Tris Dyson and Professor Dame Ottoline Leyser gave evidence.

Q1 Before we start hearing from the witnesses, do any Members wish to make declarations of interest in connection with the Bill? Nobody has given notice that they would like to do that. We will now hear oral evidence from Tris Dyson, managing director at Nesta Challenges, and Professor Dame Ottoline Leyser, chief executive officer of UK Research and Innovation. Before calling the first Member to ask a question, I remind all Members that questions should be limited to matters within the scope of the Bill and that we should stick to the timings in the programme order agreed by the Committee. We have until 10.25 am for the first witness session. Tris Dyson, please introduce yourself for the record.

Tris Dyson:

Good morning. My name is Tris Dyson. I am the founder and managing director of Nesta Challenges, which was set up in 2013 by the UK Government in partnership with the innovation foundation Nesta. Its explicit purpose is to develop UK expertise in challenge prizes as a funding model for frontier innovation. We have grown significantly over that period of time and are now something of an export; we design and develop challenge prizes for Governments around the world in North America, Europe, Africa and so on, and for companies and foundations. Essentially, the model looks at where you can stimulate innovation and new activity to create new markets, new opportunities and to solve important societal problems.

Q Thank you. Professor Dame Ottoline Leyser, please introduce yourself for the record.

Professor Leyser:

Thank you. My name is Ottoline Leyser and I am the CEO of UK Research and Innovation, which is an arm’s length body of the Business, Energy and Industrial Strategy Department. We are the major public sector funder of research and innovation for the UK. We fund right across the disciplines and sectors that conduct research and innovation.

Given that this is my first contribution, may I say what a pleasure it is to serve under your chairship, Ms McVey? I look forward to working with all members of the Committee on the Bill, which is important for our future research and prosperity.Q

I welcome our two witnesses. I have one general question for both of you, given your broad range of experience in research and development: what is the problem that the Advanced Research and Invention Agency is fixing? Professor Dame Ottoline, do you have a clear understanding of the proposed working relationship between ARIA and UK Research and Innovation, and should that be put on a formal footing to provide clarity? Mr Dyson, Nesta Challenges is based on challenges, so what is the role of challenges and missions with regard to the work of ARIA in driving high-risk, high-reward research?

Professor Leyser:

I do not actually see ARIA as being about fixing a problem; I see it as adding something new and extra to an already very high-quality research and innovation system. As I have said, UKRI is the major public funder for research and innovation. We invest £8 billion of public money every year in research innovation, and we have a major responsibility to act as stewards for the whole system in the UK to ensure that it has the right capabilities and capacity to conduct the research and innovation that we need for the kind of inclusive and sustainable knowledge economy that is so important for our country.

As CEO of UKRI, I have to think about all parts of the system. I have to think about the people—do we have the right kinds of people in the system, the right mix, the right diversity, the right set of skills, and the right career trajectories and pathways through the system? I have to think about infrastructures—do we have the right balance of institutes, universities, catapults and national facilities, as well as high-quality equipment within institutions and universities, for example? Are we funding the right mix of ideas, starting from the really high-risk, high-gain research, which will be the focus of ARIA? It is also our responsibility to fund the really important work that perhaps does not fall into that transformative, high-risk, high-reward category, but without which the benefits of that high-risk, high-reward research will not be realised and the foundations for the next transformative ideas will not be built. I also have to think about the connectivity in the system, how to join it up and make it all work effectively. Then I have to think about how we can take that and focus it on particular challenges that we face in the country. The work that UKRI does seeks to balance all of those needs and support all of them to create a really high-functioning system for the UK.

I hope that ARIA will do what you might call an extreme or particularly transformative, visionary version of that focus activity, so it will work in a different way from the way in which we typically work. Because of our incredibly broad responsibility for the system, we tend to work in a way that asks the system, in a very broad and open way, how it can best deliver the things that we think need to happen, whereas ARIA will work on the programme manager model, so it will identify a small cadre of visionary leaders who will have extraordinary ideas, we hope, to drive forward the edge of the edge, transformative, visionary ideas, and they will hopefully be empowered to work in very different, agile ways to take forward those kinds of ideas. That is quite experimental. They should be able to experiment with different ways of funding research, including, for example, the challenge model, which Tris is such an expert on. There is a whole range of opportunities. That is how I see it working. It is a small, agile agency that will bring together these visionary individuals to add something on top of a very high-functioning system. It is not about fixing a problem; it is about adding something new at the edge of the edge to push forward those frontiers.

I absolutely agree that it is very important that activity is properly rooted in the research base for which I and UKRI are responsible, because it will depend totally on that research base. The people employed at ARIA will absolutely need to understand deeply what UKRI is doing and what the opportunities are across that research base in order to deliver their vision. I would expect a very close working relationship with ARIA to allow that to happen.

Tris Dyson:

I would agree with quite a bit of that. Nesta Challenges produced a report in the summer called “The Great Innovation Challenge”, which we should share with you. We looked at the funding ecosystem. The current funding ecosystem is pretty good and our main funding mechanisms work quite well. It is not wasted. It includes direct financial support through bodies such as UKRI and also the Small Business Research Initiative. It also includes research and development tax credits and the effect that has.

There has, however, as I think the Government have recognised, been an overall need to increase funding in research and development, which is why the target of 2.4% and the promised increases in Government funding are so welcome. In that context, we think that there is an opportunity to explore new avenues and do things slightly differently. Some of the opportunities that that presents, both through ARIA and more generally, is around boosting the diversity of people involved in frontier technology and innovation and improving geographical reach. If we do have a long-standing problem in the UK, it is perhaps with that feed-in to commercialisation and the connection between university R&D and patenting and things that get picked up by the private sector, so that might be something to look at. We do not think that there is a problem, but I guess that this does present, as Ottoline has said, an opportunity for a new, smaller, dynamic agency to add to the current ecosystem.

We think the advantage of ARIA would be that, because it is smaller, it might be able to generate a culture that is a bit more nimble and a bit more agile, take some more risks, look at things about diversity of innovators, and engage with types of innovation and types of innovation funding that ordinarily might be perhaps a little too high risk. It can also be a little more focused and entrepreneurial, but—to consider the second part of the question—it can also look beyond just grants and R&D tax credits, which are overwhelmingly the main way of funding innovation in the UK.

On the role of challenge prizes, challenges get used quite loosely to mean a lot of things, but what we mean by them is outcome-based funding, where you use the combination of technology foresight and insight with some creativity and understanding of how markets evolve and develop, and what opportunities might exist in the future, in order to identify quite specific problems, where there is a real ability to push things forward in innovation but where it is unclear where the most promising innovation is going to come from. For ARIA, I think that this might be quite a useful tool, because, comparatively speaking, you are dealing with relatively small amounts of money, and outcome-based challenge funding gives you a degree of focus but also allows a degree of payment on results. So, you have milestone payments on the basis of ability to solve problem A, B or C, or of demonstrating some traction in the market.

They have other benefits as well, which go beyond the non-financial. You can use relatively smaller amounts of money in a challenge prize model because you might be building up a deal flow for investors, customers and other people who you want to crowd in and bring in additional funding. They are also quite high-profile because of the nature of the competition or the race towards solving x. That means that the publicity and the promotional opportunities for innovators can be quite significant, above and beyond just the financial reward.

Q Thank you very much for those responses. It is great to hear such support for our existing science base. A lot of the discussion around the Bill has been critical of the bureaucracy associated with current research, which has served us so well, particularly in this pandemic.

Both of your responses referred to the role of ARIA in looking at new areas, particularly having new areas of focus that may have been missed and addressing them in different ways. The document of intent that the Secretary of State published leaves the choice of areas of research or the overall mission to the programme managers rather than the chief executive of ARIA, whoever that might be. How will that address our country’s research needs, and do you think that the Secretary of State should have responsibility for identifying the overarching missions that ARIA looks at?

Dame Ottoline, there has been controversy with you over exempting ARIA from meeting freedom of information requests. UKRI meets freedom of information requests. Do you find them to be burdensome in going about your objectives, and what proportion of your budget is taken up by them? I will go to Tris first this time, if that is okay.

Tris Dyson:

I think that the question about leaving it up to the team that is put together at ARIA is a very good one. When you ask people about the US Defense Advanced Research Projects Agency, the US Advanced Research Projects Agency and so on, you get quite different answers as to what they do—that is probably because they do so much—but one of the common responses is that they have very empowered programme managers who understand and know their fields and are able to pursue agendas with a degree of freedom.

I think that has got to be a model that an agency like this—if it is going to be higher risk-taking and a bit more agile, and is going to look at funding innovation that you might ordinarily overlook—needs to be able to pursue, but it does mean that you need to get the right team in place and empower them appropriately. That means that you need a combination of, obviously, people who understand frontier science and technology; but then you also need a degree of creativity and insight as to what the opportunities might be. You need people also who understand the strengths and abilities within the UK, in order to build on that. So, yes, we are significant advocates of the idea that you would have a small, dynamic, empowered team; but they will also need to be relatively ruthless to stop funding things that do not work quite early on, and stick with things that do. That will have to be a mindset, or a regimen, that is baked in from the start.

Professor Leyser:

I absolutely agree with what Tris has said. I think it is widely acknowledged that the success of ARIA—and in many ways the rate-limiting factor—is going to be finding those people. The whole ability of this organisation to operate in this edge-of-the-edge really visionary way that we are all very excited about is critically dependent on those people; and they are in very short supply. So I think the idea of leaving it open to that team of people to decide their focus, to pick the projects that are at the edge of the edge, as it is described, is a really important element.

I also view the notion of this small, agile additional agency as having that freedom in a very positive way. The needs of the country—the priorities that the Government and Ministers set to solve particular challenges for the nation—fall very much within the UKRI remit, and indeed we have very successful programmes doing exactly that, including in a challenge-led model. Those programmes tend to operate on a slightly different basis in the more traditional open call route that Tris describes with grant applications and so on. Again, I would see ARIA as an additional small, agile, free agency that can creatively identify and capture those transformative opportunities that, indeed, are not necessarily thought about in the broader system, and reach parts of the system that our current system does not as successfully reach. It needs to be very experimental and I suppose from that point of view it is not the place where you invest the responsibility for delivering major national priorities.

We are very committed to our freedom of information responsibilities. We get about 30 requests a month and we have a team who deal with those requests and also the other data access requests, and so on, that are part of our responsibility. I am happy to be able to do that. I think that is important for public money, and there is a judgment call about the burden of administration of that, relative to the benefits in transparent use of public funding.

I will stop there, because I know many Members have questions.

I will go to the Minister, and then to Stephen. Can I have an indication—will Members put their hands up—of how many there are? That is four. If you want to ask another question, do you want to ask it now, or come back a little bit later?

I will come back later, if that is okay.

Q May I say what a pleasure it is to be here under your chairmanship to discuss such an important subject, Ms McVey? I have two separate questions for both the witnesses. The first question, for Tris Dyson, is about funding mechanisms and how they support the R&D system. Do you have some examples of how a range of funding mechanisms support the R&D system?

Tris Dyson:

We put together a document in the summer, which we can share with you, that has examples both from Nesta Challenges and particularly from the United States of outcome-based challenge prize funding. That is obviously mainly the space that we occupy. There were some great examples of where it stimulates and creates whole new industries and sectors. There were also some examples of where there can be quite big mistakes, because you go off down the wrong course.

I know there has been quite a lot of inspiration from DARPA and from the US. One example would be the driverless car in the early 2000s. DARPA ran a series of challenge prizes in the desert around the development of driverless cars. It was literally an annual race where teams from universities would compete to develop vehicles that would outperform one another, and there was prize funding associated at the end of it. That is more or less where driverless cars began. The teams that came out of those universities and the individuals have now been picked up by Google, Uber, Apple and everybody else. It is why a lot of that frontier technology is now being developed on the west coast and the rest of the world is playing catch-up.

Another example would be the Ansari X prize, which was about building a privately funded spaceship that would carry two passengers. It had a very specific target about how high a sub-orbit it needed to reach within a two-week period. That created an enormous race for people to build privately funded spaceships, again in the early 2000s. You can see now what has happened in the private space flight industry in the US. The team that won that is now Virgin Galactic and we see every day in our newspapers what has happened to them.

We are a bit newer to this in the UK, but we also have some examples. We concluded a challenge prize just before Christmas that was looking at lower-limb paralysis. It was essentially saying that there have been dramatic improvements in the fields of artificial intelligence, robotics and sensory technology but why has the wheelchair not changed very much in the last 100 years, except for electrification? That was a global challenge in partnership with Toyota that resulted in some amazing breakthrough systems and products for people with lower-limb paralysis all around the world. A Scottish team called Phoenix Instinct won. They developed a wheelchair that moves with the user, anticipates movement using AI and sensory technology, and has a very lightweight alloy frame that is quite revolutionary from the perspective of a wheelchair user. Those are some examples.

Whether you do a challenge prize or not, I think you would need to do the same thing with ARIA, which has got to focus on areas where there is the most opportunity and where you have a decent hypothesis that technology pathways can be developed in order to solve that problem and encourage activity around that singular thing. That is the whole premise of missions or challenge prizes.

Q Thank you, that is really helpful. My next question is to Dame Ottoline. We acknowledge that there is clearly a role for ARIA, but I think it is important that it does not just fund the usual suspects. What are your thoughts on this? How will ARIA be able to target people and ideas that are not picked up through the current system, for example that UKRI is able to target?

Professor Leyser:

Absolutely. I think that the kinds of examples that Tris has just talked about are quite illustrative from that point of view. Typically, the way the current system works is that we would put out a call for applications in a variety of contexts. It might be a completely open call; right across UKRI we run these so-called response-paid funding competitions where people with ideas about what they want to do can apply for funding to do them, whatever they might be. On the whole, those kinds of applications are the sort of bread and butter of really established research organisations: universities, institutes and, through Innovate UK, businesses. A lot of them are also collaborative with industry. It is that kind of grant application process that then goes through peer review, and we try to pick the projects that, as an overall portfolio, will best deliver what the UK needs, both in the short term and, absolutely, in the longer term, building that capacity and capability.

It tends to be established organisations that know the system and how to apply for those kinds of projects, and which have the structures available in their organisations to do that. With ARIA, however, I think there is the opportunity to test a much wider range of models, such as those kinds of competition-type prize approaches that Tris described—he is an expert in those. There is also a fairly well-established system called Kaggle for coding competitions, for example. That potentially reaches a much wider range of people. You do not have to apply; you do not have to have a system that can support that kind of application process. The funding flow is very different: it is a response to the results; it is the winner of the competition. As a result, it may be possible to reach a much wider range of people. In that coding space, for example, there are really extraordinary people working in their homes as freelance coders who would find it very difficult to access the classical UKRI and most of the funders that there are currently.

I very much hope that we would be able to tap into some of the talent right across the UK that is not in the more established places. That would be one really exciting outcome from this with that prize model. Where you have a really clear objective—so it is really clear who has won the money, so to speak—it is possible to do that in a way that does not automatically engage the kind of financial management systems that we have to use. For example, are we sure that this money is being spent on what the applicant said it would be spent on? If you are giving somebody the money for having done the research or having delivered the outcome—the car that goes across the desert—you are in a very different situation.

I do think there is a very interesting possibility for ARIA to reach those people who are talented and can contribute in ways that it is much harder to with the standard systems. I hope that we would learn from that and be able to import some of that expertise into the standard system when it was established and really clear that it was providing good value for money in a robust way.

Thank you Dame Ottoline and Mr Dyson for your answers so far, which have been incredibly informative and helpful. I want to pick up on a couple of things that you have said. You have both mentioned the benefits of a small, agile agency. I guess that raises the question of whether £800 million is a sufficient budget for that small, agile agency. To pick on something that you said, Mr Dyson, about ARIA being quite ruthless in terms of stopping the funding of things quite early on, what would you expect the failure level to be, and how do you expect us all to measure in a reasonable way the success or otherwise of ARIA?Q

Tris Dyson:

Well, more money is better. I think this money needs to be deployed intelligently, so being quite clear on the missions and the focuses is really important. It is even more important with a still significant amount of money but relatively smaller sums. Getting those areas right is really important. The examples that were just given about Kaggle and databased approaches are potentially a useful avenue for some of this, because the R&D investments and sunk costs are relatively low as opposed to building spaceships or something like that. That would be the sort of calculation you might need to make.

You can also use leverage. One of the areas that the UK has been pioneering is around regulatory sandboxes, for example, through the regulators’ pioneer fund, which is administered through UKRI. But some regulators, off their own backs, have also been setting up and developing sandboxes that allow innovators to play with datasets in an environment where the regulator is giving them a little bit more permission than they might have had otherwise. That in itself is an incentive, particularly when you are playing around with datasets.

You can think of examples where we have got significant strengths. One of the things we have talked about a lot during the pandemic—more recently, at least—is the UK’s strengths in genomics research. That means we have got an enormous range of data that could be made available to people through the likes of Genomics England, which in itself is an inducement or an encouragement above and beyond the financial. So being clever—boxing clever—with the money is important.

In terms of ruthlessness, part of this comes to the culture. The ARIA team will have to establish a culture where they trial things out, set targets and objectives and have constant reviews where they get together and decide whether to kill things off. That is clearer when you have defined missions or objectives that you are working towards. It is much harder when you are fostering lots and lots of different things—it is hard to compare X with Y.

Professor Leyser:

From my point of view, the question I would ask is not so much how much money should ARIA have but what proportion of the public sector R&D spend should go into this way-out-there, high-risk, transformative research-type project and, of that, how much should be in ARIA. It is a proportionality question and, as Tris said at the beginning, at a time when there is an aim to drive up UK investment in R&D to 2.4%—hopefully beyond that, because 2.4% is the OECD average and I think we should aim to be considerably better than average—that is quite a stretch target for us. We do incredibly well—the quality and amount of research and innovation in this country is extraordinary—given that we currently invest only 1.7% of our GDP. So I think the opportunities to build that really high-quality inclusive knowledge economy, given how well we perform in the R&D sector with such a small proportion of R&D, are incredibly high.

On that rising trajectory, with us aiming for that 2.4% and beyond, I think spending a small proportion of that on this edge-of-the-edge research capacity and capability is the right thing to do. I would look at the budget in that context as a percentage of the overall R&D spend. People have been comparing the current ARIA budget with the budget of organisations such as DARPA, but if you look at it as a percentage, you get a very different number because, obviously, the US spends a much higher proportion of their—anyway—bigger budget on R&D than we do. That is the important question from that point of view.

How will we know that it has succeeded, and what would one expect the percentage failure to be? I agree with Tris that it is incredible difficult to predict. There is also serendipity and other things to factor in. If you set yourself a fantastic target of solving a particular problem or producing a particular new product and you fail to do that, none the less, along the way you might discover something extraordinary that you can apply in another field.

That high-risk appetite feeds into the question, again, of how much money or what proportion of the overall R&D portfolio should be invested in that way. One has to think about risk in R&D in that portfolio way. It is considered generally in investment markets that really high-performing investment portfolios are a portfolio. You invest in stuff that you know will deliver in an incremental sort of way, and then you invest in the really high-risk crash or multiply parts of the system. That is very much how one has to think about ARIA.

In that domain, where you have a very high probability of failure—that is what high risk means—but also an extraordinary probability of amazing levels of transformative success, it is a dice roll. The total number of projects will be relatively small, so it is very hard to predict an absolute number or proportion that one would expect, and one should not need to—that is what high risk, high reward means.

Thank you, Dame Ottoline. We have just under 20 minutes. Members need to be around the horseshoe to ask a question—there is a microphone on the corner. I will tell you the order in which I will ask questions, so those who are not in the horseshoe can get there. I will go to Daniel Zeichner first, Stephen Metcalfe second, Dawn Butler third, Aaron Bell fourth, Virginia Crosbie fifth and Chi Onwurah at the end. If anyone else would like to ask a question, please indicate.

Thank you, Chair. It is a pleasure to be on this Committee. I will be brief. Good morning, Dame Ottoline. I would like to pursue the funding question. Governments have long had aspirations to raise the level of R&D, but it proves incredibly difficult to do under pressure of circumstances. Things seem to have changed, in the sense that over the last few months we have seen considerable pressures on UKRI budgets and ongoing uncertainty about the cost of being part of the Horizon programme. Given that there is lots of uncertainty, if you had £800 million to spend in the coming period, would you spend it on thisQ ?

Professor Leyser:

That is an excellent question. Clearly, the economic circumstances of the pandemic have made the choices the Government have to make about where to spend the money extremely challenging. Having said that, the opportunity thrown up by the pandemic and the instabilities put into the system as a result of the extraordinary circumstances make now an extremely good time to invest in that R&D-led recovery and to build that inclusive knowledge economy that I have mentioned several times, which creates long-term, sustainable, high-quality jobs right across the country for everybody.

In terms of taking that chance to invest in R&D—to reach 2.4% and beyond—and having the £22 billion public sector investment that has been discussed, now is the moment to do that. That is a really sound investment for the future. It is a lot of money, but it is how we are going to re-establish that stable, more productive economy that we need to fuel and to fund all the kinds of underlying public services, and so on, on which the country depends, so I think it would be a really wise investment.

I am avoiding the question, because I would rather focus on driving up that investment in R&D than work on the pessimistic assumption that it is not going to happen and therefore that we are going to have to be more conservative in our approach to R&D investment than is optimal for building that overall high-quality system that we need for the UK.

Splendidly diplomatic answer. I will pass you over to colleagues.

It is a pleasure to serve under your leadership, Ms McVey. Good morning to both of you, and thank you for your presentations. I truly believe that ARIA will significantly add to the research and innovation landscape, in an area where we perhaps have not done that before. That does beg the question of where those visionary ideas would have gone up until this point.Q

The question that I would like to ask is, what role do you believe that ARIA and UKRI have in ensuring that ARIA-funded research becomes a tangible service or product and actually supports the UK economy? If we are investing £800 million, we need to make sure that there is a benefit. I fully accept the high-risk, high-reward model—I think that is an important part of it—but we need to make sure that we support that innovation and that research along the technology-readiness scale to make sure that it turns into something tangible that adds to our overall wealth. How do you see that role playing out?

Professor Leyser:

To me, a key question in our R&D system altogether is connectivity. We have a spectacular international reputation for the quality of our R&D base right across the disciplines and in both the public and the private sectors, and we have some fantastic innovative companies creating extraordinary products and services for the UK. However, there is an acknowledged weakness in our system in the middle, so to speak, which is sometimes referred to as the valley of death. There is a lot of analysis as to what is going on there. It is partly to do with getting the right pathway of funding that supports activity across that gap.

I personally think that a bigger problem is our relatively balkanised R&D system. I think that we need to focus very hard on building much higher-quality connectivity and networking, right across the system and across that gap. We tend to think of this as a very linear, translational process, and it does not work that way. It is about joining up all the parts in a way that information, ideas, skills, know-how and, crucially, people—all those things are carried best by people—flow to and fro across that system.

One of the major priorities for UKRI is to consider the dynamic career pathways that people need to follow to connect that system up better and to support researchers in different parts of the system moving to other parts of the system—so from academia into industry and, crucially, from industry back into academia, which our current incentive structures in academia do not adequately support.

I think that that “bridging the valley of death” part is a key role for UKRI. That is exactly what we can do, because we bridge all the sectors and we have some levers on a lot of those incentives that are currently driving balkanisation. If we add ARIA into that properly connected system, then the ideas and innovation that emerge from ARIA will feed into that system in an entirely productive and creative way.

It is not ARIA’s job to think about the system and to build bridges across the valley of death; its job is to push those transformative ideas to try to drive step changes in particular areas and technologies where the experts in ARIA think the best opportunities lie. If those seeds are sown on fertile ground, they will transform into that knowledge economy that I keep talking about. My job is to make sure that the ground is fertile.

Dame Ottoline, you said earlier that you expect a close working relationship with ARIA. What does that actually look like? Legislatively, what should that look like?Q

Professor Leyser:

It is an interesting question as to the extent to which that needs to be written into legislation. In my experience, the kinds of relationship that one wants to have with key players across the system are not things for which you necessarily legislate. They are about maintaining open lines of communication and building high-quality personal relationships with different actors in the system. There are a lot of players in the R&D system. I spend a lot of my time talking to people who run other agencies—for example, in the charity sector and those who run R&D activities in businesses— connecting them up, understanding what people’s needs are, what the opportunities are and building the joined-up system I have talked of about before.

So I think the personal relationships are going to be almost as important as anything that one can write into legislation. None the less, possible tools for connection, such as seats on each other’s boards, are certainly worth considering, as is observer-type status, rather than formal status, given that high-quality boards tend to be small. Our board worked really well where people were not representative but bringing their skills and expertise round the table. One does not want to bog down the governance structures for a light, agile and out-there organisation with representative requirements. As I have said before, active and engaged communication is going to be essential for ARIA, because it needs to understand the breadth of opportunity in the system to work well. It will be in everybody’s interest for those activities to work well. Because of that, they will happen naturally, in the same way that I spend a lot of time talking with other funders of research and innovation already in the public and private sectors.

I agree with you that there needs to be a close working relationship. I do not think we can count on it happening naturally. I have two quick questions, if I may, Ms McVey?

Dawn, I am mindful of time. We have seven or eight minutes. I have another three questions and Chi Onwurah to come back. Is it a quick one?

Q It was a quick one on why UKRI cannot access the innovators of tomorrow—the people coding at home. I did not understand what was stopping UKRI doing that?

Professor Leyser:

At the moment, most of our funding opportunities require people to apply for a research grant. People coding at home have a hard time applying for research grants, because it is a system with financial checks and so on. Applying for a research grant is a non-trivial activity, whereas winning a research prize, where there is no application process and you just get on with it, is doable. We are very interested in that wider range of funding mechanisms and in how we can learn from the work of Nesta, and, in the future, the work of ARIA to reach a wider range of people. But at the moment, we work on a largely open-call process; it is really effective because it is completely open, but it none the less creates barriers for people who do not have the infrastructure and administrative support to help them submit those kinds of grant applications.

It is a pleasure to serve under your chairmanship, Ms McVey. I thank both witnesses for their time, and Dame Ottoline for her evidence to the Science and Technology Committee, on which Ms Butler and I also serve.Q

Following on from Dame Ottoline’s answer to Ms Butler, obviously, the purpose is to expand ARIA to cover areas that are not already well covered, but it also seems to be to try to pick up the pace of research and innovation. We have seen that that is possible through crises such as coronavirus. Can you explain how the pace can be picked up by some of the things that you do at Nesta and whether that would carry across to what ARIA is going to do?

Tris Dyson:

I think it helps to pick things, to say, “We want to achieve x within the next two or three years” and to give people a degree of certainty about what outcomes you are going to fund and why. It happens naturally, anyway. Coronavirus is a crisis that has created a rush for R&D. It has also shown, on the drug development or vaccine side, what a combination of funding and relatively agile thinking, including from regulators in conjunction, can do in order to improve outcomes and achieve things. A challenge prize creates that in a positive sense; it essentially says, “We are going to solve for x and award funding on that basis.” That helps speed things up.

Related to the previous question, with a grant model approach, you are funding inputs and costs primarily. People put in a proposal for half a million pounds and say, “We are going to do x and this is what the associated costs are going to be.” Inherently, your risk threshold is going to be different, because you are anticipating whether this an investment that means they are going to be able to spend that money well and achieve x. You are going to look at track records, their financial history and their institutional strengths. You are going to make a judgment on whether to fund A versus B. That lends itself more towards funding the usual suspects than an outcome-based model, where you say, “It is not important to us who solves for x as long as somebody does.” In reality, you tend to blend these models. It is not like there is a pure challenge prize model that does not involve other types of funding mechanisms as well.

Understood, thank you. I had better hand on, as we are running out of time.

It is a pleasure to serve on this Committee, particularly as a scientist. Dame Ottoline said one of the challenges was finding the right people to lead ARIA and that they were in short supply. Tris said that ARIA was about identifying visionary leaders with extraordinary ideas. My question to both of you is, how much is the success of ARIA linked to finding the right people to lead it? Are you confident that we can find them?Q

If you are both answering, you have about a minute each.

Professor Leyser:

I think it is crucial for the success of ARIA—it is everything. We need to go into the search process with absolute resolve to wait until we find the right people, and not appoint people just because there is a vacancy.

Tris Dyson:

I agree with that. I would also say that the primary thing would be the mindset and agility, rather than necessarily focusing on a private sector background, a science background or whatever. You need people with the right creative and entrepreneurial mindset.

Those were both short answers so, Chi, we have time for you.

Q There are two contradictions that I have spotted in what you are saying. Dame Ottoline, you talked about ARIA needing to deliver transformational research and outcomes, but at the same time you said that it is too small to be entrusted with society’s great challenges. Should not the public interest determine what that transformation is? Mr Dyson, you talked about ARIA having a new diversity of funders—regional as well—yet at the same time we hear that it has got to be people who know people and have lots of experience, and we do not have diversity in the base now. Twenty seconds each on those contradictions.

Professor Leyser:

I did not say that it would be too small. My point is that if it is really working on the edge of the edge, it is about capturing the extraordinary opportunities that these people see in the system. Those cannot be straightforwardly dictated. They are not to do with those outside requirements; they are to do with what the opportunities are. The smallness of the agency is to do with what proportion of your R&D spend you put into that activity, given that we have major national priorities that need substantial investment, where the target is driven by those national priorities. It is an opportunity—

Order. I am sorry, but I am going to have to stop you there. They had both been concise answers. I am sorry that we did not finally get to hear your further answer, Tris. Thank you both very much indeed for your time, Dame Ottoline and Tris Dyson.