Higher Education and Research Bill

Baroness Garden of Frognal Excerpts

Committee: 7th sitting (Hansard - continued): House of Lords
Monday 30th January 2017 Lords Chamber

Moved by

[Baroness Garden of Frognal (LD)]

483: Clause 86, page 55, line 12, leave out paragraph (h)

[Baroness Garden of Frognal (LD)]

My Lords, I shall move Amendment 483 in my name and that of my noble friend Lord Storey and speak to Clause 90 stand part, to which the noble Lord, Lord Mendelsohn, has also added his name.

The previous group has already addressed these issues in some detail and so I shall be brief. These are probing amendments of course. We recognise that UKRI is effectively a fait accompli, but following concerns raised both tonight and elsewhere by supporters of Innovate UK and of the research councils that the proposed combining of forces may have unintended consequences, this seemed to be a moment to raise the issue again. Amendment 483 would remove Innovate UK from UKRI. In the previous debate, the noble and learned Lord, Lord Mackay, the noble Baroness, Lady Neville-Jones, and the noble Earl, Lord Selborne, all addressed this proposal without necessarily supporting it.

Innovate UK is primarily business focused. It works with the private sector and is generally supported by the business community. It should perform a key role in the industrial strategy, and it performs a valuable function in ensuring that the UK benefits from UK research. As the noble Lord, Lord Mair, set out, there are too many examples of research that is carried out in the UK by UK academics being commercialised elsewhere or undersold in the UK. Innovate UK has been successful in addressing and improving that situation. The noble Lord, Lord Broers, also addressed this issue, and the Minister addressed it in his closing remarks on the previous amendment. However, the challenges of Brexit add to the need for Innovate UK to work well, and there seems to be no good reason for changing its structures.

Concerns have also been expressed by the research community that the interests of pure academic research might be disadvantaged by being under the same governance as the commercial arm. We have heard those concerns expressed again this evening.

Clause 90 follows from that. It sets out clearly that Innovate UK has the purpose of increasing economic growth, to benefit business and improve quality of life. Those are all admirable aims, and after tonight’s discussion there may be additions to them. What assessments were made of possible detriment to Innovate UK and the research councils of being under the same umbrella? What evidence is there that such a combination will be successful? Is there any provision for a review in case any problems arise with this multifaceted and enormously influential institution? I beg to move.

[The Earl of Selborne]

My Lords, we have discussed at good length the various problems that Innovate UK might or might not face within UKRI. I would like to explode one myth in case anyone has any illusion about the linear model or believes that ideas automatically start in academia and go in one direction only—into commerce. That model has long since been exploded. Ideas go in both directions and academia benefits as much from interaction with commercial activity as the other way round. Once we have got that into our heads and realise that we need to bring them all together and provide an opportunity for each to spark the other, then we will see how Innovate UK might realistically and helpfully be embedded in the organisation.

It did not help that the consultation in the early days, before the Bill was published and after the Nurse review, was, quite frankly, inadequate. There has been a great deal of excellent consultation since, which is why many of us have changed our minds—or at least are prepared to accept that it could be made to work—and I hope that we can be given further assurance about the issues referred to in the earlier debate about autonomy and being business-facing.

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[Lord Prior of Brampton]

My Lords, we could debate this issue for two or three hours, but we must restrain ourselves. I turn first to the two points raised by my noble friend Lord Willetts. I will indeed have to write to him about the powers the Secretary of State will be planning to delegate to Innovate UK. In a way that also answers his second question because he referred to “old think”, and indeed some of that could be construed in this Bill when comparing it with the requirements of the industrial strategy. But if the delegation to UKRI and Innovate UK from the Secretary of State is right, I think it will be perfectly possible to reconcile that with the industrial strategy.

I would actually take issue with the noble Lord, Lord Mendelsohn, because I think that Brexit has made the coming together of Innovate UK with the research councils within UKRI even more necessary, but I agree that Innovate UK is only a part of the answer. We have to have a competitive fiscal regime, long-term risk capital and a well-trained technical workforce among many other things. Innovate UK on its own is not going to shift the productivity dial for the country, although we believe that it has an important part to play.

The noble Baroness, Lady Garden, asked about an assessment of Innovate UK. A detailed business plan was made, although I am afraid that I cannot remember when it was published. I shall certainly endeavour to send her a copy of that report. The fact is that this is more of a judgment than something which can be proved with spreadsheets and the like. I think that the right judgment is to bring innovation together with research; that is the right thing to do because the reality is that one of our weaknesses, as other noble Lords have mentioned, is that we have a fantastic research base but have not been able to take maximum commercial advantage of it. That is a space which Innovate UK has filled and will continue to do so.

The extra investment being made by the Government in UKRI is a clear vote of confidence, and our support for the central role of Innovate UK in delivering our future knowledge economy will include a substantial increase in grant funding. The Bill seeks to name Innovate UK in legislation for the first time. It will retain its own individual funding stream and grow its support for business-led technology and innovation as a key part of the industrial strategy. I think it is worth quoting Ruth McKernan, the chief executive of Innovate UK:

“The establishment of UK Research and Innovation, including the research councils and Innovate UK, recognises the vital role innovation plays and further strengthens the UK’s ability to turn scientific excellence into economic impact”.


That is one of the 10 pillars of the industrial strategy referred to earlier by the noble Lord, Lord Mair. It is absolutely fundamental to our future and bringing these organisations together is critically important. Only by bringing Innovate UK into UKRI will we remove the remaining barriers to greater joint working between research and business at all levels. Businesses will be able to identify more readily possible research partners and will benefit from the better alignment of the outputs of research with business needs in, for example, technology and data skills. Researchers will benefit from greater exposure to business and commercialisation expertise so that they can achieve maximum impact. It will be simpler to find and form partnerships and there will be easier movement between academia and business. The UK will benefit from a more strategic, agile and impactful approach across UKRI’s portfolio which can respond to real-world challenges and opportunities.

The critical achievement is reaching the right balance between freedom and autonomy for Innovate UK while recognising at the same time that, ultimately, the Secretary of State has to be held financially accountable in Parliament for the money that is spent. With that, I hope that the noble Baroness will feel able to withdraw her amendment.

[Baroness Garden of Frognal]

My Lords, I thank the Minister for his reply and other noble Lords for their contributions to this short debate. As the Minister said, we could have carried on debating this for rather a long time, but of course we will not.

One of the points made by the noble Lord, Lord Mendelsohn, about Brexit is that it generates an extra degree of uncertainty, and with all the uncertainties already around, this may not be a propitious moment to be creating another uncertainty by combining Innovate UK with the research councils. I look forward to another letter for the dossier, and indeed we are acquiring quite a number of them at the moment. If there is any more clarification, I would also welcome that. In the meantime, I beg leave to withdraw the amendment.

Amendment 483 withdrawn.

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[The Earl of Selborne]

My Lords, I strongly support the noble Lord, Lord Watson, on this. I assure noble Lords that I have entered the premises of the James Hutton Institute, which is held in high regard not just in this country but internationally.

Here we have a situation where government departments are, very reasonably, keen to try to live within their means, and there is a suspicion among the research councils that public sector research establishments might be unloaded on to research council funding. When I wrote to my noble friend Lord Younger, having raised this matter at Second Reading but without referring specifically to the James Hutton Institute, he was good enough to admit that that was the concern. Those who were concerned did not want departments to get rid of their responsibilities by passing the funding over to research councils.

This is a typical government spat, with public sector research establishments not being allowed to apply for research council funds. As I understand it, this is a ruling made through the Department for Business, Energy and Industrial Strategy. Of course, as the noble Lord, Lord Watson, pointed out, the irony is that the James Hutton Institute is not even a PSRE, so it gets caught by a sort of collateral fire. It is an international institute but, through this ruling that any institute that gets funding of more than 50% cannot apply for research council funding, it cannot apply for international funding either, whether at an EU or an international level. This is a clearly pernicious ruling that has no bearing on the James Hutton Institute. As I said, it is there to prevent PSREs being unloaded on to research councils. It lies within the power of the Minister, standing at the Dispatch Box today, to say that Clause 88(4), which says that,

“UKRI must have regard to the desirability of not discouraging the person from maintaining or developing funding from other sources”,

can be put into operation immediately. Forget the rather infelicitous double negative; it is saying, “We encourage people working in research to look for funding wherever they can”, but of course that must be based on the quality of the science—supporting excellence, as the previous amendment referred to. No one doubts that the James Hutton Institute is a centre of excellence that should be encouraged to apply for international funding and indeed for research council funding. It needs this pernicious ruling to be abolished, and that could be done here and now.

[Baroness Garden of Frognal]

My Lords, my noble and learned friend Lord Wallace of Tankerness, who, along with the noble Lord, Lord Watson, originally tabled his opposition to the clause, is not able to be here today, and I regret that I can claim no connections at all with Invergowrie.

As has been explained, the Bill in its current form risks acting as a catalyst, which, under Brexit, may magnify and exacerbate the negative impact of the 50% rule on research organisations such as the James Hutton Institute. Of course, it may, as has also been explained, cause these long-established, highly respected organisations to downsize or close operations. It is already having an impact on attracting and retaining staff. It also creates an unequal playing field because, conversely, there are no restrictions on organisations that are majority funded by research councils. It seems a very unfair and archaic rule. I add my voice to those of the two noble Lords who have already spoken and urge the Government to work with Research Councils UK to remove the rule to ensure a fair and sustainable funding environment.

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Moved by

[Baroness Garden of Frognal]

503: Clause 95, page 60, line 3, after “(1)” insert “must respect the principle of institutional autonomy set out in section 2(6A), and”

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[Baroness Garden of Frognal]

My Lords, I will speak very briefly to Amendments 503, 505 and 506, to which I added my name. All simply assert the importance of having regard to the principle of institutional autonomy, which we have raised at various times throughout the Bill. It seems appropriate to reassert the principle of the autonomy of higher education institutions in these three places. I beg to move.

[Lord Prior of Brampton]

My Lords, as with similar amendments regarding the OfS, I assure noble Lords that the Government agree that institutional autonomy is of the utmost importance, and that we are actively considering how to address the concerns that have been raised.

On Amendment 503, Clause 95 already protects institutional autonomy by stipulating the unhypothecated nature of Research England’s funding allocations—and it does so in stronger language than that proposed.

It is unnecessary to make Amendment 505 as the same protections given to Research England’s funding in respect of grants also apply to the Secretary of State’s power of direction. As I have already stated this evening, the power to give directions is limited to financial matters; it is not a power to direct UKRI more generally. This power is similar to that currently afforded by the Science and Technology Act 1965 and does not reduce the autonomy of institutions.

Amendment 506 would be overly restrictive and could also undermine the dual-support system. It would blur the distinction between the two funding streams of dual support and erode, if not end, grant funding awarded on the basis of peer-reviewed project excellence. UKRI and its councils need to retain strategic oversight of the research that they fund, just as the research councils do now. Unlike Research England, UKRI’s remit will not be limited to higher education institutions. UKRI will have a strategic vision for research and innovation across the UK. It will fund and engage with research institutes and facilities, as well as businesses, both domestically and internationally. The principle of institutional autonomy does not apply in the same way to many of these organisations. As such, I ask the noble Baroness to withdraw her amendment.

[Baroness Garden of Frognal]

I thank the Minister for his reassurances and explanation, and I beg leave to withdraw the amendment.

Amendment 503 withdrawn.