2 Lord Watson of Invergowrie debates involving the Department for Business, Energy and Industrial Strategy

Mon 30th Jan 2017
Higher Education and Research Bill
Lords Chamber

Committee: 7th sitting (Hansard - continued): House of Lords

Science Research Funding in Universities (Science and Technology Committee Report)

Lord Watson of Invergowrie Excerpts
Wednesday 9th September 2020

(4 years, 3 months ago)

Grand Committee
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Lord Watson of Invergowrie Portrait Lord Watson of Invergowrie (Lab)
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My Lords, we are all indebted to the noble Lord, Lord Patel, and other members of the Science and Technology Select Committee, for the comprehensive manner in which they examined such an important sector of the economy, and for the clarity of their report and its recommendations.

A year may have passed, but many of the issues highlighted by the committee are now even more pressing, as many noble Lords have demonstrated today. The UK’s world-leading university and research institutes and their academic staff, researchers and students are a national asset, which is why it is so important that steps are taken to ensure their future and its future. As the report makes clear, if the Augar review recommendation of reducing the tuition fee cap in England to £7,500 was ever implemented, then without compensating direct government funding, the financial consequences for universities would be serious. As my noble friend Lady Young said in colourful terms, it is to be hoped that Augar’s proposal remains just that.

A recent Institute for Fiscal Studies report stated that the Covid-19 crisis posed a significant financial risk to the UK higher education sector, predicting that 13 universities would end up with “negative reserves” and would be at risk of insolvency without a bailout. Yet for those institutions, such assistance is by no means a given. The Government have recognised the threat to universities by establishing a higher education restructuring regime board. Alarmingly, however, at the board’s launch, the Secretary of State said that he is prepared to see universities go to the wall. Perhaps the Minister could let us know the circumstances in which that would be allowed to happen.

In part, the threat to some institutions stems from the impending drop in the number of international students, but it emanates also from threats to research funding, and of course, the two are linked. University research is underfunded against its true costs—the latest official figures showing a gap of some £4.2 billion across the UK—and as the noble Lord, Lord Patel, said, universities close this gap using the international student fee cross-subsidy. Each international student pays an average of £5,000 more than it costs to educate them, so this contribution will be severely reduced by the inevitable fall in numbers this year.

In recent years, domestic student numbers have remained static, with international students responsible for overall growth. The UK higher education sector had almost 350,000 international students in 2018-19—14% of all students at UK universities—so the effect of the reduction in numbers will be stark and the resulting drop in funding will carry through the system for several years.

Regarding research, capacity must be maintained in the face of competitor countries already actively and aggressively pursuing UK academics with offers. The noble Baroness, Lady Randerson, said that we cannot take the UK’s pre-eminent position for granted, which is absolutely the case, and the noble Lord, Lord Willetts, graphically illustrated the constraints on post-doctoral researchers coming to the UK. The research community extends worldwide and if researchers have their contracts terminated because of short or medium-term funding issues due to Covid-19, they will find work elsewhere and be unavailable whenever the sector regains strength.

In the Government’s response to the committee’s report, the then Universities Minister, Mr Skidmore, said:

“We have asked UKRI to provide formal advice to BEIS … on the balance of funding across the functions of Research Councils and Research England in preparation for the Spending Review.”


That was 11 months ago and under a different Government, but what formal advice did UKRI subsequently provide to the Minister’s department, and what decisions were taken as a consequence? Perhaps I should have directed that question to the noble Lord, Lord Willetts, as a UKRI board member.

On the subject of the spending review, is it still the Government’s intention to proceed with one this autumn? If so, will it be comprehensive or, perhaps, a curtailed version in response to the particular effect on the economy of the coronavirus pandemic? I hope that the Minister can enlighten us.

International students, which will now include those from EU member states, provide £6 billion a year to higher education institutions, with a further £7 billion spent in the UK economy. Exact numbers, and therefore losses, will not be known until later this month, but analysis for the University and College Union by London Economics forecast a reduction of around £2.5 billion. The British Council’s survey of international student intentions produced a similar figure.

There is an urgent need to protect—indeed, enhance—domestic and international research. Under the EU’s Horizon 2020 project, UK research received £3.5 billion and was a crucial part of hundreds of international research projects. I add my name to those of the many noble Lords who have urged the Government to follow the committee’s recommendation that the level of funding that the UK currently receives from the EU for research be matched in full.

Currently, 62% of research in UK higher education institutions is publicly funded. The committee report noted that public funding has largely not kept pace with inflation over the past decade, which it said has led universities to cross-subsidise research from other funding streams, such as resources for teaching. Public funding for research in universities after we leave the EU should seek to replace not just the total amount of funding but other areas it supports in quality-related unhypothecated research.

Earlier this year, BEIS and the DfE established the snappily titled Ministerial University Research and Knowledge Exchange Sustainability Taskforce. It has an impressive membership, including representatives of the devolved Administrations, so can the Minister say what consideration the taskforce has given so far to the most pressing issue facing university research, namely the future of funding when Horizon 2020 comes to an end?

Horizon Europe uncertainties must be resolved. In June, the Government confirmed that continued participation in that programme formed part of the negotiations currently being conducted with the European Union. We know all too well that those are not exactly going swimmingly and that the situation is unlikely to improve now that, as the noble Baroness, Lady Walmsley, cited, the Prime Minister is planning to act illegally by reneging on his own treaty—a treaty on which he successfully fought a general election just nine months ago. That sort of tactic—if indeed that is what it is—is hardly likely to increase the likelihood of the UK being welcomed as participants in Horizon Europe. It is a matter of trust.

In a Written Answer on 6 August, the noble Lord, Lord Callanan, stated this in relation to ongoing negotiations:

“If we do not formally associate to Horizon Europe we will implement ambitious alternatives as quickly as possible from January 2021.”


He suggested that a new discovery fund might be introduced. I hope that he will be able to say a bit more when he comes to reply about such a venture and how the funding attached to it would measure up against the opportunities available through Horizon Europe. Research teams are entitled to know the likely extent of the funding pool to which they will have access from next year.

In their response to the committee’s report, the Government committed to increasing levels of R&D to at least 2.4% of GDP by 2027. That is to be welcomed, although the research community is rightly sceptical, given that, according to the Office for National Statistics, the current figure is just 1.71%. I wonder whether the Minister can say something about the manner in which he and his department foresee that figure increasing towards 2.4% between now and 2027.

I must say, the Government are due some credit for their support for the higher education sector in reaction to the coronavirus pandemic. In May, they brought forward the relatively modest amount of £100 million of research finding as well as £2.5 billion of advance tuition fee payments. In June, they announced a support package for university research and a pledge was made to increase public funding for R&D to £22 billion a year by 2025. That is welcome and is all well and good, but what will the sector look like by 2025 if the pandemic is not brought under control and the UK’s universities remain unable to admit international students in significant numbers?

No deal with the European Union looks increasingly likely. The cost of that in terms of jobs and the general standard of living, particularly for those least able to withstand it, will be filed by government zealots under the heading “collateral damage.” That collateral damage is very likely to include the excellence of the UK’s research base, and with it would go the sector’s international reputation. The Government must decide whether that is a stain on their record that they are willing to accept.

Higher Education and Research Bill

Lord Watson of Invergowrie Excerpts
Debate on whether Clause 88 should stand part of the Bill.
Lord Watson of Invergowrie Portrait Lord Watson of Invergowrie (Lab)
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My Lords, in the unavoidable absence of the noble and learned Lord, Lord Wallace of Tankerness, I will speak to Clause 88 stand part.

Ministers are prone to deflecting arguments with the warning that they might contain “unintended consequences”. We have heard that several times, and I notice that the noble Lord, Lord Prior, followed that trend this afternoon in his response to the first amendments moved by the noble Lord, Lord Patel. Therefore, when a Bill or part of a Bill contains a provision which might have unintended consequences, logic suggests that Ministers should be willing to take that argument on board and act on it—surely that is consistency.

Clause 88 is one of the most closely associated with an issue which is of concern to the noble and learned Lord, Lord Wallace, and myself. It relates to the position in which the Bill will place a world-leading scientific organisation based in Scotland: the James Hutton Institute. At this juncture I should declare an interest of sorts. The institute has its headquarters on the outskirts of Dundee in the village of Invergowrie, which happens to be the place where I spent my childhood—the village, that is, not the institute—and which is reflected in my title. By way of clarification I should say that I have not lived in Invergowrie since 1972, and although the institute, then the Scottish Crop Research Institute, was there during my childhood, I have never entered its premises—not even as a minor, although I may well have attempted it on occasion.

The institute was one of many which sent briefings to noble Lords on the Bill and, as I have done with representatives of many other institutions that made contact, I arranged to meet with its chief executive and chief of science, Professor Colin Campbell. The tale he had to tell is a worrying one, concerning funding eligibility criteria which the Bill may leave in place, and the consequent effect on the James Hutton Institute.

The institute encompasses a distinctive range of integrated strengths in land, crop, waters, environmental and socioeconomic science, and is the biggest independent research institute in this area in the UK. Approximately 60% of its funding comes from the Scottish Government and the remainder is from the EU, international, UK and Scottish agencies, and some from private industry. Its research has been shown to make a significant contribution to the UK economy, with £12 returned for every £1 invested. It recently became one of the most successful institutes in the UK in winning EU money from the Horizon 2020 funding programme. That is the source of the dilemma facing the institute. While EU funding is open to all institutions and research providers and encourages collaboration with industry and especially small and medium-sized enterprises, as constituted, the Research Councils UK is not open to all and has eligibility rules which exclude the James Hutton Institute and others.

The institute is currently ineligible for direct access to RCUK funding due to a rule that states that no organisation receiving more than 50% of its funding from a single funder is eligible. The rule was introduced more than 20 years ago, apparently to avoid a situation whereby veterinary and surveillance labs, as fully funded government agencies, could not attract additional research funds from RCUK—which is not unreasonable. The James Hutton Institute is not a surveillance lab, although, as I said, it receives 60% of its funds from the Scottish Government. A significant amount of that funding is for centralised science facilities and national capability, which it is fully open to other institutions to use. The institute is not a public sector research establishment, and is currently the only independent research institute not eligible for research council funding.

The main concern is that with the restructuring of the RCUK and the establishment of UKRI, not only will the 50% eligibility rule carry over but there may be unintended consequences if such matters are unintentionally overlooked or if any new arrangements encompass rerouted EU funding once the UK leaves the EU. This would be very serious for the James Hutton Institute, as there is a risk that it could go from being one of the most successful research providers in gaining European funding to having next to no access at all.

As the noble Lord, Lord Patel, said when speaking to his amendments, Scotland punches above its weight in research terms. Universities Scotland said in one of its briefing papers sent to noble Lords that on the basis of competitive excellence, Scottish universities win around 14% of project funding from research councils but only around 7% from Innovate UK. Scottish research in all forms was able to win more than €200 million in the last year for which figures are available. Scottish institutions are naturally concerned about what the future will hold once the UK ceases to be a member of the EU. Not all EU funding will be lost, but it will become much more difficult to achieve when bidding is done from a standalone UK.

That, therefore, is the context within which the James Hutton Institute finds itself. It will have much of its EU finding closed off—perhaps all of it if in future it is all channelled through UKRI, to which the institute will have no access because of the 50% rule to which I referred.

It seems that there was no vehicle in terms of a detailed amendment to the Bill that would have achieved what is necessary for the institute to be able to have access to a level playing field—the scrapping of that 50% rule. I am hopeful that the Minister will be able to tell me—after a suitable period of reflection, of course—what can be done. However, the rule has applied since the Biotechnology and Biological Sciences Research Council, one of the seven research councils that work together, was founded in 1994, and that is funded by BEIS, so surely the Government can exercise their influence in this matter. Would the civil servants working in RCUK—or UKRI, as it will become—have the final say or can they be told to change what is clearly an anachronism?

This matter has been raised directly with the Minister for Universities and Science and with Sir John Kingman, and it seems that a misconception may have emerged. It appears that there are plans to run pilot trials in which PSREs in England Wales may be given access to RCUK, but this does not help the James Hutton Institute because, as I have already mentioned, it is not a PSRE and it may in any case suffer if it has to await the outcome of trials.

In conclusion, I say to the Minister, “Over to you”. This is a Catch-22 situation in which the James Hutton Institute finds itself through no fault of its own. The 50% rule is a barrier that can be dismantled if the will is there. Surely it must be.

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

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

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

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

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

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Lord Prior of Brampton Portrait Lord Prior of Brampton
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My Lords, I have to start with the confession that the James Hutton Institute is just a name to me. I confess my appalling ignorance on this subject. I need to research it. If I could, I will investigate the particular circumstance relating to the James Hutton Institute and then write to the noble Lord. I hope that that will be acceptable to him. I am sure it is a world-leading institution but, as I said, I have not visited and am not familiar with it.

Lord Watson of Invergowrie Portrait Lord Watson of Invergowrie
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The Minister is very new to his post and there is absolutely no question of reproach here. What he has suggested is acceptable. However, the point made by the noble Earl, Lord Selborne, is an important one. He has identified a particular issue with the clause, and if the Minister could refer to that in his reply, it would perhaps open up an avenue for the matter to be returned to on Report.

Lord Prior of Brampton Portrait Lord Prior of Brampton
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Let me give the noble Lord my response. If it does not cover exactly the points that it should, I will pick it up outside here and write to my noble friend Lord Selborne and the noble Lord. I will also try to set my response in the context of the comments made by my noble friend Lord Willetts.

The clause will make sure that UKRI is able to carry out one of its primary functions: to provide individuals and organisations with financial support to carry out research and innovation.

The noble Lord, Lord Watson, raised questions about other research organisations’ eligibility for funding. Many of these organisations are currently not eligible to receive Research Council funding as their research activity is already separately funded from outside the science ring-fence by other government departments or the devolved Administrations.

The rationale is to keep a clear separation between government funding and challenge-led Research Council-funded science and the capability of science funded directly by government departments. This is compatible with funding excellent science and maintaining the integrity of the funding ring-fence.

Noble Lords have argued that the wording in Clause 88(4) relates to this eligibility policy. I can reassure noble Lords that the clause does not establish or steer UKRI’s eligibility criteria. The wording is intended to ensure that UKRI does not spend public funds unnecessarily where this might result in crowding out private sector investment or funding from other sources. It is one safeguard to ensure that UKRI spends public money wisely. It also enables collaborations and partnership working, as already debated, around research charities.

The Nurse review recommended that research councils should refresh their eligibility criteria to pilot an approach allowing PSREs to become eligible for funding where they put forward high-quality research proposals relevant to their capability in collaboration with a university partner. In response to this, Research Councils UK is looking to pilot ways to include PSREs in a second call for the global challenge and research fund, with funding to start in financial year 2017-18. While the Government agree that we should be making the most of the excellent science being done in PSREs, they also agree with Sir Paul Nurse that government departments should remain the principal funders of capability and funders of last resort for PSREs. I am not sure to what extent that addresses the point made by my noble friend Lord Willetts.