RT HON ALAN JOHNSON MP, SIR BRIAN BENDER, PROFESSOR SIR DAVID KING AND PROFESSOR SIR KEITH O'NIONS

24 APRIL 2006

  Q74 Chairman: Could I welcome the Secretary of State and a high powered team: Sir David King, the government chief scientific adviser, Sir Brian Bender, the permanent secretary for the DTI, Professor Sir Keith O'Nions, the director general of science and innovation. Thank you all very much for coming and a very warm welcome to members of the public and the press who are also attending this afternoon. We were a little concerned having received notice from Sir Brian Bender that these very significant changes were taking place with the Office of Science and Technology which is going to be renamed the Office of Science and Innovation. When the budget came up, this was a budget for science. I mentioned that in my remarks during the budget debate. I think you would accept that that was very much the case. This seemed to indicate a very significant set of changes on the back of what was going to be a change in terms of the Department and the Office of Science and Technology. We felt it was important as a Committee that we got to grips with what exactly was happening and also gave you and your team an opportunity to explain what these changes are about and what will be the real effect once they are embedded into the system. That is the background to this session. We are very grateful to you and your colleagues for coming today. It is the most high-powered team we have ever had before us in the history of the select committee. I do not know whether that is quite true but it sounded good. Is the creation of the Office of Science and Innovation a superficial change or is it one of the most significant changes, for instance, during your time as Secretary of State? How significant is it?

  Alan Johnson: Thank you for those opening remarks. We are delighted to be here. It is certainly not superficial. Is it as substantial as some people may be indicating—ie, does it give them fears about some change that would for instance, affect the independence of the research councils? It is certainly not that either. We think it is a very important change. Myself and the permanent secretary asked for a piece of work to be done on the organisational and working methods of the DTI, given our absolute central aim to make science an integral part of the DTI, which it is. It is more than half of our budget now, but there is still a concern that science is seen as somehow separate from the DTI, not integrated within the DTI. We had some terrific success with the work David Hughes did. We felt it was time to take that on to a new level. Using the outcome of the piece of research that we commissioned and the report we commissioned, we decided to implement this change. What this change means is the Department now has a complete marry up between the push of science and the pull of innovation. The old system had a DG for science and a separate DG for innovation. Bringing that under one DG we think is the right management change. Introducing a director with business experience of innovation and putting this under the umbrella of the Office of Science and Innovation rather than science and technology, which goes back to 1964 and the introduction of the Department under Frank Cousins, we think reflected what that Department does much better now. Substantially, yes; no interference with the ring fenced budgets both in terms of innovation and science; no interference with the independence of the Research Councils and certainly no interference with the sacred Haldane principle. We want to put your minds at ease. It is certainly a much better structure for the DTI.

  Q75  Chairman: Four years ago when Mr Hughes was appointed, exactly those words were used about that appointment. Here was going to be someone heading up the most senior position within the DTI, innovation, someone who was going to be recruited directly from industry to lead what was seen as a bold new world in terms of innovation. Has that been a failure?

  Alan Johnson: No, it has not. There is no criticism implied or otherwise of David Hughes's work. We have done that. We have that work in and we have set up the various arms of this, including the Technology Strategy Board. The feeling of many of the people we consulted during this review was that we needed to ensure that innovation and science were in the same place. Having two DGs, one dealing with the innovation side and one dealing with science, was not the best way to take this project forward. In a sense, we have built on the success with the introduction four years ago of the work of David Hughes and now we move to the next level. It has been well received. I think it is going to operate and is already operating, as of 3 April, very successfully. It is certainly not any criticism of the previous regime.

  Q76  Chairman: Sir Brian, there was a rumour—I am sure it is a malicious and wicked rumour—that the Civil Service could not cope with somebody who had come from industry, who wanted to do things differently and therefore, in true "Yes, Minister" style, the Secretary of State had to be persuaded of the change.

  Sir Brian Bender: It is a malicious rumour. It was not put to me or I could have rebutted it straight away. If you look at the top team in the DTI, there are some with a Civil Service background; there are some at this table with academic backgrounds and the process of peer review in academia is brutally challenging. David and Keith bring some of that challenge to the discussions with the DTI. There are some, including our chief economist, who have a private sector background. I would want to have that diversity and sense of challenge and different backgrounds in the top team in the Department.

  Q77  Adam Afriyie: The government memorandum notes the achievements of the innovation group so what were its shortcomings?

  Alan Johnson: I do not think there were shortcomings of the innovation group. This is confidential so I will not name the company. One company said they had two different aspects of the same project. For one aspect they had to go to the DG science and for the other aspect they had to go to the DG innovation. That led to problems in terms of our stakeholders. It is simply moving to the next level. It has helped us to embed science into the DTI because previously innovation was with a different business relations group. Bringing that together under one DG, that DG now being the DTI's chief adviser in science, we think is a sensible, structural move.

  Q78  Adam Afriyie: Perhaps you could remind us how long the innovation group was in existence. Does not making such a radical change now indicate that there must have been some sort of failure somewhere?

  Alan Johnson: No. It was in existence for three or four years.

  Q79  Adam Afriyie: That is a very short life span.

  Alan Johnson: Yes, but if you adopted that principle you would never change anything. This is a constant process. The stuff we have said in the Budget in terms of the next steps on the 10 year science and innovation framework shows that every time you get to a step you see more steps that need to be taken. Whilst I understand the line of questioning, I can say absolutely for myself and for Brian that this was in no way saying that innovation has failed either in the personalities involved or the system involved. It is just felt that we can move to another stage now and that is a process of evolution.