Catapults (Science and Technology Committee Report)

Lord Kakkar Excerpts

Thursday 19th May 2022 Lords Chamber

[Lord Kakkar (CB)]

My Lords, I join noble Lords in thanking my noble friend Lord Mair for the very thoughtful way in which he introduced this debate on the excellent report of your Lordships’ Science and Technology Committee on catapults and their contribution to the innovation landscape, so remarkably well chaired by my noble friend Lord Patel. In so doing, I declare my interests as chairman of the Office for Strategic Coordination of Health Research, chairman of King’s Health Partners and chairman of UK Biobank.

As we have heard, there is no doubt that catapults have established themselves as playing a fundamental role in the UK innovation landscape. One of the most important areas of the economy with regard to innovation and economic development is, of course, the life sciences. The life sciences sector provides some 250,000 skilled and highly skilled jobs in the UK economy, and in 2019 contributed £80 billion to it. But the footprint for life sciences in the United Kingdom is truly global: 25 of the world’s leading biopharmaceutical companies and 30 of the world’s leading medical technology companies are responsible for 24% of the employment in UK life sciences and 37% of the turnover attributed to life sciences in our country. It is therefore critical that the environment that Her Majesty’s Government are able to facilitate and foster for innovation and economic development as a result is attractive not only domestically but to global participants, who may wish to invest in and continue to sustain UK life sciences.

We have heard in this debate about Her Majesty’s Government’s commitment to increasing R&D expenditure, and that is of course broadly welcome. In 2020, public contribution to R&D expenditure in our country reached £15.3 billion, an increase of £1.7 billion on the previous year, fulfilling the Government’s commitment, but when one looks at that public contribution to R&D funding, £6.1 billion came from UKRI—40%, the largest single public contribution to R&D expenditure. Therefore, it is vital that the funding formulae and rules that attend UKRI are conducive to supporting the broadest possible base for R&D activity in our country.

We have heard that a number of catapults were first established in 2010-11 and thereafter in 2015, and two are relevant specifically to UK life sciences: the Cell and Gene Therapy Catapult and the Medicines Discovery Catapult. The Cell and Gene Therapy Catapult, as an example of the success of catapults, is quite striking. It was established with great foresight and imagination at a time where there was recognition of an emerging technology—cell and gene therapies—to be applied not only to treat but potentially to cure diseases. We have seen a rapid advance in the technological base for cell and gene therapies, contributing at pace and increasing scale to the management of many diseases.

However, it is interesting that the area around Stevenage, the home of the Cell and Gene Therapy Catapult, is also the world’s third largest cluster of cell and gene therapy companies. In establishing the catapult, the innovation landscape has not only established the opportunity to house essential technology and equipment but provided the opportunity for nascent and established businesses to test their innovation, establish their credentials and ensure their broader application generally in healthcare. It has also encouraged the development of many novel businesses in the location and their taking advantage of those opportunities to ensure the development of jobs and economic activity.

Your Lordships’ Science and Technology Committee report identified a critical anxiety regarding funding rules attending the opportunity for catapults to avail themselves of Research Council funding and to be in a secure position to take full advantage of public funding made available by Innovate UK. These are two critical issues that my noble friend Lord Mair touched on in his presentation of the Committee’s report. I should declare that I was a member of your Lordships’ Science and Technology Committee. In making recommendations 3 and 4, we highlighted the repeated concern and the chilling effect of a restriction regarding access to Research Council funding, and that the 30% cap on Innovate UK funding to public sector organisations, which could include the two catapults or universities working together, was a substantial disadvantage. Her Majesty’s Government recognised and accepted the recommendation.

In November 2021, Innovate UK published its plan of action moving forward, recognising the success of catapults but, as far as I can ascertain, failing to address the question of restrictions to Research Council funding and the quantum of Innovate UK funding for public sector organisations. Are Her Majesty’s Government content that this issue has been addressed and if not, how do they propose to address this pivotal recommendation in the Science and Technology Committee’s report?

It is clear that public sector investment in research and development is frequently attended by a tremendous upside in terms of private sector contribution. We see this in the analysis of the biomedical catalyst fund: some £250 million of funding resulted in £1.3 billion of private sector contribution to research funding, acquisitions and other elements of commercial activity.

If the true opportunity to leverage public sector R&D in the life sciences sector is to be achieved, providing that funding consistently through mechanisms such as the catapults is of tremendous importance and significance, as is Her Majesty’s Government’s commitment to ensuring that if our country is unable to participate in Horizon 2020 funding as an associate member, that funding deficit will be matched. Can the Minister update us on the Government’s position regarding Horizon 2020 funding or its future matching, as that too plays a vital role in the UK innovation landscape?