Higher Education and Research Bill

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

Committee (7th Day)

15:12

Relevant document: 10th Report from the Delegated Powers Committee

Clause 85 agreed.

Schedule 9: United Kingdom Research and Innovation

Amendment 471A

Moved by

[Lord Mendelsohn]

471A: Schedule 9, page 100, line 26, at end insert—
“( ) at least one member of the OfS Board with at least observer status.”

[Lord Mendelsohn (Lab)]

My Lords, I start by declaring my personal interest as an investor in the UK research base and in some of the institutions that came out of science and other research councils. I am also an investor in the science base overseas.

Before we get into the meat of all the groups that we have—which I hope will go at some pace because we have a fair degree of agreement—it may be helpful if I just set out the view of these Benches on Part 3 of the Bill. According to the OECD, in tracking the change in government spending on R&D as a percentage of total government spending, between 2002 and 2015 there has been a very strong correlation with the investments that have been made that have created new and emerging tech pioneers, including across eastern Europe in Israel and in other places.

Korea, Germany and Japan have powered ahead with increases. Most countries have reduced, but of the major economies it appears that only France exceeded our almost 30% decline. In this context, the Government’s recent announcement of funding has had two major impacts. On the one hand, it has certainly helped to address the changes that we have witnessed over some time; there has now been some redress, and I hope we can get to the position where we were previously in short order. On the other hand, it has laid a comforting blanket over the measures in this part of the Bill and provided an emollient soothing of concerns about where research is going.

15:15

It is also worth noting that with regard to the major proposals in Part 3 there is a broad consensus that the proposals based on the Nurse evaluation are measured, sensible and worth a go. The outcomes that people are looking for are the ones that hold a fair consensus across the community. It is also better fair to say that the process by which they came involved some of the greatest brains and minds and some of our greatest practitioners, and should be seen in that context.

This part of the Bill needs some probing as there are some outstanding concerns. There are of course some very strong intended outcomes of the reform. We have a policy design whose test will be whether it can achieve that outcome, so we are going to probe not only the objectives but the means. We are going to probe whether it is better for universities, in helping to be able to fund the broad range of research required to ensure not just narrow economic definitions of growth but the importance of breadth; whether it is good for our general research base; whether these are effective measures; and whether we have reasonable confidence that there is enough flexibility to address failure or whether there may be a need to pivot some of the arrangements in order to create a better outcome.

The Bill also needs to be assessed against the Brexit decision, with all its impacts, challenges and opportunities. Indeed, many of the representations that we on these Benches have received have come from people who are concerned not particularly about the extreme possibility that the impact itself will be negative but the context in which these measures have arisen. The potential for reductions in funding, the loss of strategic place and some of the issues around researchers and students are particular concerns.

Our core issues will be about whether the newly invented UKRI will have the right performance metrics and KPIs in order to judge performance; whether we have a full enunciation of the Haldane principle adequately covered in the Bill; whether dual research funding and a reasonable balance operate effectively; whether we are really going to see the interdisciplinary benefits redolent in some of the text establishing the Bill; whether we are really going to be able to improve innovation; whether the governance has the right independence to allow those elements of the research community to flourish; and whether we have the right sort of structure.

There are concerns among some that universities could ditch research. Some argue that the Bill weakens the link between higher education, teaching and research. While universities have established that research is central to their mission, there is concern that some of the institutional strategies will necessarily change. There has been a trend for some years, as research funding has become concentrated among a smaller number of universities—for example, those in the Russell group—and particular research institutes have been established, that there may be an ever-increasing prospect of teaching-only universities and research-only institutions. That would have implications for students, institutions and the sector. So it would be helpful if the Minister could provide some observations on the desirability or not of such an outcome; whether this is a risk or a likelihood; whether the competition mechanics established in the Bill could lead to this or have been examined as to whether they will; what view the Government really have on the balance and blend of institutions and the relative balance of research and teaching; and whether there are any metrics or any evaluations by archetype as to what is the best series of arrangements or the best intended outcome.

I have to say that the main issue, the main deficiency, is the lack of clear metrics for measurement of performance. The structure of UKRI has yet to be fully determined. It will need to balance the need to produce a coherent and strategically oriented research and innovation body with a need to encourage the expertise embedded in the nine individual councils to be heard. It will need to maintain responsibility for strategic and cross-disciplinary matters while taking on the day-to-day administration, operational control and management in a manner that looks more like outsourcing than a coherent management structure.

Of course, there is always too much undeserved faith in the construction of a single accounting officer. More or less of something is a direction but not a destination. However, without some sense of where you are trying to get to, just starting a journey is never the most valuable way to go. So we are keen to have a stronger sense of the evaluation and the metrics. It is incumbent on the Government to ensure that confidence will grow in UKRI and there is a real sense of how performance will be measured and judged.

In moving Amendment 471A, and in addressing the others in the group, all of which we on these Benches support, we believe that even though we have had debates on the relationship between the OfS and UKRI, it is very important that there should be a strong emphasis on the nature of their collaboration and strong co-operation from the beginning. The purpose of the amendment is to address the distance between the Government’s stated intentions and their drafting. We are trying to make some helpful and friendly suggestions which I hope will get Part 3 off to a good start

The amendments look to strengthen the requirement for co-operation between the OfS and UKRI because we are trying to establish some form of prescription as to how and why they need to co-operate. The amendments probe the crucial relationship between the two new behemoth institutions and, we hope, will provide a stronger direction.

This does not just address the real issues at the interface of research and teaching, such as the awarding of research degrees. It is about whether the Government’s stated commitment on the integration of research and teaching has the necessary safeguards—which, some have said, look limited and weak in the Bill. It will be useful for the Minister to provide us with the right level of assurances, similar to or better than those we had earlier in the Bill.

The Government have conceded some of the merits of the argument, but it is important to find the best way to develop the appropriate joint governance arrangements that will embed working principles and practice in the framework documents to be established for UKRI and OfS. But it is very important to define at the beginning what we are looking to achieve. Amendment 471A specifies that there should be,

“one member of the OfS Board with at least observer status”,

as a member of UKRI. There is nothing like establishing a principle that if two organisations have to collaborate, there should be a capacity for them to do so at all the right levels. It provides the message that this is not just practically useful but important symbolically. The Government could have a reasonable argument that this in itself would not solve the problem. That is true. Having one person does not mean that the issue is solved, but it is a measure to ensure that there is at least some sense that at the top levels the architecture of governance meshes. That is very important.

We also believe that the OfS and UKRI need to have other forms of meshing together—which demonstrates that the Government have divided responsibility at departmental level. It is very important to establish that the processes and guidelines that exist, and those elements that could be in the Bill, are there to ensure that there is an effective and close working relationship between the research and teaching functions. I beg to move.

[Baroness Garden of Frognal (LD)]

My Lords, I support the noble Lord, Lord Mendelsohn, in his introduction to this part of the Bill. He commented on the danger that some universities may ditch research, but there are also concerns, following the first part of the Bill, that some universities may look rather critically at their undergraduate provision and wonder whether that is all worth while.

I have added my name in support of Amendment 508C in this group, which was suggested by a number of higher education organisations, including MillionPlus. Holistic oversight of the higher education sector is essential for its continuing success; the Bill must have measures in it that will ensure that the two major bodies, UKRI and OfS, do not work in silos. The work of each organisation is, after all, complementary to the other. A joint committee and an annual report would help to achieve this and deliver a closer working relationship between the two organisations, which would benefit students, providers and employers and provide parliamentary oversight.

Universities thrive through close collaboration between teaching and research, and in the previous part of the Bill we have already proposed that UKRI’s research expertise should be brought to bear in co-operating with the OfS in awarding research degrees. The other areas identified in this amendment are also key to the health of the sector. These issues are too important not to have some specific measures in the Bill to ensure that such co-operation and oversight takes place.

[Lord Mackay of Clashfern (Con)]

I have an amendment in this group, Amendment 509, which suggests a somewhat more vigorous role for co-operation than the amendment that has just been referred to. It appears to the noble Lord, Lord Smith of Finsbury, who cannot be here today, that the Office for Students is dealing with matters concerning research, but the whole object of this part of the Bill is to set up UKRI as the great authority on research. It seems extraordinary that the Office for Students should deal with research questions—the awarding of research degrees and the integration and teaching of research students—without utilising the resources of UKRI.

The Bill has very remarkable provisions on joint working. I do not want to examine the detail just now, except to say that joint working is permitted only in respect of UKRI in very restricted circumstances, which have nothing to do with the general power to award research degrees or deal with research students. It is about a particular kind of funding. That suggests to me that the idea of joint working seems very restricted in the Bill, and it is a matter of extreme importance. As I tried to say in my speech on Second Reading, it is a fundamental unity in many of the great universities in this country that they both teach and do research.

Some of the best teachers, in my experience, are those who are at the very forefront of research, because they usually have an enthusiasm for the subject which on lecturing they can transmit to their pupils. I think that I have some experience of that myself. People who really are at the heart of research are the best possible teachers, so to divide up the organisation of the university between the Office for Students and UKRI goes to the very heart of a fundamental unity which has been part of the strength of many of the great British universities for many years.

Therefore, I propose, in conjunction with my noble friend and with the noble Lord, Lord Mendelsohn, that the arrangement should be that, when research matters are an issue, the decision should be a joint one between UKRI and the Office for Students. The arrangements for having observers or members across the divide are no doubt worthy of consideration, but we need to go to the very heart of this matter to ensure that research matters are considered by people with expertise in research, chosen for that purpose as the leaders of the research establishment, if you would like to call it that, in this country.

15:30

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Prior of Brampton) (Con)]

My Lords, I thank the noble Lord, Lord Mendelsohn, for his opening address, which was helpful in setting the context for this debate. The noble Lord is right: the context is partly Brexit and partly that many overseas countries are spending a lot more per capita on research than we do. It is also the fact that the British Government have committed to spending an extra £2 billion a year on research by 2020.

The noble Lord also raised the important issue of the evaluation of UKRI—this will come up later in the debate. One of the first things that the UKRI board will do after it is appointed is put together a strategic plan, which will be discussed in more detail in this House and government circles.

I welcome the opportunity to debate further the issue of joint working between UKRI and the OfS, which the Government—and the three noble Lords who have contributed to the debate so far—recognise as crucial to the success of both organisations. It was recently announced that the Government will be investing an extra £2 billion a year in R&D by the end of this Parliament. This investment is a clear vote of confidence in the new structures created by UKRI. It will play a key role in delivering the industrial strategy and in the success of our future knowledge economy.

On the issue of joint working, I sincerely appreciate the concerns raised by the noble Lord, Lord Mendelsohn, the noble Baroness, Lady Garden, my noble and learned friend Lord Mackay and others. However, an absolute requirement for UKRI and the OfS to work together in exercising their functions could well be counterproductive. For the areas where they should be working together, Clause 106 offers a mechanism for the Secretary of State to require the two organisations to do so, should they fail to co-operate of their own accord.

However, this is not the sole, nor the most important, means to drive joint working. There will be regular engagement and communication between the two government departments involved and both organisations at all levels of operation. Guidance will also be issued through a variety of means, including the Secretary of State’s annual grant letters. Furthermore, in addition to regular meetings between the Government and senior representatives from the OfS and UKRI, the Secretary of State will have the power, through the Bill, to send representatives to attend the board meetings of both organisations. In combination with the expectation that each organisation’s annual report will address areas where they work jointly, this will allow the Government to perform an ongoing assessment of the effectiveness of co-operation between the two organisations, and to respond quickly if this is not satisfactory.

On Amendment 509, as my noble friend Lord Younger said previously, UKRI will work closely with the OfS on matters related to research degree-awarding powers. Likewise, UKRI will work with the OfS at all levels to ensure there is a coherent approach to the research talent pipeline. While I agree that they should certainly take a joined-up approach on these two matters, joint decisions would not always be effective or efficient. For example, each year thousands of research students in the UK are supported by research council funding. It would not be practical or useful for the OfS to be involved in these funding decisions, just as HEFCE is not involved now.

On Amendment 508C, I do not believe that legislation is the right place to specify the particular areas that UKRI and the OfS should co-operate on. It is likely that such areas will change in the future, and there must be a degree of discretion to accommodate this. I hope noble Lords will agree that guidance is a better, more flexible mechanism, and this is what the Government intend to use.

On Amendment 471A, the noble Lord, Lord Mendelsohn, echoed by a number of other noble Lords, made the case for a shared board member between UKRI and the OfS. I can reassure the House that the Government have given this matter significant thought. Following in-depth consideration, the Government have concluded that a shared board member would not best serve its purpose. The responsibility laid on this member would be to encourage and facilitate effective communication between both organisations. However, this will need to happen at all levels, and covering the breadth of their remits. I do not believe that it is possible for a single individual to fulfil this role effectively. Responsibility for joint working and effective communication will be shared by all members of the UKRI and OfS boards, and involve many officials spread throughout the organisations.

Joint working and effective communication will be of the utmost importance, and I hope that I have provided reassurance that this Bill will put in place the appropriate measures to ensure this. Therefore, I ask the noble Lord to withdraw his amendment.

[Lord Mendelsohn]

I thank the Minister for that reply but wish to make a couple of points. Certainly, there is always a place for guidance. The question here is: what are we trying to achieve? There needs to be a level of not just mechanics but of culture where these organisations work together. My fear is that the Bill could have unintended consequences. When we met senior administrators of universities, they asked how the organisation and running of their operations would change and about the interface with the OfS and UKRI. For example, the once-a-year evaluation with HEFCE will now take place with two separate organisations. Will that change the way the leadership works or the way that institutions report? A series of potential unintended consequences could occur unless we specify and knit together the way in which these institutions will work. That is the nature of the problem we are talking about.

There are some very specific measures, such as the one raised by the noble and learned Lord, Lord Mackay of Clashfern, which is one that could be reasonably accommodated. However, in general, we need to establish the right culture and circumstances to ensure that these two institutions do not just have a sense of working together but see themselves as partners in a very important endeavour.

Finally, as regards the shared board member that I proposed, we are not placing a colossal, herculean task on one individual. For institutions that are meant to work together, it is important to have someone who is able to tell the temperature or the context of the debate, and be able to ensure that at the very top level both institutions are aware of the atmospherics and the sense of how an issue is approached. That level of understanding is important. Whatever the mechanics at the bottom, and whatever arrangements we have in place, if there is a dissonance in understanding at the very top, that is a major consideration. I hope that the Minister will provide some more developed thoughts on that at a later stage. I beg leave to withdraw the amendment.

Amendment 471A withdrawn.

Amendment 472

Moved by

[Lord Sharkey]

472: Schedule 9, page 100, line 32, leave out from “UKRI,” to “experience” in line 33 and insert “ensure that the members have (between them) significant direct”

[Lord Sharkey (LD)]

My Lords, this amendment proposes a change to the wording of paragraph 2 of Schedule 9. Sub-paragraph (5) of paragraph 2 concerns itself with the experience of those appointed as members of UKRI. The intent of the sub-paragraph is clear: the Government want to make sure that the members of UKRI have experience in the various areas listed in the sub-paragraph. These are all important areas. However, a very important area is missed, which we will come to in the next group of amendments.

I think no one would disagree with the areas of expertise proposed. If UKRI is to do its job properly, it is vital that its members have between them the experience set out in the Bill. The problem is one of drafting. The Bill states:

“The Secretary of State must, in appointing the members of UKRI, have regard to the desirability of the members (between them) having experience of”,


and the Bill goes on to list the areas of experience. This is a very weak formulation and, in reality, imposes no real condition on the Secretary of State. It requires him to,

“have regard to the desirability”,

of UKRI members having the experience listed, but this is not equivalent to saying that they must have it. In fact, it allows for the possibility that a Secretary of State may conclude, no matter how perversely, that it is not desirable for UKRI members to have the listed set of experiences. Or it allows him to conclude that it is desirable that they have only some of these experiences between them. In any case, even if the Secretary of State were to conclude that it was desirable for UKRI members to have some or all of the listed experience, the Bill as drafted does not compel him to do anything about it.

Given the importance of UKRI and what I take to be the intent of paragraph 2(5) of Schedule 9, it would be much better and clearer to impose a duty on the Secretary of State, which my Amendment 472 sets out to do. It would revise paragraph 2(5) so that it read: “The Secretary of State must, in appointing the members of UKRI, ensure that the members have (between them) significant direct experience of … research into science, technology, humanities and new ideas … the development and exploitation of science, technology, new ideas and advancements in humanities, and … industrial, commercial and financial matters and the practice of any profession”.

UKRI’s membership is far too important to be left to the rather vague drafting that imposes no necessary structure on it. If we are to have a provision in the Bill to regulate membership of UKRI, it should have some practical force. Amendment 472 does this. I beg to move.

[Baroness Garden of Frognal]

My Lords, I added my name to my noble friend Lord Fox’s Amendment 473, which is remarkably similar to the one my noble friend Lord Sharkey has just spoken to. I therefore agree with my noble friend Lord Sharkey.

[The Earl of Selborne (Con)]

My Lords, these amendments certainly seem uncontroversial in that, if you look at paragraphs 2(5)(a) to (c)—we will come to a proposal later that another sub-paragraph be added—it is clear that these are experiences and expertise that will be highly valuable.

This gives me an opportunity to point out that, under sub-paragraph (c), one of the categories is experience of,

“industrial, commercial and financial matters”—

this is for a member of the UKRI board. This will be particularly essential, because of course Innovate UK will be subsumed as one of the nine councils within UKRI. It will have to have access to a completely new field of expertise, which Innovate UK does not have at the moment, particularly the ability to leverage new financial funds. Otherwise, you cannot expect the great expansion that we would like to see of Innovate UK, if it is to play the critical role in bringing research councils and commercial research into a closer relationship and improving our rather abysmal productivity levels—which, indeed, can probably be improved only by a successful rollout of innovation.

There will be a clash of cultures if UKRI is heavily weighted, as it almost certainly will be, towards,

“research into science, technology, humanities and new ideas”.

There simply must be people who understand the concept of risk, which is a completely different concept to the one that research councils at the moment have. I therefore point out just how critical it will be to have such experience not just on the council of Innovate UK, where inevitably all this expertise must lie, but it must be well represented on the UKRI board. Otherwise, the idea of bedding the two together will be doomed to disaster.

[Lord Prior of Brampton]

My Lords, I agree entirely with what the noble Lord, Lord Mendelsohn, said on the last group of amendments—that culture, not mechanics, is critical in this. That is one of the reasons why we are not being as prescriptive in the Bill as some people would like. That also applies to these two amendments.

I appreciate and understand the intention of these amendments, which recognise the vital role of the board in UKRI’s success. Of course, as my noble friend Lord Selborne just said, it is vital that the interests of research are properly balanced by people with experience in industry who are, as he put it, used to taking risks in the commercial world. The board will have responsibility for leading on overall strategic direction and cross-cutting decision-making, as well as ensuring close working relationships with the OfS and other key partners.

As noble Lords may be aware, an advertisement for board members has recently been published. It specifically calls for individuals with appropriate experience of those areas listed in the Bill but it also specifies that they,

“should be able to reflect and express authoritatively the perspective and views of stakeholder communities”.

I assure the noble Lord, Lord Sharkey, and others that we are seeking the highest calibre of candidates. It will be critical that we find the right mix of skills and experience from a diverse range of backgrounds across the UK and beyond, and it will be important to maintain as much flexibility as possible. The Bill has been carefully drafted, with the appropriate legal advice, to ensure that it will enable this on a continuing basis. I reassure noble Lords that the intent of the amendments is already reflected in this schedule, and on that basis I ask that the noble Lord withdraws his amendment.

15:45

[Lord Sharkey]

I am grateful to the Minister for that answer. However, if the intent of the description in sub-paragraph (5) is as the Minister described, I do not quite understand why it is not more rigorously written into the Bill. I do not see what possible harm it can do, given that that is in any case the intent, but I do see the benefit of including it, as it then becomes plain that it is a duty on the Secretary of State. Having said that, I beg leave to withdraw.

Amendment 472 withdrawn.

Amendment 473 not moved.

Amendment 474

Moved by

[Lord Willis of Knaresborough]

474: Schedule 9, page 100, line 38, after “commercial” insert “, charitable”

[Lord Willis of Knaresborough (LD)]

My Lords, I shall also speak to Amendments 478 and 479 in the names of my noble friend Lord Sharkey and the noble Lord, Lord Stevenson of Balmacara, and to Amendment 475, to which the noble Lord, Lord Mendelsohn, has added his name. I also strongly support Amendments 486A and 491 in the names of the noble Lord, Lord Mendelsohn, and my noble friend Lord Sharkey respectively.

Having not had an opportunity to speak at Second Reading as I was attending NERC’s council meeting in Lancaster, I should for the record declare my interests. I am currently a council member for the Natural Environment Research Council, chairman of the NIHR Collaboration for Leadership in Applied Health Research and Care in Yorkshire and Humber, a member of the Court of Birmingham University, a council member of the Foundation for Science and Technology and a consultant for HEE. I am designing a new doctoral training centre for advanced nursing, and, until 2016, I was chair of the Association of Medical Research Charities—hence my interest in these amendments.

In proposing Amendment 474, I should say that I am strongly in favour of the Government’s direction of travel with regard to the establishment of UKRI. I believe that the current system certainly needs change. Frankly, the notion that royal charter status gives freedom and flexibility to the decision-making of the research councils is fanciful. In many cases, decisions are made not by the research councils but by BIS, as it was, and BEIS, as it now is, and more regularly by the Treasury. Even with the support of committed former Ministers such as the noble Lord, Lord Willetts, who is in his place, it has at times been painful for my research council to change the governance structure of our institutes to meet challenging demands or respond to commercial requirements. However, to realise the potential of UKRI and the new research councils to be one of the most innovative and exciting research organisations in the world requires a membership which is able to think and act entrepreneurially in the interests of science, the economy and society.

Few sectors have the pressure to succeed more than the charitable research sector, whose direct interface with its millions of contributors makes it a powerful ally in research but whose support is needed on a regular basis to stay in business. What is more, while much of discovery science requires taxpayers’ money, the charitable sector is a major net contributor. The Association of Medical Research Charities, which covers most of the investors in medical research, contributed an impressive £1.3 billion in 2013, the same amount in 2014 and, in 2015, £1.43 billion. Its contribution over the length of this Parliament will top £6.5 billion.

While the Wellcome Trust, CRUK and the British Heart Foundation are the principal contributors, this sector is unrivalled anywhere in the world in its contribution to medical research. That was emphasised in the Nurse review, when Sir Paul said:

“To facilitate such interactions and to ensure that proper knowledge and understanding of the entire UK research endeavour is maintained, I recommend particular care is paid to ensuring there are strong interactions between the charitable research sector and the Research Councils”.


These amendments simply attempt to put what Sir Paul said in his report into action. They try to deliver “strong interactions” exactly where they should be—not simply on the boards of the research councils but on the board of UKRI itself.

Amendment 474 seeks that experience of the charitable sector should be an equally desirable quantity as industrial, commercial or financial experience, so drawing from the rich experience of the community. Amendment 475 seeks as desirable experience of the,

“funding of research from the charitable sector”.

Given the enormous contributions made by this sector, that seems entirely appropriate. Amendment 478 goes one step further, stating that:

“The Secretary of State must”,


include one person with,

“relevant experience in the charitable research sector”.

Who knows, perhaps even Sir Mark Walport or Jeremy Farrar, the past and current chief executives of the Wellcome Trust, might be thought worthy, or perhaps Peter Gray, the joint managing partner of Wellcome investments, who successfully manages its £20 billion portfolio? Amendment 479 would insert,

“research involving the charitable sector”,

as relevant experience for contributing to UKRI. There will be no shortage of candidates to join UKRI, but the charitable research sector must not be ignored.

[Lord Sharkey]

My Lords, I will speak to Amendments 475 and 491 in this group. I declare an interest as the current chair of the Association of Medical Research Charities. The first four amendments in this group, including Amendment 475, all deal with a rather striking omission from this Bill. As far as I can tell, there is no mention at all in the Bill of the contribution of the charitable sector to UK research and no provision made for the representation of the sector anywhere. My noble friend Lord Willis has made the case forcefully and clearly for rectifying that omission.

My direct experience is with medical research charities. As my noble friend Lord Willis has just pointed out, last year these charities spent over £1.4 billion on medical research, 93% of which was through UK universities. That was a greater amount than was spent by either the MRC or the NIHR. Medical charity funding is vital to our standing and success in medical research. The UK is a world leader in this area, in part because of charitable funding. Medical charities also provide an unrivalled point of contact with patients, and I know the Government will agree that the patient voice should be represented in discussions about research funding and direction.

I acknowledge that the Government are aware of the importance of the charity research sector and have taken important steps to rectify its omission from the Bill. For example, as the Minister said, they have listed “charity research experience” among the desiderata in the recently published recruitment ad for UKRI members. That is a good thing, but it is not a substitute for having charitable research in its proper place in the Bill. That is what Amendment 475 does. It adds a further category—

“funding of research from the charitable sector”—

to the list of experience that, between them, the members of UKRI must have.

Amendment 491 in my name and that of my noble friend Lord Willis and the noble Lord, Lord Stevenson, deals with the research councils, rather than with UKRI. As things stand, research councils can enter into joint funding partnerships with other bodies, and they very frequently do this. For example, I believe that around 40% of current MRC expenditure on research is in such partnerships. I am sure the Minister will agree that such partnerships are not only to be encouraged but are a well-established and vital way of doing business for the research councils. Amendment 491 is, essentially, a probing amendment. Its purpose is to seek reassurance from the Government, on the record, that after UKRI is established, the subsidiary research councils will still be as free as they are now to form such partnerships. I raised this issue in a recent meeting with the chair of UKRI, Sir John Kingman. He kindly wrote to me after the meeting, saying, “Let me also be clear that whilst legal agreements will be with UKRI, I fully recognise the importance, for example, of MRC being able to continue the rich partnerships they enjoy with medical research charities. The individual councils of UKRI will of course have delegated autonomy and authority to agree these arrangements, within their areas of expertise”. Could the Minister specifically endorse Sir John’s view?

I would also be grateful if the Minister could clarify a few further points about partnerships. What changes will research councils and their partners experience in practice as a result of the new UKRI/research council structure? What different experiences would new partners experience? Under what circumstances would a research council’s plans for research partnerships need explicit approval from UKRI before they could be activated? Finally, on a more general level, what spending decisions, if any, would be reserved to UKRI?

[Lord Mackay of Clashfern]

My Lords, I strongly support the thrust of these amendments, which would bring the charitable sector into an important position in UKRI. The contribution of charitable organisations to the research effort of this country has been extraordinary, and I have no doubt that a great deal of its success has flowed from that support. The idea that it should be missed out of the qualifications possible for the board of UKRI strikes me as extraordinary.

The feeling I get—I am sorry to get it—is that commercial and financial interests have taken over, which, in a sense, was the thrust of the amendment passed in the opening sittings of this Committee. The universities are not simply commercial or financial organisations, they have a much wider role. Whether or not one agrees with the full terms of that amendment is another matter, but so far as its thrust is concerned, that is what it was about. I have no doubt that I will be corrected if I have got that wrong. Why should the charitable sector be left out of the definition of those being sought for positions on the UKRI board?

Another problem which needs to be taken into account was mentioned by the noble Lord, Lord Sharkey. There is a good deal of participation at the moment between charitable institutions and universities in the carrying out of research. The research councils generally are open to participation in research with charitable organisations. Surely it is important that that strong and so far successful connection should be continued in the new organisation.

I am not completely happy with the reply to my Amendment 509 and I shall move it formally when we come to it later on. At the moment, the idea that the Secretary of State will arrange all this through guidance and so on leaves out of account the responsibility of this Parliament for one of the most successful parts of our national effort. We have a responsibility to see that the arrangements are certainly in accordance with what is best for these institutions.

16:00

[The Earl of Selborne]

My Lords, I support the thrust of these amendments and I am sure that everyone would wish to acknowledge the enormous contribution made by organisations such as the Wellcome Trust and Cancer Research UK, to name two of the largest. The noble Lord, Lord Willis, gave us the figures of just how big their contribution is at £1.2 billion from those two alone, while the sector as a whole contributes something like £1.6 billion, which is an enormous sum.

UKRI is to be the very much desired champion of research and to attract not only the interest of the Treasury but of the business and wider community, and it must therefore be totally conversant with all aspects of our research portfolio. That will include not only the large charities to which I have just referred but the smaller ones working in different fields such as the environment and nutrition. Also, we should not be too hard on the business community. Let us remember that it spends more on research than academia, something like 70%. Where we are failing at the moment is in the application of research.

We know that our science base is absolutely excellent and business will always depend on it. It should be nurtured and if anything we must increase its funding, and we therefore warmly welcome the fact that £2 billion will have been secured by the end of this Parliament. But it will not all go to academia because it has to be spread around the entire research portfolio in the country, which means that Innovate UK will be able to help bring the science base and industry together in a more purposeful way to the advantage of jobs, regional employment and much else. If we are to have a successful knowledge economy, as the industrial strategy White Paper pointed out, it will be through the successful implementation of large parts of this Bill. So I welcome the reminder that the charitable sector is an extremely important component. I am sure that when the composition of the UKRI membership is undertaken, difficult task though that may be, the charitable sector will have to be represented.

[Lord Patel (CB)]

My Lords, I rise briefly to support the amendment moved by the noble Lord, Lord Willis of Knaresborough, and spoken to by the noble and learned Lord, Lord Mackay of Clashfern, who covered extensively the reason why it is necessary for the charity sector to be represented on the board of UKRI. My experience during my time serving on the Medical Research Council showed that collaborations between the three major medical research charities, the Wellcome Trust, Cancer Research UK and the British Heart Foundation, made an enormous contribution. It would be rather odd if the medical research charities are not represented on a body whose job is going to be that of co-ordinating research in the entire sector across the United Kingdom. It is imperative that they should be represented, and I think that UKRI will gain from that. Again, I support the amendment.

[Baroness Morgan of Drefelin (CB)]

My Lords, I start by declaring my interests as the chief executive of a medical research charity and as chair of the National Cancer Research Institute. I support the thrust of the amendments in this group because I feel strongly that the contribution made by the charitable sector to medical research should not be thought of as being merely a business or entrepreneurial approach or that of the “charity sector”. It is a great source of innovation and partnership. The National Cancer Research Institute is an excellent example of that kind of partnership because it brings together not only all the leading funders of cancer research in the UK including the Department of Health, the devolved Administrations, industry representatives and the leading charities which have already been referred to such as the Wellcome Trust and Cancer Research UK, but also patients. The institute brings patients into the partnership, and of course the research councils are active partners to the institute. So I would echo the questions put by the noble Lord, Lord Sharkey, about the ability of the research councils to continue to form these productive partnerships in the interests of patients.

It is absolutely essential that the expertise of the charity sector is integrated with UKRI at the highest level and that we enable the funding councils to continue to work in these successful partnerships as they have been doing so far.

[Lord Turnberg (Lab)]

My Lords, I too support the amendments. I am afraid I did not speak in the Second Reading debate—I was detained unavoidably elsewhere—so I express my interest as having recently retired from 19 years as the scientific adviser of the Association of Medical Research Charities. I clearly outlived my usefulness there. I am also a member of boards of a number of medical research charities.

It seems incredible that the charity sector is not mentioned and represented in this group of activities. We know that Cancer Research UK funds the majority of research into cancer. The British Heart Foundation funds the majority of research into heart diseases. It has buildings and professors of cardiology. The Wolfson trust funds a large number of research buildings in universities around the UK. Arthritis Research UK funds the majority of research into arthritis. There is also the Wellcome Trust Sanger Institute, where a huge amount of work is going on, supported solely by the research charity sector.

Another element to this is that many of the charities are funded solely by raising funds from the public—from patients and their carers. In a way they represent that constituency. It is a vital sector, yet they are not represented in UKRI. We must correct that. I hope the noble Lord will take these amendments seriously.

[Baroness Neville-Jones (Con)]

My Lords, a number of points have been raised in this group of amendments. I hope when he replies my noble friend the Minister will not lose sight of the extremely pertinent questions asked by the noble Lord, Lord Willis, about the ability of research councils to form partnerships and to do so without having to seek permission.

[Lord Stevenson of Balmacara (Lab)]

My Lords, this has been a very good, sharp little debate. I look forward to the Minister’s response. Given his previous background in your Lordships’ House as a spokesman on behalf of the Department of Health, presumably he will speak with a bit more direct experience than would otherwise be expected. It must be very clear that, whereas in the first two groups of amendments we were talking about the mechanics and he was able to guide us away from any suggestion that the Bill might be amended, he is now firmly up against the fact that the culture is sorted here, but the mechanics are not. We will have to look very hard at the points made, with some force, by all those who have spoken.

We have signed up to most of the amendments in this grouping and support the points made by the noble Lords, Lord Willis and Lord Sharkey. They made it absolutely clear that what we are talking about is completely different from desirable changes. It is about ensuring that the huge success we have seen in the development of research—particularly medical research, but it applies to other research councils—is wired into the structure. We must have an assurance from the Minister that that will be the case.

What was not said, but is available for those who have read the briefings, is that the current situation is also of concern to charities. They feel that they have been slightly taken for granted. If there had not been the change proposed here for UKRI they would probably have come forward with suggestions that they should have been brought in at this stage, if they had not been before, to the Medical Research Council and others. That is not a new initiative; it has been a bit of sand in the oyster for some time. It would be appropriate to do as they suggest. We have already been reminded that the Nurse review made it clear that charities felt that, given,

“the overlap in their interests with the Research Councils, it is important that strong contacts are developed and maintained between the Councils and the charitable sector”.

Indeed, Sir Paul, in the final section of his report, says:

“To facilitate such interactions and to ensure that proper knowledge and understanding of the entire UK research endeavour is maintained, I recommend particular care is paid to ensuring there are strong interactions between the charitable research sector and the Research Councils”.


That is a coded phrase, but it is fairly clear that his intention would be that charities, which make so much of a difference to what we are doing and bringing in patients—they have been doing this for so long and have so much experience to offer—should be hard-wired into what we are about.

Our Amendment 486A is subsidiary in a sense because the primary purpose of these amendments is to make sure that charities are involved going forward. One amendment, which we support, suggests that the mechanics of this should be done by continuing the arrangement that those charities which currently fund jointly with research councils should be able to do so and there should be nothing in the Bill to prevent that. We suggest that, in looking at this, the Government might also look at the question of making sure that the UKRI has that capacity as well and there is no problem in any legal framework about it. We support these amendments.

[Lord Prior of Brampton]

My Lords, this has been a really good short debate. I think we are all in huge agreement about the importance of the charitable sector. I recognise the figures given today: over the lifetime of this Parliament some £6 billion—I think that is what the noble Lord, Lord Sharkey, said—will go into research from charities. That is about £1.3 billion a year, which is huge. As the noble Lord said, it is bigger than the NIHR. We are all acutely aware that research money from charities is absolutely fundamental to our whole research effort in the UK. Even after the increase of £2 billion a year from the Government in 2020, which is a fantastic change, if you compare our research spending with other countries we are still low. We depend heavily on the charitable sector.

I share with all noble Lords the aspiration for UKRI to work harmoniously and productively with the charitable sector. That is why the recent advert for the UKRI board lists engaging with charities among members’ duties and welcomes applicants with experience of the charitable sector. UKRI board members will be recruited on the basis of experience and expertise from across the full range of interests of the UK’s research and innovation system. We are ensuring this happens through our current recruitment exercise. If noble Lords will find it agreeable, we will reflect on today’s debate and see whether we ought to stiffen up that language.

[Lord Stevenson of Balmacara]

We have heard a number of variations on the theme of reflection. Before the noble Lord finishes, could he be clearer about whether he will seriously take this away and look at it with a view to coming back on Report or will he just sit and reflect on it? Noble Lords would be very grateful to know that.

[Lord Prior of Brampton]

I was under the impression that the word “reflection” has a parliamentary connotation and means more than just idly reflecting in the Bishops’ Bar after this debate, instead implying a serious discussion with colleagues and parliamentary draftsmen. Sometimes you can make amendments that satisfy the spirit of everything that has been discussed but they have unintended consequences which can have the opposite effect. When I use “reflect” now or later in this debate, I do so with serious intent.

Turning to Amendments 486A and 491 on partnering, raised by the noble Lord, Lord Sharkey, and the noble Baroness, Lady Morgan, with a third of university research income coming from links with business and charities, their contribution towards the UK research endeavour is clearly very significant. The councils continue to have an important role, encouraging links with universities and through forming their own direct partnerships. UKRI will continue this and ensure public, charitable and private investments in research are aligned to achieve maximum overall benefit. Noble Lords will have noted that UKRI has two specific powers to allow joint working: with the devolved Administrations and with the OfS. This is not just because these are important interactions; there are specific legal reasons why additional powers are necessary, for instance to allow Research England to continue to work with the devolved Administrations jointly on current UK-wide priorities, including developing the next research excellence framework.

In all other instances, however, I can reassure noble Lords that UKRI will not need specific provision to be able to work jointly with other bodies. I can absolutely reassure noble Lords that those partnerships between UKRI or its councils and the charitable research sector, not to mention other research funders, will be in no way impeded by the Bill. I can confirm the statement made by the UKRI chair, Sir John Kingman, in this respect. In fact, the Bill places a duty on UKRI to be as efficient, effective and economic as possible. It is difficult to envisage instances where collaborating with an appropriate funder from the charitable sector or elsewhere would not achieve these aims.

In conclusion, while I agree wholeheartedly with the spirit of this proposal and welcome the opportunity to recognise the important role of charity funders, no additions to the Bill are required to enable UKRI to work with other bodies or to ensure charity sector experience on the board. I ask the noble Lord to withdraw his amendment.

16:15

[Lord Sharkey]

Perhaps I might press the Minister for a little more clarity about how these partnerships will take place in future. Will there be any additional requirements in forming these partnerships above those that currently exist? I also asked whether there were any circumstances in which such proposed partnerships would need explicit approval from UKRI. The more general question which relates to that is: what spending decisions, if any, would be reserved to UKRI?

[Lord Prior of Brampton]

My Lords, I think I shall duck that to some extent and write to the noble Lord, if I may. Where money changes hands in these partnerships, there has always been some control from the Secretary of State. Is that not right for a new partnership or a joint venture? Rather than ad lib on this, I had better consult officials and write to the noble Lord.

[Lord Mackay of Clashfern]

I think it is reasonably clear that the research councils will cease to exist as bodies. They will become committees of UKRI. Therefore, it will be impossible for them to form any kind of partnership. What will happen, I assume, is that UKRI will form partnerships, perhaps resembling the partnerships that were there before, but there will be no question of the research councils having any right to form partnerships of any sort whatever. UKRI will have to do all of that.

[Lord Patel]

Perhaps I might expand on that. I had always assumed that the research councils will be able to form partnerships. If what the noble and learned Lord, Lord Mackay of Clashfern, just said is true, the Minister needs to emphasise that because it changes the whole working relationship between the research councils and UKRI.

[Baroness Neville-Jones]

Could there not be a delegated authority to do this?

[Lord Willis of Knaresborough]

The Minister asked me to withdraw the amendment but I think we have started a whole new debate—this letter will be very interesting when it appears. I thank the Minister for his response, particularly for nuancing the whole issue of taking something back for Report for stiffening up, which is a very nice phrase and we look forward to this stiffening up on Report. I thank noble Lords for their contributions, particularly the noble Lord, Lord Turnberg. I assure him that he has not outlived his usefulness. There is a great deal of usefulness still to come.

This has been a hugely interesting debate. Two things have emerged from it. First, recognising the importance of the charitable sector for research, particularly medical research, by the councils themselves or indeed UKRI is something that has to be addressed. I hope the Minister will address it when it comes back on Report. Secondly, partnerships are now a fundamental issue. I agree totally with the noble Lord, Lord Patel. The understanding of most people in this Committee—other than the noble and learned Lord, Lord Mackay of Clashfern—was that the councils would be able, as they are now, to make their own arrangements for commercial and other partnerships, either with charities or bodies overseas. If that is not to be the case, a whole new bureaucracy has just emerged from this debate. But I thank the Minister and beg leave to withdraw the amendment.

Amendment 474 withdrawn.

Amendment 475 not moved.

Amendment 475A had been withdrawn from the Marshalled List.

Amendment 476

Moved by

[Lord Patel]

476: Schedule 9, page 100, line 39, at end insert—
“the higher education sector of England, Scotland, Wales and Northern Ireland.”

[Lord Patel]

My Lords, before I speak to the amendments listed under my name, I declare some interests. I am currently the chancellor of and a professor at the University of Dundee. Because of what I am about to say about my amendments, I make it clear that I am a graduate of the University of St Andrews—as is, I know, the noble Viscount, Lord Younger of Leckie. I am also associated with higher educational institutes in England and have previously been associated with the Medical Research Council and other research charities. In speaking to my amendments, I express my gratitude to those who have added their names to them; I look forward to hearing from them. I also hope that somebody on the government Bench will join in the discussion, but we will see. In speaking to my Amendment 476, I will also speak to Amendments 482, 486, 501, 502, 504 and 507.

It would be wrong to assume that my amendments are special pleading for Scotland’s higher education institutions and their research arrangements. They are not; they are intended to fill a gap in the Bill, which does not recognise that while the business of UKRI and Innovate UK will be UK-wide, other areas of its business, such as Research England, do not pertain to Scotland. Some form of arrangement needs to be put in the Bill to make sure that this is dealt with. Scotland’s universities are a core part of the United Kingdom’s strength as a world force in research and innovation. Their contribution will be essential to the success of UKRI; likewise, UKRI needs to be set up in a way that fully supports the success of Scotland’s universities. The Bill as drafted does not do this.

My concerns are in common with those of other devolved jurisdictions and their universities. Importantly, the amendments are also supported on a cross-party basis by the Scottish Parliament. This was expressed in a letter written in December from the convener of the Scottish Parliament’s Education and Skills Committee to the Speaker of the House of Commons, and subsequently to the Speaker of your Lordships’ House. It should of course have been sent to the noble Viscount, Lord Younger of Leckie. I hope this House will give appropriate weight to the views of the Scottish Parliament.

As the incoming chair of the UKRI, Sir John Kingman has offered personal assurances that it will operate for the benefit of the whole UK. Such assurances have also been given by the Minister of State for Universities and Science. Good as that is, the Government still need to go further and recognise in the Bill certain arrangements, which I will come to. My amendments are intended to achieve this. They would require UKRI to work in the interests of the whole UK and to give proper attention to the interests of the devolved jurisdictions. They would create an in my view necessary financial firewall between UKRI’s UK-wide functions and its England-only functions, in a way that is consistent with the Bill’s overall policy.

Amendment 476 would therefore require the Secretary of State to have regard to the desirability of appointing UKRI members with experience across the devolved jurisdictions. Of course, I welcome the Government’s Commons amendment requiring the Secretary of State, in appointing UKRI members, to have regard to the desirability of including at least one person with relevant experience in relation to Wales, Scotland or Northern Ireland. I believe that the importance of UKRI to the devolved jurisdictions is such that the Secretary of State should have regard to the appointment of members with experience of all the devolved jurisdictions. The increasing divergence of policy between the UK Government and the various devolved jurisdictions makes it important that the people appointed to UKRI have diverse insights and experience across the constituent jurisdictions of the United Kingdom, to enable UKRI to maintain a cross-border research ecosystem that is responsive to that divergence.

Amendment 482 would apply the same principles as Amendment 476 in seeking the appointment of experts from across the UK to individual research councils. This is important so that priorities set at the research council level and individual research project decisions are informed by knowledge of the capacities that exist across the UK. This is no different from what happens now: the research councils take cognisance of institutions in Scotland, Northern Ireland and Wales in their research.

Amendment 486 requires UKRI to exercise its functions for the benefit of each part of the United Kingdom. The research councils have a strong record of support for Scottish research, and on the basis of competitive excellence, Scottish universities win around 14% of funding. In 2014-15, some £260 million in research grants was won by Scottish higher education institutions. Scotland fares much less well, however, in the research councils’ decisions about where to locate national facilities. For instance, the Science and Technology Facilities Council’s only national centre in Scotland is the UK Astronomy Technology Centre in Edinburgh. Scotland receives only 6.8% of research councils’ investment in national facilities. So Scotland punches way above its weight in research grants, but not when it comes to the placing of research councils’ facilities.

There are risks that the Bill as introduced will create a UKRI which is responsive principally to a Secretary of State whose role’s principal focus is England. There are perceived risks arising from the integration of Research England into UKRI. That is the important point: UKRI has duties regarding research and also regarding Research England. UKRI will work most closely with institutions in England, the drawback being that it will naturally focus on institutions in England alone.

There is also the structural risk that UK-wide funding for research councils may be diverted into the England-only activities of Research England. Amendment 501 requires the Secretary of State to consult the devolved Administrations before approving UKRI’s research and innovation strategy. Currently, the Bill does not ask that that be done. This amendment protects the integrity of the UK-wide research and innovation ecosystem by ensuring that the UK Government consult the devolved Administrations before deciding whether to approve or modify a research and innovation strategy proposed by UKRI. This is important because the devolved Administrations are major players in the research and innovation ecosystem, so any UK-wide strategy must be the subject of co-development with the devolved Administrations. For instance, in Scotland, research endeavour is supported by the Scottish Government in several areas to the tune of hundreds of millions of pounds as part of the dual-support model.

On innovation, the devolved jurisdictions have their own economic policies and economic development agencies, and it is important that any innovation strategy developed by UKRI take full account of these policies. For these reasons, it is essential that a UKRI research and innovation strategy be considered by the devolved Administrations and that the UK Government have regard to their views before deciding whether to approve or modify such a proposed strategy. I believe that the Government need to make an explicit and binding commitment that the devolved Administrations will be consulted about UKRI’s research and innovation strategy.

Amendment 502 would create a strong mechanism to protect the separateness of UK-wide and England-only resources within UKRI. It would also ensure that Innovate UK has a separate budget that it can rely on for its own distinctive mission. A key value of the research councils as constituted is that they provide UK-wide research project funding, currently worth around £2.6 billion per year, to institutions across the UK simply on the basis of the excellence of their proposals. This is at the heart of what makes the UK a disproportionately successful nation in research, second only to the United States, which has far greater resources.

16:30

The Bill proposes to bring an England-only entity within UKRI. Research England will inherit the Higher Education Funding Council for England’s responsibility for funding the research infrastructure of English universities. As drafted, the Bill does not prevent UKRI diverting funding from UK-wide funds to the England-only priorities of Research England. Clause 97 makes reference to a “balanced funding principle”—that is the quote about the UK-wide research councils and Research England—but does not prevent UKRI reallocating funds in favour of Research England as long as some form of balance is maintained. My amendment would create an effective firewall between the financing of the UK-wide and the England-only functions of UKRI. I believe this is necessary if UKRI is to operate so that its UK-wide functions cannot be undermined by future pressures to prioritise funding of its England-only functions.

It is also important that Innovate UK’s distinctive mission to catalyse business growth be protected through a clear funding stream. This crucial amendment would help to protect the funding streams of UKRI and Innovate UK, as well as their ability to act in the best interests of the whole of the United Kingdom. I hope the Minister will reflect on that and give some special attention to the need to include it in the Bill.

Amendment 504 would further protect the UK-wide nature of the research ecosystem by requiring the Secretary of State to agree the terms of grants to UKRI with the devolved Administrations. This would prevent the Secretary of State, at his or her own initiative, diminishing the UK-wide resource of UKRI in favour of its England-only resources in its Research England capacity.

Amendment 507 would require the Secretary of State, when exercising their wide range of functions, to influence UKRI to act “in the best interests” of the whole of the UK and to consult the devolved Administrations. It is a corollary of Amendment 486, which would require UKRI to act for the benefit of the whole UK. For reasons I have already stated, we need to ensure that the UK Government and the devolved Administrations work closely together to make the cross-border research ecosystem work well.

Collectively, my amendments not only would help to clarify the UK-wide responsibility of UKRI but, importantly, recognise the need to make all processes work in the best interests of the UK, while at the same time recognising the roles of higher education in the devolved Administrations and devolved research organisations. I hope the Minister will properly consider this issue, accept the principle in these amendments and suggest a way forward on Report. I beg to move.

[Lord Storey (LD)]

My Lords, we have Amendment 477 in this group. As we have heard in great detail from the noble Lord, Lord Patel, the Bill currently provides that in appointing members of UKRI, the Secretary of State must,

“have regard to the desirability of the members including at least one person with relevant experience in relation to at least one of Wales, Scotland and Northern Ireland”.

We do not believe that this is good enough for UKRI to be properly representative of the whole of the UK. There should be a proper representative for each of Scotland, Wales and Northern Ireland, and Amendment 477 would ensure that there will be at least one person with experience of Scotland, one person with experience of Wales and one person with experience of Northern Ireland. Although the issue of gender balance is not in the amendment, I am sure the Minister would want to reflect on that—that seems to be the word of the day—and assure us that consideration will also be given to ensuring that there is a proper gender balance.

[Lord Liddle (Lab)]

My Lords, the amendments raise important issues. I would like to bring to them my own perspective as pro chancellor of Lancaster University, not speaking for the institution but talking about how it strikes me that these issues concern us, thinking about the strength of the university sector in the north of England.

The fundamental problem with UKRI—on the whole I support the idea of UKRI, I hasten to add—is that the research and innovation strategy concerns the whole of the UK but the HEFCE functions on research are purely for England and are to be exercised by Research England. My fear about a board that, like that of the BBC, had a governor for each of the nations would be that the interests of England in such a body might not be as strong as they should be, and, in particular, that Research England and its funding might over time be marginalised as a result of the emphasis on the UK.

The funding for Research England is absolutely crucial to institutions such as my own. We are a top research university but not part of the golden triangle. We are in the north of England and we are quite small. So, because of scale, the ability to land big grants from the research councils is limited. A lot of our research success comes from the ability to do well in the research assessment exercise and get QR funding. If there were any reduction in the total of QR funding, that would hurt universities such as my own quite considerably.

I am concerned about the tension—it is in the nature of the beast, really, and we have to find a way of resolving it—between Research England, its Englishness and the need for that to be protected on the one hand and, on the other, the need, which I fully support, for a coherent UK research and innovation strategy. I am not sure that the best way of achieving it is by having, as it were, a governor for each of the nations of the UK. Indeed, if that were the Government’s response to this question, I would come back and say, “Well, can we please have a north of England member of UKRI?”.

I know that this sounds sectional, but the truth is that one of the strategic objectives that the Government have just put forward, in the very good industrial strategy paper that Greg Clark has presented, is to try to prevent the ever-greater concentration of research funding within the golden triangle. If we are going to have an effective regional resurgence, which I think there is cross-party consensus that we need in this country, universities will be at the heart of it. We have to find a way of making sure that other parts of England, as well as Scotland, Wales and Northern Ireland, have the opportunity to benefit from this welcome increase in research and innovation funding. To be frank, the risk with UKRI is that it will be dominated by the great and good of the science world, who will continue to channel most of the money into the golden triangle. I hope that the Government will take action to make sure that this is prevented.

[Lord Judd (Lab)]

My Lords, as somebody involved in the governance of Newcastle and Lancaster universities, I must say that in Lancaster we regard ourselves as extremely fortunate to have as pro chancellor my noble friend Lord Liddle. I was present at the meeting on Saturday when he made a terrific contribution and people listened with real sincerity to what he said.

There is a lot of importance in the point that the noble Lord just made about the north of England. If there is to be a regeneration in the north of England, the universities will be crucial to this. It is therefore essential that we ensure that we stop talking about regeneration in general terms and start doing concrete, specific, identifiable things to support that regeneration. This area is one that will obviously be crucial.

What attracted me to this particular amendment is that, as someone who is both a Scot and an Englishman—my mother and my brother were both at Scottish universities—I am very conscious of the high-powered and distinguished contribution that has been made by universities in Scotland, Wales and Northern Ireland. It seems to me quite extraordinary that we should not as a matter of course say that that tradition and wealth of experience should be represented in the governing councils—as of right and as essential. That is very important.

If what I have been saying about regeneration in England is true, we are also these days discussing the need and importance of a greater sense of cohesive community in the devolved parts of the United Kingdom. We need to show that we are serious about this where it matters. The amendments help in that respect. It is very difficult to look at the Scottish universities, for example, and not see the whole story of the British industrial revolutions of the future. They have made profoundly important contributions, and continue to do so.

I do not know intimately, or so well, the story in Wales or Northern Ireland, except that I know that it is powerful. There is an area that is not central to our immediate considerations, but perhaps it should be. One of the things that I have always been struck by in Wales is that Aberystwyth was the first university in the United Kingdom to make the study of international relations and international affairs a recognised, serious degree and postgraduate subject. That has been terrifically important in our history.

I thank the noble Lord, Lord Patel, for introducing the amendment, and I hope that the Minister will take it very seriously.

[Lord Broers (CB)]

My Lords, I strongly support Amendment 502. Indeed, until I saw it I had been minded to submit a similar amendment myself. My desire is to ensure that Innovate UK receives appropriate funding and the amendment happens to fit that rather well.

I believe that while the distribution of money across the research councils should to a significant extent be determined by UKRI, the allocation to Innovate UK which, I remind noble Lords, is to benefit persons carrying on business in the United Kingdom and improving quality of life in the United Kingdom, as laid out in the Bill, should be determined by the Secretary of State, and then not interfered with. It is important to emphasise that this allocation cannot be altered by UKRI without the specific approval of Parliament, by means of a resolution of each House. The criteria used by Innovate UK to determine which projects to fund are of a completely different nature from those used by the research councils. The noble Earl, Lord Selborne, mentioned this, and I shall mention it with other amendments; they are different from those used by the research councils to determine excellence in research in science, the arts and the humanities. While it is important that UKRI ensures that there are strong links between the research councils and Innovate UK, the allocation to Innovate UK should not be balanced against that to the research councils. It should be determined as a separate matter of national concern in consultation with industry and others by the Secretary of State.

16:45

[Lord Mackay of Clashfern]

I support the amendments proposed by the noble Lord, Lord Patel. I agree that consideration needs to be given to the points raised by the noble Lord, Lord Liddle, but one must not forget that there are regions of the United Kingdom south of the Scottish border which may require special attention.

I am hopeful that the reflection, which I am sure that we will have on these amendments, may result in good outcomes. Officials in the department have given me a copy of the application invitation to non-executive members of UKRI, which says:

“We welcome applicants with a range of experience from within the different nations of the UK, the charity sector, and with international experience”.

[Lord Stevenson of Balmacara]

My Lords, this has been a very interesting debate, and I am grateful to the noble Lord, Lord Patel, for introducing it so well, because he covered all the nuances. We have one amendment in this group, Amendment 500A, which complements the points that he was making. It reflects the need to make sure that Research England, in its functions, which would be very narrowly focused on England—including, of course, the north of England—could have the capacity to consult other bodies that perform the same functions in Scotland, Wales and Northern Ireland. That goes with the general grain of what is being discussed.

I have a fantasy that this area was probably dreamed up in the good old days before Brexit was on the horizon, in the confident assumption that there would be no separate Scotland—and certainly no separate Wales and Northern Ireland, if these issues are still in play, as I am sure they are. That reflects a relatively straightforward analysis of what had to be done to pay lip service to the need to ensure that those people not physically located in England were seen to have some influence on the levers that generated the money. But that is such a naive view of what is now such a complicated world that I wonder whether what is in the Bill is sufficient to take that trick. It is one area in which reflection will be required, as the noble and learned Lord hinted, because I do not think that what we have here will do.

I take it as axiomatic that UKRI is not a representative body and that there would be no advantage in making it so—so we are not talking about ensuring that the representation on it is in some way reflective of the various agencies and constituencies that need to be served by it. However, there are optical issues—it has to be seen to be representative in a way that would not have been the case two or three years ago. The idea that, as we heard from the letter of invitation, it has an acknowledgment of the need to recruit from people with obvious experience in an area will probably will not be sufficient. We are talking about the allocation of resources getting scarcer as we go forward, despite the Government’s reasonable largesse, in an environment where it would be very difficult for those bodies that have been funded to seek alternative matching funding. The institutions we are talking about are not all universities, because research is carried out outside the universities—although much less than in other European countries—in research institutes and similar places. Up until now these have been very reliant on external funding and, as we will hear in later amendments, they are feeling a cold wind coming. In this very complicated area we have to ensure that the funds will reach the institutions which are best able to provide the research services which UK plc is looking for and in a way that is seen to be fair.

We have not touched on the fairness issue. The noble Lord, Lord Patel, talked about the need for firewalls to make sure that the funding streams were not absorbed by other pressures and under other arrangements. That is probably a necessary but not sufficient condition and does not need to be in the Bill. However, the idea exists that England, because of the golden triangle effect, has a pre-eminent chance of getting all the funding and that, despite the way in which these funds will be allocated—through the Haldane principle and others—there will be enough room left for those who wish to make trouble about this in, say, Scotland or other places. This is a worry and it will need to be looked at very carefully before the Minister comes back. I do not have a solution to it, but we are not necessarily in the right place at the moment.

[Lord Prior of Brampton]

I thank the noble Lord, Lord Patel, for his speech at the beginning of this debate which helped identify some of the issues. First, I emphasise that UKRI, as a UK-wide body, has a built-in duty to work for the whole of the UK. The prospect of having people on the UKRI board from all parts of England, Scotland, Wales and Northern Ireland does not fill one with much joy. Secondly, I make it clear that these reforms will not affect current funding access for institutions in Wales, Scotland or Northern Ireland. In the other place, my honourable friend the Minister cited the Public Bill Committee evidence of the former vice-chancellor of the University of Dundee and current vice-chancellor of the University of Leeds, Sir Alan Langlands. I hope that noble Lords will permit me to echo that powerful evidence once more. Sir Alan said that,

“given the dynamics of devolution and the fact that essentially we are dealing with four different financial systems and four different policy frameworks, the one thing that has stuck together through all this has been the UK science and research community. The research councils, HEFCE and, indeed, BIS have played a hugely important part in that”.

As part of UKRI, the research councils and Innovate UK will continue to operate across the UK, funding projects through open competition on the basis of excellence, wherever it is found.

In answer to the question from the noble Lord, Lord Patel, on capital, the devolved Governments have a capital allocation direct from the Treasury as part of their block grant. Decisions on whether to allocate any of these funds on research or innovation are entirely for them: this will not change. Capital allocated by research councils, as a result of competitive processes, wherever the researchers are based across the UK, will continue to be delivered through the UKRI councils: this will not change. The Secretary of State, when making capital allocations for research, most recently through the capital road map, also makes an allocation for HE institutions to support the sustainability consequences of their relative success in winning research council funding. This process will not change, including the requirement for the devolved Governments to match-fund any allocation by the Secretary of State to the devolved funding councils.

On Amendment 501, I share the noble Lord’s desire that UKRI’s strategy should work for the whole of the UK. The strategy will be the product of a consultation with research and innovation institutions and bodies from across the UK. I also assure noble Lords that this consultation will of course incorporate the views of the devolved Governments. However, I disagree that this should be achieved by requiring the Secretary of State to formally consult with the devolved Governments on reserved UK government policy, which would undermine the whole devolution settlement.

I reassure the noble Lord, Lord Liddle, that we are putting in place extra protections for Research England. This reflects the provisions in the Further and Higher Education Act 1992, which places the same restriction on the Secretary of State in relation to HEFCE funding. The provision protects the academic freedom of institutions in respect of what is taught, what research is undertaken and who is employed. Likewise, I assure noble Lords that Research England will work closely with its devolved counterparts on matters of strategic interest—for example, on the research excellence framework. After discussions with the devolved Administrations, the Government passed a new clause in the other place, now Clause 107, to enable this joint working. Additionally, the current drafting of Clause 91 enables Research England to consult with its devolved equivalents, and we would fully expect it to do so whenever this was appropriate and valuable.

I turn to Amendment 502. UKRI must have flexibility to manage its funds to ensure best value for its resources and to meet our strategic aspirations for seamless administration of interdisciplinary research and joint research and innovation projects. Currently, allocations to funding bodies are discussed with the Treasury, which assesses any Barnett implications for the devolved Governments. This is not changed by the Bill. UKRI will also be bound by rules established for managing public money and a financial accountability and assurance framework which will be set up with the department. These arrangements do not constitute a reduction in current levels of parliamentary oversight. This amendment would place additional duties on Parliament to scrutinise even small variations in budgets that would be required in response to changes to project timelines or to support joint research and innovation projects, for example. This would not be a good use of Parliament’s time, and would hamper UKRI’s strategic agility by significantly slowing decision-making.

I urge noble Lords to consider the advice that the noble Lord, Lord Mandelson, offered at Second Reading:

“I urge UKRI not to be overly prescriptive about partitioning funds between its component parts. We need a system that allows partners to come together across STEM subjects, the humanities and social sciences, and with industry partners, to drive a research ecosystem which goes from blue-skies research to commercial application and impact”.—[Official Report, 6/12/16; col. 624.]


Noble Lords have raised concerns about Research England’s funding stream. I reassure them that the Secretary of State would not agree to UKRI viring money in such a way as to result in a net change in Research England’s stated budget over a full spending review period. This will be made clear in guidance to UKRI.

Amendment 504 would give an effective veto power to the devolved Governments on matters of reserved UK government policy. The power of direction is limited to financial matters and reflects existing powers. The Secretary of State may use it to deal swiftly with financial issues, and it is an essential safeguard to the over £6 billion of public money that UKRI will receive per annum. Since this power is intended to allow the Government to deal quickly with urgent financial matters, I further appeal to noble Lords that a restrictive and drawn-out process of consultation is not the right approach.

As regards Amendment 507, the Government will continue to work with the devolved Governments on research and innovation policy, as they do now. The Secretary of State, as a UK Minister, already has a duty to act in the best interests of the whole of the UK. The Government made an amendment in the other place to ensure that the Secretary of State, when appointing members to UKRI’s board, must have regard to the desirability of including at least one person with relevant experience in relation to at least one of Wales, Scotland and Northern Ireland. No such duty is currently in place regarding existing bodies with UK-wide remits. This strikes the right balance between ensuring relevant experience of research and innovation systems across the UK on UKRI’s board and giving the Secretary of State the flexibility to appoint the best people for these important roles. Here I assure the noble Lord, Lord Storey, that there will be a proper gender balance on the UKRI board. Further wording around the Secretary of State’s duties in this respect would damage this crucial flexibility. With these explanations and assurances I ask the noble Lord, Lord Patel, to withdraw his amendment.

17:00

[Lord Patel]

My Lords, I thank the noble Lords who supported my amendments, or at least discussed them. I will borrow the Minister’s words and say that I will reflect on his answers to see how much of a reassurance he has given. As for the application invitation that the noble and learned Lord, Lord Mackay, was handed by the department, an invitation is not the same as a requirement, and it can be interpreted in different ways. None the less, I was interested to hear about that. On that basis, for the time being, I beg leave to withdraw the amendment.

Amendment 476 withdrawn.

Amendments 477 to 479 not moved.

Amendment 479A

Moved by

[Baroness Brown of Cambridge]

479A: Schedule 9, page 101, leave out lines 13 to 18 and insert—
“(a) a non-executive chair,(b) the Chief Executive of the science and humanities Council or of Innovate UK, as appropriate, and(c) at least four and not more than eight other members (the “ordinary Council members”).”

[Baroness Brown of Cambridge (CB)]

My Lords, in moving the amendment, which is also in the name of my noble friends Lord Krebs, Lord Mair and Lord Broers, I will speak also to Amendments 481A, 481B to 481D, 482A and 482B.

Bringing the research councils, Innovate UK and Research England together in one organisation, UKRI, opens the possibility of achieving some important benefits, in particular in the areas of: interdisciplinary and cross-disciplinary research, which have not always been well served by the current structure of the research councils, and where many researchers attest that some of the most exciting and potentially far-reaching current developments are happening today; in further improving the links between academia and business; and in making a stronger case to government about the importance of research and innovation to the future success of the UK, to secure the levels of funding that will keep the UK at the top of the league tables for our research while moving us up in terms of innovation—the kind of achievement we have seen today, with the recently announced funding, which we have all been celebrating—thereby ensuring that our outstanding research translates into profitable business for the UK. That is all positive, but for this to be successful the new UKRI organisation will need the existing councils to maintain their own strengths and their diversity while it works more effectively across the councils. The amendments in this group focus on ensuring that we preserve the good things about the councils today while adding the benefits UKRI can bring.

Amendment 479A relates to the structure of the individual councils. Today, they have distinguished independent chairs working with chief executives and relatively large councils made up of distinguished academics, businesspeople and other members. The independent chair is in line with Sir Adrian Cadbury’s advice on governance in his 1992 report: it avoids the concentration of power in one individual, while allowing the chief executive to both present to, and listen to, the high-quality debate at council meetings, without at the same time having to manage the meeting; it ensures that views which the chief executive may not agree with are well aired and discussed; that all relevant issues are included on the agenda; and that all council members are enabled to play their full part. Sir Adrian was looking at the problems of the finance sector but the general principles are valid here too. If these councils are to be engaged in important business, as we all intend they should be, these principles are of particular concern. The presence of an independent chair, rather than a research council head in the role as executive chair, will give the council roles higher perceived status than simply of an advisory board reporting directly to the chief executive. That will help to maintain the high quality of individuals who compete for appointment to these roles. It will also give the chief executive a critical friend and mentor and provide the council with a senior independent voice into the chief executive of UKRI if the council is concerned about the way things are going.

That is particularly important as regards the independent chair of Innovate UK. At Second Reading, many speakers from all sides of the House, including the noble Baronesses, Lady Neville-Jones, Lady Young of Old Scone, Lady Garden and Lady Rock, and my noble friends Lord Mair and Lord Broers, emphasised the importance of maintaining the business focus of Innovate UK. This was captured in the royal charter of its predecessor, the Technology Strategy Board, which was a body established,

“for purposes connected with research into, and the development and exploitation of, science, technology and new ideas”,

for the benefit of,

“those engaging in business activities in Our United Kingdom”.

Amendment 481A would ensure that the independent chair of Innovate UK came from business, along with the majority of ordinary council members, in line with the earlier remarks of the noble Earl, Lord Selborne. Amendments 481B to 481D would introduce consequential changes.

Amendment 482A would require UKRI to establish an executive committee including all the councils’ chief executives. This seems, in any case, very likely to be something that any new chief executive of UKRI would want to do, but putting it on the face of the Bill, giving it recognition as a key part of the governance and indeed the intelligence of UKRI, would reassure the community in relation to the ongoing importance of the individual research councils. It would also emphasise the important and influential roles of the heads of the new research councils. I beg to move.

[The Deputy Chairman of Committees (Baroness McIntosh of Hudnall) (Lab)]

My Lords, I must remind the Committee that, if this amendment is agreed to, I cannot call Amendments 480 and 481 by reason of pre-emption.

[Lord Willis of Knaresborough]

My Lords, I wish to speak to Amendments 480 and 481, which stand in my name and that of my noble friend Lord Sharkey. Before doing so, I offer support to the noble Baroness, Lady Brown of Cambridge, particularly for proposed new paragraph (a) in Amendment 479A, which would insert a requirement for a non-executive chair for each of the new research councils. I totally agree with the point she made. Having worked under two non-executive chairs at NERC, I know that the advantage they bring to the challenge facing the chief executive and to leading the board in terms of that challenge is of fundamental importance, and doing so would be difficult without it. I await the Minister’s response on why the Government have chosen the route of an executive rather than a non-executive chair. That is a huge departure from the way in which we have approached the research councils in the past.

I confess that I tabled Amendments 480 and 481 to try to tease out from the Minister why the councils should consist of between five and nine members rather than between nine and 13, eight and 14 or some other number. There does not seem to be a clear explanation as to why those numbers have been chosen. I admit that I generally prefer to have small boards—of one person, if possible—because they are likely to be far more effective, efficient and dynamic, but there is clearly an optimum size depending on the nature, the mission, the budget, the governance and the expectation of the organisation.

The Bill—wrongly, I think—assumes that each of the new research councils will be exactly the same, but they will not; they will have very different aspirations, albeit a general one in terms of promoting research. The current research councils have memberships ranging from 10 on the ESRC to 17 on the EPSRC, and that is entirely possible because the Science and Technology Act 1965 did not say anything about numbers. I suggest to the Minister that, rather than adopt an amendment of this sort, it may be better to remove this requirement altogether and to allow the newly formed research councils, with guidance from the Secretary of State—we are very keen on that—to decide what number of members would work well for each one.

Amendment 481, the second amendment in my name in this group, is perhaps more significant. The one thing I have learned while I have been on a council—sorry, I have learned a lot of things; that sounded awful. But one of the most important things I have learned is the value of the lay members who come along to challenge the executive, and indeed the council, in ways that I did not think were possible. That has been particularly important as our research council has tried to remove our research institutes into different governance arrangements. It has been hugely important to have people who actually understand the machinations of changing governance and financial structures and who are able to look at complex organisations working with each other. Therefore, Amendment 481 says that on every research council there should be a minimum number of lay members to allow that challenge. If you had a board of five, it would be very difficult to say what the minimum number should be. I accept that four is a purely arbitrary number, and I look forward to the Minister’s response.

[Lord Mair (CB)]

My Lords, I support Amendments 479A and 481A, to which I have added my name. I declare my interests in higher education and research as a professor of engineering at Cambridge University and as indicated in the register. I speak from my experience both as an active leader of university research, collaborating very closely with industry, and as a practising engineer in industry for almost 30 years before becoming an academic.

As has been said by my noble friend Lady Brown of Cambridge, and reinforced by the noble Lord, Lord Willis, the aim of these amendments is to maximise the effectiveness of the councils, including Innovate UK, under the proposed new UKRI structure. They should each retain independent non-executive chairs, as well as having a chief executive. This generally works very well for the research councils and Innovate UK as they currently operate—each has a chief executive and a non-executive chair, the latter usually from a business background. This is surely good governance, facilitating the successful operation of each council, as well as ensuring that the council can provide effective challenge to its chief executive. The non-executive chair can also play a key role as an independent senior voice for each council. The Bill proposes to remove the non-executive chair, which many of us believe would reduce the effectiveness of each council. The aim of these amendments is to restore that important role.

In the case of Innovate UK, it is especially important that the non-executive chair that we are proposing should be from a science-related business background. Industry will want to see this. Close engagement with industry is vital for Innovate UK’s effectiveness. Innovate UK will be able to operate most effectively with its unique business-facing focus if the majority of the ordinary council members are from a science or engineering-related business background. There is a real danger that industry will perceive the UKRI structure currently proposed in the Bill as a downgrading of Innovate UK in terms of industry engagement. Amendments 479A and 481A seek to avoid this.

[The Earl of Selborne]

My Lords, I will also speak to Amendments 479A and 481A. Perhaps I should declare a historical interest in Amendment 479A, because way back in the 1980s when there were six research councils, two of them had a non-executive chairman—the Medical Research Council, chaired by Lord Jellicoe, and what was then the Agricultural and Food Research Council, which I chaired and which has now been subsumed into the Biotechnology and Biological Sciences Research Council. I think that both Lord Jellicoe and I were rather flattered when, as a result of the review of the research council model, it was decided that the other four should no longer be headed by what was called a HORC—a head of research council—but a non-executive chairman, whose job was to do what happens in good governance in any other organisation, where the chairman holds the chief executive to account and the two have very separate roles. That model has been well adopted by the research councils. I was on the Science and Technology Committee of this House at the time, when some of my colleagues looked with some suspicion at this proposal, but now it is clearly viewed with universal favour.

On Amendment 481A, it is inconceivable that Innovate UK should not continue to have a non-executive chairman, as it does at the moment. Innovate UK has got to be business related and facing business. Business needs to continue to have confidence that it is there to represent its interests and that it has not been taken over by academia and other interests. That will be a battle. As I said on an earlier amendment, the cultures will be very different. These two amendments precisely deal with this issue and like the noble Lord, Lord Mair, I support them both heartily.

17:15

[Baroness Neville-Jones]

My Lords, I also support Amendments 479A, 480 and 481A to 481D. I remind the House of my already declared interest as a so-called lay member of the Engineering and Physical Sciences Research Council.

The case for a non-executive chairman has been made extremely cogently by both the noble Baroness, Lady Brown, and my noble friend Lord Selborne, and I hardly need repeat what they have said. Certainly, anyone who has read the corporate code knows that the case for non-executive chairmen is spelled out extremely clearly and cogently and that the notion of having an executive chairman is roundly condemned. The first works much better than the second and avoids conflicts of interest. The two functions are different and should be carried out by different people. Innovate UK will be much stronger in its performance if it is chaired by someone who has a science-related background but is also in the business community. It is crucial that we should make that link.

As to membership, having had personal experience of council membership—I am not the only person in the Chamber so to have done—the EPSRC has one of the bigger budgets and one of the bigger boards. I talked to the chief executive, who told me that there is a limit of 18. He said it operates customarily on about 15 or 16. I do not think the boards need to be quite as large if we have UKRI also on the scene. However, we should be practical about this. All of the members of the board of the council have full-time careers and are doing a full-time job—this is something extra that they do—and some are very pressed indeed. The noble Lord, Lord Darzi, is a good example of someone who does multifarious things. The thought that the board can operate with the subcommittees that it has, with the travel it engages in and the consultations that it has with the universities, and that it can do so without having both numbers and variety of people on the board—businessmen as well as people like myself and academics—is fanciful. It will weaken the total structure if one does not allow the councils to fulfil the remit that UKRI is meant to create and enable them to do.

It is important that the Government do not limit the size of the council to that which would make it difficult for it to be effective. I am not going to suggest a limit—if you want to put in a minimum, put it in—but, on the whole, the figure for the councils, certainly for the larger ones, should be in double figures.

[Lord Broers]

My Lords, I have added my name to Amendments 479A and 481A. I understand the concern about the appointment of non-executive chairs because that would introduce an additional level of management, which is clearly undesirable. I feel that the disadvantages of not having a non-executive chair are quite serious, and they have been put extremely well by my noble friends Lady Brown and Lord Mair and by the noble Lord, Lord Willis.

However, one case has not been mentioned. A non-executive chair becomes absolutely critical when the members of a board feel that the CEO is not performing adequately. In that instance, under the current arrangement, presumably it will have to be the UKRI CEO, who would not have watched that person performing as the members of his or her council would have done. Although the UKRI CEO could consult with the members, the UKRI CEO will not be nearly as familiar with the situation as they are. That is, as I say, quite serious.

A possible solution, but perhaps not a satisfactory one, would be to appoint a senior council member in a somewhat similar way to the senior non-executive directors who have become fashionable on corporate boards. That senior member could act as an adviser to the CEO and perhaps chair meetings where there were concerns that the CEO had a serious conflict of interest.

[Lord Sharkey]

My Lords, I shall speak briefly to Amendments 480 and 481 in my name and that of my noble friend Lord Willis. The Bill proposes what is really quite a radical reduction in the size of the existing research councils, which are to have between six and 10 members. The existing councils have between 10 and 17 members, with an average of 15, of whom four or five are lay members. It would be good to hear from the Minister an explanation of the rationale for this reduction in the size of the research councils. In particular, could he point to evidence that their current size has led to inefficiencies or undesirable outcomes? If that is not possible, can he say what the evidence base is for suggesting how a reduction in the membership would actually improve their performance?

I note here in passing that the membership of UKRI itself is proposed to be at least 12 and at most 15. Why is it desirable that the membership of the research councils should be smaller than that of UKRI itself? I am not arguing that it is not, but I would just like to hear the reason the Government think it is.

Of course, it is not just the numbers that matter but the experience and the mix of the members. The practice of having lay members is an important part of our current councils. As I say, each of them has four or five lay members, except for the STFC which has three or four, depending on whether you count people as lay or not. We know from experience in other fields, especially financial services, how important it is to avoid groupthink and to have outsiders challenge established or entrenched views. Can the Minister set out what approach UKRI will take to the appointment of lay members to the research councils? Is it the intention that the present balance should continue?

[Lord Mendelsohn]

My Lords, I rise to speak to Amendments 500B, 507ZB and 507B, but first I will echo the support of these Benches for the amendments proposed. It is important to understand that they share the objective of trying to maximise the effectiveness of UKRI and the councils themselves. I hope that the Minister will be able to provide reasonable assurances on these matters.

The case made by the noble Lord, Lord Sharkey, about their size is very important. In all the evidence we have received there has been no suggestion that their size has been a disadvantage—quite the opposite: it has been a huge advantage. I will be interested to hear the justification for the reduction in number and whether there has been any assessment as to whether this diminishes capacity.

We strongly support the call for independent chairs. That case was extremely well made by the noble Baroness, Lady Brown of Cambridge. Not only do they have a good record of governance thus far, but it has been good governance. The noble Lord, Lord Broers, made the essential point that in any circumstances where there is a board, corporate governance has got to the position it has because a board needs a chair to deal with the issues incumbent on dealing with a chief executive. To eliminate that would be a strongly mistaken act.

It is imperative that councils remain the prestigious and capable institutions that they are. Their role should not be usurped or superseded. They require independence and authority. They should not be the plaything of Ministers. There should be a real, consistent quality to the recruitment of staff, the board and lay people. The Minister should accept that this should be a measure of whether they are still meeting that test. In ensuring that the councils can work effectively, especially in a new framework, they cannot have the notion that they will change quickly and rapidly from their original brief, because that would unsettle these arrangements.

There is real power to the weight of the arguments presented. I hope that the Minister will reflect on them. It reminds me of Confucius’s saying that there are three methods by which we may learn wisdom. The first is by reflection, which is the noblest. The second is by imitation, which is the easiest—I am sure that noble Lords would be more than happy if the Government were to imitate the amendments. But the third is by experience, which is the bitterest. I hope that the Minister will consider that, in this area, the weight of the arguments would help the Government to learn how they would have to rectify this from bitter experience. It is important that governance is absolutely right.

In Amendment 507B we suggest, because there is no real stated role for councils in UKRI, that the executive committee should have a role in the innovation strategy. We think that it is important that those who work on it are specifically defined as having that role.

The amendment that stands out slightly is the one that proposes that the royal charters should remain in existence but not in force. The crucial question is whether this would work or whether leaving them would create its own problems. There are two reasons for keeping them. First, in the circumstances that we are unable to establish that this system will work better, or that the mechanisms will reach a critical mass of working better, it is important that there is some useful architecture to revert to in this area, where we cannot afford to get things wrong. Our current method has not been shown to have any poor performance; it is just that we believe that there are better ways. Secondly, the system should accord a level of prestige.

There is not really a case for removal. The discussions that many noble Lords have had with the Privy Council suggested that the royal charters do not necessarily need to be eliminated. There is an argument to say that having the safety net of keeping them in place would mean that some might use it to undermine the current arrangements. This is not a reasonable concern, although it would be if we did not have such a great degree of unanimity about the importance of trying to move on and reach a new stage.

Motivation is more likely. If this is properly managed by Ministers and incentivised, there would be a quicker desire to remove the stabilisers. There may even be the opportunity for it to be a more liberating mechanism to ensure that other inventive, creative mechanisms are used. It is important that we do not throw everything out and that we do not eliminate things that we do not have to.

Finally, I would be grateful to clarify one element in this section that has not been fully covered: the position of government departments’ areas of research. Some government departments have their own research facilities, such as the Department of Health, the Ministry of Defence, Defra and others. Some would say that these are fiefdoms but I would say that they are just areas that fall under the government departments. How will they relate to the new arrangements? Of course, as we look at the Nurse review, there was consideration that these should be considered under the ambit of Research Councils UK. Indeed, the section that included Innovate UK and HEFCE—not that I wish to reopen the discussion we had earlier—also said that consideration should be given to the place of other government departments’ research within Research Councils UK. I would be very interested to hear how the Government view their interrelationship with this new set up.

17:30

[Lord Prior of Brampton]

My Lords, I agree that the issue of research council autonomy is of the utmost importance and will take this opportunity to restate the Government’s commitment to the Haldane principle so well described by my noble friend Lord Willetts. I think we will be coming back to the Haldane principle later this evening. We sought to embed it throughout Part 3 of the Bill.

These reforms have been developed following Sir Paul Nurse’s independent review of the research councils, which involved significant consultation with the sector. It would not be for the benefit of research and innovation, or the UK, were we to delay bringing these reforms forward while conducting another review. In implementing Sir Paul Nurse’s recommendations it will be necessary to make changes to current structures—for example to better enable inter-disciplinary research. I am confident that we can undertake these reforms to build on the existing success of our funding bodies.

I reassure noble Lords that the research councils will continue to be vital components of the research and innovation landscape, and through Clause 103 we are protecting their symbolic property and goodwill, including their name, insignia and branding. Furthermore, they will retain their discipline responsibility, operating within a structure that enables greater interdisciplinarity.

Key among Sir Paul Nurse’s recommendations is the need for a single accounting officer. To implement his vision, the governance structure of research councils needs to change and the role of the chief executive will evolve accordingly. Council executive chairs will be powerful positions focused on key strategic planning, performance management and decision-making within their disciplines. The role will have sufficient powers and should be able to attract extremely high-quality candidates. To ensure that this is the case, the role will combine those of the current council chair and chief executive.

I do not believe that a distinct, non-executive chair position is necessary within this new arrangement. Councils will have collective responsibility for strategic, scientific or innovation decisions in their disciplines and they will, for example, continue to take decisions on the prioritisation of their hypothecated budgets within their delegated limits. The UKRI chief executive and board, which of course has a non-executive chairman, as well as the executive committee, will be able to provide challenge and support to inform these decisions. Each executive chair will also be supported by their council. Introducing a non-executive chair and chief executive for each council into this line of accountability would risk confusing accountabilities within UKRI and undermine its key strategic role.

The noble Lord, Lord Mendelsohn, referred to Confucius and the three ways of improvement: reflection, imitation and experience. All my experience—it is possibly bitter experience—is that confused lines of accountability lead to problems. To have chief executives of councils who are accountable to a non-executive chairman, with perhaps a dotted line there and a straight line to the chief executive at UKRI, would build accountability problems into the structure. I was interested by the suggestion of the noble Lord, Lord Broers, of an equivalent to a senior independent director or SID, in a sense imitating corporate governance on the board of a council. That is worthy of further consideration. Perhaps the chair of UKRI might like to discuss that with council members once they have been appointed.

On the proposal for an executive committee, I fully agree that such a committee would provide a valuable forum within UKRI. Yet an executive committee would simply be a matter of good organisational design and governance, and it does not need to be in the Bill. However, noble Lords made an interesting case warranting—I regret to say—further reflection.

Following on from this, I will also address the suggestion from the noble Lord, Lord Mendelsohn, that the executive chairs of councils should be consulted on the development of UKRI’s strategy. I agree wholeheartedly; it is a necessity to ensure the overall coherence of the UKRI strategy and each council’s strategic delivery plan. I fully expect the executive committee, on which all the executive chairs will sit, to play an integral role in this process.

On Amendment 480, we set an upper limit on the number of members on each council to facilitate their effective and efficient operation. I believe that this is appropriate, particularly given that the UKRI board will take on certain functions such as oversight of corporate functions. None the less, the noble Lord, Lord Willis, and others made a compelling case to increase this limit. My noble friend Lady Neville-Jones suggested that there should be no limit at all. Again, that is something that we would like to reflect on.

On Amendment 481, regarding lay representation on councils, I appreciate the intent with which the noble Lord tabled this amendment and reassure him that this legislation does not preclude the councils from appointing lay members, as many currently do. I hope that I have provided some reassurance—

[Lord Willis of Knaresborough]

If you imagine having a chief executive who is also an academic, the rest of the council could then be appointed as academics. Where does the challenge come there to address the issues mentioned earlier about, for instance, the north, Scotland and other organisations?

[Lord Prior of Brampton]

I think the challenge comes from two places. First, the executive chairman would be on the executive committee of UKRI so it will be challenged there. Secondly, there will also be challenge—or support, where required—from the UKRI board. I hope that I have provided reassurance on the proposed governance structures and powers regarding the councils, and ask the noble Baroness to withdraw the amendment.

[Baroness Brown of Cambridge]

I thank the Minister for his detailed response, and in particular for his commitment to the Haldane principle and his assurance about the continued importance of the individual research councils within the new organisation. I also thank the other noble Lords who spoke powerfully in this debate for their contributions in support of both my own and the other amendments.

I really believe that UKRI can be a success but achieving that will need strong, autonomous and diverse councils working together. Governance changes do not need to remove independent chairs. Just about every major company in the world these days operates a matrix structure where people manage dotted and solid-line accountabilities and responsibilities. Managing that is not beyond the very best of science, innovation and business in the UK. I hope there will be some further reflection as the Minister withdraws to his room of many mirrors. I am glad that he will at least consider the proposal from the noble Lord, Lord Broers, of a senior independent director. I wonder if that senior independent director might still grow into an independent chair of a board.

I am delighted to hear that the Minister will also reflect on the size of councils, because they are diverse and will need to be of different sizes. As we heard from the noble Baroness, Lady Neville-Jones, the EPSRC distributes a lot of money across a very diverse collection of engineering, science and mathematics subject areas. It is very important that both the business and academic communities can be present on the council in order for it to make good decisions.

I am also delighted to hear that the Minister will reflect on whether an executive committee should be put in the Bill.

[Lord Prior of Brampton]

I did not say that I thought the executive committee should go in the Bill. I felt that it was not necessary for it to go in the Bill because it will just be part of normal, good operational governance.

[Baroness Brown of Cambridge]

I beg the Minister’s pardon. I misheard him. I thought he said he would reflect on that further and I thought that might mean it would appear in the Bill. Since it is so necessary, I do not see any reason he would not put it in the Bill because it would provide so much assurance to the community about the importance of the research councils. Of course, we would expect such a committee to play a key role in strategy.

As I think the Minister can tell, I am looking forward to hearing more about potential government amendments in this area and I hope that they will not disappoint us. On that basis, I am happy to withdraw the amendment.

Amendment 479A withdrawn.

Amendments 480 to 482B not moved.

Amendment 482BA

Moved by

[Lord Mendelsohn]

482BA: Schedule 9, page 104, line 19, leave out “any” and insert “some”

[Lord Mendelsohn]

My Lords, I was very tempted to rise during the Minister’s previous comments, but that would have undermined the next part of my address, looking at this group. I hope he does not mind if I touch on some of the other issues very briefly. In moving Amendment 482BA, I will speak also to the other amendments in my name and address some of the issues raised in the amendments in the name of my noble friend Lord Stevenson.

The first point we want to make about the functions of UKRI is that because there is a very important and complex series of relationships with the councils, the function of UKRI needs to be defined and the right assurances given. There are already considerably confused lines of accountability in how this is established. You have only to look at the different functions that are laid out for UKRI to perform and for councils to perform and where the determination rests on those. The obvious issue is who is responsible for hiring and firing an executive chair. In Schedule 9 this is the Secretary of State, for any reason that they see fit—for example, if the chair misses certain meetings—or if they feel that there is no appropriate mechanism for that to be effectively dealt with.

The main issue comes down to: what is the separation of functions? UKRI is meant to be a strategic brain. It is meant to facilitate the overall development of cross-disciplinary funds and activity. It is also meant to be responsible for the back-office functions across the organisation, although when you try to determine what those back-office functions are, many of them are core to the operations but are outsourced rather than having one organisation dealing with them. Even within the administration of an organisation, there is a series of issues which will impinge upon the other functions that the councils will have to undertake. When you identify the areas that are delegated to the councils, they lend themselves not just to an independent chair but to understanding that the lines of accountability are pretty clear, based on the definitions of the different roles, as specified by the Government.

However, I have gone a bit too far; that was not really my purpose. I wanted to raise that point but I have gone way beyond what I intended. I am keen to get some sense of how the guidance on the functions that UKRI will retain will work, particularly with regard to the back-office functions—that area where the Government believe there are such considerable savings to be made. I would be grateful if the Minister could give me some sense of how that would work. I appreciate that the detailed guidance is not published yet but I would like some idea of how the Government came to the conclusion that there was such a great bonanza to be gained from merging those activities, and how that could be effectively managed.

Many of our amendments are probing in nature but they also look at some drafting issues. We have considerable concerns about inconsistencies and areas where we believe that the wording requires some degree of change. It is more than just occasions when we feel that a “may” should be a “must”, which very often is more than just a drafting issue. There are amendments which tidy up inconsistencies—for example, social sciences are mentioned in one place but missed out in another—which I hope the Minister will address and will understand are beneficial. Amendment 482BA suggests that UKRI should be able to delegate “some” of its functions, rather than “any”, as the Bill currently states, to ensure some degree of consistency. Many of the others are in the same vein.

17:45

It is also important to look at the research being measured by its contribution to economic growth and quality of life. Here I am particularly pleased to have added my name to Amendment 484A in the name of the noble and learned Lord, Lord Mackay of Clashfern. I hope that as a mathematician he will not be too offended by what I am about to say. There is a point here about the nature and purpose of research and making sure that it is quantified by particular outcomes. I am keen to hear the Minister’s view on the case that I think should be made for serendipity in research. There are occasions when we can see research as having other than the intended outcome and times when we can look at funding blue-sky research, which does not have the most specific or enhanced research endpoint but is of merit and hard to measure in other ways.

Looking at the range of research that we have and making sure that we can look at basic, applied and strategic research, giving the capacity to UKRI to have an eye on other things is quite important. It reminds me of the story that we heard when we had discussions with some of the institutions here about one piece of research which looked almost whimsically at how herpes created latent cold sores. As a result of this research, a viral treatment to address herpes was developed. That begat gene delivery by virus, which begat gene delivery to deal with cancer, particularly melanoma. The people who were involved in that research now have a company which focuses on cancer. It is important that within the principles that we have, as well as trying to ensure that we have hard-edged research and retain our world-leading position, we think very carefully about independent researchers and—dare I say?—eccentrics, and the foundations of creativity and challenge which are inherent in the benefits of having an excellent and outstanding research base.

Finally, I would be very grateful if the Minister could take this opportunity to give us some clarification of how the Government see the role of UKRI in its function of overseeing postgraduate research students and part-time students. We have a tremendous group of institutions in this country, particularly Birkbeck, with which many noble Lords will be familiar, which is an outstanding institute that deals with part-time students. The Bill lacks clarity about the role of such institutions. I would be grateful if the Minister could make that clear. I beg to move.

[Lord Judd]

My Lords, Amendment 485C is in my name. I want to follow the theme developed by my noble friend Lord Mendelsohn in the latter part of his remarks. This country needs strong industry and strong technology, which are vital to our future survival. The universities are indispensable in this respect. But the standing of our universities in the world, particularly universities with unrivalled reputations—I am proud to be involved in one, LSE—have those reputations because of the quality of their research. What has sometimes been most important in building up that reputation is exactly what my noble friend was talking about: the independence of that research. Within the vital indispensability of the applied research we do there is also a danger: that we lose perspective and the independent ability to judge what it all adds up to for the future well-being of our country.

It is no good trying to disguise the great concern that exists that in placing heavy emphasis on applied research and its vital needs, which we have debated this afternoon, the social sciences get weaker. It is absolutely indispensable for us to have firm guarantees from the Government that whatever arrangements are made, the social sciences will be guarded and protected, because within them are the people who see the consequences of developments as they take place. They see the wider social implications of what is happening. If we are talking about the well-being and viability of our society, their significance cannot be underrated. My amendment would simply add to this by saying that pure research matters, and we must emphasise it. In doing that, we must not become so mesmerised by the battle to survive in the immediate economic sense that we lose the perspective which is the guarantee of our future well-being as a nation.

[Lord Willis of Knaresborough]

My Lords, while I strongly support the amendments in the name of the noble Lord, Lord Mendelsohn—the points he made were absolutely right and I hope the Minister will be able to address some of them—I would like to concentrate my remarks on Amendments 493, 494 and 495, which are in the names of my noble friend Lord Sharkey and I and the noble Lords, Lord Cameron of Dillington and Lord Stevenson of Balmacara.

In outlining the desirable functions of the research councils, Clause 89 is far too narrowly defined, particularly subsection (4)(a). Amendment 493 recognises the importance of resilience as a fundamental requirement for the UKRI landscape. While a significant amount of the research funded by research councils should rightly contribute to growth—and most certainly does—a significant amount of research council investment directly benefits the economy by avoiding cost, rather than increasing income. Both these funding objectives are important and contribute to the UK’s resilience. Equally, by retaining a broad scientific capability across the research councils, the UK retains the ability to be resilient when under threat or pressure.

In his earlier remarks on his amendments the noble Lord, Lord Mendelsohn, stressed the importance of the arts and social science in this respect but the impact of other areas of science is equally important. Successive Governments have cut back on our national capability to generate scientific advice, and thereby resilience, by privatising government laboratories such as the government chemist, which is within LGC, the National Physical Laboratory and the Forensic Science Service, which was the last to go into 2012. I am not making a negative comment about privatisation, but once the Government could no longer rely on them for advice, an element of national resilience went at the same time.

Particularly since the mid-1990s, right across government, departmental resource for in-house science research has dropped dramatically. Since 2010 it has virtually disappeared from some departments, so it is a rather academic exercise to say whether it should be included within UKRI or elsewhere, because most of it has gone. The only way the Government can get a great deal of that hard scientific advice is, yes, through their own advisory services, but from the research councils. The need for the research councils to maintain capacity to train a body of scientists to carry out research on all manner of possible events—from avian flu to erupting volcanoes, from BSE to the El Niño effect—and to support the efforts of organisations such as the Met Office, the Antarctic service, Rothamsted and the Diamond accelerator has never been greater. It is the research councils which generally develop the skills at PhD and postgraduate level to supply those cadres.

Amendment 494 follows in a similar vein. Clause 89(4)(b) clearly recognises that research councils should have regard to the desirability of “improving quality of life”. It would be odd if they did not want that, which is clearly an essential element of government. This amendment would go much further by adding that research councils should support research activity that seeks to improve quality of life by seeking to enhance,

“social inclusion and community cohesion”.

When I wrote these amendments, I did not know how appropriate they would become as the threats to social inclusion and community cohesion, both here and abroad, become even greater. Using scientific research to make our lives simply better, rather than wealthier, seems an objective well worth pursuing.

However, Amendment 495 is in many ways the most significant in this small group. I hope that when he responds, the Minister will either accept this in its entirety or, if not, find a suitable set of words to convey the same meaning. A huge, although I believe unintended, consequence of the Bill, along with the emergence of UKRI as a new accounting body for UK science, is that the future success of UK science will be judged by its economic rather than its societal impact. Each should have parity of esteem. The principal role of fundamental or discovery science is to improve the nation’s science and knowledge base. Everything else flows from that, which should be an objective in its own right. While research councils must guard against their presumed inability to draw to an end certain funding lines of inquiry, we should never be so risk-averse that we do not try to fund risky ventures but always try to fund winners. Some of the greatest fundamental science had absolutely no outcome at the time it was developed, yet has proved incredibly powerful across the world.

[Lord Cameron of Dillington (CB)]

My Lords, I support Amendments 493, 494 and 495, to which I have added my name. I must declare interests as chair of the advisory board of CEH, a trustee at Rothamsted and chair of the strategic advisory board of the Government’s Global Food Security programme. As has been explained, these amendments are designed to broaden the vision of the purposes of the research to take place under the councils within UKRI. It is wrong for the primary focus of Clause 89(4)(a) to be pinpointed solely on economic growth. To my mind, that is a throwback to the bad old days of the 1980s, when competing in the marketplace at all costs was considered the primary purpose of life. We soon realised that that was not sustainable. I say that as a past member of the Round Table on Sustainable Development, so I use “sustainable” in that context advisedly.

18:00

I realise that post Brexit, there is a new urgency to the economic agenda, but we need to ensure we maintain a longer term and wider vision of life on this planet. For instance, where in Clause 87(1) or Clause 89(4) does the wider environment feature? I realise that Clause 89(4)(b) refers to “improving quality of life”, both in the UK and the wider world, but what does it mean by “life”? One would hope that it means not only human life, but that could be the implication, following the rather narrow ambition currently expressed in paragraph (a) of that clause. I suppose one could take the view that the very long-term quality of just human life on earth will depend on the research work we do to maintain the quality of habitats, water and the living environment for all species on our planet—including bugs and bacteria; from elephants to plankton—but it would be better to spell that out for the sake of clarity and to include a reference to the wider environment in Clause 89(4).

Then there is the fact, to which other noble Lords, including the noble Lord, Lord Willis, have referred, that one of the features of basic primary research is that you never know where it is going to lead. Sometimes just improving our knowledge base now could be really important for some aspect of science or life in 50 years’ time, possibly for an aspect that is not even on our radar at the moment. That broad principle is not given sufficient weight in either paragraph. This is where our Amendment 495 would be a beneficial addition to Clause 89, and I hope the Minister will be able to accept it. Perhaps the wording of the three amendments is not quite right, but there is no doubt that Clause 89(4) as it stands is far too narrow to set a science agenda for the 21st century.

[Baroness Brown of Cambridge]

I rise to speak to Amendments 490C and 490D, which are tabled in my name and that of my noble friend Lord Krebs, and Amendments 495A and 495B, which are tabled in my name and those of my noble friends Lord Mair and Lord Broers. These amendments concern the roles and responsibilities of the science and humanities research councils.

Amendments 490C and 490D would ensure that the science and humanities research councils are able to exercise the functions of UKRI in their fields without any additional constraint from UKRI, which is important for the autonomy of the research councils. Clause 89(1) currently restricts them exercising those functions of UKRI in such fields of activity “as UKRI may determine”. Amendment 490D simply removes the implied additional level of control by leaving out “as UKRI may determine”. This helps to strengthen the autonomy of the research councils in the new UKRI structure which noble Lords, including my noble friends Lady Finlay, Lord Patel, Lord Kakkar and Lord Rees, and the noble Lord, Lord Darzi, spoke so passionately about at Second Reading.

Amendment 495A echoes the concerns that we have just been hearing about and reflects the focus of a number of amendments in this group that I strongly support. The research councils in Clause 89 are very focused on contributing to economic growth and quality of life, both of which are clearly very important. However, as we have heard from the noble Lords, Lord Willis and Lord Judd, and my noble friend Lord Cameron, basic or pure research, whatever you like to call it, whether in sciences or humanities, is the pursuit of new knowledge for its own sake and as a contribution to scholarship, knowledge and understanding more widely without a current economic purpose. That is critical for a healthy research base.

Amendment 495B, which is tabled in my name and those of my noble friends Lord Mair and Lord Broers is to help ensure that Innovate UK’s business-facing function remains clear and distinct from those of the humanities research councils. In Clause 90, Innovate UK is specifically prohibited from doing the research councils’ role of carrying out research, which seems appropriate. This amendment would prevent the research councils duplicating Innovate UK’s functions so that those important functions remain clearly business-led.

[Lord Willetts (Con)]

My Lords, I shall briefly speak to some of these amendments. I think the Government, perhaps through infelicitous drafting, are creating unnecessary anxieties, given the way that these clauses are currently formulated. I particularly welcome two of the amendments. First, Amendment 484AB tackles a rather peculiar feature of Clause 87, which may well be due to the way in which the parliamentary drafting developed. The phrase,

“research into science, technology, humanities and new ideas”,

is not the way in which the science and research community would list its activities. It is regrettable that social science is not specially identified in that list. We are all familiar with the term “arts and humanities”. Many of us are lay people, but we nevertheless understand the distinction between life sciences and physical sciences. This is a rather peculiar way of formulating it. I suspect a parliamentary draftsman said, “Well, social sciences are a science, so they must be covered by ‘science’. We don’t need to say ‘social sciences’ as well”. I suspect that that is the conversation that happened. We have ended up with something that, for people in this community, looks a rather peculiar list. It would be better if it were closer to the way in which we think of the range of research activities carried out in the UK.

Secondly, Clause 89(4) currently lists,

“contributing to economic growth … and … improving quality of life”.

Again, that seems to promote unnecessary anxieties. It has not been my experience that any science Minister from any political party represented in this Chamber believes that there is no value in pure research. I do not think that people sit around saying, “All we’re interested in is the immediate consequences for economic growth”. There is a great story about Margaret Thatcher, when she was Prime Minister, receiving a brief advising her not to invest in the large hadron collider because it does not have any useful economic effect. She scribbled on the brief, “But it’s very interesting, isn’t it?”, and the public funding went ahead. That is the approach that I hope all of us take to science funding. I do not believe it will be any different under this new structure. However, it would tackle a concern if the Bill were explicit that, alongside the promotion of economic growth and the quality of life, we also believe in simply extending knowledge and research in this country.

There may be other areas. I listened with great interest to what the noble Baroness, Lady Brown, said, about what can also be improved on. These are unnecessarily narrow formulations that do not adequately capture what the Government intend with the new structure. As we have heard the Minister’s willingness to reflect, I hope that this is an area where he reflects with particular energy and concentration.

[Lord Broers]

My Lords, I support what the noble Lord, Lord Willetts, said. I have my name on Amendment 495B, to which my noble friend Lady Brown of Cambridge has spoken so excellently. In trying to distinguish what Innovate UK and the research councils do, Clause 90 states:

“arrangements may not be made under this section for the exercise by Innovate UK of UKRI’s function mentioned in section 87(1)(a)”.

When you look at Section 87(1)(a), you will find it states:

“carry out research into science, technology, humanities and new ideas”.

Innovate UK spends 20% or 30% of its resource, I believe, on research that underpins the product programmes it is supporting, which is only appropriate. In Amendments 484A and 484B, which are in this group, the noble and learned Lord, Lord Mackay, suggests adding “basic, applied and strategic” before “research”, which really steps into Innovate UK’s territory. There is no specific amendment on this—I just point out to the Minister that there is concern about the wording. It is misleading if you take it just as it reads.

[Lord Sharkey]

My Lords, I shall speak briefly in support of Amendment 495, which was tabled by my noble friend Lord Willis and to which I have added my name. It amends Clause 89(4). Clause 89 defines the fields of activity for each of the research councils. It goes on, in subsection (4), to say:

“Arrangements under this section must require the Council concerned, when exercising any function to which the arrangements relate, to have regard to the desirability of … contributing to economic growth in the United Kingdom, and … improving quality of life (whether in the United Kingdom or elsewhere)”.


The requirements are a little vague, and the obligation to “have regard to the desirability of” is very weak. But the intent seems to me to be clear, and the two desiderata seem to need a third to achieve any kind of balance. The priority for any research council should surely be to increase the UK’s science and knowledge base. Contributing to economic growth and improving the quality of life are good and desirable objectives, as are the others that we have discussed this afternoon, but they must be subordinate to the objective of improving the science and knowledge base. That must come first.

My noble friend’s amendment adds improving this base to the list of have-regards, so that it is explicitly clear that this is a desirable function of research councils. We need this additional requirement, or something very much like it, to avoid distorting the priorities of research councils and to make clear, in the Bill, what their primary purpose is.

[Lord Blunkett (Lab)]

This will probably be the shortest speech I have made, or ever will make, in the House of Lords. I have a registered interest as a fellow of the Academy of Social Sciences and would like to reinforce what the noble Lord, Lord Willetts, has indicated this afternoon. Given that the Minister is respected as someone who does not just listen and reflect but is actually prepared to give and to come back with solutions, I hope we will be able to reflect on the importance of avoiding doubt and—as the noble Lord, Lord Willetts, has said—misunderstandings simply by getting the wording right and reassuring people that we are approaching this with a comprehensive view for the well-being of our university research community and for the future well-being of the country.

[The Earl of Selborne]

My Lords, for slightly different reasons, I also support the concept that social sciences should be in the Bill. One of the purposes of the formation of UKRI is to address the need to promote interdisciplinary research. So many of the exciting areas of science are interdisciplinary, but it has to be admitted that research councils have not always successfully collaborated, certainly not with other parts of the research portfolio. We have talked about the great contribution that charities, the departments and independent research institutes make, and one of the jobs of UKRI will be to have real knowledge about how all these can contribute together. One thing that is absolutely certain is that social sciences are the key to interdisciplinary research. It is almost impossible to think of a research programme that does not have some social science implication, so it would be enormously helpful just to remind us that when we are talking about interdisciplinary research, we should see social sciences as key to that.

I also very much agree with Amendment 494 in this group, for the reasons that the noble Lord, Lord Liddle, touched on earlier, regarding how UKRI should be charged with responsibility for social inclusion and community cohesion. If it was just about economic benefit, we might as well continue to have the golden triangle and all that flows from that, and the lack of community cohesion. This is a game where UKRI, taking as it does an overall view, can make a real contribution to ensuring that the areas which are suffering at the moment from a lack of investment and poor productivity benefit from innovation.

At the risk of repeating what I said at Second Reading, although we congratulate ourselves, quite rightly, time and again on the quality of our science base, it does not necessarily work through in terms of productivity, which is below the EU average: 50% of United Kingdom cities are in the bottom 25% of European cities in terms of productivity. That is a goal on which we should always concentrate our minds. Innovation and the science base are both key to getting this right—this is about the long term—but the formation of UKRI, bringing together as it does the research councils and Innovate UK, must be seen to have these wider objectives.

18:15

[Lord Mackay of Clashfern]

My Lords, before I come to the amendments in my name in this group, I will just mention first that Clause 105, a definitions clause, says that “‘science’ includes social sciences”. So that is in the Bill, in a way. It may be that my noble friend Lord Willetts or the noble Lord, Lord Blunkett, would like it to be more prominent, but it is certainly there already. Clause 105 is also the source of what I said about the councils. It says:

“’Council’ has the meaning given by section 86”.


Clause 86 is where “Councils” become “committees” of UKRI.

My amendments are inclined to emphasise the importance of basic science. I very much take what has been said by the noble Lord, Lord Judd, and others about developing knowledge for its own sake. That was a very clear statement of a very distinguished mathematician in my youth, GH Hardy of Cambridge. He was a theory of numbers man, which had no very obvious application to anything much at that particular moment, except that he brought the wonderful Indian mathematician Ramanujan to this country and made him prominent. GH Hardy’s view was that mathematics, particularly the theory of numbers, should be researched, investigated and developed for its own sake.

Amendments 484A and 484B relate to Clause 87, which defines UK Research and Innovation’s functions. I am glad that I have already had support from two speakers for these amendments before I had the opportunity to mention them myself. Clause 87(1)(a), which is mentioned in the provision referred to by the noble Lord, says:

“UKRI may … carry out research into science, technology, humanities”—


which includes the arts by definition, although I am not sure what else it includes separately from the arts other than perhaps languages—“and new ideas”. UKRI has the important function of promoting research into new ideas, which is distinct, apparently, from research in the earlier listed subjects of science, technology or the humanities. I am not absolutely clear what that adds to the whole function, but no doubt the Minister will be able to explain it to me with his usual clarity.

I want to emphasise the need for basic science to be remembered, which is why I have sought to add to UKRI’s functions as listed at subsection (1)(a) research into “basic, applied and strategic” science. That seems to me to be essential if UKRI is to carry out the kind of function that we expect from it of enlarging knowledge for its own sake as well as for the benefits that it may have to others. Enlarging knowledge will benefit people, even if you do it for its own sake. It is also important for the development of science itself that too much emphasis is not placed on applications, as the theory and development of the basic structure of the science is extremely important.

I noticed in today’s paper a comment on the research into dementia. A particular medicine or drug had been developed that was thought to be helpful in relation to dementia but, unfortunately, it did not work. It must have taken a little time to find that out, but it did not work. The comment was that the research was too narrowly focused on an aspect of the disease. This is a very topical example of what I am trying to say.

I hope an amendment such as the one I have proposed will be incorporated. I do not necessarily say that mine has the best ever wording—it could be improved, I am sure—but it is the best that I have so far been able to offer. No doubt the Minister’s reflections may improve it further.

[Lord Oxburgh (CB)]

My Lords, I had not intended to speak today. I declare my membership of the Foundation for Science and Technology, chaired by the noble Earl, Lord Selborne, and my honorary professorship of the University of Cambridge. The comments I wish to make cut across many of the amendments that we have discussed, both now and earlier.

Reading the Bill as it stands, you could believe that from a research point of view the UK was an island sufficient unto itself. There is almost no reference here to any international work. I think the noble Lord, Lord Willis, made a passing reference to that in one of his interventions in today’s debate, but it is crucial. There are whole areas of science in this country where we would not have a presence without successful international collaboration. A very good example is marine work. Marine research ships are very expensive to run, and frequently they have been run in collaboration with other countries. One could also mention big science facilities.

My concern with the Bill as it stands is that paragraph 16(3) of Schedule 9, which deals with supplementary powers, says:

“UKRI may not do any of the following except with the consent of the Secretary of State: … enter into joint ventures”.


Does this mean that if one of our research councils or other parts of UKRI wish to set up a collaboration with one of their opposite numbers, be it on the other side of the Atlantic, in mainland Europe or anywhere else, they have to go to the Secretary of State before they can do so? I hope that that is not the case, and that the importance of international work can be a little more clearly expressed in the Bill before we finally approve it.

[Lord Bilimoria (CB)]

My Lords, I declare my interest as chancellor of the University of Birmingham and chair of the advisory board of the University of Cambridge Judge Business School. On that note, if I may boast, today the FT global rankings for the MBA came out and the Judge Business School rose from number 10 to number five in the world. This is a business school that has been around for only 26 years, compared with the Harvard Business School, which is over 100 years old. One of the reasons for that success is the excellence of research at a university like Cambridge.

The problem that is overlooked completely by the Bill is that we in this country carry out excellent research despite underfunding it compared with competitor countries. We spend 1.7% of GDP, compared with 2.8% in the USA and Germany. Our research councils, which are world-class and respected around the world, have been doing a great job as autonomous units. One of the main worries about the Bill in universities and research councils is the removal of the autonomy of these institutions. They function well thanks to that autonomy.

I support Amendment 490D from the noble Baroness, Lady Brown, and the noble Lord, Lord Krebs, which would leave out the words “as UKRI may determine”. Under Clause 89, headed, “Exercise of functions by science and humanities Councils”, UKRI would have the right to determine what they do. This is absolutely wrong. Whatever the reasons the Government have given for having a layer like UKRI, many people—the noble Lord, Lord Rees, has argued well against it—have said it is completely not necessary and could be damaging to the whole sector. The analogy made was setting up a body to represent all the world-class museums in London, which are the best museums in the world. That would be completely unnecessary as they are doing a great job on their own. We have to ensure that the autonomy of the research councils is protected, whatever happens, even with the existence of this body called UKRI.

[Lord Prior of Brampton]

My Lords, my noble and learned friend Lord Mackay kindly referred to my usual clarity. I fear, in so far as I ever had any clarity, it is rapidly dissipating as time goes on. Still, I will try to respond to many of the issues that have been raised in this very interesting debate.

I shall start with the governance relationship between research councils and UKRI. I will resist the temptation to address the broader issue raised by the noble Lord, Lord Bilimoria, but I recognise that the UK still underfunds research compared with many of our competitor countries. Nevertheless, the £2 billion increase coming into UK research in 2020 is a significant change. One has to ask oneself whether that would have come about without UKRI being about to become our key co-ordinating research body.

Through Clause 89 the research councils retain their right to make decisions within their respective discipline areas. I assure noble Lords that UKRI must arrange for the seven research councils to carry out their roles and functions within their areas of activity. UKRI cannot prevent any of the research councils carrying out their functions in their respective areas.

I thank my noble and learned friend Lord Mackay for pointing out that references to “humanities” are in fact defined in the Bill, in Clause 105. It makes it very clear that they are defined as including the arts, and references to “sciences” include social sciences.

In discussions in the other place, the Government were clear that funding allocations would be made to each of the councils by the Government in the UKRI grant letter. Delegated authority limits will be set for the research councils to operate independently but additional approvals may be needed, including from the UKRI board, in line with current government best practice.

It is an important part of these reforms that UKRI will empower the councils to work together. The amendments would not prevent UKRI operating in this manner, but would obscure our intent for UKRI to take strategic decisions and facilitate development of the overall direction.

To address the point made by the noble Lord, Lord Mendelsohn, this reform is about far more than efficiency savings or a reduction in bureaucracy. We must deliver these where we have the opportunity to, but not at the expense of the strengths of the current system. However, the removal of the current duplication of back-office functions across multiple bodies will ultimately drive efficiency savings and reduce the administrative burdens placed on research and innovation leaders, freeing them up to focus on strategic decision-making. It will also help to deliver simplified systems and processes for funding recipients.

On Amendments 485C and 195A, I welcome the opportunity to assure noble Lords that UKRI’s core purpose is to seek to improve the UK’s science and knowledge base, and it will seek to improve knowledge and understanding through research. Advancing knowledge is a critical role of the whole of the UK research base, including UKRI and the research councils, and we will look carefully at this matter before we return to the House on Report. I share the aspiration of the noble Lords, Lord Willis and Lord Cameron, for UKRI to support research programmes that can help to shape government policy, ensure resilience and respond to key challenges facing the UK.

On social inclusion, community cohesion and social and cultural well-being, I am certain that the current duty on councils to consider the desirability of improving quality of life is sufficient to cover these.

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Lastly, on Amendment 495B, I can assure noble Lords that, through UKRI, research councils will continue to fund research in universities, research facilities and institutes, including fundamental and blue-sky research with no immediate application. Therefore, I can assure noble Lords that the Large Hadron Collider, the theory of numbers and, indeed, the research going into dementia now, are not in any way prejudiced by anything in the Bill. The Bill makes it clear that it is the role of Innovate UK to directly support innovative businesses with funding. It replicates the current legal basis for Innovate UK.

However, we must not tie the hands of the research councils or prevent them increasing the collaborative work they already undertake with Innovate UK. I understand the concerns of noble Lords that the research councils should be able to operate widely, and we will look carefully to see whether any further additions to the functions of UKRI could be beneficial. On that basis, I ask the noble Lord to withdraw the amendment.

[Lord Mendelsohn]

I thank the noble Lord for that reply. This has been an excellent debate, with some outstanding contributions from across the Committee. In particular, given my detour into some of the issues about matrices and responsibility, I thank those noble Lords who made a better case for my amendments than I did.

I am grateful for the support, particularly around the social sciences. I am keen to observe that the point made by the noble and learned Lord, Lord Mackay of Clashfern, about definitions is absolutely right and true. However, there is the inconsistency when referring to different places. For example, the Natural Environment Research Council means environmental and related sciences, and at that point the definition is inoperable. Therefore, the issue of consistency is important and speaks to the outstanding contribution of the noble Lord, Lord Willetts, about the language used, and the unnecessary anxiety that some of the drafting has caused across the Committee.

There is great merit to many of the amendments and I hope that the Minister will reflect on these. It reminds me of John Locke’s observation that,

“education begins the gentleman, but reading, good company and reflection must finish him”.

I hope the Minister realises that he is in good company here, and that he will reflect wisely on these amendments and bring something forward on Report. I beg leave to withdraw the amendment.

Amendment 482BA withdrawn.

House resumed.