centre to all of this, because if we want to build trust in tech, then we've got to have women as part of the conversation.
So the Invest in Women Task Force, because we know that less than 2% of of VC capital goes into female founded companies had the backing and the support of Rachel Reeves when she was a, you know, a glass ceiling smasher and becoming the first female Chancellor of the Exchequer. We saw frequent visits to number 11. And I. Other than scrolling through their LinkedIn page, the only thing I can see is they met with Johnny Reynolds at conference. Since we've had a change in government and then on the Women in Tech Task Force created by the previous Secretary of State for science, Innovation Technology, Liz Kendall, who co-chaired it like it mattered that much to her.
And it was it was machinery of government that was making that happen. I'm delighted it's still got somebody from government working on it as a co-chair, but neither of those things that I can see have got cabinet level support. So perhaps actually Minister Narayan, you as the. And if anybody else wants to contribute, that would be great. Perhaps you could give some peace of mind that when you're sitting at that cabinet table, we are still focusing on getting more women in technology, getting more female founder tech companies invested in. Because we all know that what most people in this country think of technology, unless they're working in it, they think it's going to hurt our children and it's going to kill us or take our jobs.
So I'm just really keen to know that women are still centre to all of this, because if we want to build trust in tech, then we've got to have women as part of the conversation.
10:25
Speaker 4
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Speaker 4
But let me just assure you on that, certainly on my count, on Johnny's count and on Lisa's count, I think one of the core beliefs that each of us shares is that in this wave of technology, unlike the last, we have to make sure that opportunity is spread right across different parts of our country and very fundamentally to women as well as men. And so certainly on my part, I'm very happy to go back and see what we can do on both invest investing as well as the broader Women in Tech Task Force. I was very proud, by the way, to be the junior minister supporting the Secretary of State on that task force, including a number of receptions that I know you were at as well, and Downing Street on it.
And so we will take that away and try and do everything we can to give it the elevated sense that it deserves.
And so we will take that away and try and do everything we can to give it the elevated sense that it deserves.
10:27
10:27
Speaker 3
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Speaker 3
And chair, maybe I could also contribute to that. So also maybe to provide a bit further reassurance around the Investing Women Task Force. I met with the chairs recently. I think they've done a remarkable job with over £600 million they've raised in their fund. And what we were discussing really is how we take the Invest in Women Task Force to the next level. So do we focus on deployment now of those funds or further fund raising? So there's there's a discussion to be had there. And I think it would be a good idea for us to to really look at how we can put some of those funds into action and we can generate some really good female led businesses and have some great role models, and it become kind of become self-sustaining and so on.
But ultimately, it's a decision for the task force. But they've got my support and they know that. And we've worked together, we've worked very closely together on that. I also I want to, as you mentioned, the previous Chancellor of the Exchequer really pay tribute to her work in bringing forward the the task force and how she championed the work of the Investing Women Task Force as well. And and hopefully to provide some reassurance. It's important to me and to the Secretary of State, too, that that work continues to.
Good.
But ultimately, it's a decision for the task force. But they've got my support and they know that. And we've worked together, we've worked very closely together on that. I also I want to, as you mentioned, the previous Chancellor of the Exchequer really pay tribute to her work in bringing forward the the task force and how she championed the work of the Investing Women Task Force as well. And and hopefully to provide some reassurance. It's important to me and to the Secretary of State, too, that that work continues to.
Good.
10:29
Speaker 1
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Speaker 1
Thank you. Thank you very much, Samantha. Just on the question I asked earlier about Cross-governmental coordination at ministerial level, I've just confirmed that, in fact, in the government's response to our rewiring the states report, it was confirmed that the digital inter-ministerial group had been disbanded and replaced by an official level bi monthly digital executive committee. So does that not represent a downgrading of of digital coordination? And what just briefly, you could say, what levers do you have to ensure effective expected technology strategy across government? Minister Lloyd, if you could just respond briefly.
10:31
10:31
10:31
10:32
10:32
Speaker 8
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Speaker 8
Been very effective. I, yes, I, I wouldn't want to hazard a guess whether that is the natural point. And we've moved from having taken ministerial policy decisions and it's now more operational or, or whether there is some other reason for the change from ministerial oversight to executive oversight, if it is particularly in respect of operations, that the government digital service, for example, takes how it coordinates with other departments, that that would be a reason why it might make sense.
10:33
10:33
10:33
Speaker 6
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Speaker 6
Chair. Moving on to a different topic, backing British business. One of the things that the former De CIT told us is they had oversight across IT procurement, across all government departments, and they saw all these things coming through. We hear a lot about investment in British business. And they talk tend to talk about buying shares in companies. But the best investment in business is actually through government procurement. Now, the total government procurement bill, I understand is something like 400 billion. So there's a fair amount of money that can be used there to invest in British businesses.
The Prime Minister has got a commitment to back British business by Is. The Prime Minister has got a commitment to back British business by default. Minister McDonnell, I think, is probably mostly in your your area. How are you? How are you going to put that into practice?
The Prime Minister has got a commitment to back British business by Is. The Prime Minister has got a commitment to back British business by default. Minister McDonnell, I think, is probably mostly in your your area. How are you? How are you going to put that into practice?
10:35
Speaker 3
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Speaker 3
Yes, it is mostly in my area though. Again, you might want to comment on the work that we're doing on AI. So as part of the industrial strategy, we've identified a number of levers that will help us both to commercialise and accelerate innovation, but also grow, grow British companies. And clearly, procurement is part of that. We've made over the course of the last year or so, we've made some significant changes to improve procurement, procurement rules, the social value test, the the work that we've done around the steel industry, particularly. But if you look at the if you look at the sort of headline figure for government spend on UK businesses, it comes out at around 80% of spend.
But of course, not all of those businesses would necessarily be businesses that carry out activity in the UK. They may simply be registered in the UK. And so the next step for us is to investigate that more closely. You understand, of course, we have international commitments and so on, and we're balancing that. But ultimately what we want to achieve is within the bounds of our international commitments, maximising the opportunity for UK businesses to to benefit from government procurement. And some of those will be, you know, large scale opportunities like the Chancellor of the Exchequer's announcement in his speech at the Labour Party conference on on shipbuilding, where it's not just ships that are procured by the Mod, but also for other government departments as well, making sure that that opportunity is available to UK businesses.
Some of it could be like the work I did last year with the former Chancellor of the Exchequer and Motability, which has driven tens of thousands of new car orders into the UK car industry. Some of it will very much rest on the social value commitments. I mean, what we can do, for instance, around bus procurement as well, and these aren't really these aren't explicitly science issues, but they enable British business to be more profitable and to invest more in the UK, clearly.
But of course, not all of those businesses would necessarily be businesses that carry out activity in the UK. They may simply be registered in the UK. And so the next step for us is to investigate that more closely. You understand, of course, we have international commitments and so on, and we're balancing that. But ultimately what we want to achieve is within the bounds of our international commitments, maximising the opportunity for UK businesses to to benefit from government procurement. And some of those will be, you know, large scale opportunities like the Chancellor of the Exchequer's announcement in his speech at the Labour Party conference on on shipbuilding, where it's not just ships that are procured by the Mod, but also for other government departments as well, making sure that that opportunity is available to UK businesses.
Some of it could be like the work I did last year with the former Chancellor of the Exchequer and Motability, which has driven tens of thousands of new car orders into the UK car industry. Some of it will very much rest on the social value commitments. I mean, what we can do, for instance, around bus procurement as well, and these aren't really these aren't explicitly science issues, but they enable British business to be more profitable and to invest more in the UK, clearly.
10:39
Speaker 6
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Speaker 6
And those those are all very good. And as a fellow engineer who's come from industry, I appreciate seeing someone with a background in the steel business and as an engineer. Yet despite all of those things you talk about, we still persist in buying from the big we default to buying from the big US tech giants, even though they wrap themselves up with a so-called UK headquarters, which is actually just a a legal necessity. It's not actually investing in British technology. Now, I see you're also a minister in the health department, if I have that right now.
We obviously have some significant investments there coming up with the single patient record coming up in the health bill and obviously with the re resigning potentially of the federated data platform, these are great opportunities to look at actually bringing British firms trying to build consortia and build British companies rather than relying on US tech giants. What can you do in that space?
We obviously have some significant investments there coming up with the single patient record coming up in the health bill and obviously with the re resigning potentially of the federated data platform, these are great opportunities to look at actually bringing British firms trying to build consortia and build British companies rather than relying on US tech giants. What can you do in that space?
10:41
Speaker 3
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Speaker 3
Yeah, I agree with you. These are really good opportunities. I know it raised a few eyebrows when we had a business minister appointed appointed into the health department to and I can maybe just sort of give a bit of the rationale around that. There were there were a couple of reasons. So part of it is the changing environment for life sciences globally. You know, the fact that there is, you know, the changing policy in the US, the opportunity to attract more investment into the UK to an expectation that drugs prices will rise and how we'll deal with that.
And then and then partly it's proactive as well, how we can inject a bit more of commercial thinking into the Department of Health to extract additional value. And there are a couple of places we can do that. One is around data, as you've described, because of course, the NHS owns all the Department of Health, owns the most useful and valuable data set in the world, and we want to make sure that we leverage that to maximum advantage for for the UK, for UK patients, UK taxpayers. And then the other part is around life sciences, where we've got through the life sciences strategy, which George knows very well.
We have our ambition to be the third leading country in the world for life sciences investment, the best in Europe and working with life sciences companies. That means we're not just going to be a customer for their products, but also we have an expectation that they would invest here on the back of that as well. And that's a way that procurement can drive not only improved health outcomes and access to drugs, but investment in productive activity in the economy as well. So I think I think we're very closely aligned on that. On your question relating specifically to tech, I think it's probably best to hand over to Kanishka where there are some specific procurement opportunities you might want to outline.
Thanks, Chris.
And then and then partly it's proactive as well, how we can inject a bit more of commercial thinking into the Department of Health to extract additional value. And there are a couple of places we can do that. One is around data, as you've described, because of course, the NHS owns all the Department of Health, owns the most useful and valuable data set in the world, and we want to make sure that we leverage that to maximum advantage for for the UK, for UK patients, UK taxpayers. And then the other part is around life sciences, where we've got through the life sciences strategy, which George knows very well.
We have our ambition to be the third leading country in the world for life sciences investment, the best in Europe and working with life sciences companies. That means we're not just going to be a customer for their products, but also we have an expectation that they would invest here on the back of that as well. And that's a way that procurement can drive not only improved health outcomes and access to drugs, but investment in productive activity in the economy as well. So I think I think we're very closely aligned on that. On your question relating specifically to tech, I think it's probably best to hand over to Kanishka where there are some specific procurement opportunities you might want to outline.
Thanks, Chris.
10:45
Speaker 4
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Speaker 4
I'd start with the central diagnosis of what went wrong in the last wave of technology over the last 15 years, which is that in Britain, I felt that we built neither trust in technology, nor do we actually build the technology itself to sufficient scale. And one of the things I'm most passionate about is to try and tackle both of those problems together. A number of instances you've highlighted are ones of a deficit of trust, but our ability to move on from that is shaped by our current positioning and having not built the technology. And so for me, public procurement is absolutely critical if we want to build trust, but we only do that if we're able to build in Britain in a way that is shaped by our values, what are we doing?
So there's a significant set of procurement reforms that obviously, Chris has talked about that are represented in some of the specific deals the First Secretary of State and Chancellor have been working in putting social value and British upside right at the heart of procurement decisions. What I'm trying to do on AI is to attack that problem with a sense of impatience that I know will be shared by many people across this table as well. And so if you take one specific part of the stack in AI chips, which is where most of the economic value and strategic upside geopolitically and resilience wise accrues, what we are trying to do is to say, let's act with urgency and paint a picture of revenue trajectory for potential entrepreneurs in Britain, which makes them feel like they can grow and scale to extreme success here.
So what does that mean in practice? It means a very focused set of rapid procurements on AI. R&D through the sovereign AI scheme, 100 million getting out of the door within the course of just a few months, extremely significant innovation and procurement that gets you through the door. You then have an advance market commitment for novel chips in Britain, which means the government effectively setting risk milestones. Technically, every time you unlock the risk, technically, you unlock incremental government revenue you go and raise in markets so you can scale here. It then means creating a heterogeneous compute cluster in this country, where we want the next generation of chips to be built here at scale.
And ultimately, if we attack the problem with that sense of impatience and urgency, you will then have positioned Britain for large scale procurement reform to then be in a position to act in scaling those capacities as well. And so to me, it feels like a pretty neat fit between having a very clear and urgent sense of progress here and now to make sure that startups aren't leaving this country, but to do so in a way that is fundamentally consistent with what we're trying to do more generally at scale on procurement.
So there's a significant set of procurement reforms that obviously, Chris has talked about that are represented in some of the specific deals the First Secretary of State and Chancellor have been working in putting social value and British upside right at the heart of procurement decisions. What I'm trying to do on AI is to attack that problem with a sense of impatience that I know will be shared by many people across this table as well. And so if you take one specific part of the stack in AI chips, which is where most of the economic value and strategic upside geopolitically and resilience wise accrues, what we are trying to do is to say, let's act with urgency and paint a picture of revenue trajectory for potential entrepreneurs in Britain, which makes them feel like they can grow and scale to extreme success here.
So what does that mean in practice? It means a very focused set of rapid procurements on AI. R&D through the sovereign AI scheme, 100 million getting out of the door within the course of just a few months, extremely significant innovation and procurement that gets you through the door. You then have an advance market commitment for novel chips in Britain, which means the government effectively setting risk milestones. Technically, every time you unlock the risk, technically, you unlock incremental government revenue you go and raise in markets so you can scale here. It then means creating a heterogeneous compute cluster in this country, where we want the next generation of chips to be built here at scale.
And ultimately, if we attack the problem with that sense of impatience and urgency, you will then have positioned Britain for large scale procurement reform to then be in a position to act in scaling those capacities as well. And so to me, it feels like a pretty neat fit between having a very clear and urgent sense of progress here and now to make sure that startups aren't leaving this country, but to do so in a way that is fundamentally consistent with what we're trying to do more generally at scale on procurement.
10:49
Speaker 6
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Speaker 6
And there's two different areas here. One is about startups, and I applaud your plan for that, but it's a more emergent, more more urgent area to ensure that we actually encourage our businesses that are building applications even when we're not owning the entire stack. I mean, we've lost ownership of most of the stack, but we've gained and we actually control many of the world class applications, but our firms aren't big enough when it comes to government contracts. And Minister McDonald, this really does come back to you. So it's not about AI. This is about actually okay, I'll go for it.
The FDP contract is a ridiculous contract because it brings in an American tech firm who then hires UK companies, and they own the intellectual property of all the things that we pay for them to develop, that it just makes no business sense whatsoever. And to make it even worse, we bought it on a software as a service deal so it can be switched off as an instance. And when we cease the contract, we cease the subscription. We lose all the things that we have developed. That is a failure of procurement in terms of how that contract is structured.
And when I've spoken to NHS England, spoken to their lawyers, they have given me explanations that do not make sense. That must be reformed to actually back British business. What can you do to make that change?
The FDP contract is a ridiculous contract because it brings in an American tech firm who then hires UK companies, and they own the intellectual property of all the things that we pay for them to develop, that it just makes no business sense whatsoever. And to make it even worse, we bought it on a software as a service deal so it can be switched off as an instance. And when we cease the contract, we cease the subscription. We lose all the things that we have developed. That is a failure of procurement in terms of how that contract is structured.
And when I've spoken to NHS England, spoken to their lawyers, they have given me explanations that do not make sense. That must be reformed to actually back British business. What can you do to make that change?
10:52
Speaker 3
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Speaker 3
Well, I've talked to some of the changes that we're making on procurement and the social value stuff that I mentioned. And Kanishka I identified certainly will certainly will make a difference to that. But I think that so that the more general point that you're outlining there goes back to that original strategy problem that I was talking about and also was highlighted by Kanishka as well, which is this issue of the deficit of large companies that we have in the UK that are able to take on a number of these contracts. And I think you'd agree with me on this.
I mean, you know, you mentioned we lost control of some of the tech stack, but that the the businesses that are controlling that their competitive advantage is built on the initial British science and discovery. And what is, I'm sure, frustrating for all of us is that position where we say, oh, we've we've lost that. But don't worry, there's this other thing coming down the pipeline. We'll catch that. We'll catch that next thing. How many times have you or I seen that happen? Like a very frustrating number of times actually. So there is a point where we need to stick a stake in the ground.
I'm saying it's now where we we build the companies for the future and we build them here. And that is it is essential that we get procurement right to do that, because that's one of the things that enables these companies to scale, because the fundamental thing that makes companies drop off the end, you know, the let's, let's say they get a sort of 60 million hundred million turnover. And then and then they kind of run out of UK market at that point, the UK market is, is too small to fully sustain a business of that size.
So the, the challenge that we have focused on so much has been how do we get the companies to sort of scale to this mid level? You know, let's really focus on that. And then the then essentially what we're doing is providing some sort of incubator for companies for the US is like a form of international development for the US or for other countries around the world. But to get a country to go from mid-size to large to multinational requires market access. And this is this is not just a problem of science. It is a problem of trade as well and investment too.
So it's hopefully you appreciate we're very focused on that. And I agree with you. Procurement is an important. Procurement is a necessary but insufficient condition. We need also to ensure that there is wider market access as well. But the prize of course is once you've got those companies, then you create a self-supporting ecosystem because those companies are then they'll be acquiring companies. They'll be investing back in in the system as well. And that's so this requires a bigger level of government intervention at this starting point. And we haven't gone on to discuss, you know, the work of the British Business Bank and so on, who also reports to me.
But there is a there is they have an important role to play here as well.
I mean, you know, you mentioned we lost control of some of the tech stack, but that the the businesses that are controlling that their competitive advantage is built on the initial British science and discovery. And what is, I'm sure, frustrating for all of us is that position where we say, oh, we've we've lost that. But don't worry, there's this other thing coming down the pipeline. We'll catch that. We'll catch that next thing. How many times have you or I seen that happen? Like a very frustrating number of times actually. So there is a point where we need to stick a stake in the ground.
I'm saying it's now where we we build the companies for the future and we build them here. And that is it is essential that we get procurement right to do that, because that's one of the things that enables these companies to scale, because the fundamental thing that makes companies drop off the end, you know, the let's, let's say they get a sort of 60 million hundred million turnover. And then and then they kind of run out of UK market at that point, the UK market is, is too small to fully sustain a business of that size.
So the, the challenge that we have focused on so much has been how do we get the companies to sort of scale to this mid level? You know, let's really focus on that. And then the then essentially what we're doing is providing some sort of incubator for companies for the US is like a form of international development for the US or for other countries around the world. But to get a country to go from mid-size to large to multinational requires market access. And this is this is not just a problem of science. It is a problem of trade as well and investment too.
So it's hopefully you appreciate we're very focused on that. And I agree with you. Procurement is an important. Procurement is a necessary but insufficient condition. We need also to ensure that there is wider market access as well. But the prize of course is once you've got those companies, then you create a self-supporting ecosystem because those companies are then they'll be acquiring companies. They'll be investing back in in the system as well. And that's so this requires a bigger level of government intervention at this starting point. And we haven't gone on to discuss, you know, the work of the British Business Bank and so on, who also reports to me.
But there is a there is they have an important role to play here as well.
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Speaker 3
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Speaker 3
Yes. I mean, you're you're touching on another area of industrial policy here as well, potentially, which which frankly, I find very interesting. And I think that we should we should explore. But we have if you if you look at the industrial strategy and you accept this, this premise that I have about the sort of lack of large scale corporates in some of these areas, what we do have in the UK are often, as you as you're describing mid-sized businesses who together would have a level of capability and.
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Speaker 3
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Speaker 3
Well, I wouldn't say they're disregarded, actually, but what I do accept is that it's been very difficult for them to interact with with government procurement, that is for certain. I completely agree with you on that. So we need to look at what the best way, the best way will be for that to happen. And there's a movement that government can make on that, but there's also a movement that the businesses could make on that. Too desperate to come in.
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Speaker 10
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Speaker 10
I am desperate to come in, if I may, on this chair very briefly, there's a commercial innovation hub that we're setting up that's trying to address exactly this issue. So working with departments to adopt procurement of innovation approaches, so developing guidance on things like the advanced market commitments, for example. But also how do you get a catalogue of proven solutions from some of the smaller businesses, startups for public sector buyers. So you get them together. So it is easier to your point, to make sure that we're thinking about a catalogue, a group of SMEs, and how we engage with them.
So it's both easier for them to interact with the public sector and easier for us to buy from them. So there is definitely work going on around that. And you've got commitments from the Mod, for example, to invest about 10% of its equipment budget on some novel solutions. So we have some things in train. There is absolutely more to do here, but I think particularly on the SME side, we're working through some pilots across government. There's a champion for procurement innovation in every department at DG level to try and make sure we're doing that better.
So it's both easier for them to interact with the public sector and easier for us to buy from them. So there is definitely work going on around that. And you've got commitments from the Mod, for example, to invest about 10% of its equipment budget on some novel solutions. So we have some things in train. There is absolutely more to do here, but I think particularly on the SME side, we're working through some pilots across government. There's a champion for procurement innovation in every department at DG level to try and make sure we're doing that better.
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Speaker 3
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Speaker 3
Yes, actually, I had the pleasure of being at an event to the British Business Bank just yesterday, which is which is where they were celebrating start up loans. And particularly there was wide represented. There was great diversity there. But I made a particular point in my remarks of commending the British Business Bank on what they've done to encourage female entrepreneurs. There was an overrepresentation of female entrepreneurs through the B-bbee start up. The B-bbee has been particularly successful not only at finding and supporting female entrepreneurs, but also people from low socio economic backgrounds and ethnic minority backgrounds as well, more so than regular forms of finance.
Again, I'm not I'm not complacent about it. I think more could be done, but it's good to commend the Bank on the work that they've done.
Again, I'm not I'm not complacent about it. I think more could be done, but it's good to commend the Bank on the work that they've done.
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Speaker 3
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Speaker 3
I had the I well, it's not it's not a yes or no answer. I had the data for the specific product that I was talking about yesterday. I can't say that the data is available for every product that the bank provides, but I'd certainly be happy to see what data we have and share that directly with the committee.
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Speaker 1
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Speaker 1
Be able to track the success of the British Business Bank in promoting female founders, ethnic minority founders , and those from disadvantaged backgrounds. Will you you'll let us know whether you have the data you need. Thank you very much. I'm sorry. We've got a lot to get through. I'm going to go to Freddy very quickly now.
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Speaker 12
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Speaker 12
Martin has highlighted the importance of procurement in backing British business. I just want to raise one example from my constituency with Minister MacDonald. I have a constituent who is trying to sell to the NHS, but as described to me, that selling to the United Nations is easier than the NHS and has contracts from the United Nations to prove it. Two reasons why, he says. He says that. So. One is the endless form filling that's required for an SME repetitive form filling. So submitting the same documents over and over again. And the second is bulk discounts that are required by the NHS with no guarantee for volume.
Is that the kind of thing you're going to engage with cabinet colleagues on to back British business?
Is that the kind of thing you're going to engage with cabinet colleagues on to back British business?
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Speaker 3
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Speaker 3
That's helpful because I have more knowledge of that area. So I do recognise that there is a challenge, particularly for people wanting to sell innovative products. The NHS, I, I attempted to do that myself when I was in business and was unsuccessful, primarily because it was difficult to figure out who the who the purchaser would be quite often. And there is there is an understandable caution in the NHS, which is very commendable. If you're running a health service, you want to be you want to rely on proven technology quite often, but there isn't, you know, the issues that we we heard previously around scale and so on.
Or as you say, around discounts can be a particular issue. And I've talked to businesses as well who presume that they would have a single point of contact that would open up the whole NHS market. And of course, that's not how the NHS works either. There are you need to sell the same product again and again and again and again into many different areas. So just on this general point of procurement, the NHS is clearly a great opportunity for us to help to develop British businesses and bring British innovation through. And there is so much more that we can do.
Procurement could be a really powerful lever for us. What what you could do, if you wish, though, if you wanted to share that information on that very particular case directly with me, then I'll undertake to get a reply for your constituents.
Or as you say, around discounts can be a particular issue. And I've talked to businesses as well who presume that they would have a single point of contact that would open up the whole NHS market. And of course, that's not how the NHS works either. There are you need to sell the same product again and again and again and again into many different areas. So just on this general point of procurement, the NHS is clearly a great opportunity for us to help to develop British businesses and bring British innovation through. And there is so much more that we can do.
Procurement could be a really powerful lever for us. What what you could do, if you wish, though, if you wanted to share that information on that very particular case directly with me, then I'll undertake to get a reply for your constituents.
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Speaker 1
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Speaker 1
So it is. Yes. So we have a lot to get through and I'm sorry, keep on. I mean, shorter questions and shorter answers as well. And I'll try to give an example of that by asking the next question. But I will start by saying, Mr. McDonald, what a pleasure it is, as Martin said, to have an engineer and particularly in North East engineer in government. And I know that this next issue is something that is very dear to your heart as it is to mine, and indeed, the committee's report that George mentioned flying blind focused on this, and this is devolution and innovation.
So could you briefly outline what the machinery of government changes mean for the government's approach to devolution and regional science and innovation? Both of those look at one and two.
So could you briefly outline what the machinery of government changes mean for the government's approach to devolution and regional science and innovation? Both of those look at one and two.
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Speaker 3
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Speaker 3
Thank you, chair, if you'll allow me just one moment. It is also a pleasure to see you in the chair as well. And as I'm not entirely sure if you're aware of this, but you are to a great extent responsible for me being sat here because many, many years ago, you and I were on a panel together and you said to me, maybe you should think about becoming an MP, and I think you were the first person to ever suggest that to me. So thank you very much. Yeah. Responsible. Yeah. I think you said actually, I think what you precisely said to me was you seem to have an opinion on pretty much any matter.
Have you thought about becoming an MP anyway, sorry, enough of that. So devolution, along with Re-industrialisation regionalization is clearly a personal priority of the of the Prime Minister. And whilst the reindustrialisation part, as I've described, is very much driven, the machinery of government changes our science policy. Wanting to commercialise science. The regionalization aspect is incredibly important as well. And the Prime Minister made a couple of commitments in his recent speech. One was around local innovation partnership funding, where 270 million of that funding will now be invested in the in eight of the the mayoral strategic authorities in England that have received local innovation partnership funding.
And there's also an additional £1 billion from UK Research and Investment, which was managed centrally, will be used to back clusters and projects where we can work with local leaders and businesses and universities to create world leading clusters in different parts of you.
Have you thought about becoming an MP anyway, sorry, enough of that. So devolution, along with Re-industrialisation regionalization is clearly a personal priority of the of the Prime Minister. And whilst the reindustrialisation part, as I've described, is very much driven, the machinery of government changes our science policy. Wanting to commercialise science. The regionalization aspect is incredibly important as well. And the Prime Minister made a couple of commitments in his recent speech. One was around local innovation partnership funding, where 270 million of that funding will now be invested in the in eight of the the mayoral strategic authorities in England that have received local innovation partnership funding.
And there's also an additional £1 billion from UK Research and Investment, which was managed centrally, will be used to back clusters and projects where we can work with local leaders and businesses and universities to create world leading clusters in different parts of you.
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Speaker 3
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Speaker 3
So yeah, so the Prime Minister announced 270 million of the 500 million will be directly placed with the strategic authorities, and then Ukri are allocating. In addition to that £1 billion, which will be used for cluster support in places around the country where there is the opportunity for international. Going to.
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Speaker 1
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Speaker 1
Okay. My question is about what the machinery of government changes meant for, for for innovation and science. So firstly, on science, does it have an implication for science we're talking about? I'll come back to the innovation funds, but are there. We have the our committee has heard repeatedly about the the disproportionate funding that goes to the the, the Golden Triangle disproportionate with regard to population, perhaps not disproportionate with regards to excellence, I would be interested in your views. Does the machinery of government changes have any be driven or have any implications for regional science funding?
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Speaker 1
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Speaker 1
Know, some, some some improvement has been made. But just that that doesn't just so it's not about it's not about science, but it is about regional innovation, which is which we're all very concerned about. And in this committee and the, the, the money that has been, has been devolved, the 270 million is that ring fenced for innovation?
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Speaker 10
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Speaker 10
So it's R&D funding. It's kind of Frascati compliant. We're having conversations. Of course local areas have integrated settlements. This is funding that's very specific as you know, has to be Frascati compliant to be R&D funding. Those are exactly the conversations we're having about how do we ensure that local areas are able to invest in innovation in a way that's complementary to the things we're doing on transport and the things they're doing on housing? But we ensure that money is invested in innovation. That's an ongoing conversation about the precise way we do that. But that's absolutely this is R&D funding.
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Speaker 3
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Speaker 3
No. So that will be that will be held centrally, but it will be distributed around the country in collaboration with the with the relevant authorities in those areas. But these clusters must be nationally and internationally significant. So clearly, there is a level of coordination there between the two. And that's very much around the bringing together both the regionalisation and the reindustrialisation ambitions of the Prime Minister.
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Speaker 10
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Speaker 10
They're working through at the moment. So of course across buckets two, the government priorities and bucket. Three scale up, they'll be looking to ensure we are backing excellence. I think what this does is sharpen that across, that a billion of it will be going to world class clusters, and that this will be worked through with the local areas. One of the bits of feedback we've had from the mayoral strategic authorities is that partnership has not always felt like that, in the true sense of the word, and therefore actually working in partnership with them to identify genuinely world class clusters.
But think about what that looks like would be coming from those budgets.
But think about what that looks like would be coming from those budgets.
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Speaker 2
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Speaker 2
This links directly to our Flying Blind report. I'm. For the record, I welcome the funding for regional clusters. My question to specifics are those is this only for areas with mass? And how do those areas like I'll give you the South Coast Marine Technology cluster, which has no mayor, several councils, but it's there. It's a crucial cluster. How do those areas apply? And can you reassure us that the money won't be allocated on what often wins, which is political criteria or academic criteria, but places that are building and can attract inward investment can attract this money.
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Speaker 3
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Speaker 3
So first of all, I think I can give you reassurance that the the driving force is, will, is, will be about the opportunity to create, to strengthen or create nationally or internationally significant clusters in areas that align to the industrial strategy. So it's, it's driven by that objective. And those places may not be in places where there is an existing mayor, and that's fine, but there is something very open in what I've just said, which is I use the word cluster. And we haven't really talked about what that might mean. And I think there is a conversation to be had about what we mean by that.
And that is a live conversation that I'm having right now. And this is an area where I would certainly welcome the views and the comments of this committee, because I think that many when I talk to people, many people have a very firm view of what they think a cluster is. Yeah, those people don't necessarily agree. And I think if you're sat in a place in the country, you may think the thing that you are looking at looks like a nationally or internationally significant cluster.
And when you zoom out, it does.
And that is a live conversation that I'm having right now. And this is an area where I would certainly welcome the views and the comments of this committee, because I think that many when I talk to people, many people have a very firm view of what they think a cluster is. Yeah, those people don't necessarily agree. And I think if you're sat in a place in the country, you may think the thing that you are looking at looks like a nationally or internationally significant cluster.
And when you zoom out, it does.
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Speaker 3
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Speaker 3
Well, we're still working through that, obviously, both around government and also with Ukri as well. But I am keen to do is not rush at this. I really don't want to rush at it, because I also want to be clear as well that this that means that there will be winners and losers because how many internationally significant clusters will we have in every single area? Well, clearly we won't. There'll be a small number around the country.
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Speaker 3
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Speaker 3
Well, I haven't put a deadline on it. I haven't put a deadline on it. And I think it's important not to rush at it as well, because this is this is. Well, no, it is important. This is really serious actually, because we're setting by doing this will be setting not only the science but the industrial base in the country for a long time to come. And that's why I said I genuinely welcome the views of this committee on clusters, what what a cluster needs to be and how it needs to work because we what we want to do here is make a real impact in a local area, but in a way that it attracts international attention.
And that's that's the balance that we have to strike.
And that's that's the balance that we have to strike.
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Speaker 1
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Speaker 1
Yeah, I think we appreciate that. And we appreciate your your wish for consultation. I think the point I would make, and I don't want to join Nigel in his cynicism, but that the regional investment in growth has been an ongoing issue for decades, and there has not been success, significant success. And yet we have there's been a lot of existing work on it, including undertaking by Georgia's minister. And I do want to ask you to revisit our It and made available because of the the the response from the government was not supportive. And I also want to recommend, as I did in the chamber, that you look at the Manchester Cambridge report, which has some very useful metrics for identifying effective growth.
But now we need to. We've got a lot, a lot to get to. So, Tom, can we come to you?
But now we need to. We've got a lot, a lot to get to. So, Tom, can we come to you?
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Speaker 13
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Speaker 13
Thank you chair. I welcome broader comments, but from other members of the panel. But I'll address this directly to Minister MacDonald to begin with. I think in your opening remarks, you alluded to something of an existing gap that many of us in engineering regularly. Express frustration over, which is the UK's gap in innovation in the mid trl s at scaling, where we don't do as well as we'd like to. In that kind of section of innovation. And for me, it's it's a gap that it doesn't just map to investment, it maps to skills, especially kind of innovation, leadership.
It maps to institutions. It maps to our hard capabilities, our facilities for testing and validation or access to those facilities. I welcome your openness around clusters and what they may or may not look like, but I think there's a strong desire for this to reach into towns and not just large conurbations or pre-existing industrial clusters. And this is beyond the kind of perhaps the specific sectors identified in the ten year strategy. This is like a longer term UK capability issue, and I think it touches into resilience and the themes of sovereignty and security as well as, you know, business, innovation and growth.
Who has ownership of that kind of longer term UK R&D capability piece?
It maps to institutions. It maps to our hard capabilities, our facilities for testing and validation or access to those facilities. I welcome your openness around clusters and what they may or may not look like, but I think there's a strong desire for this to reach into towns and not just large conurbations or pre-existing industrial clusters. And this is beyond the kind of perhaps the specific sectors identified in the ten year strategy. This is like a longer term UK capability issue, and I think it touches into resilience and the themes of sovereignty and security as well as, you know, business, innovation and growth.
Who has ownership of that kind of longer term UK R&D capability piece?
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Speaker 6
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Speaker 6
Right. So in terms of the that kind of end to end pipeline of or end to end growth pipeline of businesses, as you described, use the TRL sort of scale, which I think is very useful. This this issue of getting through the Valley of Death. You touched on a number of a number of aspects there. It's clear that over a long period of time, successive governments have worked really hard to try and address that. And so I do think that we have quite a number of foundations in place to help. And I mentioned I mentioned the catapult catapult centres, but you talked there about access as well.
And if we think about the point that was made by Samantha earlier about SMEs, SMEs find it particularly difficult to access those catapult centres. And yet they are the businesses that we would most want to access them in order to be able to scale up, and it can be an issue of cost or it can be an issue of of administration and so on. And so clearly that that does need to be that does need to be addressed. But the, the reason that those centres are there , and the reason that this is so difficult is because of the, in many of these sectors, the small number of UK headquarters, multinational businesses with industrial research capabilities.
And we can talk about those businesses that are that are here and already doing businesses like Rolls-Royce or Fujifilm in my own constituency, who built a a process research laboratory for life Sciences. But there are still large gaps. And if you look at places where that where those that SM technology is successfully upscaled into some of these more capital intensive industries, it is generally those large multinational companies that will undertake that work, the partner with SMEs to do it and give them access to their facilities or work with them in a government facility. And so this is why I say it, as well as helping at that stage, that SME scale up stage, we also need to figure out how we help a business to stay, to go through the last bit as well.
Kanishka pointed to some issues that could you could consider as being around culture and behaviour. And that's where I think if you compare the UK on this scale of journey with the US, you do see that. But at the same time we have lots of Brits who head off to the US in a really successful at scaling their business actually. And and I was, you know, just talking to someone recently back from San Francisco this weekend. You know, their view was having worked in the UK and US ecosystem was the science is better here, but the marketing and commercialization is just fundamentally better in the US.
And this this also then comes down to an issue around finance and how.
And if we think about the point that was made by Samantha earlier about SMEs, SMEs find it particularly difficult to access those catapult centres. And yet they are the businesses that we would most want to access them in order to be able to scale up, and it can be an issue of cost or it can be an issue of of administration and so on. And so clearly that that does need to be that does need to be addressed. But the, the reason that those centres are there , and the reason that this is so difficult is because of the, in many of these sectors, the small number of UK headquarters, multinational businesses with industrial research capabilities.
And we can talk about those businesses that are that are here and already doing businesses like Rolls-Royce or Fujifilm in my own constituency, who built a a process research laboratory for life Sciences. But there are still large gaps. And if you look at places where that where those that SM technology is successfully upscaled into some of these more capital intensive industries, it is generally those large multinational companies that will undertake that work, the partner with SMEs to do it and give them access to their facilities or work with them in a government facility. And so this is why I say it, as well as helping at that stage, that SME scale up stage, we also need to figure out how we help a business to stay, to go through the last bit as well.
Kanishka pointed to some issues that could you could consider as being around culture and behaviour. And that's where I think if you compare the UK on this scale of journey with the US, you do see that. But at the same time we have lots of Brits who head off to the US in a really successful at scaling their business actually. And and I was, you know, just talking to someone recently back from San Francisco this weekend. You know, their view was having worked in the UK and US ecosystem was the science is better here, but the marketing and commercialization is just fundamentally better in the US.
And this this also then comes down to an issue around finance and how.
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Speaker 6
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Speaker 6
That sort of venture finance to. So look, I've just trotted through about 5 or 6 different issues there, but we have to solve every single one of those problems to, to move through that scale up journey. But we are, you know, as in we are working on all of those. And I don't want to promise that we'll fix them all. But, but making incremental improvements in every single one of those areas will ultimately improve that success rate. And as I said, right at the start, there'll be, you know, a couple of dozen multinational businesses built on British science.
If we could capture two, three, four, five, whatever, who become British listed businesses on the London Stock Exchange, that would be great. And the rest can go off around the world. That's fine as well.
If we could capture two, three, four, five, whatever, who become British listed businesses on the London Stock Exchange, that would be great. And the rest can go off around the world. That's fine as well.
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Speaker 13
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Speaker 13
Thank you for that. And I'm encouraged that you have a good understanding of the problems. I guess implicit in your answer is that you feel that ownership probably sits with you, and best for that piece of work. How might we expect that to be articulated? How might we expect to see a strategy articulated for how we're going to overcome those barriers? As you say, they're long term, they're sticky, they're multi-dimensional. How, how, when, when and how do we see a strategy for how we're going to deal with that in the long term? Because evidence we've heard has said that long term piece is missing.
How do we fill that gap?
How do we fill that gap?
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Speaker 6
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Speaker 6
You know, we've got our ten year industrial strategy. I think, you know, the two the two pieces of government policy that all of this aligns to because this is all very much about alignment for me, the industrial strategy and the defence industrial strategy essentially. I mean, there is as she was talking, you sort of Lear a sort of place kind of horizontal onto that essentially. But those are the two guiding documents. And then the work that and then Ukri essentially is the government agency responsible for delivering a lot of this through innovate UK. They are already restructuring their organisation to deal with to align to that.
So Ukri restructure is about moving from a grant awarding body to a delivery body. The changes that innovate UK are making, where they're moving from working on a project by project basis to working with companies to see them through that scale of journey and the link with the British Business Bank. So they're the agencies that are then aligning to the departmental strategy, which is aligned to the top level of government strategy. And I guess I think the most powerful thing is having all of those things lined up together. So you're right, you know, you can tell I feel a responsibility for that because I've got most of the levers of control, but what I'm doing is getting my agencies to align to the best strategy, and that aligns directly through to the Prime Minister's strategy.
He has been quite clear about that direction.
So Ukri restructure is about moving from a grant awarding body to a delivery body. The changes that innovate UK are making, where they're moving from working on a project by project basis to working with companies to see them through that scale of journey and the link with the British Business Bank. So they're the agencies that are then aligning to the departmental strategy, which is aligned to the top level of government strategy. And I guess I think the most powerful thing is having all of those things lined up together. So you're right, you know, you can tell I feel a responsibility for that because I've got most of the levers of control, but what I'm doing is getting my agencies to align to the best strategy, and that aligns directly through to the Prime Minister's strategy.
He has been quite clear about that direction.
11:54
11:54
Speaker 13
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Speaker 13
The those strategies do a very good job of describing a strategy for business growth. What we're talking about here is our ability to grow and develop technology. Yeah. And and that seems to be there seems to be silence on our strategy for technology and our capability in technology. So, you know, how, how might we fill that gap?
11:55
11:55
Speaker 2
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Speaker 2
We'll just we've got a digital and tech sector strategy and we published a year on report about it in the summer. We've also got a number of strategies where we're trying to focus on specific areas. We've got the opportunities plan. For example, we've got a quantum strategy where we did procure and the the kind of billion procurement as part of a 2 billion spend package. So we're trying to both have a strategy for the sector overall and then have very specific ones for the individual sectors where we know there are different issues and working very closely with them.
But what the businesses all say is you've got the industrial strategy, you've got some sector specific ones. Please can you get on and deliver that? And that's exactly what through things like the one year on report and the digital and tech strategy, we're trying to demonstrate, it's not just having that long term plan, but actually delivering on it. I think that will be continued. Something you said you want to review.
But what the businesses all say is you've got the industrial strategy, you've got some sector specific ones. Please can you get on and deliver that? And that's exactly what through things like the one year on report and the digital and tech strategy, we're trying to demonstrate, it's not just having that long term plan, but actually delivering on it. I think that will be continued. Something you said you want to review.
11:56
Speaker 6
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Speaker 6
It is. Yeah. And we won't have a strategy for every technology obviously, but for the frontier technologies, I mean you already are aware we've got space and engineering, biology, quantum etc. so it makes sense for to have those cross-cutting ones for the frontier technologies, because they will be large businesses in and of their own. Right. One sort of open question in my mind is around advanced materials. So there isn't or there hasn't been an updated advanced materials strategy for the government for a very long time. It's not one of our frontier industries, but clearly it's an enabler for very many others.
So I sort of, you know, again, it's an open question in my mind. And if, you know, I would value the, the, the thoughts of the committee on it if the committee were interested in it. But that is an area I think would be worthy of further consideration. Right.
So I sort of, you know, again, it's an open question in my mind. And if, you know, I would value the, the, the thoughts of the committee on it if the committee were interested in it. But that is an area I think would be worthy of further consideration. Right.
11:58
11:58
11:59
11:59
11:59
Speaker 16
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Speaker 16
Thank you very much. So I'm I'm the director general for AI in PMC, Office of Prime Minister and Cabinet. I was previously in DC where I was DG, covering a range of technologies, including AI there. So as you know, the Prime Minister established his AI task force on his first day. And that task force is led by the minister to my left, but also chaired by Sir Patrick Vallance. And what we are doing at the moment, what are our priorities? The first thing we are focused on is setting an overall framework for government on AI.
So AI, I think, has always been a cross-cutting issue. So even when we were in DC, when we were talking about building the infrastructure, that was a conversation with deans and Mhclg. And when we're talking about adoption and skills, that was a conversation with the business department . And what's happened as a consequence of the machinery of government change is that we've now got a much stronger team at the centre, this task force, to help coordinate that work. And so lots of our conversation and our priority in these first few months is about working with departments, also working with ministers, First Secretary of State and the Prime Minister to help say, okay, what is the overall direction we are helping to set for the system here?
In addition, a second priority is building the team itself. We are really, really keen that this task force should be one of the most exciting places for people to come and work in government, and so we are hiring people from around Whitehall, but also people coming in externally who want to come and help with this project because they recognise the importance of it. And then a final priority I would mention is, you know, the minister mentioned things like the Ukraine data package. There are immediate things that we can see and start pushing on directly. And those are that's the kind of third category I would allude to.
Is there anything you'd add, Minister, on priorities?
So AI, I think, has always been a cross-cutting issue. So even when we were in DC, when we were talking about building the infrastructure, that was a conversation with deans and Mhclg. And when we're talking about adoption and skills, that was a conversation with the business department . And what's happened as a consequence of the machinery of government change is that we've now got a much stronger team at the centre, this task force, to help coordinate that work. And so lots of our conversation and our priority in these first few months is about working with departments, also working with ministers, First Secretary of State and the Prime Minister to help say, okay, what is the overall direction we are helping to set for the system here?
In addition, a second priority is building the team itself. We are really, really keen that this task force should be one of the most exciting places for people to come and work in government, and so we are hiring people from around Whitehall, but also people coming in externally who want to come and help with this project because they recognise the importance of it. And then a final priority I would mention is, you know, the minister mentioned things like the Ukraine data package. There are immediate things that we can see and start pushing on directly. And those are that's the kind of third category I would allude to.
Is there anything you'd add, Minister, on priorities?
12:03
Speaker 15
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Speaker 15
So the first two are operational and you've given an example of a very finite, you know, very finite sort of project. I have a concern about AI that is just diffuse across government. So it you have it in health, you have it in justice, you have it in the Home Office. You know, so we're not just talking about this. We're not just talking about DCMs, we're not talking about your role as Minister Narayan in the cabinet. You've talked a lot about coordination. My head is spinning. You spend a lot of time coordinating, which is nice to hear.
But where does the key levers of power in relation to AI across the entirety of government, with all the ministers, Minister Frith in in health, it deals with health. Tech Minister McDonnell deals with innovation. We have a commission on the regulation of AI in healthcare, just, you know, released their report with 44 recommendations. It it where do I go when I want to check that we are producing AI, we're developing it. We're encouraging its growth and its safety correctly. So, Minister Narayan, to you, where are the key levers of power in relation to AI across government and with relation to the AI taskforce?
Does it have the powers to bring together and make coherent policy decisions across government?
But where does the key levers of power in relation to AI across the entirety of government, with all the ministers, Minister Frith in in health, it deals with health. Tech Minister McDonnell deals with innovation. We have a commission on the regulation of AI in healthcare, just, you know, released their report with 44 recommendations. It it where do I go when I want to check that we are producing AI, we're developing it. We're encouraging its growth and its safety correctly. So, Minister Narayan, to you, where are the key levers of power in relation to AI across government and with relation to the AI taskforce?
Does it have the powers to bring together and make coherent policy decisions across government?
12:05
Speaker 7
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Speaker 7
Thank you. And it's good to be talking about it here, because I know we've talked about it quite a lot in person as well, and I really valued your thoughts on it. One of my experiences, as Ollie says in the last iteration of government was precisely your observation, which was that AI is now a foundational technology question in every area of government. If you're running the health service, the education service, the work and pension service and beyond at that time, very often the levers that we wanted to pull on, bits of AI were spread right across government as well as a result of that, both for AI producing sectors and AI using sectors.
What we've tried to do now is to say that it is right that every department sees itself as an AI department, because there is no future of health care. You can significantly answer without reference to the to how you're using AI. There is no future of national security question you can adequately answer without reference to AI. So it's right that government departments individually continue to own in their areas of application AI. But there was a need for an overarching set of both strategic vision setting at the centre, driven by the priorities of the Prime Minister and the Secretary of State, but also alongside that, to execute on aspects of that strategy with specific illustrative projects which were too important to urgent or too cross-government to just have done in a single department.
And that's exactly the intent of the taskforce. So to your direct question of where would you go on a specific area, the overarching question of strategy on AI is now led at the office of the Prime Minister and Cabinet. If you're interested in a contract in healthcare for AI, that is very much continuing to be the accounting officer responsibility in that department and the Secretary of State's responsibility in that department, what we're trying to do is to recognise the diagnosis that this is in some part cross-government and requires a cross-government layer, and then to execute on that, both in strategy and some illustrative projects.
What we've tried to do now is to say that it is right that every department sees itself as an AI department, because there is no future of health care. You can significantly answer without reference to the to how you're using AI. There is no future of national security question you can adequately answer without reference to AI. So it's right that government departments individually continue to own in their areas of application AI. But there was a need for an overarching set of both strategic vision setting at the centre, driven by the priorities of the Prime Minister and the Secretary of State, but also alongside that, to execute on aspects of that strategy with specific illustrative projects which were too important to urgent or too cross-government to just have done in a single department.
And that's exactly the intent of the taskforce. So to your direct question of where would you go on a specific area, the overarching question of strategy on AI is now led at the office of the Prime Minister and Cabinet. If you're interested in a contract in healthcare for AI, that is very much continuing to be the accounting officer responsibility in that department and the Secretary of State's responsibility in that department, what we're trying to do is to recognise the diagnosis that this is in some part cross-government and requires a cross-government layer, and then to execute on that, both in strategy and some illustrative projects.
12:09
Speaker 15
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Speaker 15
So how does your role work, and do you have the capacity and capability and , and the support that you need? I mean, do these ministers who have, you know, you know, the junior ministers who have responsibility for and all of these disparate departments, do they report to you how where is your power? Where is your capacity? Because you mentioned it sits with the, you know, with the minister. So what where is your.
12:09
12:09
Speaker 7
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Speaker 7
So I have two departments that I sit in the best department, which continues to own a number of the AI policy levers. And so I'm the Minister of State in that department working with the Secretary of State. But in the role that I have with the task force on the OPM, see, effectively what we're trying to do there is not to assert responsibility or territory from secretaries of state, but to instead work with the Prime Minister and the Secretary of State to say what our overall aspects of vision and direction to set and then bring in secretaries of state to be able to deliver on that in practice.
So to your question of how does an individual AI minister or AI responsible minister in, say, healthcare, end up making sure that they're held accountable and working with us in the first instance, their day to day business as usual operational questions on AI will be very much mediated within the department, with the Secretary of State holding accountability politically and then on questions with our strategic. So, for example, a question in defense that we talked about, which is how can we get the biggest upside from Ukrainian battle data in other areas? We will look at what are some fundamental illustrative public service reform things that we can do that have ripple effects across the system.
On those deeply strategic questions, they would work with the with me and the office of the Prime Minister's AI task force in being able to deliver that. And what we're doing is to make sure that prime ministerial authority and accountability and the First Secretary of State authority as leading the PMC, are brought to bear in trying to make sure that happens.
So to your question of how does an individual AI minister or AI responsible minister in, say, healthcare, end up making sure that they're held accountable and working with us in the first instance, their day to day business as usual operational questions on AI will be very much mediated within the department, with the Secretary of State holding accountability politically and then on questions with our strategic. So, for example, a question in defense that we talked about, which is how can we get the biggest upside from Ukrainian battle data in other areas? We will look at what are some fundamental illustrative public service reform things that we can do that have ripple effects across the system.
On those deeply strategic questions, they would work with the with me and the office of the Prime Minister's AI task force in being able to deliver that. And what we're doing is to make sure that prime ministerial authority and accountability and the First Secretary of State authority as leading the PMC, are brought to bear in trying to make sure that happens.
12:11
Speaker 16
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Speaker 16
Can I come in on the back of that one? So I think to your question on levers, ultimately, the lever here is that AI is a prime minister a priority. He has chosen to deliver that through this new task force, and he asks his government to work with that task force. And ultimately, that is the thing that opens the conversations, enables us to draw things together into a coherent strategy and will matter more than sort of bits of wiring diagram that we do in the background.
12:11
Speaker 15
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Speaker 15
You make me smile a little bit because there's a tension between horizontal oversight and regulation that we argue within AI, and allowing for those vertical levers within each sector to do it. It's an ongoing debate we have, and I know in the UK we've looked towards having that vertical oversight, but you're now providing that horizontal strategic view. I understand that, so I'm going to come to something I'm very passionate about, which is AI safety. And the question that was written was, was, you know what, you know, the tensions between AI growth and AI safety. I don't think there is a tension.
You cannot have AI growth unless you have AI safety there at that point. And again, it links to that thing. So I know with Director General ILO, I know you worked with AC the so the group that were dealing with the social implications, socio ethical implications for AI that were at AC and I moved to the Home office. There are other moves the talked about with with you, Minister Narayanan before about AI assurance, how how is the government looking at the priority of AI safety in a coherent strategy across. And I say this because we do need frameworks for.
If we're implementing AI, particularly if they are predictive models, for example, even in high risk or even low risk administrative tasks, there are risks with AI. Are we monitoring it? Does the government have a very clear insight that we need to audit our AI systems that we're implementing across government? And are we actually budgeting for that in the future when we do our estimations? Minister Narayan.
You cannot have AI growth unless you have AI safety there at that point. And again, it links to that thing. So I know with Director General ILO, I know you worked with AC the so the group that were dealing with the social implications, socio ethical implications for AI that were at AC and I moved to the Home office. There are other moves the talked about with with you, Minister Narayanan before about AI assurance, how how is the government looking at the priority of AI safety in a coherent strategy across. And I say this because we do need frameworks for.
If we're implementing AI, particularly if they are predictive models, for example, even in high risk or even low risk administrative tasks, there are risks with AI. Are we monitoring it? Does the government have a very clear insight that we need to audit our AI systems that we're implementing across government? And are we actually budgeting for that in the future when we do our estimations? Minister Narayan.
12:11
Speaker 7
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Speaker 7
Well, firstly, can I thank you for both the expertise and experience you bring to it and your advocacy in Parliament on this? I have believed. I think you have to that one of the central questions for our country is to take the risks of AI seriously, and that to do so, to build trust in it is actually fundamental and contributory towards building the technology, to using it, to making the most of those opportunities as well. We. One of the things I have experienced in the machinery of government changes is that on the four building blocks of our focus on AI security and risk, that actually I'm finding much deeper coordination happening.
And so what are those building blocks first, in the critical instance, to make sure that the United Kingdom is placed in the best place possible in the world to test the risk of models as a result of ASIS, obviously exceptional capability, but also now bringing the National Security and Cyber Security Centre capabilities to bear all in the Cabinet Office. Working closely with DCMs, we're able to build a pretty deep understanding not just of model risk, but as a result, mitigations. So testing is a really critical element. The second element of it is clearly hardening and defence.
We've been testing for three years plus and model risk has continued to increase. And so testing is deeply important but clearly alone not sufficient. And on hardening and resilience and defence, I think the point you're making on assurance is absolutely critical. One of the things that I announced, I think it was last week, it's flown by, was that we will work across government departments with DCMs as the lead cyber department on looking at frontier AI usage to harden the public sector as well. There is clearly a significant set of risks from AI, but the ability to use frontier AI to do vulnerability discovery in the cyber context and to be able to then defend ourselves better, is also very significant.
The third element of it is, as you all know very well, a lot of this we can mitigate domestically, including by being a leading country on assurance and ultimately insurance. But at the same time, the proliferation and open source nature of a number of the models now means that we have to convene. And that's why I'm very proud that the Prime Minister announced that the UK will lead the G20 on putting this at the top of the agenda and ultimately, through all of that, yes, you test and you harden and you convene. But the point I made earlier is the point I most deeply believe, which is that if you want to build trust, you have to build the technology.
And so the fourth element of it is how we build sovereign bits of AI, which from the get go, are much more consistent with our values and much more consistent with the standards of assurance, auditing, expectation, and then insurance and risk mitigation that we.
And so what are those building blocks first, in the critical instance, to make sure that the United Kingdom is placed in the best place possible in the world to test the risk of models as a result of ASIS, obviously exceptional capability, but also now bringing the National Security and Cyber Security Centre capabilities to bear all in the Cabinet Office. Working closely with DCMs, we're able to build a pretty deep understanding not just of model risk, but as a result, mitigations. So testing is a really critical element. The second element of it is clearly hardening and defence.
We've been testing for three years plus and model risk has continued to increase. And so testing is deeply important but clearly alone not sufficient. And on hardening and resilience and defence, I think the point you're making on assurance is absolutely critical. One of the things that I announced, I think it was last week, it's flown by, was that we will work across government departments with DCMs as the lead cyber department on looking at frontier AI usage to harden the public sector as well. There is clearly a significant set of risks from AI, but the ability to use frontier AI to do vulnerability discovery in the cyber context and to be able to then defend ourselves better, is also very significant.
The third element of it is, as you all know very well, a lot of this we can mitigate domestically, including by being a leading country on assurance and ultimately insurance. But at the same time, the proliferation and open source nature of a number of the models now means that we have to convene. And that's why I'm very proud that the Prime Minister announced that the UK will lead the G20 on putting this at the top of the agenda and ultimately, through all of that, yes, you test and you harden and you convene. But the point I made earlier is the point I most deeply believe, which is that if you want to build trust, you have to build the technology.
And so the fourth element of it is how we build sovereign bits of AI, which from the get go, are much more consistent with our values and much more consistent with the standards of assurance, auditing, expectation, and then insurance and risk mitigation that we.
12:11
Speaker 15
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Speaker 15
You mentioned the word sovereign AI. I'm sure that's tickled a lot of people in things, but I will move on from that. And Baroness Lloyd, I want to just you touch a little bit on the role of DCMs, and I'm tempted to ask an extra question about if there was an AI bill for generative AI or AI agents, where would that bill come from? Because I'm asked that all the time. So that's a cheeky question because I know you have a role for regulation, but the key question I wanted to ask was how will the new National Centre for information defence across the Cabinet Office interact with DCMs?
Responsibility for tackling mis and disinformation, because this is crucial at the moment to our democracy.
Responsibility for tackling mis and disinformation, because this is crucial at the moment to our democracy.
12:11
Speaker 12
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Speaker 12
So, as you know, the Prime Minister announced the establishment or the intent to establish this new centre for information defence and we are working very closely with the Cabinet Office to work out exactly its remit, how it will work, where it will be situated. The focus of it is to detect, attribute and disrupt foreign state directed information attacks at source. So it will be working very closely with intelligence agencies, government departments and law enforcement. And I see it as additional supplementing the work that DCMs does already on. Mis and disinformation, on online safety, on media literacy , and all the other incredibly important things that are needed to ensure that the whole of society has this sort of the understanding and judgment in this area, as well as making sure that the the platforms take their responsibilities seriously at that at that point in time.
So I'm very happy to update the committee when further work has been done alongside Cabinet Office colleagues, when there are more details about how the centre will operate.
So I'm very happy to update the committee when further work has been done alongside Cabinet Office colleagues, when there are more details about how the centre will operate.
12:11
12:11
12:11
Speaker 7
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Speaker 7
As you know, the whips and the parliamentary business leadership very well to know that I couldn't commit to any aspect of legislation without losing my job pretty instantly. And so I will try to retain my job for this moment. But but you know, the big thing I've said is that the risks that you have highlighted through this committee and and individually in your leadership on this are risks that are very top of mind for me. And so we are looking at every single mechanism for tackling those risks. And if that means regulation through legislation, that is not going to be off the table.
12:11
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12:11
Speaker 11
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Speaker 11
Thank you, chair. I appreciate that answer. Baroness Lloyd on the National Centre for Information Defence. We actually covered some of this at yesterday's DCMs meeting as well. And that need to have absolute clarity in a world of a lot of disinformation, misinformation. And I think all of us looking at future referendums, next elections , know how important this is. I don't think we can underestimate how much focus needs to be on that area. I just like to press now on a few other areas of AI and and probably, first of all, come, come to the AI Minister, because I was slightly alarmed based on experience of what you said earlier on about every government department having some skin in the game and some responsibility for AI, because we kind of were there a few years ago with digital.
And I think we've got to recognise there's there's, there's AI as a, as a service, as a technology, but also then as an industry with job opportunities and investment. And we do need to treat them slightly differently. And we did talk about this a little bit earlier on with Mr. McDonnell, but that's one of the key things. It's like, where does that really sit? And the reason why I'm raising this in slightly concerned is I say, we had this whole debate at DCMs years ago, literally, we could have had a thick of it episode over.
Should we change the name of the department? Should it be digital, culture, media and sport? Does it therefore need to be double D? DCMs? Should we be mixing adjectives and nouns? Where should the comma be? All of that ridiculous stuff, completely distraction from. The key thing was how can we grow this for the sake of the UK economy? And I'm just slightly worried that we might get a bit distracted on this. And the reason why this is important, if we look at the. Again, going back to the details for AI, the Cabinet Office is responsible for public sector AI adoption.
DCMs has been tasked with the modernisation of government for public services via GDS, the government, digital services and the office of the Prime Minister is going to be pursuing opportunities for public sector transformation now, arguably on a positive way that is overlapping responsibilities with everybody working together. Or it could cause, and I know what ministers are like, sorry, I'm afraid we've been there competing interests and different power bases. So how can we overcome that?
And I think we've got to recognise there's there's, there's AI as a, as a service, as a technology, but also then as an industry with job opportunities and investment. And we do need to treat them slightly differently. And we did talk about this a little bit earlier on with Mr. McDonnell, but that's one of the key things. It's like, where does that really sit? And the reason why I'm raising this in slightly concerned is I say, we had this whole debate at DCMs years ago, literally, we could have had a thick of it episode over.
Should we change the name of the department? Should it be digital, culture, media and sport? Does it therefore need to be double D? DCMs? Should we be mixing adjectives and nouns? Where should the comma be? All of that ridiculous stuff, completely distraction from. The key thing was how can we grow this for the sake of the UK economy? And I'm just slightly worried that we might get a bit distracted on this. And the reason why this is important, if we look at the. Again, going back to the details for AI, the Cabinet Office is responsible for public sector AI adoption.
DCMs has been tasked with the modernisation of government for public services via GDS, the government, digital services and the office of the Prime Minister is going to be pursuing opportunities for public sector transformation now, arguably on a positive way that is overlapping responsibilities with everybody working together. Or it could cause, and I know what ministers are like, sorry, I'm afraid we've been there competing interests and different power bases. So how can we overcome that?
12:11
Speaker 7
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Speaker 7
Thank you for that question. Well, look, let me let me take the general point you made at the outset first, and then the specifics on public sector adoption. And I'll bring in my colleague as well. So I suspect I have neither the capability nor the interest of grammar and syntax changes to be obsessing about that. But but let me say one very specific thing. I think there are legitimate debates on broader digital and technology, which are such a vast, all encompassing thing. On AI specifically, I hope you will feel on the question of engagement, clarity from the industry and from researchers and civil society, that they have a totally clear sense of who they ought to be engaging with, which is the minister specifically for them at the cabinet table.
And I hold responsibility for the sector when it comes to AI producing sectors. And so, as a minister in the business department, that is a responsibility that I hold. And then on AI using sectors, whilst it is the case that it is diffuse and spread rightly across government, we have now created a central strategic function. Looking at that in the office of the Prime Minister and Cabinet, precisely for the reason that you described, which is that diffusion alone is insufficient. It's important, but it's clearly insufficient. And therefore we need a task force from the Prime Minister's central team as well.
And so and so that's the that's the rationale for it. And I think in practical instantiation, you'll find hopefully in some cases that people have probably seen me too much in terms of my engagement with both civil society and external representatives in research and business as well. On the specific question of public service adoption, which is really critical here, the specific responsibility on it is held by the Government Digital Service and the incubator for AI. In terms of where the AI engineers sit, how they think about technical architecture, how they think about technical standards. The office of the Prime Minister and Cabinet, through the task force, is focused on setting an overall sense of strategy and vision, and in some cases, we'll work very closely, therefore, with GDS and the incubator, AI and DCMs and DCMs ministers to be able to deliver the illustration of that strategy and vision.
But I'll defer to Baroness Lloyd if you want to come in.
And I hold responsibility for the sector when it comes to AI producing sectors. And so, as a minister in the business department, that is a responsibility that I hold. And then on AI using sectors, whilst it is the case that it is diffuse and spread rightly across government, we have now created a central strategic function. Looking at that in the office of the Prime Minister and Cabinet, precisely for the reason that you described, which is that diffusion alone is insufficient. It's important, but it's clearly insufficient. And therefore we need a task force from the Prime Minister's central team as well.
And so and so that's the that's the rationale for it. And I think in practical instantiation, you'll find hopefully in some cases that people have probably seen me too much in terms of my engagement with both civil society and external representatives in research and business as well. On the specific question of public service adoption, which is really critical here, the specific responsibility on it is held by the Government Digital Service and the incubator for AI. In terms of where the AI engineers sit, how they think about technical architecture, how they think about technical standards. The office of the Prime Minister and Cabinet, through the task force, is focused on setting an overall sense of strategy and vision, and in some cases, we'll work very closely, therefore, with GDS and the incubator, AI and DCMs and DCMs ministers to be able to deliver the illustration of that strategy and vision.
But I'll defer to Baroness Lloyd if you want to come in.
12:11
Speaker 12
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Speaker 12
No, I mean exactly that. Basically, GDS is responsible and DCMs is responsible for the blueprint and the roadmap for modern digital government. It provides quarterly updates on how that is tracking. It will set its set standards, technical architecture, how we should use data. So that's really the sort of operational end. And as as Minister Ryan was saying, the AI taskforce is setting further ambition, getting the focus. I think what really helps also is this sort of dual track of the the focus of the Prime Minister and the office of the Prime Minister and the salience of this with the the sort of nuts and bolts help that GDS can provide.
You know, how do I do it? What do I need to. And having those conversations about prioritisation. So that's how I see them working sort of together.
You know, how do I do it? What do I need to. And having those conversations about prioritisation. So that's how I see them working sort of together.
12:11
Speaker 16
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Speaker 16
If I could I jump in off the back of that very briefly. So to your first question, I think my experience, I'm sure all of our experience of talking to members of the AI sector, as you say, everyone benefits, but there's a sector there is that they have often have two questions. And their first question is, who do I go and speak to? But their second question is, why isn't government more joined up? And in the course of this machinery of government change, by establishing a central task force, we are making sure that people have an answer to their first question.
But we're also going to improve their experience on the second question of coordination.
But we're also going to improve their experience on the second question of coordination.
12:11
Speaker 11
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Speaker 11
So I appreciate the responses. And the reality is as well, with any Mog change, some of it will be worked out over time and processes and procedures in place. Human behaviour is what it is, you know. Do you copy in this, Minister, do you have the capacity all the time to read all of these things when you've also got other core responsibilities? So I am confident some of this will come out in the wash, but I think as much as possible in advance, being clear will help just a couple of other very, very brief areas.
Chair then and probably this is for DCMs. You know, on the departmental Organogram, we've got DCMs responsible for digital infrastructure, whilst best is responsible for data infrastructure. Now those two things can overlap a lot. So how does that worked out. And the other area again probably for DCMs you're well aware, particularly in the world of AI where we are with who's really looking after the creative industries from a copyright angle. And that's obviously been a big debate over the last couple of years. And I know the government's decided not to to go forward with some of those reforms, but particularly vital for the creative industries, hugely important for the UK economy.
Can they have confidence that DCMs has got their back or is it actually the AI Minister? How's that working out.
Chair then and probably this is for DCMs. You know, on the departmental Organogram, we've got DCMs responsible for digital infrastructure, whilst best is responsible for data infrastructure. Now those two things can overlap a lot. So how does that worked out. And the other area again probably for DCMs you're well aware, particularly in the world of AI where we are with who's really looking after the creative industries from a copyright angle. And that's obviously been a big debate over the last couple of years. And I know the government's decided not to to go forward with some of those reforms, but particularly vital for the creative industries, hugely important for the UK economy.
Can they have confidence that DCMs has got their back or is it actually the AI Minister? How's that working out.
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Speaker 12
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Speaker 12
On that last point? First, DCMs leads on AI copyright following the machinery of government change that includes input, transparency, creative control and the evidence base for a preferred option, as well as digital replicas and AI labelling. So that will sit. The AI copyright sits with DCMs post the machinery of government in terms of your other digital infrastructure and so on. So the digital infrastructure part sitting in DCMs is responsibility for the telecoms sector, which sits with Ian Murray, and that sits there and then data centres over with best.
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Speaker 12
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Speaker 12
I think, I mean you are right to to say that digital and data and AI have many overlapping. But I think in terms of sector responsibilities, that is clear that technology sorry, that telecoms sits with DCMs and data centres with BIS. So I think in terms of the sort of the definitions, when you're actually in an industry or you're trying to run a business, that that that is clear.
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Speaker 8
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Speaker 8
If it helps at all. So I'm the DG responsible for digital infrastructure and as the minister said, we do fixed mobile broadband. We. But but on the on the data infrastructure, we work very closely with former colleagues, in particular Alex's team on the kind of crossover. So again, you know, we are working.
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Speaker 1
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Speaker 1
Very close, working together. Great. Thank you very much. Thanks very much. Thanks very much for that. Nigel. Just one point of clarification, Minister Lloyd, you said that DCMs would set AI standards for the public sector, but on Monday in the Public Accounts Committee, we heard very specifically from the officials that DCMs will not set standards. It doesn't have the power to set standards for departments. It can offer standards and guidelines, but it cannot set standards.
Is that the case?
Is that the case?
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Speaker 1
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Speaker 1
Not AI standards. Indeed. Correct. So digital and data standards. Okay. So that, that brings me to my , what I want to do now is try a quick fire round. Who is responsible for what. So fingers on buzzers. I mean, we heard the AI adoption in the private sector is with Minister Cameron. AI adoption in the public sector is with is with DCMs, AI, cybersecurity.
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Speaker 15
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Speaker 15
So financial stability sits with the Treasury, as you all know very well. And the Bank of England does extensive work on it, including on AI risks to financial stability. Each sector department is in charge of making sure that their areas of operation are prepared, and overall strategic responsibility for AI is with me in the office of Prime Minister and Cabinet.
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Speaker 15
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Speaker 15
The governor and I have talked about cyber risk that are immediate. There is a possibility of an economic dislocation. As I mentioned. The Bank continues to look at that. Most of that bubble is in the United States. We are clearly looking at how we can have responsible and appropriately paced development of AI in this country, including on infrastructure, which is most of those concerns lie.
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Speaker 18
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Speaker 18
Well, thank you. I wanted to just to remind her of my interest that I declared earlier. I'm hoping. I think I speak on behalf of the whole sector, that I'm hoping, alongside all the clever things that you're doing in the department, you'll have a blockage unblocking function, which is holding so much adoption of innovation back in in government. But I really wanted to ask some questions about life sciences, if I may, to to, but also, first of all, about some relationships that come out of that questioning. So as I understand it, Ukri, Aria, and OLS are now in best.
Yeah. But AI strategy is in the Cabinet Office and data is in DCMs. So who's coordinating on AI, drug discovery and the health data where all three will meet.
Yeah. But AI strategy is in the Cabinet Office and data is in DCMs. So who's coordinating on AI, drug discovery and the health data where all three will meet.
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Speaker 14
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Speaker 14
Well, the office for the Life Sciences obviously sits across both health and the business department. I mean, it always has. But the difference with the machinery of government changes that as a minister in both departments, I now have direct oversight over the full life sciences supply chain from drug discovery all the way through to application in the NHS.
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Speaker 14
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Speaker 14
No. So OLS part of OLS was always in the Department for health. And then the. And obviously they have like quite different functions. So the companies that the office for Life Sciences interact with for the purposes of drug deployment would interact with MHRA and nice. As well. So OLS can help them with that can help manage that pipeline. But the MHRA and nice sit with other health ministers.
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Speaker 14
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Speaker 14
I think that's an important difference of accountability actually, because my job is to work with the the industry. And there's a there's a division of responsibilities there that makes sure the MHRA and Nice that are approving the use of the drugs with a separate minister. I think that's quite wise, actually.
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Speaker 14
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Speaker 14
Well, there are two things actually. So one is the work that we're doing just generally in improving that pipeline. And we've reduced the number of days to clinical trial. And some of that is in response to requests from life sciences companies. But also it's a reflection of the nature of international competition in drug introductions as well. But also another significant change, clearly, in the in the industry has been the most favoured nation status rules that were brought in by the Trump administration, which will lead to an increase in drugs prices in the UK. And we and that's, you know, it's clearly a challenge for us, but it's also an opportunity as well to make sure that that additional value that the life sciences companies get there is a quid pro quo in terms of additional value for us too.
I mean, we've, you know, we've been so successful at keeping drug, drug prices at a really low level for such a long period of time. But I think we have to acknowledge that there have been trade offs for that. That means it can mean later introduction of drugs into the UK. It can it can mean companies considering where they invest as well. So by increasing result of the prices increasing, it's an opportunity for us to attract additional investment. And we managed to do that. And we've got a strong pipeline of investment now, reducing the number of days to clinical trial and the overall drug introduction times as well, make us a more attractive place for drug introductions.
And I think, you know, I've said our ambition is to be the best place to invest in Europe and the third best in the world. I actually think if you look at numbers one and two, the USA and China, we've got some advantages over China as well, because we've got such a trusted and secure pathway for drug introductions to. So that's an additional advantage we have if you look.
I mean, we've, you know, we've been so successful at keeping drug, drug prices at a really low level for such a long period of time. But I think we have to acknowledge that there have been trade offs for that. That means it can mean later introduction of drugs into the UK. It can it can mean companies considering where they invest as well. So by increasing result of the prices increasing, it's an opportunity for us to attract additional investment. And we managed to do that. And we've got a strong pipeline of investment now, reducing the number of days to clinical trial and the overall drug introduction times as well, make us a more attractive place for drug introductions.
And I think, you know, I've said our ambition is to be the best place to invest in Europe and the third best in the world. I actually think if you look at numbers one and two, the USA and China, we've got some advantages over China as well, because we've got such a trusted and secure pathway for drug introductions to. So that's an additional advantage we have if you look.
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Speaker 14
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Speaker 14
So yeah, I think that I don't have the figure in front of me now, actually. But I think that, yeah, we do have the period of the spending review. There are estimates of what that will cost the NHS. And then I said the trade off for that is around investment and greater introduction of drugs. I think the challenge within government is that the costs will be felt in the Department for health, but the value will be felt elsewhere. So that's one of the conversations I've had with the Secretary of State for health, is how we can align incentives amongst the officials who are working in the Department for health, so that they can make the right decisions on a value rather than a cost basis.
You'd appreciate that's a challenging in any organisation, but it's particularly challenging in government.
You'd appreciate that's a challenging in any organisation, but it's particularly challenging in government.
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Speaker 14
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Speaker 14
It's well, it's all about prioritisation really. And this is the point about bringing the science and the investment briefs together. So a refocusing of the investment and on the science briefs so that the science is, is delivering value and it's delivering value, particularly on life sciences both through health and health outcomes and investment at the same time. So, I mean, you know, clearly there are huge briefs, but we've got a team and then it's about prioritising within the within that.
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Speaker 18
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Speaker 18
Okay. And then the final question for me was just that the we had Liz Kendall in front of us as Secretary of State. We questioned her on the cuts to the stfc. And she said, sitting at this table, that there would be no cuts to the TSSTFC and yet a number of us, Freddie and I, who have constituency interests related to this, are seeing big cuts to some of the primary drivers of basic UK science. What's the latest on the on that organisation.
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Speaker 14
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Speaker 14
Yeah. Chair you asked for very brief answers, but I think this question is worthy of a slightly more fulsome answer, if you'll allow me, because there are staff concerned with this as well. And I want to make sure that they hear this. So if you if you think of the the words that the previous Secretary of State said to you, I mean, de facto, they're true. You know, the Stfc budget increased. But we have to acknowledge that costs have increased as well. So, you know, the costs are inflationary cost, staff costs and so on. So if you look at this restructuring that's happening within Stfc, which includes withdrawing funding from certain facilities and cancelling certain investments, I think if we it's important that we think about what's happening and why it's happening and how it's happening.
And I'll just very briefly touch on those points. So there is a cutback in in funding for some facilities such as the Boulby Underground Laboratory, which is, is, is fairly near me, but equally, stfc are prioritising keeping open their core inter-disciplinary facilities such as the the diamond light source, including additional investment there half £1 billion additional investment there. As to why, I mean, I've explained though the budget's gone up, the costs have gone up. But actually that for me isn't really the real reason. The real. The fundamental problem was a lack of good financial control.
And I'll just very briefly touch on those points. So there is a cutback in in funding for some facilities such as the Boulby Underground Laboratory, which is, is, is fairly near me, but equally, stfc are prioritising keeping open their core inter-disciplinary facilities such as the the diamond light source, including additional investment there half £1 billion additional investment there. As to why, I mean, I've explained though the budget's gone up, the costs have gone up. But actually that for me isn't really the real reason. The real. The fundamental problem was a lack of good financial control.
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Speaker 18
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Speaker 18
I guess what we don't understand is, given the foundational nature of the of the functions of the ftsc to, to UK science and the alarm across the community is why, in the same way that the department departments are absorbing, apparently the machine and government costs. Why they can't absorb these overruns and keep the. The laser facility at Harwell, for example, open and functioning well.
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Speaker 14
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Speaker 14
Ukri has allocated an additional £135 million to support Stfc through this transition over the period of the spending review. But the important point is that Stfc needs to have good financial management. That's that's the important point. And the you know, the Public Accounts Committee actually just yesterday rightly pointed out that the overruns in Stfc's budget and that that lack of appropriate financial control should have been picked up earlier by Ukri. I accept that, but we'd all agree they should have good financial control.
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Speaker 12
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Speaker 12
Thank you. Yeah. I have some questions on this as well. So my constituency is on the border of of Harwell. So I have a particular interest in this. The previous secretary of state told us, Secretary of state told us that where cuts fall is a matter of Ukri and Stfc, not the government. That's despite, as you've sort of implied, the critical importance of the facilities at Harwell. Do you take the same view?
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Speaker 14
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Speaker 14
Yes, I do, it's the prioritisation. So Stfc needs to have financial control and live within its budget. And it's right that that prioritisation is done by the science community. And it has been so Stfc have used their own expert panels and you've had the Astronomer Royal here. I'm sure she would have said the same.
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Speaker 14
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Speaker 14
If I finish the question and you raise this with the Business Secretary this week as well in the House, of course, the diamond ISIS immune facility are remaining open, they remaining open, and they're being invested in half £1 billion in diamond specifically for Jodrell Bank. So a lot of concern was raised around Jodrell Bank. I raised the defence. I asked whether there were any particular issues around defence, not with the Secretary of State for defence, but with my effective opposite number in the Mod, and we received no concerns from the Mod on that as well.
So no concerns have been raised by the Mod.
So no concerns have been raised by the Mod.
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Speaker 12
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Speaker 12
I wasn't asking about Jodrell Bank, which is which is a much smaller facility than the three at Harwell. But but I'll move on. I've received information as I, as I mentioned last week, oral questions that further cuts are being required at Harwell. Beyond the cuts that have already been announced for Stfc. Can you comment on that now on the record, as to the level of those that shortfall that's required.
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Speaker 14
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Speaker 14
I think, well, there are two things going on. I think it's possible that there's maybe a conflation, and that would be completely understandable, because they're both happening at the same time. So the the last week, last week, on Wednesday afternoon, Stfc confirmed with their staff the prioritisation, which you're fully aware of and how it affects these facilities. On Tuesday, Ukri separately launched their voluntary severance scheme with their staff as part of their Ukri restructuring. The both of those things coming together in the same week, I appreciate could could lead to a a conflation, but the Stfc plan remains unchanged.
It is a plan to put Stfc on its. financial footing and Ukri is separate.
It is a plan to put Stfc on its. financial footing and Ukri is separate.
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Speaker 14
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Speaker 14
What I'll tell you quite explicitly and clearly is that the Stfc plan is intended to keep the diamond light source, ISIS, the muon source, and the central laser facility open and financially sustainable, which they haven't been that that is the current plan intended. Yes. That's right. That is the intention of the plan to do exactly that. Okay.
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Speaker 1
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Speaker 1
Thank you, thank you. Thank you very much, Freddy, and thank you very much. Minister McDonald, just to say that the concerns that you've expressed now about the financial financial practices at Stfc were what this committee identified at the beginning of this year? I think it was in our in our hearing, and I'm glad to see them now acknowledge what I haven't heard is a plan to address that financial, best, financial, best practice, and maybe you could write to us with the.
I'm not going to ask you to answer now, I'm afraid.
I'm not going to ask you to answer now, I'm afraid.
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Speaker 13
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Speaker 13
Thank you, chair. Very quick question and I should talk. Sectors just declare my interest. I chair the all party group for the Arctic and Antarctic. Advise, the Astrakhan Sustainability Initiative Advisor Quantum Fund from a British charity in quantum biology and a life science fund. None of those are relevant for this, but I want to just to make sure I've declared them. I wanted to ask Mr. McDonald about how AI is transforming the way science is done. The traditional model is, you know, short term funding. Scientists reveal a bit more of the answer and then ask for more money.
And we give them a bit more money, and they reveal AI is going to reveal huge amounts of answers at pace. So science will become a very different activity. And I, I'm not asking you to give us the whole answer to this, but when I was minister for UK, I they were struggling with basic digitalisation, let alone AI empowered research allocations. Are there any plans in terms of turning Ukri from a pretty clunky, old fashioned analog research administration body to an AI enabled funder that can fund properly in the global race?
And we give them a bit more money, and they reveal AI is going to reveal huge amounts of answers at pace. So science will become a very different activity. And I, I'm not asking you to give us the whole answer to this, but when I was minister for UK, I they were struggling with basic digitalisation, let alone AI empowered research allocations. Are there any plans in terms of turning Ukri from a pretty clunky, old fashioned analog research administration body to an AI enabled funder that can fund properly in the global race?
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Speaker 14
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Speaker 14
Yeah, this is a really great question. It also goes back a bit, I think, to what I just said to Freddie about the the voluntary severance scheme that Ukri launched last week, because that is the product of exactly the kind of thing that you're talking about, a massive transformation in the organisation and one that we really feel the pressure to do at pace as well. So if you think about the implication of AI in the field of science, I was so sad, actually. I heard a leading physicist say just over the summer that the the opportunity for human discovery in physics and in mathematics is, is probably gone now.
And it's great because it means we'll progress in those areas. But it's also slightly sad to feel that. But as a scientist, your role is going to be really.
And it's great because it means we'll progress in those areas. But it's also slightly sad to feel that. But as a scientist, your role is going to be really.
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Speaker 14
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Speaker 14
So yes, I'm confident it's modernising at pace, but we can't get away from the fact that this is a real race to do this. Yes. And it's every time, the time it takes us to produce a plan. You know, the technology has moved on even further. And if you if you talk about that specific area of grant allocation that you that you've just mentioned, I mean, AI is has the potential to completely break exactly, completely break the whole method for Grant.
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Speaker 14
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Speaker 14
The short answer is yes, we're working on it. And this is again, this is something we could explore much more here. We could maybe bring Ukri along as well and have much more detailed discussions about this, because it is not just science discovery, but it is also, as you say, the allocation of funds element.
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Speaker 11
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Speaker 11
For the sake of time, I'm just going to sort of pivot that question and this question for yourself, Chris, and for Kanishka. So AI is still in a developmental stage. Obviously, we're looking at quantum. We're looking at neuromorphic computing, both of which have UK advantages. How are you working across the which are included, I would say in AI, tech and innovation, but many of them are still within the research lab at this point. How are you coordinating both our current AI plans, plus our R&D spend, to make sure that we are at the forefront of quantum of neuromorphic, of, of these other AI developments so that we can not repeat the mistakes of the past in terms of our power and weight.
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Speaker 11
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Speaker 11
To do I'm talking about the basic research that feeds into these further developments in quantum and neuromorphic, which is all within the AI space. And I'm trying to understand how it sits between Kanishka, sort of I do AI and your role of I am UK R&D in particularly that blue skies research funding into our universities, our amazing universities. How is that being coordinated across.
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Speaker 14
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Speaker 14
So if you. So some of it is. You're right. So some of it is quite. I mean, if we go back to the, you know, the discussions around Stfc or whatever there is there is there is investment in new capability there, clearly. But if you if you look at quantum, for instance, you'll be familiar with the parochial program and what we're doing at the at the quantum center. But the the reason I made the point about the industry versus the applications is actually some of that new fundamental science is coming from the application side to.
Yeah. And I think and, and out of industrial companies as well. So if I were to pick an area like, you know, life sciences or engineering biology, the use of artificial intelligence for molecule discovery, let's say. So the, the, when we are supporting, when, you know, all of us are supporting research in molecule discovery or, or a new dementia treatment, you know, using sort of brain cell analysis or on a slide or whatever.
So that's a really practical example that is all AI enabled, and it's using and developing AI technology at the same time.
Yeah. And I think and, and out of industrial companies as well. So if I were to pick an area like, you know, life sciences or engineering biology, the use of artificial intelligence for molecule discovery, let's say. So the, the, when we are supporting, when, you know, all of us are supporting research in molecule discovery or, or a new dementia treatment, you know, using sort of brain cell analysis or on a slide or whatever.
So that's a really practical example that is all AI enabled, and it's using and developing AI technology at the same time.
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Speaker 11
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Speaker 11
Know what? I'm not asking. I'm not asking about AI applications. I'm asking about the further research and development in the further extensions of how AI works and how. And that's not all coming from industry, particularly when you're looking at really exciting areas like quantum and, and, and neuromorphic. And just to add into that quantum, which is sort of the nearest one we're talking about Q day within the next five years, the way we keep quantum within the UK also links to another bit of what your department is doing, which is the manufacturing strategy. We may the way we make that investment sticky is to have a quantum manufacturing strategy.
So what I'm trying to understand is how you and Kanishka are working together in this wider economic, social and exciting role, from basic through to regulatory through to application, but also through to manufacturing around AI. Because, because we keep getting the answer that Kanishka does AI, I get that, but he's not necessarily doing these other bits, which from my perspective, sit with you and other ministers and, and, and whatever the department is now called.
So what I'm trying to understand is how you and Kanishka are working together in this wider economic, social and exciting role, from basic through to regulatory through to application, but also through to manufacturing around AI. Because, because we keep getting the answer that Kanishka does AI, I get that, but he's not necessarily doing these other bits, which from my perspective, sit with you and other ministers and, and, and whatever the department is now called.
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Speaker 14
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Speaker 14
And what I'm saying is some of the research in AI that is driving new, a new development in AI is being done in a multidisciplinary team that's focused on an application, and it's the application need that then is causing the AI development to happen. That's how. So it's set up as a multidisciplinary team essentially is what I'm saying.
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Speaker 15
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Speaker 15
Just to come in to add to what Chris has said, there are three ways in which we're trying to work very closely together on the intersection of some of the technologies you've described in AI. The first of those is, Chris says, are AI for science strategy, which was joint strategy with the science minister at the time, and me focused both on applying AI to science, but crucially, the science of AI in some part as well. And so what Chris is saying about multidisciplinary disciplinary teams shaping where AI is going in light of need being designed upfront is really critical.
The second way.
The second way.
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Speaker 15
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Speaker 15
AI for science is a strategy that at the time, the science minister, Lord Vallance, and I wrote together. And so I do AI for science. Chris does a series of areas of application, including life sciences and quantum. The second thing is that specifically in the quantum and neuromorphic computing areas that you described, Emily, which are really critical, a lot of that is really focused on one bit of AI, which is developing the next generation of compute and chips. It's extremely important because that's where a lot of our focus has been. It's not the only thing that quantum is relevant for, but it is one important area.
And so what we're trying to do there is across the portfolio of funding all the way from Aria supporting really kind of future oriented, high risk support for aspects of next generation compute through to procurement that we're doing. My hope is that when we build a heterogeneous compute cluster on AI, that that effectively is a pathway to then what we're trying to do on an advance market commitment on quantum as well, and so on, trying to make sure that right across the financing and procurement landscape, we're tightly tied up on compute specifically as it relates to quantum and neuromorphic computing developments.
I think those are those are things that we're working on. And then the final thing is that when we're focused on areas of AI and trying to do plans, so for example, the AI hardware plan, we're trying to look at the entire pipeline and say, how do we support both PhDs, postgraduates at the earliest stages and teams in the research lab on where the future of these technologies goes? And you can't
And so what we're trying to do there is across the portfolio of funding all the way from Aria supporting really kind of future oriented, high risk support for aspects of next generation compute through to procurement that we're doing. My hope is that when we build a heterogeneous compute cluster on AI, that that effectively is a pathway to then what we're trying to do on an advance market commitment on quantum as well, and so on, trying to make sure that right across the financing and procurement landscape, we're tightly tied up on compute specifically as it relates to quantum and neuromorphic computing developments.
I think those are those are things that we're working on. And then the final thing is that when we're focused on areas of AI and trying to do plans, so for example, the AI hardware plan, we're trying to look at the entire pipeline and say, how do we support both PhDs, postgraduates at the earliest stages and teams in the research lab on where the future of these technologies goes? And you can't
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Speaker 7
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Speaker 7
Of quantum being an important part of that seriously as well. And so my expectation is that the work we're doing on those functional blocks of PhD support, for example, when they're thinking about chip engineering and electrical engineering, that they end up ultimately actually in some small part at least, and growing part becoming quantum adjacent PhDs as well.
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Speaker 6
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Speaker 6
Well as advanced manufacturing and digital and tech. Obviously two separate strands in the well, they're two strands in the industrial strategy. I shouldn't say they're separate. Of course there's a massive overlap between the two. So hopefully that generates the end to end approach. But yeah, the industries they're the applications are with me. And then the Reindustrialisation minister owns the industrial strategy.
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Speaker 1
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Speaker 1
Me, funding for what we've talked about. Okay. We've kept you over time very, very grateful for that. I've just got two hopefully brief questions of clarification because I realise we talked about we talked about devolution and science and innovation, but we didn't mention the Department for devolution, which the Department for the Department for housing, Communities and Local Government. Are you working with that department on on the devolution of science and innovation, and who is the key minister there?
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Speaker 1
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Speaker 1
Okay, okay. And then finally, Baroness Lloyd, we have mentioned previously that the last the State of Digital government review said there were £45 billion unrealised savings and productivity benefits from the digitisation of public services. Is that . Do you still stand by that figure, given the machinery of government changes and your responsibilities there? Are you looking at identifying or are you looking at new work to identify the current overall savings?
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Speaker 14
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Speaker 14
The 45 billion figure was an estimate of long term productivity gains. It wasn't a kind of one off figure for savings. Yes, we shared the methodology with you last year. So I mean, I'd say in terms of practical steps forward, we're focusing the department is focusing on the implementation of the roadmap and blueprint for modern digital government. That is the way in which we will sort of prioritise the areas for digitisation, the areas where the public sector can really transform, and those are costed and they're they're they're initiatives which set out what the potential benefits are going to be.
And there are quarterly updates on those initiatives, which I think you have seen.
And there are quarterly updates on those initiatives, which I think you have seen.
12:11
12:11
12:11
Speaker 1
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Speaker 1
Right. Okay. All right. Well, so so thank you very much. I'm very I'm very grateful for your your attendance here. I think it's been a really good session. We have we have gone beyond simply the minister, the minister, the machinery of government changes, as could be expected. We've looked sort of deep into some of the responsibilities and how they have evolved and how they will impact on our economic growth and our security and safety, etc.. I'm really grateful to the committee, but particularly to our witnesses, and I think it shows that scrutiny of science and technology in the new government is, is going to be just as detailed and just as intensive as this incredibly important subject requires.
So with that, with my thanks to you, I will now say order! Order!
So with that, with my thanks to you, I will now say order! Order!