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.