Catapults (Science and Technology Committee Report)

Lord Mair Excerpts

Thursday 19th May 2022 Lords Chamber

Moved by

[Lord Mair]

To move that this House takes note of the Report from the Science and Technology Committee Catapults: bridging the gap between research and industry (2nd Report, Session 2019–21, HL Paper 218).

[Lord Mair (CB)]

My Lords, it is a great privilege to open this debate on the Science and Technology Committee report Catapults: Bridging the Gap between Research and Industry. This topic could not be more important at the present time: there is an increasingly vital need to stimulate the UK’s economy by driving innovation and investment by industry from our science and technology research. I thank the Minister for making time to respond to this debate. It was a privilege to have been a member of this House’s Science and Technology Select Committee under the excellent chairmanship of the noble Lord, Lord Patel, who has asked me to open this debate. I speak on behalf of the committee in thanking him for his inspirational leadership and I am delighted that he will also be speaking in this debate.

The committee was very fortunate to have the benefit of excellent committee staff for our inquiry: our clerk, Dr Simon Cran-McGreehin; policy analyst, Dr Amy Creese; and committee operations officer, Cerise Burnett-Stuart. I thank them all for their hard work in running the committee proceedings so well and for producing the report.

The background to our inquiry was the crucial importance of the UK’s research and development in science and technology for the future economy, and the need to clarify the important role of the catapults in promoting collaboration between industry and research organisations. The Government have set a target that the UK should spend 2.4% of GDP on R&D by 2027, up from the current level of 1.7%. The current level is significantly lower than the average for EU countries and the average for OECD countries. The Government have committed to increasing public sector R&D spending to £22 billion per year—about 0.8% of GDP—by 2024-25. This is very welcome. However, achieving the overall target will require significant private sector investment, which is expected to be around twice the public sector spending. The 2.4% target therefore represents a very significant increase in private sector funding, some of which is expected to arise through the catapults’ activities. The question is how to achieve this?

In July 2020, the Government published its R&D road map, which reiterated the spending target and sought to build on the UK’s innovation infrastructure, including enhancing the catapult network. Importantly, as well as expecting the catapults to promote increased private sector funding of R&D, the Government also envisage the catapults supporting their levelling-up agenda for regional development. In November 2020, we launched our short inquiry to examine the contribution of the catapults to delivering the UK’s R&D road map, including their role in stimulating long-term private investment and supporting new innovation tie-ups. Our inquiry was not a review of the catapults themselves. We received written evidence from the catapults and we heard oral evidence from all nine catapults in December 2020 and January 2021. Our report was published in February 2021.

By way of background, the catapults were proposed in a 2010 review for the Government by Dr Hermann Hauser. In the foreword to that review, Dr Hauser wrote that the UK

“falls short on translating scientific leads into leading positions in new industries. This is in part down to a critical gap between research findings and their subsequent development into commercial propositions that can attract venture capital investment or be licensed … Other countries benefit greatly from a translational infrastructure that bridges this gap”.

Dr Hauser’s review proposed

“that the UK develops an equivalent capability … focused on sustained and substantive support for an elite group of Technology and Innovation Centres … that aim to exploit the most promising new technologies, where there is genuine UK potential to gain competitive advantage.”

In response to Dr Hauser’s recommendation, the then Government directed the Technology Strategy Board, now Innovate UK, to establish the Catapult Network.

From 2011 to 2013, during the tenure of the noble Lord, Lord Willetts, as Minister for Universities and Science, who I am very pleased is taking part in this debate, the first seven catapults were established: High Value Manufacturing; Cell and Gene Therapy; Digital; Offshore Renewable Energy; Satellite Applications; Transport Systems; and Future Cities. In 2015 and 2016, three more catapults were added: Energy Systems; Medicines Discovery; and Compound Semiconductors. In 2019, the Connected Places Catapult replaced the Transport Systems and Future Cities Catapults. The catapult network has proved to be an important national asset. A recent report by the Royal Academy of Engineering and the National Engineering Policy Centre, Late-stage R&D: Business Perspectives, highlights the role that the catapults have in supporting late-stage R&D, a vital part of the innovation process that accounts for the majority of R&D that businesses do.

Many businesses choose global locations for high-value, late-stage R&D activities, from multinationals to mobile, innovative SMEs with growth ambitions. But existing UK support for late-stage R&D is not meeting business needs and is considered poor compared to competitor countries. Catapults provide the physical and digital infrastructure needed to test, certify and develop new products, processes, services and technologies, safely and effectively. They assist late-stage R&D by allowing access to specialist equipment, knowledge and data that would otherwise be unaffordable or inaccessible to companies.

There have been various reviews of the catapults over the past five years. Shortly after our committee’s report was published, the Government published their review in April 2021, Catapult Network Review 2021: How the UK’s Catapults can Strengthen Research and Development Capacity. In the same month, the Government also published their response to our report. I will highlight a few of our key recommendations and draw attention to the Government’s responses.

The first was funding. We recommended that specific rules governing innovation funding should be reformed to allow greater flexibility for catapults and their partners. These rules currently act as barriers to collaboration between catapults and universities, and often place too much risk on industry in transformative R&D projects. The funding available for innovation in the UK does not appear to be commensurate with the Government’s ambitions as set out in the R&D road map. The 30% cap on collaborative R&D funding for public sector bodies inhibits collaboration between catapults and universities. Leveraged funding requirements can place too much risk on industry in transformative R&D projects. Also, lack of access to research council funding puts catapults at a disadvantage compared to universities. We therefore recommended that specific rules governing innovation funding in respect of catapults should be reformed. In their response, the Government recognised the current restrictions on funding for innovation and acknowledged that the 30% cap on collaborative R&D funding for public sector bodies could be reducing the ability of catapults to collaborate with universities as well as with each other. The Government’s response indicated that UKRI, and specifically Innovate UK, had been asked to review its funding rules to allow catapults greater flexibility. Could the Minister provide an update on what changes to the funding rules have been made or soon will be made? Will the catapults be allowed greater flexibility?

Our second recommendation was mobility between academia and industry. We highlighted the importance of strengthening links between academia and industry, and the role of catapults in providing a key role in facilitating this. The Dowling Review of Business-Research Collaborations, undertaken for BIS in 2015, highlighted that the

“lack of porosity between industry and academia remains a significant challenge”.

Noting that the strong links between researchers in academia and in industry are a strength of the highly successful Fraunhofer institutes in Germany, we recommended that UKRI foster closer links between industry and universities and assist researchers to work at the interface between the two, including through supporting roles for academics at the catapults. In their response, the Government undertook to work with Innovate UK, catapults and universities to actively promote new connections between catapults and universities. Could the Minister provide an update on this promotion of such connections? What new steps are being taken to facilitate mobility of researchers between universities and catapults?

Third was regional development. Our committee concluded that the Catapult Network can play an important role in the Government’s levelling-up agenda, about which we have heard a great deal. Catapults are one of several bodies that can contribute to regional development, and better co-ordination is needed at local levels. However, catapults face a barrier to involvement in UKRI’s Strength in Places Fund, a flagship part of the levelling-up agenda. In their response to the BEIS review into the catapults, the Catapult Network explained:

“As the funding is geographically ring-fenced, it prevents Catapults from investing in regions where they do not presently work”.


This has the effect of restricting the national reach of the catapults, preventing them from participating where they could potentially add value. Our committee therefore recommended that BEIS and UKRI develop a more strategic approach across policies for innovation and regional development, such as broadening access to the Strength in Places Fund. In their response, the Government acknowledged that their Places strategy is particularly relevant to how catapults can play a greater role in supporting local innovation and growth. Could the Minister provide an update on the Government’s position on a more strategic approach as to how catapults can contribute to their levelling-up agenda? How can they all be involved in the Strength in Places Fund run by UKRI without facing geographical barriers?

Finally, there is the crucial question of the future role and long-term continuity for the catapults. Our committee was unconvinced by the Government’s approach to encouraging industry investment in R&D and how national assets such as the catapults might be enhanced. We recommended that the Government make the best possible use of the Catapult Network, preferably with an uplift in public investment, promoting it as the UK’s national innovation asset, and using it as the default mechanism for exploiting promising technologies and sectors.

In their response, the Government referred to their innovation strategy, which was subsequently published in July 2021. In this innovation strategy, the catapults are mentioned but it is not clear whether or how the best possible use of the Catapult Network will be made, particularly in terms of the envisaged prioritisation process based on the “seven technology families” identified in the innovation strategy, a concept inspired by the Government’s “eight great technologies” introduced in 2013. We understand that the new national Council for Science and Technology, chaired by the Prime Minister, will steer this crucial prioritisation process. Could the Minister comment on this? Will this process involve the catapults and how will the Government make the best possible use of the Catapult Network in the coming years?

In summary, it is clear that the Government rightly have strong ambitions for research and development, as set out in their R&D road map. Achieving the important 2.4% target will require substantially greater private sector investment. The key questions are: how is this to be achieved, which technology sectors will be prioritised, and what role should the catapults play, given that they are unique national assets? I look forward to hearing the contributions to today’s debate and to the Minister’s responses. I beg to move.

--- Later in debate ---

[Lord Mair (CB)]

My Lords, I thank the Minister for his responses to many of the questions raised by noble Lords, and of course I thank noble Lords for all their contributions. In particular, I think the Minister confirmed the Government’s confidence in the Catapult Network and their support for its important role in driving the innovation agenda. I will make just a few comments on some of the excellent speeches made by noble Lords in this debate.

The noble Lord, Lord Patel, rightly referred to the innovation strategy having very high ambitions. We have all noted that catapults are mentioned quite frequently in the innovation strategy, but there is no specific role for the catapults described in it. However, from the Minister’s replies to some of the questions, we now understand a bit more about the Government’s role for the catapults.

The noble Lord, Lord Willetts, referred to a lot of reports having been written about catapults. That is absolutely right; there have been a lot of reports and reviews, and it was a great pleasure to hear him say that our report was well informed and crisp. We are grateful to him for that. He emphasised that he would like to see more connection between catapults and universities, and that has been a theme throughout this debate. He also made the important point about how the catapults could well be used by government as an easily accessible template for future initiatives. He rightly referred to the formation of the Faraday Institution and how that might well have become a battery catapult in a much more streamlined process.

The noble Viscount, Lord Hanworth, drew attention to the very important role of technical education and technicians, and of further education—I think it is recognised that that sector has been starved of funds. We all recognise that, in this great drive to improve the relationship between research, technology and investment in new ventures, we need to make much more of our technicians.

The noble Lord, Lord Bilimoria, referred very eloquently to the important need to get to the targets that we see in the USA and Germany: 3.1% or 3.2% on R&D. The very ambitious target of 2.4% is to be welcomed, but the noble Lord is absolutely right: it is not, in fact, big enough and we should aim for higher figures. Having heard the Chancellor speaking recently at a dinner that he hosted, the noble Lord emphasised that the Government may well be able to play a major part in changing the tax regimes to encourage and promote private sector investment, particularly in the context of R&D. He very much supports the crucial role of catapults in promoting all of that.

The noble Lord, Lord Kakkar, rightly drew attention to the life sciences and the enormous contribution that they have made in many ways. He talked about the Cell and Gene Therapy Catapult and how it led, in the region of Stevenage, to a series of clusters. That absolutely illustrates how powerful a catapult can be.

The noble Lord, Lord Holmes of Richmond, also emphasised the crucial role of technical education, echoing the noble Viscount, Lord Hanworth. He also very much wanted to emphasise examples of catapults at their best and illustrated some very important applications by the Digital Catapult in many areas throughout the country. He also rightly asked a question about ARIA.

The noble Baroness, Lady Walmsley, also emphasised some of the contributions from the Digital Catapult. She raised an interesting and important question: should there be more opportunities for less successful catapults? In our report, we noted that some catapults are far more successful than others. There is a role for government in addressing that and enabling more opportunities for the less successful catapults.

The noble Baroness, Lady Blake of Leeds, rightly drew attention to the multitude of road maps, reports and plans. The same point was made earlier by the noble Lord, Lord Willetts. We have seen a lot of words and there is an awful lot to actually do in terms of action now. She also talked about levelling up and a regional role for catapults, citing as a good example the excellent work that the Offshore Renewable Energy Catapult is doing. That was something the Minister referred to in his summing-up; the catapult is very close to home for him in Blyth, and it is a very successful one, too.

The Minister gave a lot of good responses to our questions. It is excellent to hear that there will be increased funding for the catapults and that the Government will in due course set out that funding. It is welcome to hear that catapults will be able to apply for research council funding—I think the Minister said that would be from 1 June, which is very welcome. We were also pleased to hear about a large percentage of R&D funding being devoted to the levelling-up agenda.

In the seven technology families that we referred to, the catapults have a clear role—but that role is not yet very specific. It is still rather in generalities. The seven families cover a very wide area and we would like to hear more about what is specifically envisaged for catapults. The organisations Innovate UK and UKRI are promoting further interactions between academics at universities and catapults. That is extremely welcome and we are pleased to hear it. I think the Minister’s last point was that there is a clear plan for catapults. We may not yet know the full details of that plan and would obviously be keen to hear the details from the Government as soon as possible.

So, again, I thank all noble Lords who participated in today’s debate. Many excellent points were made and I hope they will be taken on board by the Government. As has been said, there have been many position papers and reviews published about catapults and the comprehensive UK Innovation Strategy has been published. Even more reviews are under way; one is being undertaken by Sir Paul Nurse. Of course, we look forward to the outcome of these, but, although it is a huge challenge, it is really time now for decisive action—not necessarily more words and plans.

There are potential dangers in a proliferation of committees and reviews, but I hope that our committee’s report and the speeches today have emphasised that the Government should make the best possible use of the Catapult Network. Catapults need to be promoted actively by the Government as a UK national innovation asset. They have a crucial role in developing technologies in which the UK excels, promoting private sector investment and supporting sectors that will bring substantial benefits to our economy.

Motion agreed.