Select Committee on Agriculture Minutes of Evidence



Examination of witnesses (Questions 120 - 139)

WEDNESDAY 13 DECEMBER 2000

RT HON BARONESS HAYMAN and DR DAVID SHANNON

  120. We all have that T-shirt and have found that it does not quite amount to what we thought.
  (Baroness Hayman) If I can answer both parts of your question. If I paint the glasses half empty rather than half full, it is only because I would prefer to be accused of pessimism and then found to be wrong than to be accused of over-optimism. I think it is prudent to be fairly rigorous, that is not to say that we would have invested £4.5 million of public money if we did not believe that these plans were worth it. As far as the future of the organisation, we are between Quinquennial Reviews, where the responsibility is to look broadly and radically at all of the possibilities. The last Quinquennial Review concluded that HRI should stay in the public sector, I believe, for the time being, at this moment in time. We have another Quinquennial Review coming up, exactly the same questions that we are being asked should be asked then. I do not think it would be appropriate to anticipate that Quinquennial Review now. I think we have to give the organisation the opportunity to restructure, to get into the strongest position as possible, to have the science assessed and then to look at those issues.

  121. That is a rather hidebound answer, if I may say so, to suggest that we operate on a Quinquennial Review cycle and we must, therefore, be driven by that, when the evidence before us is of an organisation which certainly, on the face of it, is developing a direction towards the private sector, which is clear. I cannot quite see why the public sector should be taking the level of risk of continuing on-going commitments to a management belief without their undertaking that risk for themselves as well.
  (Baroness Hayman) It could be hidebound, but it could just be that my assessment of the situation is different from your assessment of the situation—

  122. It could be.
  (Baroness Hayman) —as to the necessity of taking radical action now. There is still a large proportion of the income—I do not have the pie chart here—of HRI that does come from public sector sources.

  123. Declining.
  (Baroness Hayman) Declining when you put BBSRC and MAFF together? They have got 85 per cent of MAFF's horticultural research over a stable period of time.

  124. There have been questions raised about whether that proportion is appropriate as well, that there are other bodies in this country that can provide horticultural research of quality, and that HRI, to some extent as an additional prop to its death by a thousand cuts that it has been going through for the last few years, has been swallowing that cash too. To some extent the institution is driving the strategy rather than clearly applied strategic thinking about what we are wanting out of horticultural research in this country and how best to deliver it. That is the picture that we get, that this is all about how do we keep HRI trundling along until the next Quinquennial Review and then we will look at it properly rather than looking radically at the options now when, to be honest, the opportunity presents itself.
  (Baroness Hayman) I am not sure that the opportunity does present itself quite as simply and in quite such a clear-cut way as you suggest. Equally, I am not sure that it is fair to characterise the institution as running the strategy. If we believed that there was an incompatibility between our strategy for horticultural research and the research strategy broadly and the amount of funding that was going into HRI, although a proportion of it, as I think you have acknowledged, goes into competitive funding, it is not going automatically into HRI, then I think that you would be right to say now is the time to reassess. When we do look at our aims for horticultural research and the existence of HRI there is not such a bad fit that we should immediately go and suggest that we should make radical changes. We are, of course, in the middle of a consultation on the whole of the science strategy within MAFF and, again, I would like to look at the future of individual institutes in that context rather than be triggered by the financial problems within one of them into what could be a precipitate restructuring.
  (Dr Shannon) Just to comment, I think the Quinquennial Review will need very serious consideration. There seems to me a question of whether, if HRI were in the private sector, BBRSC would continue putting funding in.

  125. That may well be the kind of sensible choice that someone has to make as to whether that is the most quality oriented way of delivering the research.
  (Dr Shannon) It may well be but, if I recall the history, HRI was, if you like, strongly advocated by the industry in the early 1990s. The solution was to have the range of science within the institute from basic science through strategic science to the industry's own near market funded work. I think in the responses you have had, whilst there have been some that point to more radical solutions, many have still made the point about the strength of having the range of sciences within one organisation. The horticultural industry also made a very strong case at the time, whether that case still holds or not, that horticulture was different, it was a large number of small sectors that needed to have focus in its research effort. All of those questions will need to be looked at again. The point of the Quinquennial Review is to carry that out thoroughly.

  126. But to be really horrible about this, the 60 million quid which has gone down already, another four and a half million quid which is going into restructuring, would not half have gone a long way. You cannot spend it now, it has gone, but it would not half have gone a long way in horticultural research if it had not been focused on propping up HRI and gradually funding its decline, which is what appears to have happened. You are continuing with the process.
  (Baroness Hayman) You can always characterise spending as throwing good money after bad, you can always do that.

  127. The brave person has to say "when do we turn the tap off and say `I am sorry, I think we have just got to think the strategy through?'" You are basically kicking that decision a little bit further away.
  (Baroness Hayman) One has to try to get the right balance between being brave and being wise. That is what one is trying to do.

Chairman

  128. Leaving aside Dr Shannon's intimation that there are large numbers of failing scientific institutions across Britain, and if he could give me a list we might call them in one by one, clearly there is a great deal of work to be done here, let us move on Stockbridge House, if we may. Has the CSL expressed any interest in taking it over?
  (Baroness Hayman) As I understand it there has been a discussion at CSL Board. They have looked at a possible business plan for acquiring the site and have decided against so doing. I think what they are interested in doing is potentially placing some glasshouse work there that they sub-contract out at the moment because they do not have the capacity themselves. There is no formal expression of interest in taking over the site.

  129. So, as things stand at the moment, it is not a potential customer for the site?
  (Baroness Hayman) No.

  130. Given that you have to get best value from it, given that it could end up back in local authority ownership because of the origins we have talked about, given that Mr Prescott is anxious to build lots of high density houses on used sites, and this is clearly a used site, is not the best value just to put houses on it?
  (Baroness Hayman) I do not think I can answer that question. We will have to find out what the future is.

  131. Would you facilitate the formation of a Stockbridge House Technology Centre? If one were formed, would it be a candidate for Government funding?
  (Baroness Hayman) I am sorry, I sound as if I am not answering hypothetical questions. I think I would take Mr Todd's strictures about putting Government funding into things that are essentially private enterprise exercises, one would have to see what it looked like and whether there was a case for facilitation or support. We have had one meeting already with John Grogan MP, who obviously has interests in looking at solutions that will help in terms of the future of Stockbridge House. I have agreed to meet again if that would be helpful to him. I think at this stage we explore but we cannot commit in any way.

  132. Obviously HRI itself does not wish to facilitate the creation of a potential competitor, and we understand that and they explained that a short while ago, but there is some pressure from local growers who would quite like to see the facility continue. You equally from your point of view, if you are bailing out HRI, do not wish to see things happen which might lessen the value of putting into the bail out, as it were?
  (Baroness Hayman) No. Nor would we wish, if the analysis is that there is over-capacity in horticultural research, to underwrite the creation of extra capacity.

  133. So if then there were to be the creation of a new institution or body of some sort there, they would be wise not to assume in putting together their business ideas that there would be any Government support available?
  (Baroness Hayman) I think they should not make any such assumption.

  134. We have established that the site is a MAFF site.
  (Baroness Hayman) Yes.

  135. Who do the facilities belong to?
  (Dr Shannon) I think the movable assets belong to HRI, as I understand it. The actual site belongs to MAFF. I think that is normal. The laboratory equipment and other facilities on the site will be on HRI's books as their assets.

  136. You are satisfied with the arrangements HRI has made to transfer work from Stockbridge out to its other sites? Obviously the SOLA programme is the one that people get most agitated about. You believe that is assured?
  (Baroness Hayman) Yes. That is obviously one of the questions that was fundamentally explored and whether there was the capacity. That underpinned the choice of Stockbridge House as the site to close, whether there was the capacity both in terms of physical resources and people to undertake the work that was done there at other sites.

Mr Borrow

  137. Just very briefly on the Minister's comment on the reason for the choice of the site. Did no alarm bells go off in your head during those discussions that, given the sensitivity of the north/south divide in Government research establishments, the closure of Stockbridge House may not have been a, shall we say, politically sensitive thing to do compared with closing another establishment?
  (Baroness Hayman) I do not think this is part of the north/south divide. I think that the appropriate question to ask was whether this restructuring package would deliver in the context of the business plan, and whether this was in those terms the site which would cause the least damage to HRI and its future capacity. That was the basis on which we assessed the proposal. We had to ask whether other sites and other options and combinations had been appropriately assessed. This came out as the strongest in those terms, meeting the scientific and the business plan, and that was how it came out.

Mr Jack

  138. In paragraph six of our conclusion from the last time we looked at this area, we recommended a Bill be laid before Parliament to rectify the legislative problems which HRI faces. We learn from your own evidence, paragraph 15, where you say, "The intention of successive governments since 1990 . . ." I can personally own up and say it happened whilst I was there and it has also happened whilst you were there, and that nothing has happened. Mr Curry as well. We accept our share of the blame. You have been there now for three and a half years, so why has there been no action?
  (Baroness Hayman) I think at the beginning of that period, probably, the reason for no action was the same as yours and Mr Curry's, that there was a desire to bring in legislation and to tidy this up and to provide a legislative framework. However, in terms of competition with other MAFF priorities and other government priorities this never came top of the legislative table. Can I now deal with the immediate past and the present time? There are, if you like, three sets of reasons for looking at legislation. Two of the most urgent ones, and the ones that have been running sores, have been the employment of staff and pensions. As I understand it, the 1999 Employment Relations Act gives an opportunity for sorting out some of the TUPE issues without primary legislation. I believe that it is possible that we will be able to bring all of the pensions of HRI's permanent staff within the Research Council's pension scheme. There is a meeting scheduled with the Treasury this month to discuss this. The overall governance issues are still left to be resolved. I suspect that the hard truth is that it will be difficult to do that as we get nearer to the Quinquennial Review, even though that is too far away for Mr Todd's liking.

  139. There would have been opportunities, with a bit of innovation, to have got the legislation in. You have not exactly been overburdened in this Department with new primary legislation, have you?
  (Baroness Hayman) No, we never are. I think the Chairman might agree.


 
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