Select Committee on Science and Technology Seventh Report


SEVENTH REPORT


The Science and Technology Committee has agreed to the following Report:

THE OFFICE OF SCIENCE AND TECHNOLOGY: SCRUTINY REPORT 2002

Introduction

1. Our Committee is appointed by the House of Commons to examine the expenditure, administration and policy of the Office of Science and Technology (OST) and its associated public bodies.[1] The OST is a small department, part of the Department of Trade and Industry since 1995. It is divided into two parts:

  • the Transdepartmental Science and Technology Group (99 people), which supports the Chief Scientific Adviser (who is head of OST) in his role of advising the Prime Minister, the Cabinet, the Secretary of State for Trade and Industry, and the Minister for Science on science, engineering and technology matters; and

  • the Science and Engineering Base Group (49 people), which supports the Director General of the Research Councils in allocating the science budget and in securing the successful operation of the seven Research Councils, which are the OST's principal associated public bodies.

2. The wide responsibility of the OST for furthering science and technology in the UK means that our Committee has a similarly wide brief to examine science and technology issues across Government and outside; but examining the work of the OST and the Research Councils is our primary role. The importance of this scrutiny role was reinforced by the resolution of the House of 14 May 2002, which approved the Modernisation Committee's Report on Select Committees and called on the Liaison Committee to establish common objectives for select committees taking into account the illustrative model set out in that Report.[2] The Liaison Committee subsequently agreed a set of ten core tasks for departmental select committees.[3] These include: "examining the expenditure plans and out-turn of the department and its principal non-departmental public bodies"; and "examining the department's Public Service Agreements, associated targets and the statistical measures employed, and reporting if appropriate".

3. Mindful of our responsibility for scrutinising the work of OST, we made an informal visit to OST on 13 February 2002 and were briefed by officials on its work. We took evidence on 15 May 2002 from Professor David King, Chief Scientific Adviser (CSA) to the Government, and from Dr John Taylor, Director General of the Research Councils (DGRC). The transcript of the evidence is printed with this Report.[4] Following the evidence session, we asked the OST a number of questions in writing. These questions arose partly from issues raised at the evidence session, and partly from our scrutiny of the Department of Trade and Industry's Annual Report 2002[5], the Estimates[6] and the outcome of the Spending Review 2002.[7] OST's response is printed with this Report.[8]

4. The purpose of this short Report is to put in the public domain the evidence which we have received and to highlight a number of concerns.

Departmental performance targets

5. The objectives of the OST are subsumed in the objectives for the Department of Trade and Industry (DTI) set out in the Public Service Agreements (PSAs) which are published with each Spending Review. The first Public Service Agreements, for 1999-2002, were published after the Comprehensive Spending Review 1998.[9] Four objectives and 12 underlying performance targets were set for DTI, of which two of the objectives and two of the targets relate to the work of the OST.

Table 1: DTI Public Service Agreement 1999-2002: objectives and targets relating to OST



Objective 1: Promote enterprise, innovation and increased productivity

Objective 2: Make the most of the UK's science, engineering and technology

Performance targets

v) To improve the overall international ranking of the Science and Engineering Base in terms of quality, relevance and cost-effectiveness (Objective 2).

vi) To increase by 50% the 1997-98 number of companies spun out from universities by 2001-02 (Objectives 1 and 2).


6. The Public Service Agreements 2001-04 published in July 2000, after the Spending Review 2000, set broadly similar targets for OST, though in modified form.[10]

Table 2: DTI Public Service Agreement 2001-04: objectives and targets relating to OST



Objective II: to make the most of the UK's science, engineering and technology.

[Target] 5. Improve the overall international ranking of the UK's science and engineering base, as measured by international measures of quality, cost-effectiveness and relevance.

[Target] 6. Increase the level of exploitation of technological knowledge derived from the science and engineering base, as demonstrated by a significant rise in the proportion of innovating businesses citing such sources.


7. The Public Service Agreement 2003-06, published in July 2002, combines these two targets in one.[11]

Table 3: DTI Public Service Agreement 2003-06: objectives and targets relating to OST



Objective II: science and innovation.

[Target] 2. Improve the relative international performance of the UK's science and engineering base, the exploitation of the science base, and the overall innovation performance of the UK economy.


In common with other Departments, the DTI also has a number of productivity or departmental operations targets. For example, it is expected to achieve value for money improvements of 2.5% a year across the department, to deliver all key services on-line by 2005 and to reduce staff sickness absence by 13.8% by 2003.[12] The OST is required to keep Research Councils' Headquarters administration costs at under 4% of overall Research Councils' expenditure.[13]

8. While the PSA targets themselves have become less explicit since 1998, details of how they will be measured are set out in technical notes to the PSA. The technical notes to the PSA 2001-04 (which were published with the DTI Annual Report 2001) are quite specific.

Table 4: Public Service Agreements 2001-04 Technical Notes: targets relating to OST



5. Improve the overall international ranking of the UK's science and engineering base, as measured by international measures of quality, cost­effectiveness and relevance.

Source: OECD (http://www.oecd.org/statistics/)

 Science Citation Index (http://www.isinet.com)

Measured by: International ranking on quality, relevance and cost­effectiveness of the science and engineering base output.

Date: Annual from 2001; target date 2004

6. Increase the level of exploitation of technological knowledge derived from the science and engineering base, as demonstrated by a significant rise in the proportion of innovating businesses citing such sources

Source: Community Innovation Survey

Measured by: the percentage of innovating businesses, as defined by the Community Innovation Survey, citing science and technology base sources, including DTI supported standards and measurement

Date: survey every two years from 2001; target date 2005

 


The Technical Notes to the PSA 2003-2006 have not yet been published. We recommend that in future the Department publish the technical notes with the PSA itself. Doing so might prevent the impression that the targets are insubstantial.

   9. Since 2000, the way in which each Department intends to meet its PSA targets has been set out in a Service Delivery Agreement (SDA). The DTI's SDA 2000 was published in its Annual Report 2001 and was available on the DTI website from November 2000.[14] The SDA 2000 adds little in respect of PSA target 5, but some interesting details in respect of target 6.

Table 5: DTI Service Delivery Agreement 2000: targets relating to OST



5 Improve the overall international ranking of the UK's science and engineering base, as measured by international measures of quality, cost effectiveness and relevance.

DTI and the Office of Science and Technology will deliver this target through increasing the ranking of quality and cost effectiveness and the ranking of relevance of the Science and Engineering Base.

The OST will implement the Science Research Infrastructure Fund to renew the science infrastructure in universities and invest in three major new cross cutting science programmes: e­science, post genomics and basic technology.

6 Increase the level of exploitation of technical knowledge derived from the science and engineering base, as demonstrated by a significant rise in the proportion of innovating businesses citing such sources.

DTI and the Office of Science and Technology will work to achieve this target by: achieving a year­on­year increase in the income the university sector earns from working with business, and from spin outs and licences; increasing the amount of university/company, university/intermediary and university/intermediary/company collaborations; increasing the number of papers jointly authored by the science base and industry.

DTI and the Office of Science and Technology will also: establish permanent umbrella mechanisms to enable the Science, Engineering and Technology (SET) base to work with business, such as the Higher Education Innovation Fund in England (HEIF) and at least 24 Faraday Partnerships in the UK by 2002/3; work with other organisations in the field (e.g. Regional Development Agencies and the CBI) through the Teaching Companies Scheme (TCS) and Faraday Partnerships to increase the proportion of SMEs employing graduate scientists/engineers; ensure that innovation facilitators employed by Business Links, Faraday Partnerships and similar organisations are properly trained and aware of the scope for exploiting SET knowledge by firms; deliver final rounds of Science Enterprise Challenge and University Challenge by April 2001; develop, in partnership with Higher Education Funding Council for England (HEFCE), management arrangements for the HEIF and deliver the first round of allocations by April 2001; work with the Research Councils towards their implementation of the Small Business Research Initiative; and help commercialise research by Public Sector Research Establishments.


It is expected that the SDA 2002 will be published on the DTI website by the end of October 2002.[15] We understand that the Department will also be producing in the Autumn a more detailed Delivery Plan, a working document demonstrating how it intends to meet its PSA targets. The Public Service Agreements 2003-2006 White Paper states that "the key features of these plans" will be set out in the published SDAs.[16] We recommend that the DTI publish its Delivery Plan in full on its website, as well as the headline SDA.

10. In addition to the SDA, the DTI has in recent years published on its website an annual "Strategic Framework" which sets out "key priorities" for the year ahead. The Strategic Framework 2001-02 contains the following key priorities under Objective II (science and technology).

Table 6: DTI Strategic Plan 2001-02: Key priorities for 2001-02 (science and technology)



- Further strengthen national capabilities in science, engineering and technology by improving the means by which strategic research priorities are identified and the quality of the science base is assessed

- Undertake and implement the results of a review of public understanding of science engineering and technology policies and activities

- Implement recommendations of current Quinquennial Review (QQR) of the Council for the Central Laboratory of the Research Councils (CCLRC), and complete QQR of the six grant awarding Research Councils

- Deliver:

 - the Science Research Investment Fund for science research infrastructure, in partnership with the Higher Education Funding Councils and devolved administrations

 - the Higher Education Innovation Fund

 - the final rounds of University Challenge and Science Enterprise Challenge

- Launch the Science and Engineering Ambassadors scheme as part of Science Year

- Develop improved mechanisms to support and encourage knowledge transfer, particularly between higher education and business, including expansion of the network of Faraday Partnerships to at least 24 by March 2002

- Work to help business recruit and retain the high quality fully trained people it requires, supporting the review by Sir Gareth Roberts of the provision of skilled scientists and engineers

- Continue to ensure world class measurement science programmes which satisfy users' needs by implementing the recommendations of the National Measurement System Review and by completing the construction of improved laboratory facilities in Teddington

- Negotiate a well­focused sixth EU Research and Development framework programme that reflects UK priorities

- Work towards ensuring UK space­related industries are ready to meet the infrastructure requirements for global electronic business and any European global satellite navigation positioning system

- Promote the conditions that will enable the UK to become an international leader in the new markets for cleaner energy and green technologies, products and services


No Strategic Framework has been published for 2002-03 and we understand that these documents have been superseded by a new system of Business Plans which is being introduced across Government. We recommend that the Department demonstrate its commitment to openness by publishing its Business Plan on its website.

11. We appreciate that it is not easy to encapsulate what a Department is expected to achieve in a few clear and measurable targets, and the PSA targets for science and technology are not a bad effort. However, they are far too general and high-level to allow judgement of OST's performance. We asked the OST whether it had more detailed performance targets than those set out in the PSA and SDA, and, if so, for a copy. The response is disappointing: "The PSA target on science and the associated SDA targets form the basis on which the performance of the Science and Engineering Base Group within OST is measured. Those targets are cascaded down to all staff through the DTI's annual appraisal and business planning cycle."[17] We appreciate that the overall PSA targets will be reflected in individual staff performance targets, but that is not what we are after. We find it hard to believe that the OST, or parts of OST, do not have more detailed collective targets than the headline targets given in the PSA. We understand that the new Business Plans will set out targets at various levels. Furthermore, the OST's response states that the PSA target applies to the Science and Engineering Base Group: we are unclear to what targets OST's Transdepartmental Science and Technology Group is working. We believe that OST should be more open about its detailed performance targets and intend to pursue this with the Department.

12. In January 2001, the Trade and Industry Committee published a Report highly critical of the information available on the Department's performance against target.[18] In response, the Department has included in its Annual Reports for 2001 and for 2002 a useful chapter outlining its progress against its PSA targets. In its Annual Report 2002, the DTI states that, in respect of the 1998 PSA targets, it is on course to achieve its target of improving the international ranking of the Science and Engineering Base, though there has not yet been any improvement on baseline in the UK's share of citations in scientific papers worldwide.[19] DTI states that it has met the target of increasing by 50% the 1997-98 number of spin-out companies. [20] In 1999-2000, 199 companies were spun out from universities, compared to 26 in 1997-98; though reliable information on their survival rates - which must be a more important indicator - is not available.[21] In respect of the Spending Review 2000 PSA targets, the DTI reports that it is on course to improve the overall international ranking of the Science and Engineering Base (as discussed above). It has not yet assessed its progress in increasing the level of exploitation of technological knowledge derived from the Science and Engineering Base, as demonstrated by a significant proportion of innovating business citing such sources: baseline figures are to be based on the Community Innovation Survey 2001, a Europe-wide initiative, and will be compared with results from the next Survey in 2005.[22] We note that the DTI, in common with other Departments, will be publishing an annual Autumn Performance Report, updating the information on progress against PSA targets.[23] The National Audit Office is to validate the data systems underlying DTI's reporting of progress towards its PSA targets. We await its findings with interest.

13. OST's memorandum states that it is "reviewing the whole issue of strategic and performance management of the activities supported by the Science Budget ... and we expect to have something to say about this later this year".[24] It appears that this review relates primarily to the performance management framework between OST and the Research Councils, rather than within OST itself. Nevertheless, we await its outcome with interest. The proliferation of documents and acronyms - PSAs, SDAs, Technical Notes, Strategic Frameworks, Delivery Plans and Business Plans - is highly confusing to the outsider. We recommend that the Government rationalise these publications, for the sake of greater clarity and transparency.

Departmental Annual Report

14. OST does not publish an Annual Report of its own: information about its activities and expenditure plans are contained in the Annual Report of the DTI. In the 2002 Annual Report, chapter 3, "The Science and Engineering Base", relates to the work of the OST's Science and Engineering Base Group and the Research Councils, and chapter 5, "Cross-Departmental Work on Science", to the work of OST's Transdepartmental Science and Technology Group. Parts of Chapter 4, "Raising Productivity and Innovation in Business", relate to OST responsibilities (Foresight, University Challenge, Science Enterprise Challenge and the Cambridge/MIT Institute, for example) . All three chapters are grouped in a section entitled Innovation Group, although, as we understand it, OST does not form part of that Group.[25] The present lay-out of the DTI Annual Report makes it difficult to distinguish clearly between the activities and expenditure of OST and those of other parts of DTI.

15. The OST publishes every two years, in the year following each Spending Review, a document entitled The Forward Look.[26] It is a useful publication, comprising a short statement from every Government Department and other body that spends money on science, engineering and technology, and from each Research Council, on its strategy for science and technology, and tables showing departmental expenditure on RD&D and science, engineering and technology; but, apart from a short statement from the CSA and from the DGRC, it contains little on OST itself. The Forward Look, as its name suggests, is a forward-looking, aspirational, document, not an account of what has been achieved.

16. We asked OST whether it had considered publishing an Annual Report of its own. It responded that "OST is not a Department in its own right and does not therefore publish its own annual report".[27] We accept that, as it is not a Department in its own right, OST could not present its expenditure plans formally to Parliament, but there would be value, we suggest, in it publishing an annual report on its activities. We recommend that OST consider publishing an annual activity report of its own. If it does not, we recommend that there should be a self-contained OST section within the DTI Annual Report.

17. Following the Government's review of departmental reports in 2001, the Annual Report 2002 contains a significantly reduced set of financial tables. The more technical tables are now published in a new and separate document entitled Supplementary Budgetary Information, which is published alongside the Main Supply Estimates.[28] We regret the loss of financial detail in the Departmental Report, and the further proliferation of documents, though we accept that the readership for the more technical financial tables will be small. Departmental Annual Reports are a valuable source of factual information and a crucial element in Departments' accountability to Parliament: they must not become merely a glossy presentation of the Department's activities and aspirations.




1   House of Commons Standing Order No. 152 Back

2   Votes and Proceedings, 14 May 2002; First Report of the Select Committee on the Modernisation of the House of Commons, Session 2001-02, Select Committees, HC 224-I, para 34 Back

3   20 June 2002. Back

4   Ev 1-Ev 13 Back

5   The Government's Expenditure Plans 2002-03-2003-04: Trade and Industry 2002, Cm 5416, June 2002 Back

6   Main Supply Estimates for 2002-03, HC 795, and Supplementary Budgetary Information, Cm 5510 Back

7   2002 Spending Review: New Public Spending Plans 2003-2006, Opportunity and security for all: Investing in an enterprising, fairer Britain, Cm 5570, July 2002. See also Official Report, 15 July 2002, cols 21-30 Back

8   See Ev 13-Ev 24 Back

9   Public Services for the Future: Modernisation, Reform, Accountability, Cm 4181, December 1998. Available via www.archive.official-documents.co.uk  Back

10   Spending Review 2000: Public Service Agreements 2001-04, Cm 4808, July 2000, Chapter 11 Back

11   Spending Review 2002: Public Service Agreements 2003-06, Cm 5571, July 2002, Chapter 12 Back

12   For details see Cm 5416, figure 1.2 Back

13   Cm 5416, para 1.157 Back

14   The Government's Expenditure Plans 2001-02 to 2003-04 and Main Estimates 2001-02: Trade and Industry 2001, Cm 5112, March 2001, Annex D and Annex E  Back

15   Ev 16, para 6. Back

16   Cm 5571, para 1.10 Back

17   Ev 16, para 7 Back

18   Second Report of the Trade and Industry Committee, Session 2000-01, The Department of Trade and Industry: Role, Objectives and Targets, HC 140 Back

19   Cm 5416, paragraphs 1.20 - 1.24 Back

20   Cm 5416, paragraph 1.25 Back

21   Qq 65-69; Ev 18, para 12 Back

22   Cm 5416, paras 1.95 to 1.107 Back

23   Cm 5571, para 1.16 Back

24   Ev 16, para 8; see also Ev 17, para 9 Back

25   For DTI Organisation Structure, see Minutes of Evidence, 19 December 2001, HC 459-i, Ev 4 Back

26   See The Forward Look 2001, December 2001, Cm 5338 Back

27   Ev 20, para 19 Back

28   Central Government Supply Estimates 2002-03 Supplementary Budgetary Information, Cm 5510, May 2002 Back


 
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