Public Bodies Bill [HL] — Committee (7th Day)

Part of the debate – in the House of Lords at 3:15 pm on 28th February 2011.

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Photo of Lord Warner Lord Warner Labour 3:15 pm, 28th February 2011

My Lords, in this new mood of enthusiasm for constructive scrutiny, I rise to speak to the amendment standing in my name and in the names of my noble friends which would remove NESTA from Schedule 1. My purpose in tabling this amendment is to find out why the Government thought it necessary to convert NESTA from an NDPB to a charity, and to understand the processes by which they will do this and at the same time safeguard public money and the remit given to NESTA by Parliament.

NESTA was set up in 1998 with a statutory remit to support and promote talent, innovation and creativity in the fields of science, technology and the arts. It does this by leveraging private capital into the next generation of innovative, entrepreneurial businesses, running cutting edge experimental programmes to test new ways in which to solve big challenges of the future, and building an evidence base that provides policy options to promote innovation. Its work has focused on innovation for economic growth, cheaper public services, and in the creative industries. All these seem to be areas where the UK economy needs all the help that it can get.

NESTA has done many good things, and I am a supporter of it. In this connection, I declare my interest as chairman of the Health Innovation Committee for the Young Foundation, which benefits from the generous support of NESTA. However, it is not self-evident to me that most of NESTA's work is in pursuit of a charitable purpose, as defined in the current Charities Act. What discussions have the Government had with the Charity Commission to confirm that the work of NESTA would be accepted as a charitable purpose, and when did they take place? I am assuming that there will be no significant change of functions, or do the Government have other plans? Will the Minister also tell the House what discussions there were with the board of NESTA about converting it into a charity before Francis Maude made his announcement on 14 October? Was the board enthusiastic about the idea, or did it have problems about being an NDPB, which interfered with the discharge of the role given to it by Parliament in 1998? What other options or alternatives to an NDPB or a charity have been considered by the Government?

Alongside those questions, there are some important issues relating to the substantial sum of public money that would be transferred into a charitable body if the Government turned NESTA into a charity. NESTA is funded by an endowment from the National Lottery, which has grown from the original £200 million and now stands at well over £300 million. Along the way, the National Lottery has given it repayable loans and revenue allocations. NESTA does its work through the allocations, loans and the investment income from its endowment, without grant in aid from the Government. How would NESTA's funding work in future if it was a charity? Would the current endowment be transferred in total to the charity, bearing in mind that charities can change their charitable purpose? Do the Government have any plans to cut NESTA's endowment when its status changes? We need answers to these questions before we include in a cavalier fashion a perfectly satisfactory body such as NESTA in Schedule 1 and create unnecessary uncertainty about its future. I beg to move.