Select Committee on Agriculture Minutes of Evidence



Examination of witnesses (Questions 60 - 79)

WEDNESDAY 13 DECEMBER 2000

MR PETER SIDDALL, PROFESSOR MICHAEL WILSON and MR DAVID TEMPERLEY

  60. —the name of CSL was mentioned and it was mentioned in the context by those representing the growers as a possible white knight who might have come in and saved Stockbridge House. Why should they have believed the Central Science Laboratory, a government owned facility, would have any remote interest in taking over this enterprise? Why were they encouraged by CSL?
  (Professor Wilson) I cannot answer that question. I understand we—HRI Stockbridge—may have done a little bit of work with CSL, but they certainly did not inundate us or shower us with money or projects or largesse when we were running Stockbridge House.

  61. Are CSL short of the kind of bodies that you employ?
  (Professor Wilson) They have a different mission from us. They have a statutory role as an Agency to ensure plant health and so forth. They have very good pathologists and so forth.

  62. Would they have had an interest in the SOLA work?
  (Professor Wilson) I cannot answer for them. They may have done as a contract.

  63. Let me ask one final question about Stockbridge House. You are looking for it to contribute I think over £4 million by virtue of its sale to fund the cost, is that right?
  (Professor Wilson) No, that is not correct. The Buildings and Estate Management Department of MAFF have put a value on Stockbridge House. I think it is probably inappropriate for me to cite that number because that could affect the market value of the site. It is nothing like £4 million. It is but a fraction of the restructuring cost, which is the number you quoted, £4.5 million.

  64. Am I wrong then that the sale of the assets and the savings are not the source of the seed corn funding for the restructuring costs of HRI? Have I got the wrong picture?
  (Mr Siddall) It is a factor. I think that we have to look to MAFF to provide the funding for the restructuring in the best way they choose. This is one of the sources that they intend to use, but it is not our asset. It is really up to them. They have committed to support the plan.

  65. At this moment in time, we do not know what Stockbridge House is worth. We have some idea of what the saving on the staff might be. What could the site be used for?
  (Professor Wilson) Again, that is up to MAFF's Building and Estate Management Department. I imagine it could be used for any purpose whatsoever once given permission. There is some light industry in the area. There are business parks and various retail distribution centres.

  66. As the owners of Stockbridge House you have—
  (Professor Wilson) We are not the owners.

  67. You operate it.
  (Professor Wilson) We lease it from MAFF.

  68. You put forward the idea of the sale, did you not?
  (Professor Wilson) No, no.

  69. This is not your idea?
  (Professor Wilson) Not at all.

  70. Not invented here?
  (Professor Wilson) No.

  71. MAFF are the ones. Is it MAFF who pops up one day and says "Ah, we can realise this asset and we can fund your restructuring plan", is that how it works?
  (Mr Siddall) It was part of the discussion.

  72. It was part of the discussion. So it is both of you?
  (Mr Siddall) No, no, let us be clear.

  73. Yes, let us be clear because I am just trying to understand where this plan originated.
  (Mr Siddall) The sequence of events was we needed to restructure. We had a number of options. We decided that the closure of Stockbridge was one of the options. As I think you have understood already, most of the £3 million savings do not come from that. The discussion was we close Stockbridge. Stockbridge is a MAFF asset. In the course of the conversation, when the sums were done, the costs of restructuring amounted to £4.5 million and it was considered that some of that money would come from the sale of their asset, the site.

  74. We had better ask the Minister then all those questions about what it is worth and what can it be used for?
  (Mr Siddall) No, I think I would rather look at it the other way, if I may. I think the important point for us here is we do not have any financial capacity. We do not own the assets. We do not have any security of tenure over the assets. Our whole constitutional position—I do not want to go over this again but as I pointed out to you the last time—we have not any capacity to do any financial arrangements like this. We have to go cap in hand to MAFF and MAFF have to think about how it fits in with their programme and that is what took months.

  75. So you would agree with Dr George Thorburn who said "This sorry tale has shown that non departmental public bodies are a complete waste of time and money"?
  (Professor Wilson) An interesting thesis.
  (Mr Siddall) No. We have heard the thoughts.

  76. I would like to move on and look at your management position because we have talked, for example, about the need for a Head of Business Development. I want to take you to paragraph IV on page two of the note which you sent to us and I quote "At the same time, HRI announced that it would be strengthening its senior management team by recruiting a Head of Business Development and an Operations Manager, to fill posts vacant since October 1999 and August 2000, respectively". So where are we with these posts? What will these people do? How much are you offering to pay them? Give us a flavour of what paragraph IV means.
  (Professor Wilson) Those two senior management posts are both vacancies; one created by the departure of Mr Thorburn last October, the other created by the unfortunate loss of Mr Mark Woodget who is now doing a job with the Blood Transfusion Service. In any case that was August of this year.

  77. It looks like you need a financial transfusion.
  (Professor Wilson) We have advertised those positions. We have received a significant number of applications. We have shortlisted six in each case. We are taking up references and we anticipate interviewing in January to fill both those posts. In the case of the Head of Business Development we are specifically looking for a person coming with a scientific background, preferably up to PhD level but certainly having worked in management, in multi-national industries, agrichemicals, whatever. We are not prejudging this, but obviously we are looking for the strongest candidate inevitably. We are looking for someone with a sympathy for the complexity of HRI, its core business, research and development, the adding of value, the bringing of new contracts from the commercial sector, trading and exploiting intellectual property in all its various forms, and basically looking after and integrating, as it were, the projects that we have from all of our funders, not just from the commercial sector because of course, the HortiTech Business Development Department is but a department of HRI.

  78. What are the salaries, say, for the Head of Business Development? What are you going to pay these people?
  (Professor Wilson) I am advised by a number of senior colleagues that to attract the right sort of person we have to go to the maximum that we can offer. In the private sector, of course, these sorts of people command much higher salaries than we can do. We are looking at £60/70,000 for the Head of Business Development and circa £40,000 for the Operations Manager.

  79. You are looking for a Superman or woman to fill this post at a salary under what you deem as the competitive rate outside. What performance criteria are you going to set for these people given that they are going to inherit a plan, which is already worked out, as to how you are going to financially recover this business? What happens if they come along and say "Well, I do not agree with this"? Clearly you want to get somebody who is competitive, who can develop their own strategy and yet you have worked it out beforehand.
  (Professor Wilson) No, we have not worked it out in detail beforehand. What we have done is we have been preparing the ground, as it were. Since we last met with you, we have done a very thorough analysis of all the business units. Again, since we last met with you, independently of the restructuring exercise, we have improved our team building. We have focused much more on research teams and themes across the organisation. We are clearly bringing in new high value business on the back of our research and development capability.


 
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