Chapter 34

Cross-Departmental Review of science research

Scope

This review examined whether science supported by public funds is being conducted and exploited to the benefit of the economy at large. The focus was on how best to deploy DTI and DfEE funds to secure a viable knowledge base - particularly in the universities - and to forge university/business links. The review also looked at science commissioned by various Government departments to support policy and service delivery.

Background

34.1 Science and technology are the vital underpinning of a successful economy. Comparative advantage will increasingly lie in the generation of knowledge and its exploitation to create innovation. The level of research in the economy is a crucial determinant of innovation and the Government recognised this in its major settlement for science in the 1998 Comprehensive Spending Review. The Government has since taken steps to improve the commercialisation of science research and boost firms' investment in research and development.

Outcomes

34.2 The Government has produced a major new package to enhance the UK's world-leading position in science. Over the next three years, this package will deliver the following outcomes:

modernise UK science laboratories, and restore a major investment backlog, with a two year £1 billion Science Research Investment Fund over 2002-03 and 2003-04, including £225 million from the Wellcome Trust;
enhance research in key areas that will shape life and the economy in the 21st century - like understanding the human genome and developing the next generation of e-science;
enhance universities' role as drivers of growth in the knowledge economy with extra resources to commercialise research, transfer knowledge and expertise, and train scientific entrepreneurs;
secure the vital flow of science and engineering PhD students in an increasingly competitive labour market by raising the basic grant to £9,000 per annum by 2003; and
underline the importance of research in modernising public service delivery, with anticipated real terms rises in the biggest civil R&D programmes - those of the Ministry of Agriculture, Fisheries and Food, the Department of Health and the Department of Environment, Transport and the Regions.

34.3 The Government will also pursue modernising reforms including:

removing any biases against the funding of applied and patented research; and
incentivising universities to forge closer links with business and the community by requiring them to find £1 for every £3 of taxpayers' money invested in research infrastructure, and encouraging them to provide incubators for new enterprises.

34.4 Key PSA targets associated with this package are set out in Box 34.1.

Box 34.1: Key PSA targets - science research

Improve the overall international ranking of the UK's science and engineering base, as measured by international measures of quality, cost-effectiveness and relevance.
Increase the level of exploitation of technological knowledge derived from the science and engineering base, as demonstrated by a significant rise in the proportion of innovating businesses citing such sources.

Spending plans

34.5 To fund these plans, combined DTI and DfEE spending on science research will increase at a real average annual rate of 5.4 per cent over the next three years. The Government's spending plans for science and research are summarised in Table 34.1 below. These increases are taken into account in the departmental spending totals for DTI and DfEE set out in Section III.

Table 34.1: Key figures

£ million
	2000-01	2001-02	2002- 03	2003-04
Spending on science and research	2,620	2,846	3,033	3,306
of which: DTI Science budget	1,638	1,776	1,920	2,165
DFEE: Higher Education Funding Council
for England*	982	1,070	1,113	1,141