IAN PEARSON MP AND PROFESSOR SIR KEITH O'NIONS

23 OCTOBER 2007

  Q1 Chairman: Could I welcome Ian Pearson, MP, Minister for Science and Innovation at the Department for Innovation, Universities and Skills, and Professor Sir Keith O'Nions, Director General of Science and Innovation at the Department for Innovation, Universities and Skills to this the last evidence session of the Science and Technology Select Committee where a Minister of Science and indeed the Director General of Science and Innovation will be present. Could I in particular thank you, Minister, for coming and in particular thank you, Sir Keith, for all the evidence and support that you have given this Committee during your time in office. It has been greatly valued and we thank you very, very much indeed for that. Could I start, Minister, by saying that on 31 July this year you made one of your most interesting comments—they are all interesting but this one was particularly interesting. You said: "Science is one of the Labour government's great success stories, but we have not really communicated that as well as we should have done." How are you going to change that?

  Ian Pearson: Firstly, thank you Chairman, for your comments of introduction and I hope to see you in another incarnation at the start of a new session. Yes, my comments were that I just do not think, despite the fact we have got a generally pro-science culture in the United Kingdom, that there is the breadth and depth of understanding that there needs to be about the importance of science in general and the contribution that science can make to both social advancement and economic prosperity. One of the things that you will see in our PSA agreement on world-class science and innovation is very centrally the importance of world-class science to the future of the United Kingdom. I think we need to do more to transmit that general view about the central importance of science to our economic and social well-being.

  Q2  Chairman: Just how are you going to do it? I think Lord Sainsbury would have said the same and other Science Ministers would have said exactly the same, so what is going to be different with you?

  Ian Pearson: Certainly we will continue with the investment in science that we have made over the last ten years. As you know, the science budget has doubled since we came to power in 1997. By the end of this Spending Review it will have tripled. If that does not demonstrate the Government's commitment to science, I do not think anything does. Answering your question specifically, I think we need to look at the Science and Society agenda and what more we can do to give it some extra oomph. I do not know how the shorthand writer will record that one.

  Q3  Chairman: "Oomph" is a very scientific word; this is very encouraging from the Minister of Science!

  Ian Pearson: Maybe I should say va-va-voom.

  Q4  Chairman: That is French, we will leave that!

  Ian Pearson: There will be some increase in the budget for Science and Society and the promotion of science. I think there is greater overall coherence that we can bring to the messages that we need to put out as a Government but also that the scientific community put out on a regular basis as well.

  Q5  Chairman: Okay, what then is your personal perspective of the future of UK science and innovation? How optimistic are you?

  Ian Pearson: I am very optimistic. I think we have an incredibly bright future when it comes to UK science. I wrote a small booklet called Universities and Innovation which was published back in the year 2000, and in doing research for that back in the late 1990s, I was going round a number of our universities and also looking at universities in the United States, and I have to say I think that UK universities were way off the pace compared with their US counterparts at that time. That is now no longer the case. We have seen the benefits of 10 years of sustained investment. At all the universities that I have been visiting over the past few months, it is tremendous to be able to go and see the cranes on site, the new buildings that are already there and additional ones to come. We have seen massive investment in our infrastructure. We have seen a massive boost as well to excellent research, and more and more of that is coming out of our university research base. David Sainsbury said also that when it comes to translating research into commercial benefit we used to be in the third division but that is no longer the case. That is absolutely true. I am not sure we have got three divisions now if he is talking about football, but certainly I think we are in the premier league when it comes to using our knowledge base for economic benefit. There is more that we can do and we continually need to upgrade our performance, but I think if anybody looks at our university system now and compares it with how it was ten years ago, they could not fail to recognise that there has been huge progress.

  Q6  Chairman: You have mentioned on a number of occasions there—and I do not want to get into the Sainsbury Report because we will deal with that later this morning—the whole emphasis which the Government has on knowledge transfer, translational research, the Technology Strategy Board at the centre of all that, and we will move on to all that later, but there is perhaps a feeling that basic research is of less importance. In terms of basic research itself, where do you see the future of that? Where is the emphasis on that? Speaking to some of our scientists, they actually feel that that is the case, that your eye is on another ball rather than on what actually creates that huge bedrock of research to translate?

  Ian Pearson: I would not accept that basic research is less important than research that is user driven. I think we have demonstrated over past years that we are doing both and we have also demonstrated the importance and the necessity of doing both. There clearly is research that is curiosity driven where we are genuinely world class. As is frequently stated, we are second only to the United States when it comes to the percentage of citations, and that is as a result of the world-class basic research that we do in the United Kingdom, and we need to continue to do that. If some of that is Britain's gift to the world then so be it, it is a good thing to do, but I think it is also right that although we do not know whether there is going to be commercial benefit that comes out of some of this basic research, experience and history tends to indicate that commercial benefit and economic benefit for the UK as a whole can come out of it. Research Councils UK produced a report just a week ago, I think it was, looking at measuring the economic benefits of research. In many cases they said this is an incredibly difficult thing to do, and some of this is unknowable at this stage, but I do think focusing on economic benefit has some value although we have to recognise as well that we are going to invest in research for research's own sake, and it is right that we should do so as a country.

  Q7  Chairman: Okay. My last opening question is that obviously one of the great challenges for any Government is making sure that science is effective, not simply within the department which you are in as Science Minister but that it applies right across the whole piece, and particularly a department like DBERR, the business and regulation department, it is absolutely crucial in terms of not only translational work but also in terms of our international work as well. I just wonder what plans you have to actually create those relationships with other departments so that science is seen as at the heart of government rather than just something which DIUS does.

  Ian Pearson: It is not just the Department for Business, Enterprise and Regulatory Reform; we need to work closely with a range of other government departments—the Department of Children, Schools and Families, the Treasury obviously, but other departments as well. We work very closely with Defra when it comes to climate change issues. I will hold regular meetings with some of my ministerial counterparts as part of that. Of course we have GO-Science which is the Office of the Chief Scientific Adviser, and I think that has made significant progress in embedding good evidence-based policy-making with scientific underpinning right across government.

  Q8  Chairman: Can I just say that in terms of Culture, Media and Sport you have a Permanent Secretary there who says that they do not need a departmental chief scientific adviser. That is not acceptable, is it, and when are you going to sort him out?

  Ian Pearson: What I will say is the DCMS is another good example of where we have close co-operation. The work that is being done at the moment on the Creative Economy has been led by DCMS, but I have had meetings with DCMS ministers and BERR ministers as well to discuss this to ensure that we are joined up as a Government, and I can assure you that science forms a strong part of those discussions in looking at the evidence base for policy initiatives that we may wish to take as a Government.

  Q9  Chairman: Why do you think the Permanent Secretary said that they do not need a departmental chief scientific adviser?

  Ian Pearson: I think maybe you need to take that up with the Permanent Secretary. I do not think it would be for me to hypothesise on his views.

  Chairman: I thought you would say that.

  Q10  Dr Spink: But you are the Minister responsible for Science so I would have thought it was for you, Minister. The Minister started by saying how he is going to improve the communication of science and get some excitement going in the industry. It is for you to do this, Minister. How are you going to encourage your colleagues to work with you?

  Ian Pearson: It is not for me to speculate on a Permanent Secretary's views; let me be clear about that. I believe it is a role for myself and for the Chief Scientific Adviser to ensure that we have good science right across government, and that is why we have been encouraging the appointment of chief scientific advisers at departmental level. We think it is right we should do that. There are some departments where science is perhaps less important than other departments, so we continue to have a debate about that, but the principle that we embed science right across the government is surely the right one, and that is what we are following. Chairman: We have made the point subtly. Des?

  Q11  Dr Turner: Well, Ian, the scientific community would happily concur with your opening remarks; the conditions under which they are working have improved immeasurably since the dark days of pre-1997. Sainsbury puts the situation rather nicely in his latest report. He says: "investment in science and innovation is not an intellectual luxury for a developed country but an economic and social necessity." I think those are probably words that we around this table would all very much agree with. The question is, does the latest Comprehensive Spending Review provide the investment that is necessary at a sufficient level in science, technology and innovation to sustain and support the UK's continued prosperity and hopefully growth in prosperity?

  Ian Pearson: Yes I believe it does. As I said at the outset, one of the things I am most proud of is the fact that we have doubled the science budget over the last ten years, and it will have tripled by the end of this Spending Review period from its figure of £1.3 billion a year in 1997. So we are going up from £3.4 billion in the current financial year to just a shade under £4 billion by 2010-11. That is a significant additional investment and we have seen some big increases in the budgets for research councils. If you look at the Medical Research Council, for instance, which has the highest increase, by the end of the CSR period its budget will be 30% higher than it is today.

  Q12  Dr Turner: It was starting from a deplorably low base, however, we do have to remember that, and another of the features of science is that it gets progressively more expensive to do, so you have to keep increasing the spending if you are going to stay in the game. How soon are we going to know more about the actual detailed allocations of funding for the research councils and in particular the division of funds in the post-Cooksey arrangements for medical research?

  Ian Pearson: We announced the headline allocations at the time of the publication of the Comprehensive Spending Review. We are currently going through a process with the individual research councils who are looking at their draft delivery plans, and we are offering comments on them, and we hope to reach agreement on those certainly before the end of this calendar year, I would hope before the end of November.

  Q13  Dr Turner: The Annual Review announced that 80% of full economic costs were going to be borne by research councils. This is a long-standing issue and, as you will remember, at one time the research councils were not bearing any of the full economic costs. Is there a possibility, however, that by picking up this level of economic costs it will actually swallow up most of the growth in research allocations?

  Ian Pearson: There is certainly no doubt that the implication of full economic costing and funding at 80% plus the additional capital investment, which is what we are proposing to do, does have an impact on budgets, but I think it is widely accepted in the research community that this is the right thing to do and that it simply was not acceptable that full economic costs were not considered when research decisions were being taken. You are right, we have come a very long way from those dark days in 1997 when for a considerable period of time before then the research community was starved of basic finance. That is no longer the case now but it is a challenge to make sure that we continue to look to provide full economic costs, and we need to bear in mind as well when we look at full economic costing the need for the UK research base to be internationally competitive. There are people out there who say that full economic costing is making our research in the UK very expensive compared with some other countries, and we need to look at these things in the round.

  Dr Iddon: Just before we leave that point, Chairman, I wonder if I could just ask the Minister about Framework Programmes from the European Union. In order to encourage people to bid for FP7 and later FP8, have you had another look at funding the economic cost of running those programmes in the UK?

  Q14  Chairman: Can you also include the charities in that as well.

  Ian Pearson: Thank you very much. We are currently in discussions at a European level on FP7 and also on the Joint Technology Initiatives. There are four early term JTI programmes where I think the UK needs to take a strategic interest. There is a clear skies programme, there is an innovative medicines programme, there is one on technologies, and there is one on computer-embedded electronics, so we need to look at participating in all of those. We have not, as I understand it, looked at factoring in full economic costs as part of FP7 allocations. Universities and researchers that will be bidding for these funds will clearly know what support is available and will be able to make judgments on whether to apply and at what level to apply for research as part of that. With regard to charities, we have a commitment which we will honour to ensure that we provide a reasonable share through the Charities Research Support Fund.

  Professor Sir Keith O'Nions: HEFCE.

  Ian Pearson: HEFCE will be making announcements on that again before the end of this calendar year.

  Q15  Dr Turner: The Government has expressed a desire for research councils to focus on "key areas" of research. This clearly raises several questions. Who is going to decide what are the key areas? To what extent will they diminish effort in other areas which might later develop into key areas, because you can never quite tell where things are going? Will it be for the Government or for research councils to ring-fence funding to sustain these key areas? Can you flesh out what the Government means by developing key areas of research?

  Ian Pearson: It might be helpful if I explain in a little detail the science budget allocation process that we have been going through. We originally invited the research councils to bid into us on different scenarios as to whether there will be a flat cash increase, whether there will be a minus 5% increase, a plus 5% or a plus 10% increase. We gave them guidelines in terms of some of the key priorities that we face as a Government and those broadly reflected the Treasury's "grand challenges", so they were to do with climate change, the impacts of an ageing society, security and globalisation—those big trends. We then had a process where research councils came back to us saying, "We want to do this in terms of our research, this is how it fits in with your priorities, this is what we do under this scenario, this is what we do under that scenario," and we used this to make judgments as to allocations between different research councils. We announced those in headline terms, as I said, at the time of the Comprehensive Spending Review, and now we are talking to research councils, whilst respecting the Haldane Principles of course, about the detail of what they are proposing. When you look at the different research councils you will see that some of their research is top-down but a significant proportion will be bottom-up and it will vary from research council to research council as to what extent it will be themed and to what extent it will be purely curiosity driven, and that would not be influenced by any of the key priorities that we have set as a Government.

  Q16  Dr Turner: So the research councils will retain a fair measure of flexibility?

  Ian Pearson: Research councils will certainly have a significant degree of flexibility and we will continue to respect, as I say, the Haldane Principles.

  Q17  Dr Turner: One other thing which is good in the CSR is an increase for the Large Facilities Capital Fund. Having seen some of the results of its spending last Friday, it is very important for the future of British science, but there is just one thing that needs to be covered. It is very fine to have such a fine, world-class beast as Diamond for instance but they are also expensive beasts to run, so if you increase your large facilities, where is the extra revenue coming from to keep those large facilities running effectively?

  Ian Pearson: You are absolutely right to say that Diamond is a truly world-class facility and it is great that we have got something of that calibre here in the United Kingdom. Again, we have been investing heavily in science infrastructure, and that is right because to do world-class science you need world-class facilities. When it comes to running costs, we look at these very carefully, and certainly the research councils will look very carefully when they are making funding allocations to ensure that running costs are taken into consideration when it comes to major programmes, and whether it is a science and innovation campus or a university that houses some of these big pieces of equipment, you expect the running costs to be taken into account as part of their business planning process.

  Q18  Chairman: Could I just ask you two quick supplementaries, Minister. You have quite rightly made reference to the significant increases in spending on science since 1997. I do not speak about anything before 1997 because I was not in the House before 1997, but when you look at the way in which our economy has been growing during that time, the actual increase in science spend is 0.01 of 1% of GDP. Do you not feel that science in fact should be measured against GDP rather than just simply an increase in cash? Is that not the real measure?

  Ian Pearson: There are a number of possible measures that can be used, but I think the crucial point is that we have heavily invested in science. Whether you go to Diamond, or you go to the University of Manchester which I was at yesterday, they are in the middle of a £401.5 million building programme, a third of which is funded by Government, or if you go to Aston University where I was on Friday, again big, new investments in infrastructure have taken place there, and in virtually every university you can name you can see significant building work that has taken place over the last 10 years and you can see significant investment in research at research-intensive universities as well.

  Q19  Chairman: When you actually compare the investment that is being made by our competitors, we are not in fact keeping pace with them. I am not debating that it is a good story; of course it is a good story, and this Committee has always been at pains to point that out, but everybody else is investing so much in science, is not the question that really we have to do even more in order to simply keep pace?

  Ian Pearson: I agree we have to do even more and that is why in a tight CSR settlement round science has been one of the winners, so we will continue to invest in science. When you look at the science budget to GDP ratios, one of the reasons that does not look as impressive as maybe some other countries is the fact that the UK has performed exceedingly well over the last 10 years when it comes to economic growth.