I thank honourable colleagues for their enthusiastic support for our world-class research and innovation system. UKRI will be a strong and unified voice, championing research and innovation nationally and internationally. It will support fundamental and strategic research, drive forward multi and inter-disciplinary research, support business-led innovation and help to promote business links with publicly funded research.
UKRI will build on the great work already being undertaken by our research and innovation bodies and maximise the benefit to the UK of a Government investment of over £6 billion a year. That is why the Prime Minister this morning announced that, by the end of this Parliament, we will invest an additional £2 billion in research and development, including through a new industrial strategy challenge fund, led by Innovate UK, by our world-class research councils and, once established,
by UKRI. This is clear testament to how UKRI can help to deliver greater outcomes for the research and innovation communities and for the whole UK.
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UKRI will, of course, need insight not just into the research environment, but into innovation strengths and the business needs of the entire UK. We recognise the importance of UKRI board members having the appropriate experience to fulfil these important roles. Government amendment 35 will ensure that, when making these key appointments, the Secretary of State will have regard to the importance of the board having experience of the research and innovation systems in one or more of the devolved Administrations.
Amendment 42 would require Research England to consult the devolved funding bodies, when an equivalent requirement would not exist for them to consult Research England. I would highlight instead the new clause that I introduced in Committee, which will ensure that Research England can work with its devolved equivalents, as the Higher Education Funding Council for England does now. It is important that that joint working continues, and the provision in the Bill will enable that.
Turning to amendments 53 and 54, research and innovation must be joined up at the heart of our industrial strategy. Incorporating Innovate UK will bring benefits to businesses, researchers and the whole UK. It will help businesses identify possible research partners and mean that research outputs are better aligned with their needs. Researchers will benefit from greater exposure to business and commercialisation expertise, and it will deliver a more strategic, agile and impactful approach across UKRI’s portfolio.
As UKRI chair, John Kingman, has highlighted,
“it would be a huge mistake, and a backward step, to set up UKRI with the innovation mission left elsewhere. The big challenges facing our country require more and better co-ordination and partnership between our great research base, Innovate UK and the business community, not less.”
And stakeholders recognise the potential here, too. The CBI has said:
“The latest proposals for integrating Innovate UK within UKRI should support valuable synergies between different aspects of the UK’s science and innovation communities. Bringing Innovate UK’s business-facing perspective into UKRI can bring strategic advantages and should be used to build partnerships, creating the best conditions for fast growing, dynamic businesses to thrive.”
Let me reassure the House, however, that I recognise the importance of Innovate UK maintaining its business-facing focus. That is why the Bill will protect Innovate UK’s distinctive focus and autonomy in the delivery of its functions. Innovate UK will continue to develop new projects and programmes, working with companies to de-risk, enable and support innovation that will grow the UK economy. Furthermore, it will retain its separate budget, set out via a grant letter from the Secretary of State.
The Secretary of State will appoint both academic and business representatives to the UKRI board, including a member to lead in promoting and championing innovation and business interests.
To realise our potential fully, we need to respond to a changing world, to anticipate future requirements and to ensure we have the structures in place to exploit the knowledge and expertise we have for the benefit of the
whole country. The way to do this most effectively is to bring Innovate UK into UKRI. It is important that we deliver the flexibility and agility that the new structure for our research and innovation landscape will provide.
Turning to amendment 55, the Government have already committed to setting out separate funding streams for each council. The funding streams will be established in the annual grant letter. It is important that UKRI retains some flexibility to manage its funds to meet immediate financial pressures, to ensure best value from its resources and to meet the aspirations for seamless administration of multi and inter-disciplinary research and joint research and innovation projects. Small-scale, practical and mutually agreed virement is essential for any organisation that is managing a large portfolio of innovative, complex projects. This would allow UKRI’s councils to adapt to changes in project timing or to shift small amounts of funding to a lead council to support an interdisciplinary project in response to creative ideas from the community. I can also reassure hon. Members that the Secretary of State would not agree to UKRI viring money in such a way as to result in a net change in Research England’s hypothecated budget over a spending review period. This will be made clear in guidance to UKRI.
On amendment 56, I would like to take this opportunity to be very clear that UK-wide research and innovation funding, as conducted through the research councils and Innovate UK, are reserved issues and will continue to be so after transition to UKRI. It is already the Secretary of State’s duty, as it is mine, to work for the interests of the whole of the UK. Similarly, it is the responsibility of the research councils and Innovate UK to operate on an equal basis across the UK. Primarily, this is achieved by funding projects selected through open competition on the basis of excellence. The fact that they do so effectively is widely recognised in the research and innovation communities, as recognised by the former vice-chancellor of the University of Dundee, Sir Alan Langlands, in the evidence he gave last month to the Public Bill Committee. The research community functions remarkably well across the UK political landscape, not least because the UK Government and the devolved Administrations work together to make it do so. We would not seek to bind UKRI into a restrictive process of consultation, as proposed in this amendment.