Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 160-179)



  160. Really?
  (Ms Leahy) So we felt that the lessons we could get from looking at these three research councils (as we had to focus our Report) were probably the key.

  161. I looked up the figures for all the research councils and mine are slightly lower. The equivalent for the EPSRC was £427 million and £19 million went on equipment. That leaves over £400 million that is not on equipment.
  (Ms Leahy) I certainly would have to look at our figures again.

  162. This is a document called the Allocation of the Science Budget 1999-2002, a booklet published by Mr Mandelson when he was Secretary of State. The numbers could be completely wrong but I assume they are accurate. Research council area, EPSRC—equipment funding £19 million; BBSRC—equipment funding £5.7 million.
  (Dr Taylor) The important thing about the EPSRC is that almost all its money flows to university research groups. It has virtually nothing that you could recognise as an institute. I think the NAO quite rightly, in calling a judgment, are saying there is very little to be learned from studying equipment. From this point of view they do not have research institutes or major institutes.

  163. What, if anything, has NAO done to look at the way the EPSRC funds delivering the commercialisation of their part of public sector science, because they have a lot of programmes that have commercial application, do they not?
  (Ms Leahy) We focused on just the three research councils that are represented here and we thought the different type of activities they carried out and the different sorts of markets they were in would allow us to maximise the chances of learning useful lessons and we did not look at the EPSRC.
  (Dr Taylor) It is fair to say that you did not look at the university part of what these three councils do either, only the research.

  164. Professor Goodfellow, I wrote it down when you said in addition to the £2.7 million mentioned on page —
  (Professor Goodfellow) 1.9 on page 14.

  165. You had £14 million of consultancy income and then another £30 million of something else, I am not quite sure what.
  (Professor Goodfellow) The numbers here in 1.9 we are looking at £2.7 which, I agree, is sales of equity in spin-out companies and licensing of royalties. We have another £14 million from research contracts with industry, and I do mean industry, and we have a further almost £30 million with DEFRA. We also have inter-actions with the Food Standards Agency as well.

  166. It is 46.
  (Professor Goodfellow) We would not count that as commercial; it is industrial.

  167. Including licensing, royalties, consultancy income, what is your total commercial income?
  (Professor Goodfellow) We call it £16.7 million. £2.7 plus £14 million and we put in £70 million recurrent to the institutes.

  168. Are you sure you are doing that correctly? Presumably there are contracts that DEFRA places with you which they could place with other laboratories elsewhere in the world or in the private sector possibly?
  (Professor Goodfellow) Of course. It is all competitive and our institutes have to win in competition.

  169. Arguably it is commercial, it is hard charging?
  (Professor Goodfellow) It is competitive and certain of the grants, depending on the type of DEFRA grants, have almost full economic cost. Some of the others do not but basically you could add another £30 million.

  170. If you include the whole lot, it is basically 46.
  (Professor Goodfellow) It depends how you like to add the numbers up. I think we have to be careful whether we are working for another government department or whether it is with the private sector.

  171. The NAO does work for various governments around the world and presumably that is counted as commercial income?
  (Sir John Bourn) It comes in as appropriations in aid, yes, and it has to be run competitively.

  172. I accept there are labelling issues but other than the money you get from central government grant, depending how you call it, there is potentially between £40 and £50 million of other consultancy income, be it from government or private sector?
  (Professor Goodfellow) Yes.

  173. Professor Lawton, how much is your number?
  (Professor Lawton) We receive £26 million in round terms for commissioned research. 75 per cent of that is from government departments, therefore, the other 25 per cent, about £5 million or £6 million, is from industry. We receive £4 million in European Union grants and we receive the £2.45 million that you have down under paragraph 1.9, page 15.

  174. Sir George, would you mind saying what is your total for MRC?
  (Professor Sir George Radda) If you just take our royalties from licensing agreements, in 1998-99 that was nearly £3 million. In 1999-2000 it was £7.5 million and in 2000-2001 it was £17.9 million, nearly £18 million. That was just from licensing income. In addition to that we have industrial collaborations and they amount to just under £10 million per annum.[7]

  175. Thank you very much. Mr Young, is there any way that you as the DTI can assess what level of receipt would represent a good return?
  (Mr Young) No, not in a one-size-fits-all way method. There is no formal process which will get an easy answer. What we do do is meet regularly the Chief Executives and set them personal objectives. We compare them over time and we look at the different ways in which they could be maximising commercialisation. Remember, receipts are not the only indicator. What we need is a menu of indicators to discuss on a sensible basis year-by-year-by-year with each research council what they are doing and that is what we do.

  176. Presumably you do accept the statement in para 2.6 that more should be done or can be done to develop further objectives and targets?
  (Mr Young) I certainly do and we are working up new performance indicators currently.

  Mr Bacon: Chairman, no further questions.


  177. Thank you very much. Just a couple of questions to wrap up. Do you take a strategic approach, Mr Young, across a portfolio of projects or do you take a case-by-case approach as set out in paragraph 4.10 on page 35?
  (Mr Young) What we do is we ask each research council to produce a formal risk assessment process which we discuss with them, so we clear the generic form of risk assessment which they are applying and leave it to them to do the case-by-case risk assessment.

  178. Sir George, you mentioned that you had taken on somebody who was an expert from America in stem cell research. I do not want to get involved in all this debate but it occurs to me to ask this question. There has been a lot of debate about this subject that perhaps it is driven by commercialisation. There are huge commercial rewards if this works well. Vast advances in medical science could be achieved and some people are saying that is what is motivating this whole thing and that it what has motivated the debate between embryo research and adult stem cell research. To what extent can you cut yourself off from the difficult ethical arguments? You mentioned the ethical debate earlier and there you have got a particular issue where medical science is involved and there is a fierce ethical debate raging and huge commercial interests. Just give me a feel about how you are feeling your way through this difficult moral maze.
  (Professor Sir George Radda) The number one consideration is that the opportunities of using stem cells to perform new forms of therapy are enormous and we can certainly think about the diseases where it could well be applicable. I do not believe at the moment that many of the major commercial organisations are expressing a terrible interest because they do not know how exploitable it is going to be. The major issues are scientific and clinical opportunities and ethical issues. The ethical issues have been addressed by appropriate groups of people like the House of Lords' Select committee. In fact, both Houses of Parliament have looked very clearly at the ethical issues. We have provided information to people about what the scientific opportunities would be. I do not think that the debate currently is really driven by commercial considerations. It is a long way down the road before this can be commercialised, in my view, because there is a great deal of fundamental biology to be done to understand the behaviour of stem cells derived from embryos and those derived from adult cells. Until we understand that we do not know what the commercial possibilities are. Clinical treatment is five or ten years down the line and that is when you begin to see what the commercial side might be.

  179. If you are looking at the difference between research based on adult stem cells and embryos, adult is going to be far more difficult apparently and therefore less prone to commercialisation. Is that a motivator in your work or not?
  (Professor Sir George Radda) Not that they are less prone to commercialisation. There is much less scientific knowledge about the way that you can reprogramme an adult cell to produce tissues of all the different kinds that you would like to produce in this study. There is a difference in the biology in the way that the adult cells can become kidney cells or brain cells compared to the biology of a cell derived from an embryo. I do not believe that any of the arguments that we have put forward were driven by commercial considerations in this instance but instead are driven entirely by scientific and clinical considerations.

  Chairman: Thank you for that. I hope my colleagues will forgive me for asking a couple of questions. May I thank you, ladies and gentlemen, for some very interesting evidence. We have had a very distinguished panel in front of us and we have found it extremely informative. Thank you for coming here this evening. We pay tribute to you and your staff for being such a beacon of excellence in terms of world-class research. We salute your work. Thank you very much.

7   Note by Witness: On checking, the income to MRC in 2000-01 from contracts with government departments and commercial collaborations was £13.3 million, not including research contract and collaboration income to MRC Technology. Back

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