Public Bodies (Abolition of the National Endowment for Science, Technology and the Arts) Order 2012

Baroness Hayter of Kentish Town Excerpts

Monday 19th March 2012 Grand Committee

[Lord Razzall]

My Lords, I welcome the explanation given by the noble Baroness. Of course, I fully support this proposal, as does, it appears, virtually everybody who has been consulted. My one question relates to the retention of the endowment within the public sector. As I understand it, the Government do not want to transfer the endowment out of the public sector, as the endowment is held more in less in government securities and, if those were to be transferred out, that would lead to an increase in the public sector net debt. Could the noble Baroness assure me that the retention for national accounts purposes of the endowment in the public sector does not imply any form of control of those assets by the Treasury? Clearly, the whole purpose of doing this is to get this out of the public sector entirely. Will she assure me that this is purely a technicality and that there will be no attempt by the Treasury to control that flow of money?

[Baroness Hayter of Kentish Town]

My Lords, the central question facing us on this issue is to ensure that, after replacing NESTA with a charity, it will continue with NESTA’s fine role in helping to grow our innovation economy and have an appropriate level of public accountability and scrutiny, which are not the same as diktats from the Treasury.

NESTA was one of the very successful measures introduced by the last Government to improve the translation of new research ideas into business and jobs. It used lottery money, which is, after all, the people’s money, to make the UK more innovative. As part of that, NESTA forged some interesting partnerships between innovators and policy-makers. As well as the investors, community organisations and educators have been there from the start. Some £50 million of the £320 million of the endowment that the noble Baroness mentioned was invested in start-up businesses. NESTA became the UK’s single biggest seed capital investor, which is something that we probably all applaud. That meant investing in life sciences and the healthcare sector, diagnostics, devices and biomaterials. These went into areas such as immune regulation, using some interesting new research and translating it very closely to patient use, a new generation of nerve repair from an innovative material and even being able to find a means to regrow teeth where they have been lost.

That work continues through the running of programmes with health service providers to improve the way that patients can work with doctors in managing long-term healthcare and, in a different sphere, through helping arts and cultural organisations to develop new business models and reach new audiences. The work also continues through developing with local authorities ways of looking after the elderly and young people and funding new ways to increase the giving of time, skills, assets and money through the Innovation in Giving Fund—something that I think we all welcome. We hope to see NESTA’s work continue to develop, but it has also played a role in encouraging high-flying early-stage researchers to be aware of the possibility of working across other disciplines and communicating science and its innovations to the public. I hope that the Minister will assure us that that work will continue.

As the Public Bodies Act was going through, I never accepted the necessity of moving NESTA from the public sector. I thought that that was being done simply to add another tick to the list. However, as it is now about to become a charitable company limited by guarantee, I hope the Minister will reassure us that it will not be caught by a lot of Charity Commission rules which were developed for a different purpose; that is, to protect normal beneficiaries of normal charities. We hope that it will not therefore have to answer a lot of questions designed for a different reason. Perhaps more importantly, we are about to lose some public accountability over the expenditure of money which has been raised from the public. The Minister mentioned the protector, which is an interesting name. It seems that the protector will ensure that the money is spent only on charitable aims and that NESTA’s procedures have integrity—I think the Minister used that word—but the protector will not be able to ask whether better things could have been done or other projects helped. At the moment Parliament can ask those questions about how NESTA is fulfilling its role and about its record, priorities and effectiveness. It seems to me that this accountability will now disappear. Therefore, the population whose money was spent on the lottery and then given to NESTA will have no say over the new charity via their elected MPs, this House or the Government. I hope that the Minister can reassure us on that point.

I am delighted—I have a feeling that the Minister will agree with me on this—that half the new trustees are women, which is an improvement on the fact that 100 per cent were men when the body was in the public sector, so some good things are happening. However, who in the future will appoint those charitable trustees? Will there be any public accountability over the decisions that those trustees will take on the use of the endowment? As I say, I regretted the original decision that was taken in this regard but we have probably ended up with the best possible outcome. However, I hope that the Minister will reassure me as regards public accountability and how the charitable trustees will be appointed in future. I also hope that she will reassure us that she will encourage the Government to use NESTA as a vehicle for promoting innovative ideas. It will be much better placed to do that outside the public sector. I hope the Government will give it every encouragement to do that.