§ Mr. Ingram
To ask the Chancellor of the Duchy of Lancaster when the departmental review of all the research establishments of his Department announced in the White Paper "DTI—the department for Enterprise" (Cm 278) of January will be completed; and if he will make a statement.
§ Mr. Kenneth Clarke
[pursuant to the answer, 12 May 1988]: In the White Paper, "DTI—the department for Enterprise", my right hon. and noble Friend and I announced our intention to review DTI's four research establishments (the national physical laboratory, the national engineering laboratory, the laboratory of the Government chemist and Warren Spring laboratory). The review has now been completed.
We have decided that in future the REs should concentrate on research that is required by Government, whether for statutory, regulatory or policy reasons. We wish to encourage technology transfer and non-research activities arising from this work so that the widest possible benefit can be drawn from it. Consistent with the focus on work for Government as customer, industrially relevant R&D and repayment work for industrial customers will each be limited in future to approximately 10 per cent. of the full cost of each RE. Additionally, each RE will be able, as at present, to spend on strategic research up to 10 per cent. of the full economic cost of such work carried out for DTI. Programmes of industrially relevant R&D will, in general, receive up to 50 per cent. support and will be carried out for groups of companies which have agreed to collaborate to share the benefits and the remaining cost of the work. These criteria are consistent with those announced in the White Paper for the support of extramural R&D.430W
WSL will in future concentrate more heavily on environmental engineering, largely for public sector customers, with a reduction in industrially relevant R&D.
To give greater flexibility and responsibility to the laboratories, we plan to consider establishing NPL. LGC and WSL as separate agencies, within the public sector. in line with the policy described in "Improving Management in Government: The Next Steps". This seems an appropriate structure for laboratories whose main task is to undertake research for public sector customers.
NPL, LGC and WSL would thus retain their identities, but the benefits of common services would be fully exploited within the new structure. Work will now be put in hand to develop the agency framework for these laboratories together with that for a fourth agency for the national weights and measures laboratory, and we hope that it will be possible to have them operational by April 1989.
Roughly three quarters of the work at NEL currently falls into the category of industrially relevant R&D. The principal beneficiary is industry, not Government, and strong signals from industry are needed in guiding the development and direction of the work. This "market pull" is more easily provided and understood when the R&D is carried out in an organisation whose progress depends directly on its success in providing services to industry.
We have therefore decided in the first instance to invite organisations which have experience of carrying out R&D to make proposals to DTI by 22 July to develop NEL within the private sector. In addition we would be happy to receive proposals from NEL staff.
We would wish to make suitable arrangements with any new owner for the continuation of the work that NEL does for Government on flow measurement, or to retain that work within DTI, as part of an agency. There will also need to be proper arrangements for the ownership of the assets of NEL. Finally, DTI would be prepared to continue to support industrially relevant R&D carried out at NEL by any new owner, subject to the normal criteria applied to extramural R&D.
We have taken steps to inform the staff of the REs and their trade union representatives in parallel with my announcement. There will be full consultations with the trade union side on the implications for staff.