Appendix 8: VISIT TO THE NORTH EAST
1. Concluding the first-hand observation of how
RDAs interacted with their regional partners, on 20 March 2003
members of the Sub-Committee visited ONE, the Regional Development
Agency for the North East of England (Durham, Northumberland,
Teesside and Tyne & Wear) and the North East Science and Industry
2. The visiting party comprised Lord Patel (Chairman),
Lord Freeman, Lord Methuen, Lord Oxburgh and Lord Thomas of Macclesfield.
They were supported by the Clerk (Mr Roger Morgan) and Assistant
Clerk (Mr Gordon Baker).
3. The party was welcomed to ONE's suite at Newcastle
Upon Tyne's International Centre for Life by senior representatives
of the Agency and the Science and Industry Council. Before a series
of formal presentations, members had informal discussions over
a buffet lunch with people from a wide cross-section of regional
business and HE interests.
4. Mr Chris Pywell, Head of ONE's Strategy for
Success Team, set the scene by noting that, despite over 70 years
of Government intervention, the North East's economy was still
under-performing in comparison with the rest of the UK. It had
less high added-value employment and lower productivity than most
UK regions. New business start-ups had been below the national
5. The North East's regional policy was based
on mobilising regional potential, locally-driven through the RDA,
building on existing strengths and concentrating on developing
globally-competitive innovation and entrepreneurship. The strength
of the regional SET base was critical to this approach.
6. The North East was starting to turn the corner.
A recent independent study had shown that the region had the highest
percentage of large enterprises involved in innovation and was
second only to the West Midlands for innovation by all enterprises.
36% of North Eastern businesses regarded science as important
(compared with a national average of 28%) and the North East was
second only to London in new technology start-ups.
7. Mr Neil Mundy, Director of Integration at
ONE, outlined the Agency's regional strategies, during which he
made the following main points.
a. ONE's Regional Economic Strategy recognised
the importance of bringing the region's HEIs together with business
to create a new entrepreneurial culture, raise productivity and
improve the skills base.
b. This in turn had spawned a strategy for building
a knowledge economy in the North East, the Strategy for Success.
Consultants had helped to identify key regional strengths measured
against international business trends and best practice. Science
and technology were seen as the main drivers for future economic
growth, hence the early establishment of the North East Science
and Industry Council (see paragraph 8 below). However, attention
had also to be paid to the role of parallel infrastructure developments
(such as the transformation of Newcastle's Quayside) to help support
c. The cluster concept inherent to this strategy
had to be firmly rooted but dynamic. It was as important to encourage
more innovation among existing businesses as it was to stimulate
new innovative business ventures. In any case, it was essential
to avoid the lower technology investments which had characterised
much of past assisted regional development.
d. ONE had also set up three new regional investment
funds and a new facilitating company, NorthSTAR, to offer business
development services, especially to help maximize IP, and overcome
financing gaps. A partnership programme with Cambridge-MIT would
stimulate new research links.
e. A coherent approach was being developed with
the Research Councils, HEFCE and the FRESA. The principles of
Foresight should inform the strategy, but needed to be adapted
to meet local needs and aspirations.
f. ONE's role was to act as a catalyst, translating
the strategy into action by providing leadership, strategic analysis,
practical advice, access to funds and fruitful contacts, and to
promote and lobby for the region in the UK and abroad. In doing
so, it explored possibilities for mutually beneficial collaboration
with other RDAs through networking at various levels which also
helped avoid needless competition and duplication.
g. The Agency's strengths lay in the local knowledge,
contacts and commitment of a Board and staff with solid business
experience and independence from Government.
North East Science & Industry Council
8. Mr Pywell spoke about the North East Science
& Industry Council, making the main points as below.
a. The Science and Industry Council had been
set up at an early stage to provide independent guidance in developing
the strategy. Its title explicitly recognised ONE's and the Region's
need for expert industrial as well as scientific advice. That
balance was also reflected in its distinguished membership.
b. The Council had brought together a wide range
of expertise from people committed to the region, and had played
a crucial part in developing the regional strategy. By common
consent, it had a central role in helping to steer the region's
c. To help provide a focus for future developments,
centres of excellence were being established in particular fields
where the region had world-class potential, namely: new and renewable
energy; life sciences; nanotechnology, photonics and microsystems;
digital and media technology; and process industries. By creating
critical mass in these key areas, the centres of excellence would
build on the existing industry clusters and university research,
help pull in additional investment, and generally fast-track the
most advantageous developments.
d. The centres were new models of public/private
development companies limited by guarantee, with their
own independent boards and freedom to pursue their objective of
sustainability. Five Chief Executives, of international standing,
had been recruited to run the companies.
e. The Council would provide overall long-term
vision as well as key sectoral expertise. This would help to keep
ONE abreast of significant scientific, industrial and policy developments
and ensure that the assumptions on which the strategy was founded
remained valid. It would also monitor the implementation of the
strategy, act as a champion in promoting it, and use members'
contacts and influence to foster creative partnerships and support
9. Professor John Goddard, the Deputy Vice-Chancellor
and Professor of Regional Studies of the University of Newcastle,
gave a presentation on the Universities' perspective. Among his
main points were the following.
a. Universities wanted to be located in a vibrant
forward-looking region, not least to help them attract talented
staff and students and expand their own research base.
b. They were significant contributors to the
regional economy and increasingly aware of their local civic and
social responsibilities, including the needs of the local labour
market and demands for life-long learning and access to high-quality
local academic institutions.
c. Too much publicly-funded research was concentrated
in the South of England. The proposals in the recent HE White
Paper could have the perverse effect of exacerbating this geographical
imbalance and hampering the growth of Third Leg activities. North
East universities were countering this by working, with ONE's
support, to build critical mass through intra- and inter-institutional
d. It was important to avoid wasteful "turf
wars" between universities, as it was between regions. ONE
and the Science and Industry Council had helped to bring HE and
business together in a coherent regional strategy. This, and other
RDAs' efforts, should feed into a joined-up national SET policy
involving Whitehall Departments, the Research Councils and HEFCE.
The International Centre For Life
10. The above events were, as noted, held at
the International Centre For Life. The Centre's Chief Executive,
Alastair Balls, explained that it had brought together a probably
unique mix of science and biotechnology, research and education,
entertainment and ethics, all on a single site. Built at a cost
of some £70m (raised from the Millennium Commission, the
EU and the private sector) and opened in 2000, it had developed
into a flagship UK location for exploring genetic science and
was a vital part of the underpinning for ONE's centre of excellence
in life sciences.
11. One of the site's recent arrivals was Xcellsyz,
a company using cell-based technologies for drug discovery. Xcellsyz
had been spun out of a collaboration between the University of
Newcastle, the University of Barcelona and University College,
London. Mr Brad Hoy, the CEO, outlined the benefits of ONE's support
and co-location with other research activities on the site. Dr
Rez Halse, Xcellsyz's Head of Cell Biology, showed members round
the company's state of the art facilities.
12. Members also visited the Centre's public
exhibition, where they were shown round by Ms Linda Conlon, the
Director. Joined by Mr Noel Jackson, the Centre's Education Manager,
they also toured the associated school science education facilities.
13. The day ended with a dinner kindly hosted
by ONE and the Science and Industry Council. This enabled the
visiting party to continue informal discussions with leading figures
from the host bodies and the region's business and academic communities.
14. Members endorsed the Chairman's thanks to
ONE, the North East Science and Industry Council and the participants
in the various sessions for an informative day which would be
of great assistance to the work of the Inquiry.
82 Members stayed in Newcastle the following day, 21
March, for a public meeting at which oral evidence was heard from,
among others, ONE and the North East Science and Industry Council
(see pages 191 and 152 of Volume II). Both bodies had also submitted
written evidence to the Inquiry (see pages 167 and 139 of Volume