§ Mr. Tom Benyonasked the Secretary of State for the Environment what arrangements he has made to effect the transfer of the Hydraulics Research Station to the private sector.
§ Mr. HeseltineThe Hydraulics Research Station was set up in 1947 to provide a research capability to serve the civil engineering industry. It was transferred to the Department of the Environment in 1971 as part of the Department's responsibility for the building and civil engineering industry. But only 20 per cent. of its research is carried out for the Department; the remainder is for repayment customers in the private sector and in central and local government. This is a clear example of an organisation which would benefit from the freedom which transfer to the private sector would bring in terms of ability to respond to market forces and to the needs of industry.
The Government, therefore, propose that the HRS should be constituted as a company limited by guarantee and be registered under the Companies Act. I have set up a shadow board under the chairmanship of Sir Alan Harris to act on behalf of the prospective company.
Its main responsibilities will be to define the conditions necessary to secure the viability of the prospective company, to draft its memoranda and articles of association, to seek suitable guarantors, and to represent the company in discussions with the Government and the staff on the terms and conditions of asset and staff transfer.
I believe that the station's commercial prospects are good, that it will benefit from the challenge and the discipline of the private sector and that within a very few years it will become fully self-supporting, both on capital and on current account.
Meanwhile, I recognise that the station is not at present earning sufficient revenue to finance capital investment or to provide working capital. I therefore propose limited support by the Government during the period immediately following the transfer to the private sector. In addition to the transfer to the new organisation of the land, buildings, and equipment of the existing station, I propose the making of grants to cover the cost of certain major capital items and to provide working capital. Furthermore, my Department will maintain a minimum level of support for research at the station during the transitional period. The Estimates for 1981–82 already make provision for the change of status of the station. Revised and more detailed Estimates, and a Treasury Minute, will be laid before the House when the details of the transfer have been settled.
As an interim measure and to provide continuity it is proposed to second the present staff of the HRS to the new company. This will give them and their representatives time to negotiate satisfactory terms of employment for those transferring permanently to the company.