Higher Education and Research Bill - Report (4th Day)

– in the House of Lords at 6:07 pm on 15 March 2017.

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Votes in this debate

Relevant documents: 10th and 19th Reports from the Delegated Powers Committee

Schedule 9: United Kingdom Research and Innovation

Amendment 159

Moved by Lord Prior of Brampton

159: Schedule 9, page 104, line 38, after “matters” insert “, the charitable sector”

Photo of Lord Prior of Brampton Lord Prior of Brampton Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

My Lords, this is the first Bill that I have brought through the House of Lords to this stage, it having been through Committee, and I have to say that it has been a good experience. Everyone who has contributed can take some credit for having improved it considerably. For me, it is a good example of the value this House can bring to a Bill of this kind. Therefore, I thank all noble Lords who have contributed to improving the Bill.

I should like to start with the governance structures of UKRI and its councils. The issue of co-operation with the charitable sector was debated widely in Committee. Following the compelling argument put forward by a number of noble Lords—including the chair of the Association of Medical Research Charities, the noble Lord, Lord Sharkey—I am pleased to have tabled Amendments 159 and 164, which are also kindly supported by the noble Lord, Lord Mendelsohn.

These amendments will require the Secretary of State also to consider experience of the charitable sector on the equivalent basis to those other criteria in Schedule 9 when making appointments to the UKRI board. In doing so, we are recognising the vital contributions of charities to research in the UK, and ensuring that UKRI will be fully equipped to work effectively with this important sector.

In Committee, the noble Lord, Lord Krebs, and the noble Baroness, Lady Brown, tabled an amendment calling for an executive committee for UKRI. On that occasion, I was able to offer my reassurance that such a committee would be established. Now going a step further, we have tabled Amendments 168 to 171, which will include that in the Bill. Amendment 168 will also further empower the executive committee by enabling it to establish sub-committees, should it deem it necessary.

Also in Committee, a number of noble Lords made the case for increasing the maximum number of ordinary members on each council; including the noble Baroness, Lady Neville-Jones, and the noble Lord, Lord Willis, who drew on their own experiences as research council board members. Having listened to their concerns, we have now tabled Amendment 165 which will increase the maximum number of ordinary council members from nine to 12, thereby allowing individual councils greater flexibility for managing their breadth of activity, while still being mindful of best practice guidance on governance structures and board effectiveness.

While discussing the councils, allow me to introduce Amendment 167. In Committee, the Secretary of State’s power to make one appointment to each of the councils was questioned. This is an important power; in particular, it provides the mechanism to appoint an innovation champion who will sit on both the UKRI board and Innovate UK council. However, it is right that such appointments should be made in consultation with UKRI. This amendment seeks to address concerns by requiring the Secretary of State to consult the UKRI chair before making such an appointment.

Amendments 179 to 181 seek to address the concern, raised in Committee by noble Lords, including the noble Lord, Lord Sharkey, that UKRI may steer away from the pursuit of knowledge for knowledge’s sake, with the Bill being too narrowly focused on economic growth. As I did in Committee, I reassure noble Lords that UKRI will fund the full range of basic and applied research and will create opportunities to make serendipitous discoveries. I have tabled these amendments to make this absolutely clear. Amendment 181 explicitly recognises that the advancement of knowledge is an objective of the research councils. Meanwhile, Amendments 179 and 180 clarify that when councils have regard for economic growth in the UK, this may result in both indirect as well as direct economic benefit.

Photo of Lord Sharkey Lord Sharkey Liberal Democrat

My Lords, I declare an interest as chair of the Association of Medical Research Charities. Government Amendments 159 and 164 mirror amendments that we put down in Committee. As the Minister said, they rectify the omission of the desirability of experience of the charitable sector in those appointed to UKRI. The charity sector plays a vital role in UK research. Medical charities alone spend £1.4 billion each year, 93% of which goes through our British universities. It is clear that UKRI needed to recognise the importance of engaging with and understanding the sector. Sir John Kingman and the Minister were quick to accept that. These amendments put that acceptance on the face of the Bill. We thank the Minister for that and enthusiastically support the amendments.

Amendment 165 responds to a Committee amendment from my noble friend Lord Willis and me. It increases the maximum number of members of research councils from nine to 12. In Committee, my noble friend Lord Willis confessed that in our proposal to increase membership we had chosen a completely arbitrary number. We simply wanted to tease out from the Minister the reasoning behind their proposal for what was then a truly radical reduction in the size of the councils to nine from an average today of around 15. I am not sure we really got an explanation then in Committee, and I am not sure we have had a rigorously defended explanation today of this new figure of 12. Perhaps it is simply an application of the Goldilocks principle. However, nine seems to us to be too few and much too radical a reduction. Twelve is better than nine and likely to cause less disruption to the working of the councils themselves, and we welcome the amendment.

Amendment 165A is in my name and those of my noble friend Lord Willis of Knaresborough and the noble Lord, Lord Mendelsohn, whose support I am grateful for. As in Committee, the amendment would preserve the position of lay members on the research councils. As I pointed out, at the moment the existing councils have between 10 and 17 members, with an average of 15, of whom four or five are lay members, depending on how one defines “lay”. I am sure the Minister would readily acknowledge the importance of having lay members on the council and the valuable contributions they make, not least in combating magic circle groupthink. Our amendment would simply include in the Bill the requirement that councils have lay members. At a time when the membership size and constitutional and governance arrangements of councils are all being rewritten, we believe it is important that the Bill preserve lay membership. I hope the Minister can confirm the Government’s commitment to lay membership of councils, preferably by accepting Amendment 165A, but I am sure there are other means of doing that.

Finally, we welcome Amendments 179, 180 and 181, which helpfully clarify the areas to which the councils must have regard when exercising their functions. Amendment 181 is particularly useful. Its inclusion avoids imposing on councils what may be seen as exclusively economic obligations.

Photo of Baroness Brown of Cambridge Baroness Brown of Cambridge Crossbench 6:15, 15 March 2017

My Lords, I give my strong support to the government amendments in this group that allow for larger research councils, including an executive, and make it clear that our research can aim just to advance knowledge. I am very much an applied scientist, but I think it is hugely important that people are able do research that is just about moving forward the frontiers of their subject, even if we may not know for many years whether it has any purpose or practical application. I am delighted to see that such a provision has been included. I thank the Minister for not only listening to the comments of noble Lords and the research and innovation community, but responding to them.

I also add my support to Amendments 164A and 166A in the name of the noble Lord, Lord Mendelsohn, which would add a senior independent member to each council. I encourage the Minister to adopt that approach among the many other excellent improvements that he has already made.

Photo of Lord Krebs Lord Krebs Crossbench

My Lords, I, too, echo the thanks of the noble Baroness, Lady Brown, to the Minister, the Bill team and the honourable Member for Orpington for the fruitful discussions and for listening to the points we raised at earlier stages of the Bill. I strongly support the government amendments in this group. There are two amendments with my name on them, which have already been discussed: on the establishment of an executive committee of the executive chairs of the research councils. I should declare that I am a former chief executive of the Natural Environment Research Council, so I have first-hand experience of this issue.

The noble Baroness, Lady Brown, and the noble Lord, Lord Sharkey, both mentioned the importance of Amendment 181, which sets out that one of the research councils’ objectives is the advancement of knowledge. In fact, I would go further and say that the core objective of research is to advance knowledge. The fruits of that may be to improve the economy or quality of life but, as I said at Second Reading, one can never predict where those fruits will grow. I quoted the words of Nobel Prize winner Andre Geim, saying how important the advancement of knowledge for knowledge’s sake was in helping to promote the well-being of society and of the economy.

Amendment 164A concerns a senior independent member. I would have preferred to have a non-executive chair because I know from my own experience as the chief executive of a research council that it is quite hard to fill the roles of both the chair of the board and the proposer of initiatives to the board, but I understand that for various reasons the Government are not willing to go down that road. The role of the senior independent member who can be a mentor to the executive chair, and in difficult circumstances perhaps chair the board if it wishes to take the executive chair to task, is an important addition.

Also from my own experience, I strongly support the notion of lay members on the council as set out in Amendment 165A. There were occasions when I was the chief executive of the NERC when disputes between the warring factions of the academics—the earth scientists, the oceanographers, the ecologists and the atmospheric scientists—became so severe that I had to call upon the lay members to act as brokers in order to resolve them. I can hear the noble Lord, Lord Willetts, laughing at that remark, so obviously he has seen that kind of phenomenon before. The lay members of the research councils will have a key role to play and we should certainly support their inclusion among the 12 board members.

That is all I want to say at this stage, other than to repeat my thanks to the Minister and to noble Lords on these and other Benches with whom I have worked in trying to improve the Bill; I think we have significantly improved this part of it.

Photo of Lord Broers Lord Broers Crossbench

My Lords, I compliment the noble Viscount, Lord Younger, and the noble Lord, Lord Prior, on their willingness to talk about these issues and on the changes that have been brought about in the Bill. In the end, it has been a very positive experience. I too would like to support Amendments 164A and 166A, tabled by the noble Lords, Lord Mendelsohn and Lord Prior, as they resonate with the opinion that I expressed on Report. Those points have reached a satisfactory conclusion.

Photo of Lord Mendelsohn Lord Mendelsohn Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (International Trade)

My Lords, in Committee certain clear governance gaps were identified which the Government have addressed in some measure, and we thank them for their positive response. Indeed, we have signed the government amendments and we are pleased that such a positive response has been forthcoming. We would like again to associate ourselves with Amendment 165A tabled in the name of the noble Lord, Lord Sharkey, which addresses the important point about the valuable contribution which can be made by lay members.

Amendments 164A and 166A tabled in my name propose that each council should comprise a senior independent member alongside an executive chair and the other council members. This would ensure an element of independence and balance in the governance of the council, complementing the role of ministerial appointees. We believe that there is still a weakness in the governance of the research councils with the establishment of executive chairs and the UKRI governance structure. We also feel that without a proper governance role, the membership of research council boards will be denuded of talent if they believe that they are not part of an effective operating board. In Committee we discussed whether appointing chairs to research councils might address this weakness, and Amendments 164A and 166A, as the noble Lord, Lord Broers, has just pointed out, mark an evolution in the debate.

We believe that this is a sympathetic and effective change which is consistent with the Government’s objectives and is likely to benefit the governance of research councils. The senior independent member is modelled on the practice in public companies of having a senior independent director. The title in this case is “member” specifically to ensure that the role is not confused with the duties of a director, which would raise structural issues that are not appropriate to the Bill. In the private sector, appreciation of the important role played by the senior independent director has grown in recent years. It was introduced in 2003 at the time of the Higgs review of the combined code, and the idea was that the senior independent director should be available to shareholders if they had reasons for concern that contact through the normal channels of the chairman and the chief executive had failed to resolve. Over time that remit has changed and the senior independent director is seen as a versatile intermediary who is in part ambassador, conciliator, counsellor, senior prefect and kingmaker. Most importantly, it establishes an address that stakeholders are able to go to and takes away the sometimes divisive politics of trying to find an appropriate address.

It is in this area that the role would be most useful in the context of UKRI. The senior independent member would ensure that there is a recognised channel to use from the level of the board of the research council to the board of UKRI to make sure that matters can be solved and conflicts and issues resolved. It is not about establishing new lines of management but creating a governance structure which is flexible enough to resolve issues as they arise. We have not set out a detailed role or job description, and certainly the latter is not appropriate for legislation, but there is flexible scope to ensure that such an individual can play a useful role in many different circumstances, from deputising in situations to leading aspects of succession processes to reviews of board effectiveness and other such matters. I hope that the Minister will see this amendment as a useful and flexible suggestion.

Photo of Lord Prior of Brampton Lord Prior of Brampton Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

My Lords, first, I thank the noble Lord, Lord Mendelsohn, for not pressing his amendment requiring a shared OfS and UKRI board member with at least observer status. While I do not think that such arrangements need to be put on the face of the Bill, I recognise absolutely the value of establishing such a link between the OfS and UKRI boards. As such, I am pleased to be able to confirm that the chairs of both the OfS and UKRI would welcome an observer of each other’s organisations at their respective board meetings.

I turn now to Amendment 165A. The noble Lord, Lord Mendelsohn, and the noble Lord, Lord Willis, drawing on his experience as a member of the Natural Environment Research Council, have previously outlined the value of lay members, and they have been supported today by the noble Lords, Lord Sharkey and Lord Krebs. Although in the future appointments to councils will be a matter for UKRI, I should like to take this opportunity to make it clear that the Government would have the full expectation that the current practice regarding lay member representation will continue and we will commit to reflecting this in guidance to UKRI. Perhaps I should add in passing that the number of 12—the Goldilocks solution—reflects best practice advice from the Cabinet Office. I cannot recall what the code says on numbers, but 12 is a manageable figure. If a board is much larger than 12 members, it becomes much more difficult for it to be effective.

The idea of a senior independent member was raised in Committee by the noble Lord, Lord Broers, and described just now by the noble Lord Mendelsohn. I really cannot add to his description of the sometimes critical role in acting as a very important channel, in this case to UKRI from council members. That could be extremely important. I have some words here about the senior independent council member, but given the way the noble Lord has set out the role, I feel that I no longer have to do so; I will simply agree with what he said.

Having discussed the issue with the chair and chief executive of the future UKRI, I am pleased to be able to confirm that a member of each council will be appointed as the senior independent council member. This does not need to be set out in the legislation, not least because the amendment would result in an additional member of each council beyond what I believe to be a reasonable and workable number. Instead I can commit to making this a permanent feature of the organisation through setting the role out clearly in the governance documentation for UKRI. I therefore ask the noble Lord not to press his amendment.

Amendment 159 agreed.

Amendments 160 and 161 had been withdrawn from the Marshalled List.

Amendment 162

Moved by Lord Stevenson of Balmacara

162: Schedule 9, page 105, line 2, leave out from “least” to end of line 4 and insert “—(a) one person with relevant experience of Scotland;(b) one person with relevant experience of Wales;(c) one person with relevant experience of Northern Ireland;with the respective agreement of the Scottish Government, Welsh Government and Northern Ireland Executive.”

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

My Lords, Amendment 162 is taken from Amendment 476, moved in Committee by the noble Lord, Lord Patel. While there is no dissatisfaction with the way the Government responded at that stage, it is more that, particularly in relation to the changes wrought by the decision reached a few days ago for the Scottish Government to try to move forward on a second independence referendum, a certain piquancy has been added to the debate and discussion. It might be time to reflect a little further on some of the issues that were raised on that occasion.

When the noble Lord, Lord Patel, moved his amendment in Committee, he was clear that he did not expect this to be a surrogate for a change in the way in which UKRI is set up. It is not a representative body and I do not think that either he or I in this amendment are trying to make that change. However, as the noble Lord pointed out, there are significant differences in the customs, practice, legal systems and operational practices of the Scottish university sector and research community to suggest that at least there, and I believe also in Wales and Northern Ireland, it would be sensible for UKRI to have regard to more than just once in a few returns around the membership cycle of having someone with experience and practical knowledge of how things operate in those parts of the United Kingdom. In Committee we also talked about other parts of England requiring certain attention, but I do not think the difference between what happens in the regions of England in any sense mirrors the differences present in the legal and other structures that operate in Scotland and will over time also accrue in Wales and Northern Ireland.

In re-presenting this amendment I make no excuses for going over some of the same ground, but it is important that we reflect very carefully before agreeing to a system that will not give specific responsibilities to those who have worked in and have experience, understanding and knowledge of the operation of Scottish universities and research institutions. In his response last time the noble Lord, Lord Prior of Brampton, quoted the words of Sir Alan Langlands, who has been vice-chancellor of the University of Dundee. He said essentially what I have been saying, which is that,

“given the dynamics of devolution and the fact that essentially we are dealing with four different financial systems and four different policy frameworks, the one thing that has stuck together through all this has been the UK science and research community”.

He draws a different conclusion from the one I would draw, but the point he makes is worth saying.

I hope I have said enough on this occasion to show that, while we welcome what the Government did in the other place to ensure that the Secretary of State, in appointing members to UKRI and its board, must have regard to the desirability of including at least one person with relevant experience in either Wales, Scotland or Northern Ireland, I do not think it is sufficient. Will the noble Lord think again about this issue? I beg to move.

Photo of Lord Wallace of Tankerness Lord Wallace of Tankerness Liberal Democrat 6:30, 15 March 2017

My Lords, I shall speak to Amendments 184, 193 and 194 in my name. Amendments 184 and 194 are supported by the noble Lord, Lord Patel. In many respects these amendments complement the amendment that has just been moved. I will describe briefly what they would do. Amendment 184 would require that, before approving a research and innovation strategy for UKRI, the Secretary of State would be obliged to consult the devolved Administrations. Amendment 193, which relates to Clause 100, would add an obligation to the general duties of UKRI to have regard to the promotion of research and innovation in Scotland, Northern Ireland and Wales. Amendment 194 refers to guidance that would be given by the Secretary of State to UKRI. It states that the Secretary of State,

“must have regard to the promotion of research and innovation in Scotland, Wales and Northern Ireland”.

I apologise that I was not able to be here in Committee as I was abroad at the time, but I noted the debate and the amendments moved very effectively and eloquently by the noble Lord, Lord Patel. He emphasised that this is not special pleading for Scotland or any of the devolved parts of our United Kingdom, but rather seeks to address a situation where UKRI will have a remit right across the United Kingdom but, in respect of some parts of its business, will be focused on England only. We know that, with the best will in the world, if you are dealing day by day with one part it is sometimes easy not to have the full picture of—I do not mean ignore—what is going on in other parts of the United Kingdom.

We know from what has been said in previous debates that the contribution of Scotland’s universities to United Kingdom research and innovation has been immense. Scottish universities certainly punch well above their weight in terms of the research funding that they have received from the research councils. That is a mark of the quality of the research that goes on in Scottish universities and, in turn, of what they put back in to United Kingdom research and innovation. That is something I am sure we all wish to see continued.

There have of course been reassurances from the honourable Member for Orpington—the Minister, Mr Jo Johnson MP—and from Sir John Kingman that UKRI will work for the benefit of all parts of the United Kingdom. I do not for a moment doubt the sincerity of these aspirations and the personal commitment, but the principal of the University of Edinburgh—I declare an interest that it is one of my almae matres—Professor Tim O’Shea, said in a letter to Mr Jo Johnson on 17 February:

“I remain concerned that UKRI’s attention to devolution issues relies on personal trust rather than being hard-wired into the statutory framework of UKRI”.

These amendments would ensure that some of that hard-wiring was put in statute.

I read the Minister’s response to the debate on 30 January. I also express my thanks to him and his officials from meeting me earlier this week to discuss these amendments. In response to the amendment on statutory consultation he said:

“I disagree that this should be achieved by requiring the Secretary of State to formally consult with the devolved Governments on reserved UK government policy, which would undermine the whole devolution settlement”.—[Official Report, 30/1/17; col. 1004.]

With respect, there is a bit of hyperbole there; nor do I think it is wholly accurate, as I will deal with in a moment.

There is no doubt that important aspects of research and innovation are devolved. I recall when I had responsibility in the Scottish Executive as Minister for Enterprise and Lifelong Learning. The annual letter that I sent out to the Scottish Higher Education Funding Council referred to priorities, including priorities for research. Research and innovation are in a number of respects devolved matters. The Scottish Government put money into research and innovation in Scotland. This is not a situation where, as was perhaps suggested, having statutory consultation would trespass on a reserved matter. It is important that we have such consultation because important work in research will be going on with which the Scottish Government, or for that matter the Welsh and Northern Irish Administrations, are wholly cognisant.

The Minister’s department, BEIS, will be dealing day in, day out with what is going on in England. It will have a much better picture of what is going on in England, but it is no criticism that it will not be as familiar with the landscape of research and innovation in Scottish institutions. It would not be a very effective use of public funds if, through lack of proper consultation, it led to duplication or it cut across things that were being done in Scotland that could have been done much more effectively and efficiently if there had been that consultation.

My preferred option would certainly be that the Minister would accept the hard-wiring of a statutory requirement, but he knows that devolution has shown flexibility as it has proceeded. There are memorandums of understanding between the United Kingdom Government and the Scottish Government, and indeed the other devolved Administrations. I hope he would be willing to consider that a memorandum of understanding would be possible, if he does not feel that the statute book is the proper place for these requirements. Regarding the guidance that the Secretary of State would give to UKRI in Amendment 194, a commitment from the Minister that that guidance will not be in statute but nevertheless would include a direction to UKRI to have regard to the promotion of research and innovation in Scotland, Wales and Northern Ireland would be very welcome indeed.

I said that it was not wholly the case that these matters were reserved. The reservation in head C12 in Part II of Schedule 5 to the Scotland Act 1998 refers to:

“Research Councils within the meaning of the Science and Technology Act 1965. The subject-matter of section 5 of that Act (funding of scientific research) so far as relating to Research Councils”.

That has been amended quite significantly. That amendment, passed by a Section 30 order under the Scotland Act in 2004, added the Arts and Humanities Research Council. When it was established it was not covered by the reservation in the Scotland Act 1998. I recall that when the then Higher Education Bill was going through this Parliament, I had to take the legislative consent Motion through the Scottish Parliament to allow the Arts and Humanities Research Council to apply in Scotland. There was subsequently an order—I think that it was the first ever order which reserved something which had previously been devolved back to the Westminster Parliament. My concern is that the minor repeals schedule to this Bill—it is a small-print detail—puts the work of UKRI into Schedule 5 to the Scotland Act. The Bill defines the functions of UK Research and Innovation as to,

“carry out research into science, technology, humanities and new ideas”.

That is probably quite right, because, as we stand here today in March 2017, we do not have a clue what kind of issues will be here in, let us say, March 2027, where it would seem perfectly right and proper for there to be research council activities. However, I do not see “new ideas” in the 1965 Act. Therefore, what I think is being done by this legislation is to extend the reservation. I am not sure that the legislative consent Motion picked that up. I do not think for a moment that it is a deliberate subterfuge or land grab, but I think that it has not been fully thought through. I invite the Minister to address that, because he knows that we are in sensitive times dealing with devolution and devolved and reserved issues.

My main point to the Minister is that he should recognise the different landscape—the different environment —for research and innovation. There is great merit in going forward as a United Kingdom, but the specific arrangements in Scotland, Wales and Northern Ireland have to be catered for.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Deputy Chairman of Committees

My Lords, I support the amendments in this group. I add thanks from these Benches to those expressed to the noble Lord, Lord Prior, and the noble Viscount, Lord Younger, for the government amendments that they have brought forward and for supporting those from noble Lords, which have certainly made it a much better Bill.

Amendment 162 mirrors an amendment which we brought forward in Committee. For all the good reasons which the noble Lord, Lord Stevenson, has expressed, it seems niggardly to have one person trying to represent the three devolved Administrations. The arrangements would be stronger if there were somebody with experience of each of the three. There are distinct differences in higher education provision in the four parts of the United Kingdom. UKRI would benefit if it had relevant experience of all. We note that the amendment insists not that the person be Scottish, Welsh or Northern Irish, but that they have experience of those three devolved Administrations. I hope that the Minister will look favourably on it.

Photo of The Earl of Lindsay The Earl of Lindsay Conservative

My Lords, the amendments proposed by the noble Lord, Lord Stevenson of Balmacara, and the noble and learned Lord, Lord Wallace of Tankerness, address an important issue. I acknowledge that the significant proportion of research policy and funding reserved to Westminster offers advantages in its ability to support and encourage a cross-UK research ecosystem that can benefit all parts of the UK. I have had first-hand experience of what such cross-UK advantages can achieve from a Scottish perspective.

Until recently, I was chairman of a Scottish HEI with a strong research track record. The HEI that I refer to is SRUC, or Scotland’s Rural College. In the 2014 research excellence framework results, SRUC, in collaboration with the University of Edinburgh, came top in the UK for research power for agriculture and veterinary and food science. This is just one example of the extent to which Scotland contributes significantly to the overall strength of the UK research sector.

However, the ability of a cross-UK research ecosystem to benefit all parts of the UK, and in turn to benefit from all parts of the UK, relies on the research infrastructure. More specifically, it relies on a research infrastructure designed and operated in such a way that it clearly involves, understands, reflects and serves the needs of all parts of the UK equally.

In this respect, I am aware of well-placed concerns about the currently proposed design arising from the view that the different parts of the UK need a better defined role and involvement in setting overarching UK research policy and direction, hence my interest in Amendments 162, 184, 193 and 194 and my hope that my noble friend will support their intent.

The amendments would result in more structured, more certain and less ambiguous protection of UKRI’s duty and capacity to act in the interests of the whole UK. It could make sense for UKRI’s research strategy to be subject to consultation with the devolved Administrations. It could make sense for UKRI and for the councils to include members with experience drawn from the devolved jurisdictions of the UK to ensure that decisions were informed by knowledge of the diverse contributions made by different parts of the UK. It would also make sense for Innovate UK’s priorities to be informed by the specific economic policies of the devolved jurisdictions as well as by the UK Government’s economic policies. I hope that my noble friend will acknowledge the importance of the issues that the amendments address.

Photo of Lord Prior of Brampton Lord Prior of Brampton Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy) 6:45, 15 March 2017

My Lords, I thank all noble Lords who have spoken in favour of the amendments. I think we all share the sentiments that lie behind them.

Perhaps I may first deal with the interesting, rather technical point raised by the noble and learned Lord, Lord Wallace, about the scope of the matters in the Science and Technology Act 1965 that are reserved under the Scotland Act 1998. He raised it with me earlier in the week and I agreed to write to him on it if I can, as it is of a fairly technical, legal nature, and to put the letter in the Library for others to see if they are interested.

I acknowledge that I and the Government appreciate the sentiment of the amendments and the underlying concerns from those working in the devolved nations. It is essential that we continue to work together to secure for the long term the UK’s global reputation for excellence in research and innovation. This joint working happens on a number of levels, from regular informal discussions to formal partnership arrangements. Where appropriate, it can include the development of an MoU between the bodies, the devolved Administrations and their agencies and institutions.

There are many such arrangements at present, from ESRC’s MoU with the Scottish Government on the What Works programme to the MoU between HEFCE and the devolved funding bodies, which ensures the operation of the UK Research Partnership Investment Fund across the whole UK. There is even an MoU between BBSRC and the Scottish Government for the horticulture and potato initiative. These arrangements will continue and I can commit to new MoUs being put in place where appropriate. I know from my own experience that MoUs can be window dressing, but they can be of great substance—it varies, entirely depending on the intent behind them of both parties. I sometimes think that we are beguiled by an MoU, when it is the informal relationships that lie behind them which are often much more important.

As we have debated at length and agreed on a number of occasions, it is vital that UKRI, a body which will operate UK-wide, is empowered to work for the whole of the UK. Noble Lords do not need to take my word for this. Duties for it are built into the Bill—hardwired, if you like—in multiple clauses.

Let me make it clear that these reforms will not affect current funding access for institutions in Wales, Scotland or Northern Ireland. As part of UKRI, the research councils and Innovate UK will continue to operate across the UK, funding projects through open competition on the basis of excellence wherever it is found.

On the UKRI board, the Bill as amended in the other place recognises that the Secretary of State has a duty to consider appointing at least one person with relevant experience of the devolved nations. This change means that the Bill already goes further than the current legislation, which makes no such requirement. Of course, this should not be taken to mean just one person. The search for UKRI board members now under way actively seeks suitable applicants with experience from across all nations of the UK. We want and are actively working to recruit a board that will have this broad experience. However, requiring experience of all four countries at all times could have potentially unintended consequences. If a member of UKRI’s board were to step down from their position, we would not want only to be able to recruit a like-for-like successor with the same background as their predecessor. Equally, we would not want to limit experience of each nation to just one individual on the board if the quality of applications is high. Such flexibility is essential to ensuring that the diversity and quality needed to deliver the best outcomes for research and innovation across the UK is present on the UKRI board at all times.

Amendments 193 and 194 ask that UKRI and the Secretary of State have regard to the promotion of research and innovation in Scotland, Wales and Northern Ireland. I agree wholeheartedly with the sentiment of these amendments. In fact, we already provided for UKRI to undertake this in its functions, described in Clause 89(1)(h), which says that UKRI may,

“promote awareness and understanding of its activities”.

However, the proposed drafting of these amendments limits the scope of this additional duty to Scotland, Wales and Northern Ireland. I understand noble Lords’ admirable desire to ensure that the interests of Scotland, Wales and Northern Ireland are suitably protected, but this should not be done at the expense of English institutions. Ministers’ responsibilities are to the whole UK, and the Secretary of State, and UKRI, should be held to account by Parliament on that basis.

I also share noble Lords’ desire that UKRI’s strategy should work for the whole of the UK. The strategy will be the product of consultation and engagement with research and innovation institutions and bodies from across the UK. Let me also assure noble Lords that this consultation will of course incorporate the views of the devolved Governments. However, the development of a full research and innovation strategy for the UK may be an infrequent affair. I have spoken to Sir John Kingman, chairman-designate of UKRI, and he agrees that regular consultation with the devolved Administrations on UKRI’s priorities would be a more appropriate way of ensuring their views are captured and taken account of regularly. This would be consistent with the MoU between the UK Government and the devolved Administrations, in which the principle of good communication with each other is key. The primary aim is not to constrain the discretion of any Administration but to allow them to make representations to each other in sufficient time for those to be fully considered. I commit today to putting this intention regularly to consult on strategy with devolved Administration colleagues into guidance from the department to UKRI.

I have been clear today that there are many areas where we expect UKRI to work with the devolved Administrations, and many areas where we have a common goal. I have committed to capturing this in guidance to UKRI. Therefore, I ask the noble Lord to withdraw his amendment.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

My Lords, I thank all those who spoke in this debate. We learned a great deal from the contribution of the noble and learned Lord, Lord Wallace, whose experience is of course unparalleled in seeing things from the perspective of the devolved Administrations. The noble Earl, Lord Lindsay, has real experience of trying to operate in an institution that is largely based in Scotland but that draws from the strength of UK science and UK contributions to its work. He therefore understands the mechanics of what we are about.

It seems that Goldilocks has been ignored in this process. I agree that “not just one” does not exclude “more than one”, but I think that Goldilocks would have wanted a little more in her porridge than just the promise that over a period of time there would be not one bowl but three bowls and that she could sup from all of them—I think my metaphor is about to run out, but noble Lords get my point. I hear what the Minister said, and he is an honest and good man. I am sure that he is trying to set up an arrangement under which we will achieve what is set out in Amendment 162. I will not press that to a vote on this occasion. We will take his assurances, but I hope he recognises that we are in difficult circumstances here.

Hardwiring may be too hard an approach to this. Underwiring, with support from below, may not be sufficient. I just hope that in some way, in the gap between memoranda of understanding and letters of guidance, we can get to a more settled arrangement over a period of time. I agree that it is difficult and I am not trying to constrain the Minister in any way. However, it is a bit defensive to say that one reason you do not wish to go down this route is so as not to disincentivise or in other ways constrain English institutions. That is exactly the sort of poison that will be used by those north of the border and in Wales and Northern Ireland to complain they are not getting fair treatment. The sensibility is probably right, but the wording must be looked at carefully. I hope that that message will get across.

We seem to be permanently in difficult times in terms of constitutional issues. This is not the time to let any chink through. If we all agree around the House, as I think we do, that this matter cannot be ignored and must be brought forward and foregrounded, then we can make progress together. Our commitment will not be doubted. I beg leave to withdraw the amendment.

Amendment 162 withdrawn.

Amendment 163 had been withdrawn from the Marshalled List.

Amendment 164

Moved by Lord Prior of Brampton

164: Schedule 9, page 105, line 9, after “matters” insert “, the charitable sector”

Amendment 164 agreed.

Amendment 164A not moved.

Amendment 165

Moved by Lord Prior of Brampton

165: Schedule 9, page 105, line 15, leave out “nine” and insert “twelve”

Amendment 165 agreed.

Amendment 165A not moved.

Amendment 166

Moved by Baroness Brown of Cambridge

166: Schedule 9, page 105, line 16, at end insert—“( ) In the case of Innovate UK, the Council must have a non-executive Chair, and the non-executive Chair and the majority of the Council members must be from science-related business backgrounds.”

Photo of Baroness Brown of Cambridge Baroness Brown of Cambridge Crossbench

My Lords, I rise to move Amendment 166 and support the other amendments in this group, which focus primarily on ensuring that Innovate UK—a very important business-facing council which is joining a group of academic research councils in UKRI—retains its unique character, strong business focus and ability to act in different and innovative ways. Innovate UK is, for good reason, a very different organisation to the other research councils.

My Amendment 166 goes beyond the earlier proposal for senior independent members. I was delighted to hear the Minister’s response on that, and I very much welcome the approach he will take on senior independent members. My amendment proposes that Innovate UK retains a non-executive chair and that a person appointed to the role be a senior figure from business.

Most of Innovate UK’s funding goes to companies, not to universities or research institutes. This funding is used to support innovative and strongly product and process-focused research and demonstration. Innovate UK’s support has direct economic benefit and will be all the more critical as we exit the EU, with a change in relationship to the industry-focused programmes of Horizon 2020. Innovate needs to retain its strong business voice, both inside UKRI and, critically, also outside it. That voice will be very much amplified if Innovate is chaired by a leading industrial figure and has a majority of business members on the board. This is the purpose of Amendment 166.

Government Amendments 173 and 183 are enormously welcome, recognising the need for UKRI and Innovate to be able to provide a wide range of forms of support to new products and companies, which could include investing in and forming companies as well as giving grants and loans, reinforcing Innovate’s role in supporting UK business—as indicated in Amendment 183. I beg to move.

Photo of Lord Oxburgh Lord Oxburgh Crossbench

My Lords, I will speak to Amendment 173A. On the face of it, it appears that the provision, under “Supplementary powers”, in paragraph 16(3)(b) of Schedule 9 prevents the research councils from doing a number of things that are important to their fundamental function. Clearly, they should be able to continue to do them. I hope the Minister will be able either to explain to us that this amendment is unnecessary because of provisions elsewhere in the Bill that I have not spotted or to accept that this is something that needs to be changed.

Photo of Lord Broers Lord Broers Crossbench

My Lords, I have put my name to Amendment 173A. Although the wording of the amendment does not say it, this applies especially to Innovate UK. In its functions, Innovate UK very often has to collaborate and work with industry, so it would seem unnecessary to forbid it from setting up joint ventures.

Photo of Baroness Young of Old Scone Baroness Young of Old Scone Labour 7:00, 15 March 2017

My Lords, I support Amendment 166 in the names of the noble Baroness, Lady Brown of Cambridge, and the noble Lord, Lord Stevenson of Balmacara. I apologise that I was not present for this item when it was dealt with in Committee because I was abroad, but I have read carefully the discussion that happened at that point.

I, too, am a member of the Science and Technology Committee, which looked at this issue recently. I share the concern that was raised by a number of witnesses that Innovate UK would be hijacked by the research councils and become the commercialisation and innovation arm of the research councils, and that that would usurp the hugely valuable role that Innovate UK currently has in being business facing and supporting innovation, especially by small businesses and especially at very early stages, when an entrepreneur has a bright idea but no backers and no proof of concept. I share the concerns of the noble Baroness, Lady Brown of Cambridge, that the membership and chairmanship of the committee for Innovate UK need to be very much business focused and to include a predominance of business-focused people.

I recognise that the Government have gone some way in Amendment 183 and I welcome that. Indeed, I welcome the meetings that I have had with Ministers here and Sir John Kingman and with the Minister of State for Universities and Science in the other place—who is not here today, although he regularly is—but it is probably my conversations with Jo Johnson that have made me the most alarmed, I am afraid, because although he gives assurances throughout about the business-facing role of Innovate UK, every time I have heard him describe it unprompted, he immediately describes it as being the innovation arm of the research councils.

I hope the Minister will recognise that the role of Innovate UK needs further strengthening and that to give it a business-based chairman and a predominance of business-based members on the committee would do that.

Photo of The Earl of Selborne The Earl of Selborne Chair, Science and Technology Committee (Lords), Chair, Science and Technology Committee (Lords)

My Lords, I welcome government Amendment 183, which addresses the issue that the noble Baroness, Lady Young, has just referred to. As chairman of the Science and Technology Committee, I can confirm that we were indeed concerned at the original proposals, some months back now, that Innovate UK should be put together with Research England into a research council, because it was clearly absolutely essential that the business community should have confidence that it had Innovate UK very much at its disposal as its organisation, and it was not somehow going to be subsumed by the research councils to be the commercial arm of Research Councils UK.

I accept that the concerns expressed by the noble Baronesses, Lady Brown and Lady Young, have validity, but I recognise that the government amendments, particularly paragraphs (a) and (b) in Amendment 183, requiring arrangements to have regard to,

“persons engaged in business activities”,


“the need to promote innovation by persons carrying on business”,

go a very long way from where we were some months ago. I, for one, am content to accept these as meeting most of my original concerns.

Photo of Lord Bhattacharyya Lord Bhattacharyya Labour

My Lords, I draw attention to my interests as declared in the register, and specifically to my chairmanship of WMG at the University of Warwick. I should also mention that I served as a member of Sir Paul Nurse’s review of the UK research and innovation landscape that put all this together.

As peace appears to be breaking out today, I hope that those who laboured for so long in the salt mines of Committee will allow me a few brief words on Amendments 166, 173 and 183. All three will help Innovate UK promote partnerships between business and academia. I can tell your Lordships that that can be a tough job. When I started WMG, we encountered a lot of opposition. Academics are protective of their independence from commerce. However, engineers like making an impact—the bigger, the better—so their curiosity won out in the end.

We know that academic traditions can obstruct business collaboration. For example, grant application writing is a highly prized skill in universities, for a very good reason: critical assessment of research proposals is vital to academic debate. Businesses see this rather differently, especially if they are expected to disclose commercially sensitive knowledge. The Technology Strategy Board was created to address this cultural gap. We debated it here for about four years before it was formed because there were arguments on whether government should intervene and pick winners and many other arguments at that time. But we won and the Technology Strategy Board was created. Of course, this body is now Innovate UK.

Change is constant, so Innovate UK needs leaders who understand the way business and science are changing, as well as the flexibility to create the right partnerships. Amendment 166 would ensure this. Today, every business is multidisciplinary. If you make cars, you need programmers, cryptographers and medical researchers, as well as metallurgists and engineers. Bringing Innovate UK and the research councils under the same roof makes both scientific and commercial sense. Amendments 173 and 183 will ensure both business and scientific knowledge in Innovate UK’s leadership, allowing it to build flexible partnerships with business.

Innovate UK’s role is to act as a catalyst for business collaboration and partnership with academia. However, although flexibility is needed, Innovate UK should not be a bank. It has neither the resources nor the skill set. Instead, it should use its commercial expertise to create incentives to encourage businesses to invest in innovation. Its role is that of a matchmaker, not a moneylender. Its role has to be improve productivity in this country via scientific research. The amendments in this group will help Innovate UK deliver on that vital task. More generally, the amendments proposed elsewhere today will do the same for UKRI as a whole.

Photo of Lord Bilimoria Lord Bilimoria Crossbench

My Lords, in relation to Amendment 166, I want to emphasise again the importance of having individuals from a business background because, all too often with these initiatives, the Government have the best of intentions but there are people involved who do not have experience in business and have not run businesses, and it is when you run businesses that you realise that innovation and creativity are at the heart of it. I would go further and say that they must come from science-related business backgrounds. Any good business has to be innovative. In my industry—food and drink—you have to be innovative. But the key issue here is having people with business backgrounds at the top table.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

My Lords, I confirm that we are signed up to Amendment 166 and support the comments made by the noble Baroness, Lady Brown. It is important to get the balance right. There is probably another Goldilocks pun there but I am sure the Minister will pick it up and we will get a response to that.

We have also signed up to government Amendments 173 and 183, which are at the heart of the debate we had earlier. Again, this plays to the argument made by the Minister that there are ways of improving the Bill. We have been able to explore them in Committee and now on Report, and it is good to see that there are movements here that have support right round the House, which we are pleased to be part of.

We also feel that more constraints may emerge from the business consideration than have perhaps been allowed to emerge so far. As my noble friend Lord Bhattacharyya pointed out, given the genesis of all this through the Technology Strategy Board, and now through Innovate UK, it is important that institutions learn from their history and gain from their experience over time. The formation of UKRI and the involvement of Innovate UK in that was not recommended by Sir Paul Nurse, who just felt that the issue should be looked at. But the Government decided to move forward and it is therefore their responsibility to make sure that we get the most out of it.

My noble friend Lord Bhattacharyya was also at pains to point out that we are talking about the creation not of a bank here but of a ginger group. It is an opportunity to create incentives and a ginger group that moves forward with the support of industry will be much better than one which tries to do it on its own. I look forward to hearing what the Minister has to say about that.

Photo of Lord Prior of Brampton Lord Prior of Brampton Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

My Lords, I find myself in complete agreement with the noble Baronesses, Lady Brown and Lady Young, my noble friend Lord Selborne, and the noble Lords, Lord Bhattacharyya, Lord Bilimoria and Lord Stevenson. All our sentiments are the same. To pick up on a phrase from the noble Lord, Lord Bhattacharyya, about the purpose of Innovate UK, if we were to sum it up in three words, which he did, they would be “productivity from research”.

When we discussed the first amendment today, the noble Lord, Lord Krebs, talked about the serendipitous fruits that can sometimes spring from blue-sky basic research. The point of Innovate UK is to ensure that more of those fruits take root in the UK, rather than ending up in Silicon Valley or Israel, or in other countries which are frankly more innovative than we are. The whole purpose of UKRI in bringing together Innovate UK with the research councils is to create more fertile soil for some of the great ideas, technologies and research that come out of our universities.

In creating UKRI we are making something new, greater than the sum of its constituent parts. We are not merely bolting together nine separate bodies. To make this work the governance structures need to change, so we are introducing an overarching board in UKRI and a high-profile chair and chief executive. It is appropriate that the governance of the councils changes too to reflect this. We have been listening to debate on this for some time now, particularly the contributions on the role of the council chairs from the noble Baroness, Lady Brown, the noble Lord, Lord Mair—I know that he cannot be here today for other reasons—the noble Lord, Lord Broers, and my noble friend Lord Selborne. However, introducing a non-executive chair for the councils into these new lines of accountability would risk confusing accountabilities within UKRI and undermine its key strategic role. This would apply just as much to Innovate UK as to the other councils.

Although I can of course see the attraction of having a well-known leading industrialist as a non-executive chair of Innovate UK, it would not sit well within the governance structure of UKRI. I think it would fatally undermine the whole concept of UKRI. However, we acknowledge that chairs can play valuable roles outside direct lines of accountability, for example in giving support to the chief executive and acting as a route for high-level communication. We have already discussed the sensible suggestion by the noble Lord, Lord Broers, that we give one member of each council the role of a senior independent member. We have given assurances that that will be done and we hope that it is adequate to address his concerns. The noble Lord, Lord Mendelsohn, gave a good description of the important role that a senior independent member can play in these circumstances, without undermining the integrity of the governance structure of UKRI.

Amendment 166 also seeks to determine the background of a majority of Innovate UK’s council members. As was discussed in respect of UKRI board members in an earlier group, prescribing the background of members of councils in legislation would encroach on the freedom of UKRI and its councils to manage their own affairs and could be unhelpful in achieving the best possible mix of individuals at any one time. However, we agree with the sentiments expressed. In the case of Innovate UK, government would have a strong expectation, set through guidance, that a substantial proportion of members should have a science-related business background. Indeed, Innovate UK’s current board membership speaks for itself, with most of the council members having science and technology-related business backgrounds. In addition, the board contains much complementary experience of universities, finance, economics, consulting and government.

On Amendment 173, many of your Lordships have asked to see stronger language in the Bill to protect Innovate UK’s business-facing role. In Committee, the Government undertook to reflect on how this could be done and have tabled an amendment that achieves this in two ways. First, our amendments introduce stronger language to describe Innovate UK’s role in supporting the business community. Having,

“regard to … the need to support … persons engaged in business” is substantially more direct than the previous text. Secondly, Amendment 183 introduces a new requirement to have regard to,

“the need to promote innovation by persons carrying on business” in the UK. Finally, it maintains the overarching mission to increase economic growth and the existing duty to have regard to,

“the desirability of improving quality of life”.

It has been said that productivity is not everything but it is nearly everything. If there is one word that should be in Innovate UK’s DNA, it is “productivity”. With these amendments, the Bill could not now be clearer on Innovate UK’s mission to support business innovation. It is therefore distinct from the other councils of UKRI.

The noble Baroness, Lady Brown, and the noble Lords, Lord Broers and Lord Mair, also raised concerns in Committee that Innovate UK’s freedoms to engage in certain activities appeared overly restrictive in the Bill. Let me be clear: there will be no diminution of Innovate UK’s current freedoms in the move to UKRI. The Bill’s text is based on conditions that apply to all government departments and public bodies, and is determined by the Treasury.

Government Amendment 183 is intended to make it clear that UKRI can, for example, enter into joint ventures or form or invest in a company subject to appropriate safeguards and, moreover, that the broad parameters of these activities will be set out clearly in advance and can be iterated as Innovate UK’s portfolio of support develops. I hope that these amendments reassure noble Lords over the Government’s positive intent for business innovation. These reforms come in the context of the historically large Autumn Statement settlement for innovation funding as part of the industrial strategy.

Finally, regarding Amendment 173A, tabled by the noble Lords, Lord Oxburgh and Lord Broers, let me reassure them—I hope that this meets the point raised by the noble Lord, Lord Oxburgh—that it is not the intention of the Bill to disrupt existing commitments and obligations within the current councils. Government will not require UKRI or its councils to seek the Secretary of State’s permission to continue with existing joint ventures as part of the legal process to set up UKRI and, in forming new ventures, government will not subject councils to any oversight from the Secretary of State that the councils do not already undergo. Indeed, our ambition is that they will be subject to less process and be able to concentrate more on their functions.

Furthermore, noble Lords may not be aware that a great deal of work is currently under way in the councils and their parent departments to ensure a smooth transfer of personnel, assets and activities from the current organisations to the OfS and UKRI—subject, of course, to the will of Parliament. Joint ventures, alongside many other forms of corporate arrangements, are very much in scope of this work. The Bill provides tools in Schedule 10 to transfer these assets efficiently from the councils to UKRI through property transfer schemes. If more specific intervention is required, for example as may be the case where a joint venture is not arranged under UK law, the novation of contracts and joint ventures will be individually addressed.

I hope this reassures the House of two things: first, that we do not intend to inflict any undue process on UKRI and its councils; and, secondly, that they will continue to have delegated autonomy over matters pertaining to their subject areas. In summary for this group addressing Innovate UK and UKRI’s financial freedoms, I kindly request the noble Baroness, Lady Brown, to withdraw her amendment.

Photo of Baroness Brown of Cambridge Baroness Brown of Cambridge Crossbench 7:15, 15 March 2017

I thank noble Lords who have contributed to this short debate and the Minister for his detailed response. I recognise from what he said that we have a strongly shared objective of retaining the different role and character of Innovate UK. In the light of the government amendments, which go a long way towards doing that, and of his earlier and very positive assurances on an important role for senior independent members of the councils, I beg leave to withdraw the amendment.

Amendment 166 withdrawn.

Amendment 166A not moved.

Amendments 167 to 173

Moved by Lord Prior of Brampton

167: Schedule 9, page 105, line 20, at end insert “after consulting the chair of UKRI”

168: Schedule 9, page 107, line 11, at end insert—“Executive Committee8A_(1) UKRI must establish a committee called “the Executive Committee”.(2) The Executive Committee is to consist of—(a) the CEO, who is to be its chair,(b) the CFO,(c) the executive chair of each of the Councils, and(d) such other members as the CEO may appoint.(3) Those appointed under sub-paragraph (2)(d)—(a) must be employees of UKRI, and(b) if they cease to be such employees, may not continue as members appointed under that provision.(4) The Executive Committee may establish sub-committees, and a sub- committee so established is referred to in this Schedule as an “Executive sub-committee”.(5) An Executive sub-committee may include persons who are not members of UKRI, Council members or employees of UKRI.(6) UKRI must pay such allowances as the Secretary of State may determine to any person who—(a) is a member of an Executive sub-committee, but(b) is not a member of UKRI, a Council member or an employee of UKRI.”

169: Schedule 9, page 107, line 13, after “Councils” insert “and the Executive Committee”

170: Schedule 9, page 107, line 33, leave out sub-paragraphs (1) and (2) and insert—“(1) UKRI, a Council and the Executive Committee may each determine their own procedure and the procedure of any relevant committee.(1A) “Relevant committee” means—(a) in the case of UKRI, a general committee,(b) in the case of a Council, a Council sub-committee established by it, and(c) in the case of the Executive Committee, an Executive sub- committee.(2) But sub-paragraph (1) is subject to the rest of this paragraph.”

171: Schedule 9, page 108, line 16, after “committee,” insert “or of the Executive Committee or any Executive sub-committee,”

172: Schedule 9, page 109, line 8, at end insert—“( ) The report must include a statement regarding how UKRI has cooperated with the OfS during that year.”

173: Schedule 9, page 109, line 31, leave out from beginning to third “the” and insert “But UKRI may do any of the following only in accordance with terms and conditions specified from time to time by”

Amendments 167 to 173 agreed.

Amendment 173A not moved.

Amendments 174 and 175

Moved by Lord Prior of Brampton

174: Schedule 9, page 110, line 14, leave out “paragraph” and insert “paragraphs 8A and”

175: Schedule 9, page 110, line 23, leave out “paragraph” and insert “paragraphs 8A and”

Amendments 174 and 175 agreed.

Clause 88: The Councils of UKRI

Amendment 176

Moved by Lord Prior of Brampton

176: Clause 88, page 58, line 12, at end insert—“(4) Before making regulations under subsection (2), the Secretary of State must consult such persons as the Secretary of State considers appropriate.(5) UKRI must, if requested to do so by the Secretary of State, carry out such a consultation, on behalf of the Secretary of State, of such persons.(6) In such a case, UKRI must carry out the consultation in accordance with such directions as the Secretary of State may give.”

Photo of Lord Prior of Brampton Lord Prior of Brampton Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

My Lords, I start by expressing my gratitude to the noble Lord, Lord Krebs, and the noble Baroness, Lady Brown, who have worked so constructively with me and my colleagues over the past few weeks and months. I am also indebted to my noble friend Lord Willetts, whose written definition of the Haldane principle is, and will continue to be, a beacon for Ministers, setting out in detail this important principle and its practical applications.

The Government have been consistently clear in stating that the spirit of the Haldane principle, through various provisions, is already, to use the word of the noble Lord, Lord Mendelsohn, “hardwired” into the Bill. I am grateful to all noble Lords who spoke on this point at Second Reading and in Committee, many of whom asked for a firmer form of words that directly refer to the principle itself. I offered to reflect on this, and I am delighted to table Amendment 191. I hope noble Lords will be equally delighted to accept it. We have drawn from the first line of my noble friend Lord Willetts’s written statement to define the Haldane principle as the principle that decisions on individual research proposals are best taken following an evaluation of the quality and likely impact of the proposals, such as a peer review process. This amendment is hugely symbolic and an important protection for UK research by putting a reference to the Haldane principle in legislation for the first time.

Amendments 176 and 182 place a duty on the Secretary of State to consult formally before laying regulations to alter the names, number or fields of activity of the research councils. I am grateful to the noble Lord, Lord Stevenson, who asked for clarity on the point of prior consultation in Committee. I hope that these amendments overdeliver on my promise to address the noble Lord’s question. While this Government previously committed to consult before altering a council, these amendments will bind future Governments to this commitment.

Likewise, this Government have been consistent in their pledge to allocate separate budgets to each council of UKRI. I listened carefully in Committee to the calls from the noble Lords, Lord Patel and Lord Broers, and the noble Baroness, Lady Brown, for greater protections. I have reflected on their speeches, and in response the Government have tabled Amendment 188, which requires the Secretary of State, when making grants to UKRI, to publish the whole amount and the separate allocations that will go to each council. This will ensure complete transparency, from this Government and future Governments, on all funding allocations to UKRI and to the research councils, Innovate UK and Research England.

In Committee, my noble and learned friend Lord Mackay spoke passionately about the definition of “relevant specialist employees” in Clause 91. This provision is intended to ensure that the research councils may continue to recruit directly certain specialist staff who are employed in relation to a council’s field of activity. My noble and learned friend raised concerns that the current definition could lead to ambiguity for relevant staff who may not be considered by some to be researchers or scientists. I have reflected very carefully on the powerful case that he put forward, and I am very happy indeed to table Amendment 178 to address his points. This amendment draws on the language my noble and learned friend employed in his amendment in Committee and expands the definition to include any person with knowledge, experience or specialist skills that are relevant to the council’s field of activity who is employed by UKRI to work in that field of activity. I sincerely hope that this amendment alleviates the concerns of my noble and learned friend.

I look forward to hearing noble Lords speak on the other matters included in this group, and I will respond after they have had a chance to speak to these amendments.

Photo of Lord Judd Lord Judd Labour

My Lords, I rise simply to make two brief points. In doing so, I hope I will be forgiven for taking the opportunity to pay the warmest tribute to, and to express my admiration for, my noble friends Lord Stevenson and Lord Watson for the sterling work they have put in on the Bill on behalf of this side.

There is a great deal of feeling in the research community about the points covered by these amendments. I am sure there is a recognition that a tremendous amount of work has gone into trying to find an acceptable formula of words. It should be put on record that many of those who are involved in the most outstanding research in our universities remain mystified about why the phrase,

“(such as a peer review process)” should be in brackets. They believe it should, if anything, be in capital letters because they see peer review as essential to the process.

There is some feeling that the word “excellent” should not have disappeared. Quality is, of course, important, but what ultimately matters in the research record of our universities and in its contribution to Britain’s noble standing in the world community for the quality of our research is its emphasis on excellence. As this goes forward it will be essential to keep those two important concerns of the research community in mind. In saying that, I should emphasise that I am involved with three universities and that I was a governor of the LSE for many years and am now an emeritus governor.

Photo of Lord Krebs Lord Krebs Crossbench

My Lords, I thank the Minister for his introduction of these amendments. I shall refer very briefly to Amendments 189, 190 and 191 which are related to the Haldane principle. I am delighted that it is in the Bill. During the passage of the Bill we heard many different views on what the Haldane principle is, whether there is more than one Haldane principle and, indeed, whether it should be called the Willetts principle because one of the key references is the paper by the noble Lord, Lord Willetts.

Cutting to the core of what is involved here, it is about peer review and deciding which individual projects are funded within broad areas. Of course, it is reasonable for Ministers to have broad priorities, just as when the noble Lord, Lord Willetts, was Minister for Universities and Science, he described the eight great technologies that he thought were priorities for this country. However, within those, it should be the peer review system, the practitioners and others who are close to the action, who decide which projects are funded. Although the wording says “quality”, if I were on a peer review committee I would interpret “quality” as including excellence, echoing the point made by the noble Lord, Lord Judd. Therefore I warmly support this amendment.

Amendment 176 is about changing the name of research councils or reconfiguring their remit, and in the past we have seen many changes in the research councils. The 1993 White Paper and the legislation that followed it introduced a complete reconfiguration of the councils and we have seen a number of changes since then. We all accept that both the remit of individual councils and indeed the names and the configuration may change. What is important is that changes are the result of wide consultation taking into account the views of the scientific community. Therefore I welcome Amendment 176 too.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative 7:30, 15 March 2017

My Lords, I thank the Minister for Amendment 178. The point was drawn to my attention by the Prospect trade union. I am glad to say that it is also satisfied with this amendment.

Photo of Lord Sharkey Lord Sharkey Liberal Democrat

My Lords, I will speak to Amendments 177A and 178A. Amendment 177A in my name and that of my noble friend Lord Willis of Knaresborough returns to the subject of the ability of research councils to enter into funding partnerships. We discussed this extensively in Committee. We had two key questions. The first was, under UKRI, would there be any additional requirements above those already existing for research councils in forming these partnerships? The second question was, are there circumstances in which such partnerships would require explicit prior approval from UKRI?

The Minister addressed the partnership issue in his letter to us all of 8 February. He acknowledged that the councils currently engage in many partnerships, nationally and internationally, to significant effect. He quoted from a letter that Sir John Kingman had written to me in which he had said:

“The individual councils of UKRI will of course have delegated autonomy and authority to agree these arrangements within their areas of expertise”.

This was helpful but did not quite seem to answer our two questions explicitly.

I explored this further in a subsequent meeting with the Minister and his officials. The essence of our discussion was over the meaning in practice of “delegated autonomy and authority”. In particular, I was anxious to have an explicit answer to the two questions. I thought that it would be helpful for everyone involved, especially the councils, to have maximum clarity. What differences, if any, would the councils see under the new regime when it came to forming partnerships? Amendment 177A allows the Government to answer these questions and to put the matter beyond doubt.

Amendment 178A is in my name and that of my noble friend Lord Willis of Knaresborough, who regrets that he cannot be present today, having urgent family business to attend to. As with amendment 177A, this amendment looks for clarity and confirmation from the Minister. The context is set out in the letter of 8 February that the noble Lord, Lord Prior, sent to us all. On the penultimate page, the Minister addresses the concerns of the noble and learned Lord, Lord Mackay of Clashfern, over the employment by UKRI of the “relevant specialist employees” to which Clause 9 refers. Government Amendment 178 deals with that matter.

However, in his letter to us, the Minister also referred to the research councils’ role in appointing some relevant specialist staff in line with the principles of autonomy. As he reminded us:

“A package of flexibilities for research council institutes was approved by Her Majesty’s Treasury at the 2015 Budget”.

There were five flexibilities. Two of them are of concern to my noble friend Lord Willis, who is a member of the NERC, and to the CEO of the NERC. These are the exemptions concerning pay and the rollover of commercial income.

The CEO of the NERC has pointed out that neither of these exemptions is in practice available to research councils. They do not form part of the councils’ agreed delegations and there is no mechanism within BEIS for their approval, so they do not happen. For example, to address the 20% pay gap that now exists between NERC institutes and the HEIs requires a multiyear strategy. NERC as an employer must have confidence that this can be adopted without being placed in annual jeopardy by being subject to annual BEIS approval. There is no real sense in which the councils have the freedom to manage payroll within existing budgets as agreed at the 2015 Budget. Neither does the rollover flexibility work. In practice, an offer is made to HMT to consider a rollover of commercial income in January. NERC did this but had received no reply by the second week in March. If no answer is received, the money will be lost. Accordingly, NERC has now committed the relevant expenditure in this year. That means that in reality the rollover flexibility does not work either.

Our amendment addresses this problem. It seeks to impose an obligation to have regard to the agreed package of flexibilities and it seeks to give the Minister an opportunity to explain if the freedoms granted to the research councils in the 2015 Budget will in fact be available after the introduction of UKRI and the reorganisation of the councils.

I acknowledge that we are raising these rather complex matters at a late stage. I apologise for that. I should entirely understand it if the Minister preferred to write to us in response.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

My Lords, it has been a good debate on a wide range of issues broadly around the work of the research councils. It includes the Government’s important and welcome commitment to uphold the Haldane principle—or Willetts principle—and indeed to enshrine it in the Bill and throughout the instructions that will be given to the various bodies that are to subscribe to it.

We are delighted to be able to sign up to a number of government amendments in this group. We are pleased to see the concession made to the point argued strongly in Committee by the noble and learned Lord, Lord Mackay, about including under specialist employees all technical staff where they are involved in research. That contrasts with the attitude taken in Committee and earlier stages of the Bill, when we attempted to broaden the representational elements relating to the Office for Students—or office for higher education, as it should be called. In particular, we raised the lack of engagement with students, which seems perverse given the Government’s willingness at this stage to include others involved in their discussions.

I shall speak briefly to Amendment 177—the one amendment to which no one has spoken—and seek the Government’s response. We all accept that the strength of our higher education and research institutions will be central to the health of our economy and vitality of our society. As we look towards a post-Brexit world, the role of research in driving innovation, investment and wellbeing will surely assume greater significance. The capacity of research institutions to act with autonomy and independence will be key to their success.

The Government’s amendments, as I have already said, rightly respond to concerns raised about the need to embed the principle of institutional autonomy more firmly within the Bill. Why, therefore, have the Government not accepted Amendment 177 or brought forward their own version of it?

The Government did respond to arguments about autonomy in relation to the OfS. We welcomed their amendments and signed up to them—they are now in the Bill—such as that on,

“the institutional autonomy of English higher education providers”.

Yet as it stands, UKRI has no such duty, despite the extensive influence and engagement—indirect and direct—that it will have with higher education providers under the new system. We accept that UKRI is not a regulator, but its role is instrumental. It is bound to be engaged in discussions with institutions and bodies that are in a different sector from the institutional autonomy provided by the Secretary of State and the OfS.

That is an asymmetry that I regret. Could the noble Lord, when he comes to respond, at least give us some solace by accepting that, although it may be too late to amend the Bill at this stage, the institutional autonomy issue percolates through to research, is important to the institutions that will be working with the research councils and UKRI post-implementation of the Bill, and is something which the Government should address at some point, whether through memorandums of understanding or by guidance?

Photo of Lord Prior of Brampton Lord Prior of Brampton Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

My Lords, first, I echo the words of the noble Lord, Lord Judd, about excellence. I subscribe to the views he expressed on excellence absolutely, 110%. I am pleased as well that my noble and learned friend Lord Mackay is happy with our Amendment 178. I also thank the noble Lord, Lord Krebs, for his comments about the incorporation of the Haldane principle into the Bill. I think he almost called it the Willetts, rather than the Haldane, principle, but in any event, we will amend the Explanatory Notes to the Bill to make clear reference to my noble friend Lord Willetts’s Written Statement, so there is complete clarity about what we mean by the Haldane principle.

I turn to the amendment in the name of the noble Lord, Lord Mendelsohn, introduced today by the noble Lord, Lord Stevenson, regarding institutional autonomy. I agree that this is also a very important principle and I think we are all glad to see it so clearly articulated in Part 1 of the Bill. I assure the noble Lord that UKRI has the necessary protections already built in through existing provisions in the Bill, much enhanced by the Government’s Haldane principle amendments.

Clauses 97 and 98 already protect institutional autonomy, as they mirror the language used in the definition of institutional autonomy that noble Lords have agreed should be added to this Bill, specifically with respect to courses of study, the appointment of staff and the admission of students. In fact, they already go beyond this and extend this protection to cover universities’ research activities, as supported by Research England. Funding from research councils and Innovate UK is competition-led, and I assure the noble Lord that they do not, nor can they, tell institutions and businesses what they may or may not research or develop, or how they may recruit staff.

This amendment would require UKRI to have regard to the need to protect the institutional autonomy of English higher education providers but, unlike the Office for Students, UKRI’s remit is not limited to these institutions. UKRI will have a strategic vision for research and innovation across the whole UK. It will fund and engage with research institutes and facilities outside the university sector as well as with businesses, both domestically and internationally.

This is why the Government have made the provisions I have already described. Combined with our commitment to the dual support system, the Bill already protects the autonomy of institutions in a way that is tailored to UKRI’s mission. This additional amendment is unnecessary and potentially confusing in relation to the scope and responsibilities of UKRI, which are very different from those of the OfS. Again, in sentiment, I think we are fully agreed on this, but I hope in view of what I have said the noble Lord will feel able not to press the amendment.

The noble Lord, Lord Sharkey, made a powerful case regarding the research councils’ ability to strike up partnerships with other funding bodies directly. I have to confess I got a little lost at some point as he was making his speech, and I will take up his offer to write to him when I can read it tomorrow in Hansard, but I will try to be as clear as possible in my response this evening. As part of UKRI, the research councils will be able to form partnerships with other bodies, such as charities, in the same way as they do now.

The noble Lord has rightly identified the need to still abide by prevailing public sector expenditure rules—for instance, those covered in HM Treasury’s Managing Public Money. Although decisions on more routine partnerships such as joint funding research programmes in a particular discipline will still be taken by the councils themselves within delegated limits set by the department, other more complex arrangements—which might involve setting up an SPV or joint venture, for example—would, as now, require explicit prior approval from government. I am grateful to the noble Lord, Lord Sharkey, for raising this important point, and I hope sincerely that my strong assurances are enough to persuade him not to press his amendment.

Amendment 178A would enshrine in legislation a package of spending flexibilities afforded to some research council institutes by Her Majesty’s Treasury in 2015. These flexibilities recognise the important work these institutes undertake and are designed to provide freedom over how much institutes can pay staff, how much they may pay for marketing and how they may carry out procurement, alongside assurances around approval processes for budget exchange activity and exceptional depreciation. I assure noble Lords that these flexibilities are not affected by the creation of UKRI, and there are no plans to alter them.

However, it is absolutely essential that we do not ossify such flexibilities in primary legislation. Not only is it the prerogative of Her Majesty’s Treasury to determine cross-government rules on public expenditure, but it is important that we are able to evolve these flexibilities over time to respond to changing circumstances. I hope noble Lords will acknowledge the irony of solidifying a “package of flexibilities” in primary legislation, rendering the package unalterable, and hence inflexible. These amendments enshrine the Haldane principle in law and further protect the autonomy of UKRI’s councils.

Amendment 176 agreed.

Clause 89: UK research and innovation functions

Amendment 177 not moved.

Clause 91: Exercise of functions by science and humanities Councils

Amendment 177A not moved.

Amendment 178

Moved by Lord Prior of Brampton

178: Clause 91, page 60, line 12, leave out subsection (3) and insert—“(3) A “relevant specialist employee”, in relation to a Council, means—(a) a researcher or scientist employed by UKRI to work in the Council’s field of activity (see the table in subsection (1)), or (b) a person who has knowledge, experience or specialist skills which is or are relevant to the Council’s field of activity and is employed by UKRI to work in that field of activity.”

Amendment 178 agreed.

Amendment 178A not moved.

Amendments 179 to 182

Moved by Lord Prior of Brampton

179: Clause 91, page 60, line 18, after “contributing” insert “(whether directly or indirectly)”

180: Clause 91, page 60, line 18, after “growth” insert “, or an economic benefit,”

181: Clause 91, page 60, line 18, after “Kingdom,” insert—“( ) advancing knowledge (whether in the United Kingdom or elsewhere and whether directly or indirectly) in, or in connection with, science, technology, humanities or new ideas,”

182: Clause 91, page 60, line 24, at end insert—“(6) Before making regulations under subsection (5), the Secretary of State must consult such persons as the Secretary of State considers appropriate.(7) UKRI must, if requested to do so by the Secretary of State, carry out such a consultation, on behalf of the Secretary of State, of such persons.(8) In such a case, UKRI must carry out the consultation in accordance with such directions as the Secretary of State may give.”

Amendments 179 to 182 agreed.

Clause 92: Exercise of functions by Innovate UK

Amendment 183

Moved by Lord Prior of Brampton

183: Clause 92, page 60, line 31, leave out subsection (3) and insert—“(3) Arrangements under this section must require Innovate UK, when exercising any function to which the arrangements relate, to have regard to—(a) the need to support (directly or indirectly) persons engaged in business activities in the United Kingdom,(b) the need to promote innovation by persons carrying on business in the United Kingdom, and(c) the desirability of improving quality of life in the United Kingdom.”

Amendment 183 agreed.

Clause 95: UKRI’s research and innovation strategy

Amendment 184 not moved.

Clause 97: Grants to UKRI from the Secretary of State

Amendments 185 to 188

Moved by Lord Prior of Brampton

185: Clause 97, page 62, line 39, after “subsection (1)” insert “in respect of those functions”

186: Clause 97, page 63, line 9, after “subsection (1)” insert “in respect of those functions”

187: Clause 97, page 63, line 15, at end insert—“( ) provide for the allocation of the whole or a part of the grant to a particular Council and for subsequent changes in that allocation,”

188: Clause 97, page 63, line 22, at end insert—“( ) Where the Secretary of State makes a grant to UKRI under subsection (1), the Secretary of State must publish—(a) the amount of the grant, and(b) if the terms and conditions of the grant allocate the whole or a part of that amount to a particular Council—(i) the name of the Council, and(ii) the amount of the grant which is so allocated to it.”

Amendments 185 to 188 agreed.

Clause 99: Balanced funding and advice from UKRI

Amendments 189 to 191

Moved by Lord Prior of Brampton

189: Clause 99, page 64, line 7, at end insert—“(za) the Haldane principle, where the grant or direction mentioned in subsection (1) is in respect of functions exercisable by one or more of the Councils mentioned in section 91 (1) pursuant to arrangements under that section,”

190: Clause 99, page 64, line 8, after “principle” insert “, in any case”

191: Clause 99, page 64, line 10, at end insert—“(2A) The “Haldane principle” is the principle that decisions on individual research proposals are best taken following an evaluation of the quality and likely impact of the proposals (such as a peer review process).”

Amendments 189 to 191 agreed.

Amendment 192 had been withdrawn from the Marshalled List.

Clause 100: General duties

Amendments 193 and 194 not moved.

Clause 108: Cooperation and information sharing between the OfS and UKRI

Amendment 194A

Moved by Lord Smith of Finsbury

194A: Clause 108, page 67, line 26, at end insert—“( ) Where a decision to be made by the OfS or UKRI relates to—(a) the power to award research degrees; or(b) research students;the OfS and UKRI must make the decision jointly.”

Photo of Lord Smith of Finsbury Lord Smith of Finsbury Non-affiliated

My Lords, I rise to move Amendment 194A, standing in the name of the noble and learned Lord, Lord Mackay of Clashfern. I remind the House of my interest as Master of Pembroke College in Cambridge.

The Bill has been substantially improved over the course of recent weeks, and we are very grateful for many of the amendments the Government have brought forward. But one aspect of the Bill still gives rise to concern: its basic failure to understand the essential interrelationship between teaching and research. Research is not only important in universities of and for itself in pushing ahead the frontiers of knowledge and understanding, and vital for our economic future and success as a country; it is also important for the way it enriches, enlivens, illuminates and deepens the teaching universities undertake. Having postgraduate students alongside undergraduates enhances the undergraduate experience, provides added value to their learning and benefits the overall academic atmosphere of the university community.

The recognition of research degree-awarding powers is therefore of critical importance but the Bill fails to recognise that. It ultimately places the authority for the awarding of such powers solely in the hands of the Office for Students. As a result of government amendments, the Bill now helpfully requires the OfS to seek the advice of UKRI before granting, varying or revoking degree-awarding powers. That point was reinforced in the letter the Minister helpfully sent us this morning.

However, seeking advice is not enough. In Clause 108, the phrase “may co-operate” is not enough, nor are “may provide information” and,

“must, if required … by the Secretary of State”.

Our amendment seeks to put this right very simply by saying that the decision to grant, revoke or vary research degree-awarding powers should be made jointly by both the Office for Students and UKRI. The body that knows about students and the body that knows about research should both be intrinsically involved in that decision. It would be daft to leave open the possibility, as the Bill does at present, that the OfS could ignore the advice, knowledge, expertise and research experience of UKRI in deciding whether a university should be able to grant research degrees. Worse, if a decision to vary or revoke has been made, the university can make representations but only to the Office for Students. The OfS could deal with these representations unilaterally. An appeal could then be made to the First-tier Tribunal. At the moment the Bill envisages only an appeal relating to an Office for Students decision. Surely an appeal should be able to be made in relation to the views and decisions of both the OfS and UKRI. If it is a joint decision, there will rightly be subsequent joint accountability for that decision.

It is also worth pointing out that UKRI will be a major funder—post-Brexit, quite possibly the major funder—of postgraduate research study. Are we seriously saying that it should take only a minor advisory role in ratifying a university’s degree-awarding status? I urge the Government to think again, support research, intertwine research and teaching to the fullest possible extent, bring clarity and firmness to the process and ensure that the best decisions are taken with the full expertise of UKRI intimately involved. This must surely be a joint process. I beg to move.

Photo of Lord Mackay of Clashfern Lord Mackay of Clashfern Conservative

My Lords, I have my name on this amendment. I am grateful to the noble Lord, Lord Smith of Finsbury, for moving it so fully and eloquently, and I entirely agree with everything that he said.

It seems extraordinary, and I thought this at Second Reading, that the research knowledge and capability is at UKRI but—so far as I know, and I will be corrected if I am wrong—there is no requirement of any sort that the Office for Students should have any particular knowledge or experience of research or, for that matter, research degree-awarding powers. Therefore, the decision is to be taken by people who profess no particular knowledge of the subject matter of research-degree-awarding powers. That is to be left to a matter of advice. The difficulty with that, as the noble Lord, Lord Smith, has pointed out, is that when it comes to accountability all that the Office for Students can say is, “Well, we got this advice from UKRI. That’s our defence”. Surely, the people who should defend the advice that is the essence of the matter should be the people who give it. There is a difference between decision-makers and advisers, as we were authoritatively informed some years ago: Ministers decide, advisers advise. In this context, the decisions are to be taken by the Office for Students while UKRI, with all its expertise, is relegated to being an adviser.

I have interests in the University of Cambridge, in the sense that I am an honorary fellow of two of the Cambridge colleges and I am a member of the Council for the Defence of British Universities. However, my view, which I have expressed consistently since Second Reading, is that UKRI’s research capabilities mean that it should be involved in the decision-making process as a decision-maker, not merely an adviser. As the noble Lord, Lord Smith of Finsbury, said, we got a letter this morning, which was followed up by an invitation to telephone. Naturally, I accepted the invitation to telephone as soon as I was free to do so. We had a considerable discussion, and I was asked whether the second part of the amendment was as important as the first, the second part being about research students. I said, “Not for me”; I thought the essential part was the first part. I thought, “This sounds good”. Your Lordships will no doubt wait with bated breath to hear what the answer is to that. Anyway, I expressed the view that the second part was not so important. Therefore, if at some stage the amendment is subject to further consideration, I would be perfectly happy—I think this goes for its co-mover as well—to forget about that. The essential part is the decision-making. Surely the Government recognise that there is a difference between a decision-maker—a person with some responsibility for decisions—and an adviser. I strongly support the amendment and feel rather disappointed that the Government have not seen the logic of its position.

Photo of Lord Bilimoria Lord Bilimoria Crossbench

My Lords, I support what the noble Lord, Lord Smith, and the noble and learned Lord, Lord Mackay, have said.

I shall read out the mission statement for the University of Cambridge, which is very short:

“The mission of the University of Cambridge is to contribute to society through the pursuit of education, learning, and research at the highest international levels of excellence”.

That came home to me when I was a student there. We finished the last supervision of term in my favourite subject with a brilliant supervisor, and he said, “Have a good holiday. Now I can get on with my real work, which is research”. That is the importance of research to our top academics.

At the University of Birmingham, where I am chancellor, I chaired the annual meeting earlier this month. We announced that Birmingham had won three more Nobel prizes, taking our total to 11, because of our research.

The University of Cambridge Judge Business School, where I chair the advisory board, has in just over a quarter of a century become fifth in the world in the global FT MBA rankings. One of the main reasons for that is the absolute priority placed on research.

Anything we can do to make sure that we have robust support for our research—not just through advice but taking the expertise of UKRI along with that of the OfS, jointly—would be good for the future of research and the excellence of our universities.

Photo of Lord Winston Lord Winston Labour 8:00, 15 March 2017

I have a brief question for either the noble and learned Lord, Lord Mackay, or the noble Lord, Lord Smith. One thing that slightly concerns me is that certain institutions, such as the conservatoires, are generally not funded in their research by UKRI at all. Very often these students, who do PhDs at the Royal College of Music, for example, are either self-funded or funded through other charitable grants. Could the noble Lord, in summing up, address why we would need that kind of governance for the research degree? I should just like a bit of clarity on that.

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

My Lords, I am also signed up to this amendment. I come from a slightly different position, but I arrive at the same point. Throughout this section of the Bill, the Minister has been at pains to stress how it has been improved by the preceding contributions and debate of noble Lords who have experience of operational activity in the field we are covering. He is, I think, aware of my feeling—I explained it to him earlier this evening—that, had we had the same measure of agreement earlier in the passage of the Bill, we would have made a lot more progress and the Bill would be a lot better. We had to force our way into a position of improvement in the earlier parts of the Bill, but we have been able to do it by dialogue and discussion in this part, which is to be welcomed.

I say all that because this issue of research degree-awarding powers is really important for the higher education institutions in this country. In this section, we are dealing primarily with the UK-wide impact on research funding, but the reality is that this issue relates to the power to award research degrees. English higher education providers, as we need to call them, have attached great strength to this—so great that it was the motivation behind the insistence that we try to change the way the Bill is configured by ensuring that an amendment, which was resisted very strongly by the Government, was added to the very first clause to set out what we meant by a university. Intrinsically wired into what we mean by a university is the question of who has responsibility for awarding degrees. That was decided in the context of the opening clause with a discussion of what universities meant. Then we agreed with the Government to insert a very strong sentence referring to institutional autonomy and academic freedom. With that goes the ability for universities—higher education providers in England, particularly—to award degrees in their own right within a framework established by statute. This issue goes right through the Bill. It is interesting and quite informative that we have come back to it at this point. It has been a long and interesting journey.

Goldilocks, who featured earlier in our discussions, would have taken the view that there was a need here for some sort of equitable approach. It is very surprising that the very presence of the former Lord Chancellor, the noble and learned Lord, Lord Mackay, sitting directly behind the Minister and looking sternly at him, although he cannot see it—that got him moving quickly—has not had more success in cutting through on this point than his case warrants. He made it clear early in Committee that this was something he felt very strongly about. He got a lot of support around your Lordships’ House and he is still there today. It is an extraordinary situation, unprecedented in my short experience here, and I cannot wait to see the denouement of this process. We wait to hear what the Minister will say. He has tried a letter, he has tried a phone call and now he is going to do it in person—what a wonderful triage we will have before us on this occasion. I am rambling slightly, but I wanted to make the point—

Hear, hear!

Photo of Lord Stevenson of Balmacara Lord Stevenson of Balmacara Opposition Whip (Lords), Shadow Spokesperson (Culture, Media and Sport), Shadow Spokesperson (Business, Energy and Industrial Strategy), Shadow Spokesperson (Education)

Hush. I wanted to make the point that this is important. It matters to the institutions and cannot be taken away or given just by discretion—it really is about what universities are about. Not to approve the requirement that the Office for Students or office for higher education must work jointly with UKRI is to take away a very valuable part of our community. I support the amendment.

Photo of Lord Prior of Brampton Lord Prior of Brampton Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

My Lords, I rather fear that an irresistible force has met an immovable object on this occasion. That is a shame because we have agreed on so much in this part of the Bill and we all agree that the various amendments that have been made have vastly improved the Bill. I would argue that we have done 98% of the work required. Despite the very eloquent speeches made by the noble Lord, Lord Smith, and my noble and learned friend Lord Mackay, I feel we are somewhat dancing on the head of a pin on this issue. What is the difference between the two cases being put? On the one hand, my noble and learned friend and the noble Lord, Lord Smith, say that research degree-awarding powers should be made jointly by the OfS and UKRI, whereas the Bill says they should be made by the OfS with advice from UKRI. There is clearly a distinction between the two and I understand it, but we are not talking about a huge distinction this evening. It is important to bear that context in mind as we wind our way to the end of this debate.

I start by stating that the Government fully recognise the importance of a co-ordinated approach to supporting the pipeline of undergraduate and postgraduate talent and skills development. Let me explain briefly where responsibilities will lie across the two organisations, UKRI and the OfS. The OfS will be responsible for maintaining the quality of higher education in England, including postgraduate provision, and promoting the interests of students in English higher education providers, including students engaged in postgraduate research and study. In Scotland, Wales and Northern Ireland this is the responsibility of the devolved Administrations.

UKRI will support the cost of postgraduate research degree programmes in English universities through Research England’s dedicated PGR funding stream. Support of this type is also a devolved matter for Scotland, Wales and Northern Ireland. Additionally, the Government made an amendment in the other place that clarified UKRI’s ability not only to support postgraduate provision but to encourage it. At his appearance before the Science and Technology Select Committee last October, Sir John Kingman argued that these reforms would improve oversight of the research talent pipeline.

UKRI will be a major and influential advocate for the importance of maintaining a strong, healthy pipeline of research students. Crucially, it will have a strategic centre that can gather and analyse intelligence on the pipeline from across its councils and can work with the OfS and the devolved funding bodies to develop a more holistic and comprehensive picture of the landscape than is possible under current arrangements.

The Government are backing UKRI to succeed. In the Budget—funnily enough, very little publicity was given to this aspect of it, which is surprising given the importance I know noble Lords attach to it—the Government committed to spend £250 million over the next four years to increase the number of highly skilled researchers and develop the talent needed by British industries for a thriving and innovative economy. We also announced £100 million for global research talent over the next four years to attract the brightest minds to the UK and help maintain the UK’s position as a world leader in R&D. That was a very significant announcement. Let me be clear: UKRI will work closely with the OfS and its equivalents in the devolved Administrations to ensure that this vital part of the university system is protected.

I turn now to the amendment in front of us; there are two distinct proposals within this amendment. First, on the matter of research students, it must be said that the OfS is an England-only regulator, while UKRI is a UK-wide funder. It would be entirely inappropriate to give the OfS a decision-making power in relation to a research council’s doctoral funding for a Scottish, Welsh or Northern Irish university, for example. Secondly, each organisation will make countless decisions that relate to research students. Requiring them to make every one of these decisions jointly would result in a duplication of effort and, in many instances, simply not make sense. For example, the OfS will not be well placed to take decisions on where research funding should be allocated to fund doctoral training for the purpose of enhancing the UK’s research capability where this is outside the university sector—for example, in one of the UK’s world-leading research institutes. Conversely, this amendment would risk giving UKRI unnecessary decision-making responsibilities on regulatory issues which affect all higher education students, but where UKRI will have no particular remit or expertise, such as on ensuring institutions have appropriate student protection plans in place.

As we have been clear throughout the passage of this Bill, the OfS and UKRI can share information and will co-operate at all levels to ensure that the respective decisions they make regarding research students are appropriately informed by the expertise of the other organisation. This is a much more proportionate and effective approach. Clause 108 already enables this and, since both organisations have a duty to have regard to the need to operate in an effective and efficient way through Clauses 3 and 100, the Bill actively encourages such co-operation. In addition, this House has already agreed amendments that require the OfS and UKRI to detail in their annual reports how they have co-operated in the past year. We fully expect evidence of co-operation on matters related to research students to be included in these reports and, through provisions in Clause 108, Ministers can act to require this to happen should the evidence suggest otherwise. However, I put to the House that while co-operation and collaboration is appropriate, asking the OfS and UKRI to make joint decisions in every instance is not.

On research degree-awarding powers, we considered carefully the constructive arguments made in Committee by my noble and learned friend Lord Mackay, the noble Lords, Lord Mendelsohn and Lord Stevenson, and the noble Baroness, Lady O’Neill, that this should be a matter where OfS and UKRI should make decisions jointly. Having given this matter much thought, we do not agree that the decision itself should be a joint one between the two bodies, given that UKRI has no direct regulatory function in relation to higher education providers. Nevertheless, while we believe that the OfS as regulator of the sector is best placed to take the final decisions, we fully agree that it is important that the expertise of UKRI should be fully utilised in ensuring that the OfS makes well-informed decisions. Because of this, we put forward an amendment, which this House has already agreed, requiring the OfS to request advice from the designated quality body or committee on degree-awarding powers. This amendment ensures that the advice must be informed by the views of UKRI when it concerns research degree-awarding powers, and this advice cannot be ignored by the OfS. This gives UKRI a clearly enshrined role, securing its influence in decisions on research degree-awarding powers, which is much stronger than anything that has gone before in securing a guaranteed role for such advice to be given for matters concerning research degree-awarding powers. Through our reforms, we see UKRI having a bigger role than any research organisation currently has, or that HEFCE has now.

The new system that we have designed has clear accountabilities, and instituting joint decision-making in this way could give UKRI a role in matters which have nothing to do with an institution’s research capability. Further, the Government will also commit to giving UKRI an important advisory role when the department is preparing guidance on the criteria by which applications for research degree-awarding powers will be assessed. These are meaningful legislative provisions. The Bill does not prevent UKRI having a role in the appeals process when appropriate. We believe that it is a more practical and reasonable alternative to the amendment, taking into account the real-world operations of the two bodies, while crucially ensuring that any decisions are informed by the relevant expertise. The amendment as drafted would make it a legal requirement for the OfS to jointly take decisions about the number of doctoral training places to be supported by the research councils, about the funding of doctoral research training in research council institutes and facilities, and about the support given by UKRI for doctoral training in universities in the devolved Administrations. These things are the primary responsibility of UKRI and are outside the scope of the OfS’s responsibilities, and I believe it would be wrong to put them into legislation today. It is with those things in mind that I ask the noble Lord, Lord Smith, to withdraw his amendment.

Photo of Lord Smith of Finsbury Lord Smith of Finsbury Non-affiliated

First, briefly to address the point from the noble Lord, Lord Winston, even though UKRI may have no direct funding responsibility in relation to conservatoires, it can none the less play a useful role in making a joint decision, and I do not think that diminishes in any way the research standing of the conservatoires.

Photo of Lord Winston Lord Winston Labour

I do not want to delay this debate any longer, but I am still puzzled by this. A huge number of research degrees are master’s degrees with a research component. Of course, they are often not funded by research councils; sometimes they are, but sometimes they are not. Where do they stand with relation to this proposal? I would like a bit of clarity about it.

Photo of Lord Smith of Finsbury Lord Smith of Finsbury Non-affiliated

I do not think that our amendment would make any substantive difference from the position under the provisions of the Bill. It simply means that UKRI is part of the process alongside the Office for Students.

In relation to UKRI, the Minister has shown in our discussions much wisdom and willingness to take on board points made from all sides of the House. This is only to be expected from an alumnus of Pembroke College. However, on this particular issue, about research degree-awarding powers, he says that we are dancing on the head of a pin. I do not think that we are. There is a fundamental difference between having a statutory duty to give advice and for that advice to be considered, and taking a joint decision. There is a world of difference between those two. The question is who has the ultimate authority, who has the subsequent accountability and whether we can, by making this a joint decision, give reassurance to many of our leading research universities, which have expressed concern. As I said earlier, the body that knows about students and the body that knows about research should both be involved in the decision about whether to give research degree-awarding powers, and they should make that decision jointly. It would be useful to test the opinion of the House.

Ayes 101, Noes 142.

Division number 1 Higher Education and Research Bill - Report (4th Day)

Aye: 99 Members of the House of Lords

No: 140 Members of the House of Lords

Aye: A-Z by last name


No: A-Z by last name


Amendment 194A disagreed.

Clause 112: Power to make consequential provision etc

Amendments 195 and 196

Moved by Viscount Younger of Leckie

195: Clause 112, page 69, line 9, leave out “subsection (3)” and insert “subsections (3) and (4)”

196: Clause 112, page 69, line 14, at end insert—“(4) Provision made under subsection (1) by virtue of subsection (2)(b) may not revoke a Royal Charter in its entirety.”

Amendments 195 and 196 agreed.

Clause 115: Regulations

Amendments 197 to 202

Moved by Viscount Younger of Leckie

197: Clause 115, page 70, line 11, at end insert—“( ) regulations under section 10 (1)(prescribed description of providers for whom a transparency condition is mandatory);”

198: Clause 115, page 70, line 16, at end insert—“( ) regulations under section 38 (3)(prescribed description of providers eligible for financial support);”

199: Clause 115, page 70, line 24, after “or” insert “of”

200: Clause 115, page 70, line 27, at end insert “any of the following provisions of that Schedule applies—(a) paragraph 4(1A)(first regulations prescribing the higher, basic and floor amounts);(b) ”

201: Clause 115, page 70, line 29, leave out “applies”

202: Clause 115, page 70, line 29, at end insert—“( ) paragraph 5 (accelerated courses).”

Amendments 197 to 202 agreed.

Schedule 11: Minor and consequential amendments relating to Part 1

Amendments 203 to 206

Moved by Viscount Younger of Leckie

203: Schedule 11, page 112, line 35, leave out “in receipt of remuneration”

204: Schedule 11, page 113, line 6, at end insert—“Education (No. 2) Act 19864A_(1) Section 43 of the Education (No. 2) Act 1986 (freedom of speech in universities etc) is amended as follows.(2) After subsection (4) insert—“(4A) The establishments in England to which this section applies are—(a) any registered higher education provider;(b) any establishment of higher or further education which is maintained by a local authority;(c) any institution within the further education sector.”(3) In subsection (5), after “The establishments” insert “in Wales”.(4) In subsection (6), in the definition of “governing body”, for “in relation to any university” substitute “— (a) in relation to a registered higher education provider, has the meaning given by section 81 (1) of the Higher Education and Research Act 2017;(b) in relation to a university in Wales,”.(5) In subsection (6), after the definition of “governing body” insert—““registered higher education provider” has the meaning given by section 4 (10) of the Higher Education and Research Act 2017;”.(6) After subsection (6) insert—“(6A) For the purposes of this section—(a) an establishment is taken to be in England if its activities are carried on, or principally carried on, in England;(b) an establishment is taken to be in Wales if its activities are carried on, or principally carried on, in Wales.”(7) In subsection (7)(a), after “subsection” insert “(4A)(b) or”.

205: Schedule 11, page 117, line 25, at end insert—“29A (1) The Education Act 2005 is amended as follows.(2) In section 92 (joint exercise of functions)—(a) in subsection (2), for “Higher Education Funding Council for England” substitute “Office for Students”, and(b) omit subsection (5).”

206: Schedule 11, page 117, line 26, leave out “to the Education Act 2005”

Amendments 203 to 206 agreed.

Clause 120: Commencement

Amendment 207

Moved by Viscount Younger of Leckie

207: Clause 120, page 72, line 8, leave out subsection (1) and insert—“(1) The following provisions of this Part come into force on the day on which this Act is passed—(a) sections 111 to 113;(b) sections 115 to 117;(c) section 119;(d) this section;(e) section 121.”

Amendment 207 agreed.

Amendment 208 not moved.

House adjourned at 8.30 pm.