Scottish Affairs Committee
Oral evidence: Science and Scotland, HC 151
Monday 4 March 2024
Ordered by the House of Commons to be published on 4 March 2024.
Members present: Pete Wishart (Chair); Alan Brown; Wendy Chamberlain; David Duguid; Sally-Ann Hart; Mark Menzies; Douglas Ross.
Questions 255-329
Witnesses
I: Professor Dame Jessica Corner, Executive Chair, Research England (representing UK Research and Innovation); Helen Cross, Director of Research and Innovation, Scottish Funding Council.
Examination of witnesses
Witnesses: Professor Dame Jessica Corner and Helen Cross.
Q255 Chair: Welcome to the Scottish Affairs Committee and our postponed session on science and Scotland with a couple of representatives of the funding organisations. I will now allow them to introduce themselves and to add anything else by way of a short statement.
Professor Corner: Hello. I am Jessica Corner. I am executive chair of Research England, one of the nine councils of UKRI. I am here in my capacity as lead for UKRI on place. I have a long career to bring to bear, spanning more than 40 years across all sorts of different universities and research institutes, with leadership roles in health and other things. My day job is to be responsible for Research England, which funds English universities for their research.
Helen Cross: I am Helen Cross. I am director of research and innovation at the Scottish Funding Council. I was formerly a civil servant and worked in the predecessors of the current science Department, BIS and BEIS. I worked for UKRI for five years. I went to university at Glasgow and was delighted to come back to Scotland last year to join the Scottish Funding Council.
Q256 Chair: Thank you for your concise introductions. A basic question to get things started: could you tell us what your organisations do to support scientific research in Scotland? We will start with you, Dame Jessica.
Professor Corner: As you know, UKRI is the national funding body for research and innovation, and covers nine research councils. The research councils range across the disciplinary specialist research councils, like the Medical Research Council, through to Innovate UK, which funds business to translate and support innovation in the business community and from research.
There is a long history of working with the excellent funding and research base across Scotland. UKRI supports and directly funds—I think—six institutes and centres, so there is a very deep involvement in and support for excellent research in Scotland. A couple of examples are the Roslin Institute at the University of Edinburgh, which last year was given an extra £35 million by BBSRC, one of the research councils, and the UK Astronomy Technology Centre at the Royal Observatory in Edinburgh, which is funded by the Science and Technology Funding Council. Another example would be the Edinburgh Parallel Computing Centre. There are very large research investments and assets in Scotland, and a long history of working with really superb facilities and science.
Q257 Chair: There are lots of very good things about UKRI and the support you have been giving to Scottish science. The same question to you, Ms Cross: how exactly do you operate, and how do you fund Scottish research?
Helen Cross: The role of the Scottish Funding Council is to fund higher and further education in Scotland’s universities and colleges. When it comes to research and innovation, I think we form a complementary part of the system with UKRI, but our funding goes mainly via block grants to universities, so that they have the capacity and capability to employ people, build basic infrastructure and have a portfolio of research that allows them to apply for grants from UKRI.
Q258 Chair: This is all through what is called the REF—the Research Excellence Framework.
Helen Cross: Some of it is through the REF. The REF is a UK-wide system for assessing research quality, and we—the four funding bodies across the UK—work together to do that. Some of our money is awarded as a result of that. In Scotland, that is called the REG.
Q259 Chair: Do you two work with each other? Do you know each other well?
Helen Cross: Yes.
Professor Corner: We certainly do.
Q260 Chair: Are you familiar with each other’s operations?
Professor Corner: Absolutely, and we have shadow status on each other’s boards. We are regularly in touch with each other. We share best practice, and the four funding bodies collectively design and administer the Research Excellence Framework, as just described. There are many activities in common. I would like to say that it is a great collaboration—Helen should speak for herself.
Helen Cross: I agree.
Q261 Chair: We have heard that Innovate UK could do more to co-ordinate funding projects with other organisations, including Scottish Enterprise and the Highlands and Islands Enterprise. Professor Corner, what is UKRI doing to support a more joined-up approach to funding projects such as that?
Professor Corner: There is ongoing collaborative work and forums in which we come together, with Scottish colleagues, to understand what the priorities of different parts of the system are. Innovate UK funding is one part of the system where perhaps the success rates are slightly different in terms of the overall funding that Scottish businesses are receiving, because Innovate UK funds businesses, rather than institutions or research centres. We think that that might be to do with the make-up of the business community in Scotland being slightly different from other parts of the country.
Q262 Chair: More SMEs.
Professor Corner: Yes. To try to work on that harder, Innovate UK has recently established a memorandum of understanding with Scottish Enterprise, so that there is greater join-up and collaboration by those organisations between the two different kinds of activities, in order to optimise that.
Q263 Chair: We had the Minister in last week, just to discuss some of the funding-related issues with him. One of the things that came out of that was that researchers in England are more successful than researchers in Scotland at securing this funding. He said—maybe you could elaborate on this or tell us what you think—that “when they compete,” they are successful, and “Let us have more of them showing up.” That was the direction that he was giving to Scottish researchers and projects.
Is it the case that we want to see more of the Scottish science projects turning up to try to secure research funding? And when they do show up, do they tend to be successful?
Professor Corner: If you look at success rates for any of the funding councils for the whole of UKRI, Scottish academics actually perform very well and have a success rate higher than English academics, as a total. On an award value, a project-by-project value, that might be somewhat less, although it is higher than for Wales and Northern Ireland, so it is not as if it is necessarily that much lower—but there is a difference. There may be something there about the number of applications that are coming in and the scale of those applications, but I suppose that you also have to look at the make-up of the institutions and the research groups—Helen might want to talk to this—and at whether there is something that we need to do about that. But on an academic-for-academic competitive basis, Scottish academics are excellent.
Q264 Chair: Again, that was stressed to us, but there was a point about not enough institutions making these applications. I think there was gentle encouragement from the Minister for more of them to think about coming forward. Is that your experience of this?
Helen Cross: You have talked quite a lot with people in this inquiry about Innovate UK. As Jessica set out, Innovate UK’s target audience—who they are wanting to apply—is primarily businesses, so it is not academics or research groups. While more people could apply, we should also trust people to know which of the opportunities are right for them.
In Scotland, we have a high SME base, so they are very successful in winning funding when they apply, but there might be opportunities that are not right for those sorts of businesses. There might be opportunities that are more appropriate for larger-scale, research-intensive firms, and it is for Innovate UK and other funders to make sure that there is a full portfolio of opportunities available for businesses, and for businesses to look for the ones that are right for them.
Q265 Chair: Lastly from me—again, to Professor Corner—do you think that there is a need for a UKRI-wide presence in Scotland? Would we benefit from that, given what we have heard about some of our excellence in science projects and some of the issues around funding?
Professor Corner: This is something I lead on for UKRI, and, as a whole, we are looking at how we engage in order to ensure that we support the distribution of funding across the whole of the UK. As you know, it has traditionally been a bit more concentrated in the greater south-east, and we absolutely want to make sure that it is well distributed to all parts of the UK. In Scotland, there are engagement managers for two of the councils—EPSRC and Innovate UK—so they are very active on the ground, connecting, and we do various things to try to increase our presence. But certainly, yes, we are looking at how we should optimise that approach in future so that all the councils—all the opportunities—are fully present to all bodies, institutions, research centres and businesses that might want to access them.
Q266 Chair: What would that eventually look like? Is that a building with people in it?
Professor Corner: We think it is unlikely that we will put up buildings. In the virtual world that we now live in, that may not be the most optimal way of creating the right presence, but we are certainly looking at how we can create a team of engagement managers who can talk to the whole of the offer and make that much more visible, and co-ordinated in the way we approach that, to all parts of the country. That would probably be our approach.
We are also looking at other forums, meetings and collective activities that we could do to have more of a conversation. Our chief executive Ottoline Leyser now regularly holds events in different parts of the whole country. She did one not too long ago, actually, in Dundee, where UKRI held an event on the ground. She met very senior people, including the Minister for Education and others, while she was there to have that on-the-ground conversation. That is another way of hearing about what the great assets and opportunities are while we try to connect with the funding that might move towards them.
Q267 Chair: One example that was given to us was the Engineering and Physical Sciences Research Council, which was praised for its engagement with the research community in Scotland. How can UKRI spread this good practice across other research councils?
Professor Corner: We have a strategy steering group now, which is directed solely to look at how we do this engagement across the whole country and how we think about the strategy for investment. That is the sort of environment there is. We are continually listening to different councils about the way in which they do really good practice and great innovations, so that all other parts of UKRI can learn from them and put them into practice, but also to be more co-ordinated and have a more up-front strategic plan to do that.
Q268 Alan Brown: Good afternoon. I want to touch on regionality across Scotland. You can imagine, given my politics, that I bristle sometimes when Scotland is classified almost as a region in itself, but clearly there is variation right across Scotland. We heard from Professor Brown from the University of St Andrews, who said that “from down south, Scotland looks like one region”, but “Scotland is more than one place, and we need to be able to express place in a way that fits the research problems that we are talking about.” Professor Corner, can you elaborate on how you ensure that you have an up-to-date understanding of the research ecosystem across Scotland and how it varies from region to region?
Professor Corner: Absolutely. That is about using our colleagues on the ground and connecting with institutions in the ecosystem directly, holding regular forums where we can get together with groups of different organisations and institutions to hear those things, and doing that on a regular basis. It is really important. There is a lot of ground to cover, but that nuance between all the different types of institutions and research centres in Scotland is very important, because they do not all have the same strengths, and we need to understand them. I don’t know whether Helen would add anything to that.
Helen Cross: For me, it was something that attracted me to go back to Scotland. There are 18 institutions that we fund to do research, and we also work with the Open University in Scotland. That means that I can engage with each institution on a regular basis and have a conversation about their areas of expertise, regional differences, how they interact with their local communities and the challenges that they face. I find that really valuable.
Q269 Alan Brown: Have you ever done analysis that maybe shows that one region is doing much better than another, or that there are areas that are not accessing as much funding? Have you changed how you target and engage with them to rectify those things or build best practice?
Professor Corner: I guess that that might sit in your domain, Helen.
Helen Cross: In terms of assessing and understanding Scotland’s research strengths and weaknesses, the REF is the biggest tool we have in our bag to do that, and we share that. We last did that in 2021, and we are still looking at and understanding the rich picture that it gives us. We published SFC case studies late last year that looked at how the impact of the research carried out in institutions was seen across Scotland and the different activities that resulted from that research.
It is really fascinating when you look at where institutions get their money from. I often say that, broadly, the SFC gives institutions about a quarter of their research money and about a quarter of it comes from UKRI, but actually that differs quite a lot across different institutions. Some universities get more of their money from charities—those universities that do lots of biomedical research, for example. Some get more from the public sector, and they do more work in their local communities—“public good” work. Looking at the differences between them and talking about how they implement that has been really fascinating.
Q270 Alan Brown: Thank you. We have had written and oral evidence recommending a mapping exercise to get a further understanding and pin down the regional variation. Is that something that your organisations have undertaken?
Professor Corner: We probably do slightly different things. At UKRI, we use tools like the Research Excellence Framework outcomes, which gave us a very comprehensive picture of research conducted through universities.
Quite a lot of work has also been going on to understand where clusters of innovation are emerging. What are the combined areas and things that are building up that sit around innovation ecosystems? Work goes on in that respect. It is not region-specific; it is trying to look at the whole UK system picture and know where the strengths are. That sort of activity goes on.
A third activity is about trying to get the leaders of institutions and organisations across different sectors to come together to talk about what the strategies are, what the priorities of those organisations and locations are, and then how they interface with the way Government might be thinking about priority technologies, for example, or UKRI in terms of delivery of its own strategy. The way we do this is multilayered, and then each particular competitive funding call will look in competition at which are the best proposals that seem to be going forward in those areas.
There are certainly very important and significant strategic investments being made. A very good example would be the ARCHER2 supercomputing facility in the Edinburgh Parallel Computing Centre and the recent announcement to invest in and scale up supercomputing and make Edinburgh the very important centre for that to be started off. It will give the UK a supercomputer of 50 times the current size, and it is going to be based in Edinburgh. That is a very strategic decision about an investment.
It is multilayered. The decisions are made by looking at where the best place is and where the excellence and the capability to position something like that would be.
Helen Cross: On this idea of mapping, I think it is important to understand that it is not a once-and-done thing. You could not make a perfect map of where the research excellence is; we sort of did that in 2021, but it is already changing, and different people want different information.
The UK and the Scottish Government both have their own cluster map exercises going on, and they are trying to interrogate different questions. We fund an organisation called Interface, which helps businesses that want to grow and use academic expertise to link up with academics. It has really sophisticated systems, but the landscape that it is looking at is always changing. The cutting edge is always changing, so we cannot stop doing this.
Q271 Alan Brown: You have both mentioned innovation clusters. There was also a suggestion that the Scottish Government and the UK Government need to co-ordinate or work better together on this. Is that a charge that either of you recognises? Are there any considerations that need put forward?
Professor Corner: Understanding what innovation clusters are, how they best develop and how they can best be supported is an emergent area, and the evidence about how to do that is emergent. I think our respective Governments are very interested in that and are trying to understand where the opportunities may lie. There is more opportunity to join up that thinking and do more with it, for sure, because this is going to become more and more of a priority: how do we make strategic choices about investments in order to grow our respective economies?
Alan Brown: Helen, do you want to add anything?
Helen Cross: No, thank you.
Q272 Alan Brown: I will move on to funding. It will probably not surprise you, Professor Corner, but the proportion of funding has come up time and again. Scotland has 11.4% of the researchers in the UK, but it receives 5.9% of Innovate UK funding. Is Scotland’s proportion of Innovate UK funding fair and proportionate, given how many researchers Scotland provides?
Professor Corner: You have specifically picked out the Innovate UK funding, which is funding to business rather than to other aspects of the research and innovation system. Those figures are over quite a long time, but actually if you compare that statistic to the proportion of the business population, there is probably a closer match between funding and size. It is smaller, but it might not be so distant a gap as it might seem to suggest, although it does suggest that there is more work to do.
In terms of the whole of UKRI funding, Scotland is doing pretty well. It ranks fourth or fifth in the 12 regions of the country. In its success rates, as we were saying, it is very good. There are differences depending on whether you look at the Innovate UK funding or the total funding, but the picture is pretty good. Some of the data that you might have seen for this Committee was over a long period of time. We are particularly looking at the last two years, for example, in which there has been something like a 20% increase in funding to Scotland, which is larger than the overall increase to the UKRI budget as a whole. There are good things going on.
Q273 Alan Brown: Yes, but arguably if you have a smaller share of the pie it is easier to get a slightly bigger increase, even though you are still lagging behind. It is curious that you say if you look at it in a business context rather than as a proportion of researchers, Scotland does better. Can you explain what you mean by that?
Professor Corner: It might go back to what we were saying earlier about the mix. That relates to Innovate UK funding, which is targeted at business, so it might be a factor of the rather different nature of businesses in Scotland from those in England or other parts of the UK that creates that effect. We would all say that we want to do more work to understand it properly and to make sure, if we are going to make some interventions to try to change the picture, what the best ones should be. That is why the joint working between different parties like Scottish Enterprise and Innovate UK is being formed.
Q274 Alan Brown: On that business landscape, another very common theme that comes out is that businesses in Scotland tend to be SMEs, so Scotland has a much higher reliance on the proportion of SMEs that make up the business sector. How do you factor that into decision making about funding from UKRI?
Professor Corner: That would be the nature of the Innovate UK funding. Another feature is that there are probably fewer of the large research and development-intensive businesses in Scotland than perhaps there are in other parts of the UK, which might mean that they are less likely to seek funding for research and development activity from the funding body. Helen, is there anything that you would add on that?
Helen Cross: I think it is about scale and resources. Obviously, SMEs do conduct R&D, but to access some grants you have to be able to match-fund in order, I guess, to stay within subsidy control rules. That can be a barrier to SMEs participating in some of those schemes—just having the scale and capacity to do that.
Q275 Alan Brown: Going forward, I am not looking into how that would change, but I take your point about subsidy and match funding. Is there not a way to still help SMEs not only to access the money, but to grow? That is the end desire, isn’t it: the growing of successful outcomes?
Professor Corner: Absolutely. Of course, they need to be research and development active companies. There is possibly something around the development of the companies in that space and making sure that they can take up the offer that is there.
The growing of the companies is not so much within the territory of UKRI. There are probably other features that may be beyond the scope of the remit of UKRI that need to be addressed. That is certainly something that the Committee might want to explore.
Q276 Wendy Chamberlain: Welcome, both. Reflecting on Alan Brown’s questions, it sounds to me as if there is something there around giving the businesses support, rather than necessarily the institutions. How do the businesses make those connections into institutions? How might Scottish Enterprise and Highlands and Islands Enterprise help them to do that? This one is probably to you, Helen: is there the capability within Scottish Enterprise and HIE to deliver that, in your view?
Helen Cross: Yes. In SFC we provide research and innovation funding into universities. We do not fund businesses directly, but our funding helps to support business development offices and technology transfer offices. It helps things like spinouts to start happening in universities, and it helps academics to connect with businesses to help them to grow.
We work hand in hand with the enterprise agencies in Scotland, because their job is to fund the business end of that connection. We have investments in common where we are supporting the transfer of knowledge and skills into businesses to help them to innovate and grow.
Q277 Wendy Chamberlain: Further to what the Chair said about institutions and businesses turning up, it sounds as if there is some work from a Scottish Government perspective to make sure they can do that and come to the table and make a successful application. Would that be a fair assessment?
Helen Cross: The Scottish Government published an innovation strategy this year in which they expressed the need to do just that. It is growing more businesses and more successful businesses, and helping to grow the Scottish economy. I am sure that part of that mix is being more successful in bringing in money, including from Innovate UK.
Wendy Chamberlain: Great—everybody pulling in the right direction. Thank you.
Q278 Sally-Ann Hart: Good afternoon to our panel. The UK is very good at setting up businesses, but not quite so good at growing them. Witnesses have told us that start-ups and spinouts need greater access to scale-up capital. Can you tell us how you are supporting companies to do that?
Professor Corner: There is great interest in this. As you know, there was an independent review into how spinout companies are formed via universities, what the factors are that make them successful, and whether there are interventions to be done to speed up the journey through to the scale-up. A response to that was published last November.
As far as UKRI goes, through to the Innovate UK territory, the work is mostly about the formation of those companies from a discovery right through to the company being formed and then getting under way and being successful—less so at the scale-up end of that, because there are multiple things that need to be in place to make the environment as conducive as possible to enable companies to scale up. That is an area that everybody has said needs addressing. Some of it is out of scope for the UKRI portfolio of activities, other than to understand and recognise it and pull out the features of what might need to be in place.
Helen Cross: As I have said already, SFC’s support is inside universities. One example I would pull out is Scottish Enterprise’s high-growth spinout programme.
Sally-Ann Hart: I was going to ask about that.
Helen Cross: I think it is a very good programme in helping spinouts to find a clear pathway to market, supporting research teams to commercialise their ideas, and making them not just businesses, but successful businesses. They recently published a report that shows the best ever figures, including 14 companies in the recent period seeing that continuing growth, leveraging £35 million of private investment and undertaking £9 million-worth of R&D activities, which is very positive. Scottish Enterprise was named in a recent Royal Academy of Engineering report as a top investor in spinouts.
Q279 Sally-Ann Hart: How does the Scottish Government’s high-growth spinout programme fit in with the UK Government’s funding?
Helen Cross: In terms of how the funding for spinouts and start-ups interlocks in Scotland and England and through the UK-wide schemes, I do not think that there is a problem in eligibility for funding. We support a programme called Converge, which helps that initialisation of ideas in universities, and UKRI and Innovate UK support a programme called ICURe, which does a similar thing.
The people who run those programmes work together, and people can transfer between the schemes to get the knowledge and learning that they need. We have seen examples of that happening and those businesses spinning out and growing.
Professor Corner: The journey of discovery into becoming a successful company and onwards is complicated and has many steps along the way. When you trace the journey of successful spinout companies, you can see they have had many inputs and many different kinds of funding that are targeted at different stages of that process. The two schemes fitting together is a good example.
Scotland does pretty well, actually. I think there are some 1,167 spinout companies that have been part of the UKRI family of funded initiatives, of which 133—one in 10—are Scottish spinout companies. They attract a lot of grant funding and private equity.
The University of Edinburgh is one of the top six universities in the country for doing this kind of activity and is part of an initiative called TenU, which has been signalled in the Government response to the review of spinouts, around developing best practice around what should be done to smooth that journey and make it work much better than perhaps it has done. Edinburgh was one of the participants in designing that guidance. It is very active and there is very good work going on. What we want is for that to be going on more and across greater parts of the system.
Q280 Sally-Ann Hart: Looking at that spinning out, going into the commercialisation process and then scaling up, should the UK and/or Scottish Government establish clear pathways to market from university spinouts? Is there anything that can be done to help that along?
Professor Corner: The review came up with 11 or 12 recommendations that cover a range of things from proof-of-concept funding, which helps an idea to get designed for market—the Government have given £20 million to set that up and it will be open to everybody—to asking universities to adopt best practice, approaches to equity splits and other aspects of developing companies and supporting them to get off the ground.
We are working to establish a register of spinout companies across the country. We hope to make that a UK-wide initiative so that we can begin to understand, with more evidence and data, the factors that make them go faster and better than other things. It is quite a hotly debated area. We have not got all the best evidence as to precisely what we should do to make this all work as well as it can.
Q281 Sally-Ann Hart: They must attract venture capital funding.
Helen Cross: Everybody would like there to be a very simple, linear answer, where if you struck something really soundly at the beginning there would then be a chain effect and you would have a route. But in different sectors and for different opportunities, there are different pathways. In things like life sciences, it is quite regimented, because there are regulatory barriers and you have to follow a certain path if you want to take a product to market. With others, the journey is much quicker, and that sort of intense venture capital investment is not required.
A one-size-fits-all answer would never be appropriate for all the types of opportunity that are coming out from our university sector. However, there has been guidance in the past, and there could be more helpful guidance in the future, to lower the barriers.
Q282 Sally-Ann Hart: Professor Corner, in response to a question from one of my colleagues, you talked about looking at best practice in other counties—or was it in other countries?
Professor Corner: Probably both, actually. It is across the system, and there has also been a look at other countries.
Q283 Sally-Ann Hart: They must have higher education institutions that are very successful at scaling up university technologies. I wonder how they do that. Are they further ahead than us, or just different?
Professor Corner: It is very interesting. We all look to the MIT, Stanford and Silicon Valley environments, but when we have looked at the data on the number of spinout companies that are being developed successfully per head of academic population, actually the UK performs pretty similarly. It is a question of scale that is different, as you can imagine. I think the availability of capital to invest in those companies is of a different order in places such as MIT, Stanford and Silicon Valley. It is not the same environment.
It is not because we are not doing it well. We are actually doing it very well, but we have a relatively small number of universities that are very active doing this. It reflects the R&D base of those universities. The more there is, the more likely they are to be doing it. There has been long-standing support for universities through different funding models—it is different in Scotland from how it is in England—that support the technology transfer offices and infrastructure to enable that.
What we are doing at the moment is not saying that it is wrong, but asking how we optimise it, make it smoother and make the difficult bits work better than they have done. We are very keen to encourage a wider and more diverse and inclusive set of entrepreneurs thinking about doing this as part of what would be a career opportunity. That is a job to be done. An example is getting more women thinking of spinning out companies themselves. All of those things need to be done. It is a question of doing better with what we do, not saying that it isn’t any good, because it is actually pretty good.
Q284 Sally-Ann Hart: Brilliant. This is my last question. Looking at optimising it, we have heard that a lack of infrastructure, notably incubators and lab space, is acting as a push factor for spinouts and start-ups in Scotland. Would you agree with that? I will go to Ms Cross first.
Helen Cross: Our universities are very good at incubating spinouts that are to be. They are very good at looking after companies before they are properly established as companies. I think there is an opportunity to do more. When businesses are growing quickly, they want to be able to grow where they are. They want to be able to expand their space, and sometimes that cannot be offered where they are. I am absolutely sure that there is an opportunity to do more in that space.
Professor Corner: I probably know less than Helen about what is happening on the ground in Scotland but, certainly, it is an issue in different parts of the UK. It depends a bit on the specialisation around a particular university ecosystem, for example. There has been quite a lot of development of the right sort of incubator spaces. As companies grow, they need to grow into bigger accommodation. It depends on whether they are engineering and manufacturing focused or something else—if it is software, that is easy. There is a job to do to work on what all that infrastructure should look like and to try to develop it.
Sally-Ann Hart: Room for growth.
Professor Corner: Now we are all looking at actually growing the economy, it is going to be more and more important. Yes, absolutely—we need to be working on it.
Q285 Mark Menzies: I have a brief question on the international dimension of all of this. Is there any mechanism or structure in place that could help to facilitate, for example, a Scottish university or spinout doing a collaboration or a joint venture with a similar body in Europe or North America, or do they just have to find their own way? Is there anybody they could go to that would help them to line that up, hold their hand and do negotiations for them, or is it just up to each institution or individual?
Professor Corner: Are you referring to a spinout company or a research collaboration?
Q286 Mark Menzies: Either, really. Thinking from an export point of view, companies often do really well in a domestic setting, and when they are having conversations about going overseas and the different legislation and legal system, that can become quite frightening and off-putting. Sometimes they need someone to hold their hand and give them that piece of encouragement. From an innovative, research or attracting-capital point of view, again there could be barriers in place, and that could be equally daunting and so on. How do we enable Scottish institutions and companies to tap potentially the best and brightest opportunities for joint ventures, collaboration and partnerships—that sort of thing? I am thinking particularly about Europe, North America and Japan, potentially. Does any structure like that exist?
Helen Cross: Research is innately a collaborative endeavour, and a lot of the collaborations that come into emergent businesses are from existing research collaborations. That said, there is an infrastructure beyond that. With Scottish Enterprise and Scottish Development International, there are opportunities for businesses to be supported to go on trips, make new connections and build those collaborations. Obviously, at the moment, at the forefront of all our minds is our association with Horizon Europe. To be able to forge those partnerships again is really important, and we have been talking a lot in the last couple of months about what we can do. Our focus at SFC is on universities and their partnerships, but that reaches outwards. While we have had really good support from UKRI on the guarantee around pillar 1 schemes in the ERC, it is actually the multi-partner collaborative bit of Horizon Europe where we really need to make ground.
Q287 Mark Menzies: Just to add on that, and if you could answer the two things together, Professor Corner, is there, again, any mechanism that would allow someone to help facilitate access to foreign capital into Scottish universities, innovators or spinouts? For example, someone who could help them navigate their way through Gulf state sovereign wealth funds, and your Mubadalas and those types of people, which could attract high amounts of capital into specific projects. Again, is there anyone who would help with that?
Professor Corner: I am not sure there is a structure designed to do precisely that. I think it is inherent in different opportunities and how they develop, and there will be different partners coming together. I will give one example—I don’t know whether it fits the international dimension and is quite what you are looking for. There is a scheme called the UK research partnership investment fund, or UKRPIF, which Research England runs on the part of the UK. It is for universities to identify a development they would like to put forward in the research partnership arena and set up a building and whatever infrastructure facility they want to.
For every £1 we might give to it, £2 has to come from private-sector investment, and it has to be for a particular purpose. In the summer, we announced a UKRPIF award of £11 million to the University of Strathclyde, with a £23.7 million co-investment, for a continuous manufacturing and advanced crystallisation data lab for medicines manufacturing. That was with AstraZeneca, GSK and Pfizer. When you use those companies, you know you are talking about a global effort with R&D investment.
That is just an illustrative scheme; there are other things like that. UKRPIF is quite unique because it sets out to create the conditions where you can get partnership investment in a building that is all set up with all the facility equipment it needs to get research off the ground. It is very exciting, and it was great to award that funding to Scotland.
Q288 Douglas Ross: Good afternoon to our witnesses. Ms Cross, you were previously with UKRI, and are now with the Scottish Funding Council. What did you make of the letter from Sir Anton Muscatelli, the principal of the University of Glasgow, to the Scottish Government in October last year comparing the two bodies and the funding increases? He said: “While Scotland continues to do well in securing funding from the UK’s major research funder, UK Research & Innovation (UKRI), data suggests Scotland’s share of total UKRI C grant income to universities has gradually declined over the past decade. While the UK Government has increased its spend on R&D and grown UKRI’s overall budget, this has not been echoed to the same extent in Scotland.” Given your experience of both bodies, what is your response to that?
Helen Cross: I recognise that description. It is true that Scotland’s share of funding from UKRI, or from the bodies that made up UKRI, because it has only existed for five years, has fallen. However, the amount of money has grown. What the letter may recognise—and I don’t think we are clear on the data yet—is that the organisations that UKRI funds are becoming more diverse. While Scotland’s universities have continued to grow the amount of money they get from UKRI, UKRI is funding a greater diversity of organisations, so Scotland’s universities are winning a lesser proportion of the money.
Q289 Douglas Ross: I am reading from the letter Sir Anton Muscatelli published. He states: “When additional funding is announced for English universities via Research England, in general the Scottish Government receives corresponding funding through the Barnett formula”, which we all accept and understand, “these uplifts need to be passed on in full to the SFC.” He is suggesting that when money is given from the UK Government to UKRI, and then from the UK Government to the Scottish Government through the Barnett consequentials, you are not getting the full share. Is that correct?
Helen Cross: Our funding for research has been set out by the Scottish Government on a five-year trajectory in the capital spending review. We are just about to go into year four of that. Sometimes, UKRI receives in-year funding as a result of new announcements that come in. In my experience, a couple of those in the last year have been passed on to Scottish universities. That has not always been the case.
Q290 Douglas Ross: Why is that? Is it because of political decisions?
Helen Cross: Yes. It is a choice for the Scottish Government where they use their Barnett formula money. They do not have to pass it on to research and innovation. Recently, they have chosen to, and Scottish universities have welcomed that.
Q291 Douglas Ross: What do you do when the Government do not choose to do that—when the Scottish Funding Council sees the money going from the UK Government to Research England and you are expecting x amount to come, and it doesn’t? What representations do you make to the Scottish Government when you don’t get that passed on in full?
Helen Cross: When there is an opportunity for in-year funding to come to the Scottish Funding Council, we show the Scottish Government what we would do with that money.
Q292 Douglas Ross: Sir Anton says, “From 2016/17 to 2022/23, the combined total of research and university innovation funding in Scotland provided by the Scottish Funding Council (SFC) increased by...7%”. That is welcome, but he says that is “well below the equivalent Research England core funding streams which increased by around 30%.” That is quite a gulf between those two figures. Are we suffering as a result of that compared with the rest of the United Kingdom?
Helen Cross: I don’t think you can necessarily take that from those figures, because in Scotland we don’t choose to split our funding in exactly the same way as England; we don’t just follow down the same path. We have three core funding streams in Scotland. We have REG, which is by far the biggest and the equivalent of QR in England in terms of purpose, we have UIF, which is the equivalent of the innovation funding stream in England, and we have a stream of funding called RPG for postgraduate students.
Research England also has other unhypothecated pots of funding, but most of our funding is driven through those three streams and they are not in the same proportions in Scotland as they are in England. When we set our funding, we consult with the institutions and they give us their preferences for how they would like it to be allocated, and of course we discuss that with the Scottish Government.
Q293 Douglas Ross: Were you aware of that letter and those figures?
Helen Cross: I was aware of those figures, yes.
Q294 Douglas Ross: So how did you respond to that? Obviously, that was a letter to the Scottish Government back in October. You have had several months now. Have you met with—
Helen Cross: That data is shared with SFC. We are aware of those figures.
Q295 Douglas Ross: So what do you do when you see that in the media? This is someone who was just highlighting how they want more investment, as everyone does. What do you do when you have principals of Scottish universities writing to the Scottish Government? Are you backing the principal of Glasgow University here, or are you supporting the Scottish Government’s decision not to pass that money on? What do you believe is the role of the Scottish Funding Council?
Helen Cross: Sir Anton is privileged to make that case to the Scottish Government. We are an agency of the Scottish Government. We make representations about what we would do with an increased funding pot, but we have to respect their ability to direct Barnett consequentials as they see fit.
Q296 Douglas Ross: Does that mean that you can’t fully endorse what the principal of Glasgow University is saying because you are an agency of the Scottish Government?
Helen Cross: I respect his right to make the case for additional funding—that is his job.
Q297 Douglas Ross: But it is additional funding that you could then spend if that is successful.
Helen Cross: He would spend it; I would give it away.
Q298 Douglas Ross: Yes. You could give out more money if he was successful. So you would endorse that?
Helen Cross: I support his right to do that.
Q299 Douglas Ross: This is a question for you both, and we will come to Professor Corner first. Last week when we had the Minister in, we were speaking particularly about AI and its advancement. Through UKRI and the Scottish Funding Council, are you seeing an increase in interest for research and innovation in the AI field? It is growing by the day, and it brings with it many challenges, but also opportunities. I think the UK Government’s evidence suggested that Edinburgh will be home to the largest number of people studying AI and suchlike going forward, so Scotland has a real opportunity. Are you seeing an increase in interest in this field, and are you providing grants associated with that increased interest?
Professor Corner: Absolutely. It is one of the priority technologies in the science and technology framework. There has absolutely been significant additional funding directed towards AI, and some of those awards have already been made—you just mentioned one of them. Yes, it is high priority, and there are schemes being developed and implemented to support the development of that very important area.
On the ground, there is a lot of activity; computer science is one of the most attractive subjects, and the interest in it is growing very quickly. We will still need very well-trained people, and we probably cannot keep pace with the demand; so yes, you could say that it is a very high-priority area.
Q300 Douglas Ross: The line I was looking for from the UK Government’s evidence to the inquiry is that the University of Edinburgh houses the largest pool of AI researchers in Europe. That obviously presents an opportunity for what we can do in Scotland, but also challenges for getting people with those skills to be able to come in. How has the Scottish Funding Council viewed the increase in interest, and those challenges and opportunities within AI?
Helen Cross: As I explained previously, most of our funding to universities is unhypothecated, which means that they get to use it to underpin their opportunities. One of the few areas where we have made a specific investment is in the Data Lab—an innovation centre which is about bringing data and AI skills innovation to new and existing businesses. We definitely see that as an opportunity, not just at the cutting edge but throughout the business space in Scotland, to power economic growth in the future.
Q301 Douglas Ross: When we spoke last week to the Scottish Government Minister, Graeme Dey, I think he accepted, as we all did, the challenges in Scotland—though they are not unique to Scotland, and exist across the UK and in many other parts of Europe and the world—around people studying STEM subjects at the moment. There is quite a worrying shortage of STEM teachers in Scotland, and particularly in the number of women who study STEM subjects and then continue in that sector.
Is that something you see on your risk register as a threat going forward? Should maybe Scotland be in discussion with the UK about what we can do around the United Kingdom about the number of people taking STEM subjects, for example?
Professor Corner: That is very interesting. STEM has been a high-priority subject for a long time. I do not know about the issues with shortages in Scotland specifically, so perhaps I will hand that to Helen.
Helen Cross: You talk about this as a threat, but actually it is the most enormous opportunity. Looking at all the skills gaps, if we just took the fair share of women who are not continuing these subjects through, we would fill so many of those gaps.
Q302 Douglas Ross: Just to clarify, when I said it was a threat, I meant: is it a threat that we are not doing that?
Helen Cross: Yes, exactly. There have been changes at school level in terms of people going through and then into university and getting first degrees. We have seen changes over the last 10 years in the proportion of women in those subjects. If we could just carry that forward one step at a time, it would be a real supercharge for opportunity.
Q303 David Duguid: So much has been discussed already that I am dying to come back to, and I might touch on a few things. If I may, Professor Corner, I will take you back three years, if you can remember that far back—I can’t believe it was three years ago. There was the industrial decarbonisation challenge, and £171 million was paid through the industrial strategy challenge fund specifically for decarbonisation projects across the UK.
If that is not ringing any bells yet, the reason I bring it up is because about £51 million of that came to the so-called Scottish cluster—the Acorn carbon capture and storage project. The reason I am fixating on that a little bit is because the Acorn project sits in St Fergus in my constituency. Do you remember that at all—the funding mechanism or the announcement?
Professor Corner: I certainly remember the funding mechanism. It was before my time at UKRI, so I was not involved in it, but yes.
Q304 David Duguid: You are aware of it?
Professor Corner: Yes.
Q305 David Duguid: In that case, I will direct my question to Ms Cross. You were both reflecting earlier on the fact that UKRI—or Innovate UK, I should say—focuses on funding innovation in businesses whereas you focus on learning institutions. At about the same time or maybe a little bit after that, the Scottish Government said that they were going to invest £80 million in the same project. What mechanism is open to the Scottish Government effectively to do the same thing, if there is such a thing? If the Scottish Government said, “We are going to invest £80 million in innovation in an industrial process”—
Helen Cross: Research and innovation is a complicated landscape because it is part reserved and part devolved. What that means is that, for most activities, UK Government Ministers and the Scottish Government have the same powers. In terms of being able to fund projects and programmes to advance research and innovation, they have the same powers. In terms of industrial decarbonisation, I don’t know—I guess the details of what sort of projects and programmes that could be funded, but in general the Scottish Government would have similar choices to the UK Government as to they wanted to implement this.
Q306 David Duguid: I am not saying that this is an argument that the Scottish Government have made, but there is not a barrier to their doing it because it is reserved to the UK Parliament or the UK Government. They could invest that money if they wanted to.
Professor Corner: They could, yes. In fact, there are examples of joint co-investment in initiatives. That does happen. Again, I don’t know the specifics of that particular example.
Q307 David Duguid: Previous witnesses have said that there is certainly an opportunity for improvement in how well the two Governments can co-operate. There is maybe something there. I am wondering about the subject of barriers. We discussed UKRI funding earlier. In Minister Griffith’s evidence last week, he said that the success rate of applications is actually quite good in Scotland, but there are fewer people coming forward to make applications. I wonder whether either or both of you could give us a clear indication of where you think the barriers are—if they exist—to Scottish businesses or Scottish education institutions to actually stepping up and applying for those funds.
Helen Cross: I will say something broader first. This is not unique to Scotland; it is UK wide. People talk about the golden triangle of Oxford, Cambridge and London; in fact, their success rates are not noticeably different to Scotland’s success rates. What is different is the quantum—the number of people, the number of researchers, the number of R&D active businesses. In order to have greater success in Scotland, we need to grow our activity, but that cannot just be everybody working harder and churning out more applications. You have to preserve the quality. In Scotland, we should be proud of our world-class, internationally renowned institutions, but we must also recognise that they are smaller than the biggest ones in England—even Edinburgh, our biggest institution. That means we sometimes have to do things differently, and that is why at SFC one of the things we try to do is incentivise collaboration as well as competition to ensure that we can apply for those biggest opportunities and see the main prize.
Professor Corner: We have been talking about, perhaps all afternoon, the various things that need to happen to make sure that all opportunities are taken, as much as we can. We need to think about people, capacity, facilities, infrastructure—all those things would need to be addressed to scale up, if that is the perception of what is needed. It may be that the difference is not as big as we think it is, as it first appears, but it is probably scale, although it will also be about capability and capacity, which need to grow as well. It’s not just a matter of putting money in. You’ve got to have the people to do the work, and the facilities and infrastructure to make that work.
Q308 David Duguid: Certainly in England, compared with Scotland, you have a larger population, so more stuff is going to happen in England. There is maybe more concentration of different organisations that can come together and collaborate, as you say. It is something I have seen in many industries and many industrial sectors—competing organisations actually coming together to collaborate, at least to some sort of level. It usually ends up with the outcome being more than the sum of individual parts. There is definitely something there.
However, I just wondered whether we might want to go back to the data that we have looked at previously, or the evidence that we have looked at previously, to see the number of applications per head of population; that kind of thing. We’ll maybe look back at that.
Professor Corner: If it is helpful or useful to the Committee, we are happy to provide more data than we have perhaps talked about this afternoon.
Q309 David Duguid: If that’s available, yes; that could be really helpful. Generally, we have heard from previous witnesses that funding has increased at a greater rate in England than in Scotland. Is that something that you would recognise?
Professor Corner: It depends on which dataset you look at and what dimension. It’s not all uniform. I think we have separated out the business end from some of the research—
Q310 David Duguid: Again, I am just going by what witnesses have told us and I am repeating their words back at you a little bit, because they have also told us that English universities can access more pots of funding for some of the issues you have described, giving them an advantage in REF assessments, perhaps.
However, we have also heard that Scottish universities may be as disadvantaged due to their lower incomes from domestic students. Is that something that you recognise?
Helen Cross: In terms of how the finances work in universities in Scotland, obviously that is slightly different, because we pay money for each domestic student coming through, whereas in England that comes from fees. But Scottish institutions obviously have a balance of domestic students, students from the rest of the UK, and international students. Overall, that leads to a tighter environment, but it is managed differently.
Q311 David Duguid: So you wouldn’t recognise the argument that Scottish universities—I don’t remember where we heard this from; I am just quoting here—“may be disadvantaged due to their lower incomes from domestic students”? Is that because the income for those students is actually funded, but it’s funded through the Government?
Helen Cross: The funding that comes through the Scottish Government for each student place is less than the UK fee.
Q312 David Duguid: Okay; I think I am clear on that. So, you are basically saying that it doesn’t matter whether it’s funded by a fee or funded by the Government; the universities get funded either way.
Helen Cross: The universities get funded either way, but the unit resource is less when it’s coming through the central grant than it is through a fee.
David Duguid: I think that’s all I was going to ask at this point.
Q313 Wendy Chamberlain: My first question is about the REF and the proposed changes to it; perhaps I can come to you first, Ms Cross. Given that the Research Excellence Grant or REG is a big part of the Scottish Funding Council’s means of dispersing money, what are your thoughts on the REF changes and some of the concerns that have been raised with this Committee?
Helen Cross: I guess what I would say is that, unfortunately, you have picked two people who are one on the REF, because we are working together to develop it. However, we are obviously working with the community to develop it.
When you have a lever that is as important and big as the REF, it is important to get it right. People are concerned that changes may disadvantage them, but there are also people who recognise that it is an enormous opportunity for change.
We are listening carefully and looking to pilot those changes, and to make sure that we are doing it in a way that is fair to all the institutions that want to participate.
Q314 Wendy Chamberlain: I will come to you then, Professor Corner. Are you hearing similar concerns to those we have heard about Scottish institutions and the changes to REF?
Professor Corner: There has been a whole process of open consultation and a lot of listening. We have heard a whole variety of different views, some of which are concerned about change and do not want to change a system that seems to have worked well. Others recognise that there are some great opportunities to change the emphasis around what we think is important in developing a very healthy research system that supports talent and all the other things that are needed in great research.
On the basis of all the input that we have had, we have announced that we are going to delay REF for a year so that we can give it more time. In particular, we are interested in ensuring that institutions can switch to inputting their data via what we call the Higher Education Statistics Agency system rather than sending us lists of staff, which was the arrangement before. Also, we want to pilot the changes so that everybody develops confidence that they are well designed and so that institutions can respond.
I think we are doing everything that we can to listen, but it is also co-designed. It is always designed in partnership with universities so that we get it right. It is for everybody and it is community-driven—
Wendy Chamberlain: Everybody wants that best opportunity.
Professor Corner: And it is coming in 2029 now, not 2028.
Q315 Wendy Chamberlain: I want to follow up on some of the questions that Douglas Ross asked in response to the letter from the principal of Glasgow University, and I want to check about the funding. Innovate UK was very clear that it was for business, Research England’s higher education innovation fund is for institutions in England, and the SFC’s university innovation fund is the equivalent in Scotland.
I’m assuming that the Research Wales innovation fund is the equivalent in Wales. In terms of Wales, do we have a clear view on whether the money used in its innovation fund is a direct layover from the Barnett consequentials that arise from Research England? Do we know that? I don’t know whether you can respond, Professor Corner.
Professor Corner: As far as I am aware, yes. Absolutely.
Wendy Chamberlain: So what the Welsh Government get in Barnett consequentials, as a result of—
Professor Corner: The model. Yes.
Helen Cross: However, it is not matched innovation fund to innovation fund. Obviously, in general, how Barnett consequentials work is that the total amount funded on an England-only basis in a particular area goes through the Treasury to the Scottish Government. We do not have a detailed accounting of how that—
Q316 Wendy Chamberlain: I suppose I am trying to get at the same point as Douglas Ross. Obviously, with Barnett consequentials, it is up to the Welsh Government and the Scottish Government what they choose to do with that. Douglas was getting at the fact that the Scottish Government maybe have not used everything they could have for the innovation fund in Scotland. I suppose I am just asking whether the Welsh Government have made a similar decision. It sounds like they perhaps have not.
Professor Corner: They also had a period without an innovation fund, where they determined not to have it. There is data showing with and without, which is quite an interesting experiment.
Q317 Wendy Chamberlain: We are just trying to get to the bottom of what Professor Boswell from Universities Scotland said. She said Edinburgh University would be receiving £5 million a year for innovation if it was based in England, whereas it received £1.7 million being based in Scotland. I feel I have heard this afternoon that that is because the Scottish Government have made different decisions in relation to the innovation fund, as opposed to anything that UKRI could have done. Have I got that right?
Professor Corner: I cannot tell you all the detail of this, and I do not know the detail—Helen might know more than me. Just because it is not flowing to universities does not necessarily mean that it is not spent on innovation. It might be going through other mechanisms to other entities to do a job in the innovation space. The answer is that it is very hard to tell where innovation funding is going and how it is being deployed.
Q318 Wendy Chamberlain: Obviously, it is Universities Scotland’s right to come here in front of this Committee and say that there is a disparity, when they are looking at that fund as opposed to across the whole piece.
Wendy Chamberlain: Yes. I suppose what we are looking at as a Committee is how we help to support them, so it is good to get that clarity.
Professor Corner: To support universities to do the best they can, yes.
Wendy Chamberlain: Do you want to add anything, Ms Cross?
Helen Cross: I think I would be repeating myself. We make the choice of how that is distributed across our three funds, and the balance is different from the balance in England, but that has been on the advice of Universities Scotland.
Q319 Chair: I am starting to get a bit confused here. My understanding of the situation—obviously, I know Professor Muscatelli’s letter—is that Scotland has its own priorities and its own funding environment. Funding becomes available through the Barnett consequentials and is applied according to the priorities of the Scottish Government. Is that roughly where we are with that?
Professor Corner: That is exactly it. I suppose what you are hearing is a strong case that, if Innovate funding goes specifically to universities, you can see that there will be an outcome from that we have probably demonstrated.
Chair: It is in universities’ interests, as Professor Muscatelli demonstrated, to advocate for and to get that money exclusively, even though it is possibly going into different funding arrangements and streams to meet the specific environment in Scotland. Sorry—I’m just trying to be helpful.
Q320 Wendy Chamberlain: Absolutely. From our perspective, Chair, it has been pointed out in evidence that there is a difference in cash growth—since 2014, there has been a variance. You are right to point that out.
David Duguid mentioned this, but the other piece of evidence we heard was about accessing more pots of funding. One pot that was mentioned to us was the Strength in Places fund and how beneficial it had been to Scottish researchers—indeed, we were told that a quarter of the Strength in Places funding went to Scotland. Professor Corner, are there plans for similar funds in future, given that that fund has now ended?
Professor Corner: I am delighted to be the lead responsible officer for the Strength in Places fund, for UKRI. That was an allocation under this spending review, so the funds have been allocated and it is great to be evaluating all the good things that are coming of it, of which the schemes in Scotland are excellent examples. It will be for the next spending review to decide what sort of schemes might be great to put in place. We will put forward arguments, or cases to be made, for different kinds of schemes, but certainly Strength in Places is a strong example that we might want to put forward.
Wendy Chamberlain: It sounds as though you have written a recommendation for the Committee’s report. Thank you.
Q321 Mark Menzies: What is UKRI doing to support IROs, which may be particularly disadvantaged by the 80:20 funding model?
Professor Corner: UKRI has been looking at research organisations and how the different models have been playing out for universities versus research institutes and other organisations. It is looking to tweak the model a bit to make sure that it supports the institutes’ needs. It has been working that through, analysing data and making sure that they are on a reasonable playing field relative to others.
They are funded differently, so it is not that they do not get underpinning funding to support their infrastructures. Universities get it through QR; research organisations get it through another mechanism. It is about looking to make sure that the model works for both and that the playing field is reasonably level. That work is under way.
Q322 Mark Menzies: One thing that we heard is that IROs in Scotland are in need of more long-term funding to ensure stability in their work. Is that something you recognise?
Professor Corner: It is not my area of expertise, to be honest—I look after universities more than I look after IROs—but, again, we can follow up with some answers to your questions, if you would like more detail.
Mark Menzies: That would be great, thanks. Helen Cross?
Helen Cross: I talk to the Scottish Government—including Professor Fitzpatrick, whom you had here last week—regularly about the whole ecosystem in Scotland. I guess it is about recognising that it is different for IROs in that they do not have the same streams of funding that universities have, to match fund and build a portfolio of research. But again, when they are bidding for competitive funding, they need to make sure that that funding is aligned with their core mission, and therefore it makes sense that they also have to pay a contribution towards undertaking that research.
Q323 Chair: Briefly, going back to the spinout arrangements with universities, we spoke to a number of the small businesses that were benefiting from the arrangements that are offered by universities. Is the model always the same—the university or higher education institution holds on to the intellectual property and licenses it to the businesses that it supports? Is that always the case, and is it the same internationally?
Professor Corner: Each particular discovery or technology that is being commercialised will have a different arrangement, to be honest. There are different ways of working in commercialisation. Sometimes it is around a contract with industry to develop that technology and it is not a spinout company at all—it is not managed like that.
Q324 Chair: I was specifically referring to the spinout arrangements in universities, where the university holds on to the intellectual property and licenses it to the company. Is that roughly the model that you would expect if you were a university?
Professor Corner: There are some slight differences by country, but mostly the model is very similar. Some of the debate is around the share of equity that is split between the university, the company and then, as it goes forward, investors. As I was saying earlier, there are differences of opinion about what that should look like. In the life sciences sector, there has been the TenU work, which has come up with a best practice guide around the terms.
Q325 Chair: That was exactly what I wanted to get into. We had a series of meetings with some of the companies that were in this type of arrangement with universities, and it was all dependent on the type of advice that they were able to secure from the HEI. We heard quite a lot of dissatisfaction with the advice that was being offered and the licensing arrangement that was in place.
I think there was a sense that arrangements could have been better and could have favoured the company a little bit more than the higher education institution. Are we getting this structure right? Are these the right type of arrangements to fully support the spinout and commercialisation of these—hopefully—wonderful products?
Professor Corner: The Tracey and Williamson independent review of spinout explored all this in a lot of detail.
Q326 Chair: It did that properly—is that what you are suggesting?
Professor Corner: It is a complicated area. There are many views and many constituents. But they did a very thorough job at going to talk to all parties and then coming to some recommendations, which are in their report. Broadly, I think the community accepts those recommendations as being the right direction of travel.
Chair: Okay.
Q327 Wendy Chamberlain: The other thing that came across to me very strongly when we had those roundtables was the number of biomedical spinoffs that find it very difficult to really get any traction in the NHS. Is that something that you have picked up?
Helen Cross: That’s your background—I’ll let you take it.
Professor Corner: That is a whole other area to talk about. Of course, the regulation of the development of drugs and other technologies for use in health is a complicated business, and the NHS can be quite a complicated area to—
Q328 Wendy Chamberlain: It just felt as though companies were ending up going overseas because they could not get anywhere in terms of clinical trials or anything with the NHS, and that is obviously very frustrating for us to hear.
Professor Corner: There is UK-wide collaborative conversation going on about how to support that area actively, which might be of interest to the Committee.
Q329 Chair: Most definitely. Finally, we were encouraged to start this inquiry by Scotland’s excellence and history as a creative nation and by the inventions we have brought to the table. We have heard from a number of companies, and we have heard very encouraging news about where we are. Are we in a good situation and position in Scotland? Do we still tend to be world leading? Are we matching our history and culture when it comes to scientific research?
Professor Corner: We should both try to answer that, shouldn’t we? I would say that the Research Excellence Framework—the REF—that reported in 2021 would tell you that it is very strong and that there is excellent research going on across institutions in Scotland, which performed among the best in the world. That process also evaluated and checked whether the REF’s peer review process measured against other indicators of global standing, and it did. I think it is a very strong picture. That is not to say that we should not keep our eye on it and make sure that we are doing everything that we can to make sure it thrives in future. Helen, you might have something specific to say.
Helen Cross: Since I have come back to Scotland, I have been excited about the difference that research and innovation are making to Scotland. That is everything from social research that reduces youth reoffending to remote sensing that can help people to manage heart conditions when they live very rurally. Those examples really brought home to me what a difference our research and innovation community is making to the people of Scotland.
Chair: On that very positive note, we will leave it there this afternoon. Thank you very much for coming down for this rearranged session. I think you said that you might get back to us on a couple of things, so we will look forward to receiving that from both of you.