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House of Lords Hansard
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Science Research Funding in Universities (Science and Technology Committee Report)
09 September 2020
Volume 805

Motion to Take Note

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That the Grand Committee takes note of the Report from the Science and Technology Committee Science research funding in universities (4th Report, Session 2017–19, HL Paper 409).

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My Lords, I declare my associations now and in the past with academic and professional organisations, all of which are in the register of interests.

It is with great pleasure that I open this debate on science research funding in universities. I thank all noble Lords most sincerely for taking part. I am pleased to see that the desk clerk today is Donna Davidson. She was the Science and Technology Committee clerk at the time of the inquiry and a key person in writing the report. I take this opportunity to thank her for all her work during her tenure. My thanks go also to: Dr Amy Creese, our policy analyst; Cerise Burnett-Stuart, the committee assistant; and Dr Simon Cran-McGreehin, our current committee clerk, who joined us in the latter part of the inquiry. I am indebted to all the committee members, whether they are able to speak today or not, for their support.

I am pleased to see that the Minister responding to the debate is the noble Lord, Lord Callanan. To avoid him getting withdrawal symptoms, I promise that I will not finish my speech without mentioning Brexit.

My task today is to introduce the findings of our report but, as it has been a year since we published it, it may be right also to consider the effect that government policies on science funding will have on research and innovation in the United Kingdom going forward.

We launched our inquiry on science research funding in universities in May 2019. During it, the Augar review of higher education was published. UK universities are recognised internationally as the best place to conduct scientific research. Traditionally, the dual funding system for research has worked well but, over time, its flaws have begun to have a negative impact. For example, quality-related, or QR, funding has stagnated and fallen by more than 12% since 2010. This has come at the same time as a decrease in the percentage of cost recovery for research from funding councils and charities, which has added to the problem.

The committee looked at the recommendations of the Augar report in the context of research funding in universities. We were more than surprised to hear that, in making its recommendations, the review had not considered the impact they would have on universities’ ability to conduct science research—one of the key roles of universities. Furthermore, it did not think it within its remit to do so.

As the Government prepare their response to the Augar review as part of their spending review, they should be in no doubt that, if Augar recommendations are implemented, it will seriously affect the Government’s ambition to make UK a science superpower. I could not put it more strongly. Stagnation in QR funding for over a decade, a decrease in full economic costs to 70% from funders and a shortfall in support funding from government in relation to charities’ research grants leaves universities to have to cross-subsidise costs, mainly from international student fees. Added to these ongoing funding issues, there is now the significant and unknown effect of Covid-19 on university finances and research.

In 2018-19, universities reported a £4.5 billion shortfall between income and costs of research. Universities predict a reduction in the number of international students; if that happens, it will further add to financial pressures. Also predicted is a possible shortfall of approximately £790 million from other streams of income. The effect of temporary removal of controls on student numbers this year may further add to costs. Other effects of Covid-19 on UK research have included restrictions on research activities, closure of labs, et cetera, as a result of lockdown, and also reduced numbers of postgraduate students coming from overseas.

Medical charities with a shortfall in their income have cut or cancelled 18% of their research funding, amounting to hundreds of millions of pounds. The biggest threat to universities from the reduction in funding is a reduction in research talent. Early-career researchers are particularly likely to be affected. Research students’ funding is funded only to 45% of costs, resulting in a £1.5 billion deficit. Cuts to charity research funding are likely to disadvantage early-career researchers such as PhD students, postdocs and research fellows. Covid-19 clearly is going to have a significant effect, and no one knows for how long.

I turn to the government response, which in some terms is positive and is much appreciated, as far as it goes. The Government have provided short-term funding of £100 million in QR-related funding that is brought forward. A research sustainability task force engaging with the university sector to discuss science research and issues is most welcome. The £280 million sustaining university excellence fund—the so-called SURE fund—is another initiative. That is all good, but how do you plug billions of pounds-worth of shortfall? Some questions remain about the long-term level of support.

In December 2019, the Government announced their ambition to make the UK a science superpower. The recent research and development road map reaffirmed the pledge to increase R&D spending to £22 billion by 2024-25. By the way, our report identified a key issue of the large number of scientists who will be needed with this scale of increase in R&D. Estimates suggest that an increase of as much as 50% in the numbers of research scientists and technicians will be needed; in the short term, this could be met only by international mobility. The government R&D road map sets out the framework, but now it needs the Government to engage with the university sector to get the details right.

I said that I would not disappoint the Minister by not mentioning Brexit. Agreeing a sensible deal and associating UK with the Horizon Europe programme is important. It will enable the UK, a leading science research country in Europe, to continue and enhance the strong links with academia and the private sector, not only with other European counties but more globally. If the UK fails to secure association with Horizon Europe, it will be necessary to have schemes focused on international partnerships, with bottom-up, excellence-based frontier research put in place, with funding and the ability to tap into Horizon Europe on a third-country basis. Is the Minister able to comment?

Putting this all together, I have the following questions for the Minister. What steps will the Government take to improve the financial resilience of university-based research and innovation? Will this include addressing the shortfall in funder contribution to full costs and short-term and long-term adjustment to QR funding? When do the Government intend to publish the terms and conditions of the SURE fund? What involvement will the university sector have in developing the R&D road map? What involvement will the universities have in the Government’s place-based strategy for research? I look forward to the Minister’s response and very keenly look forward to listening to the speeches of other noble Lords. I beg to move.

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My Lords, I declare an interest as chairman of the Royal Veterinary College and, until recently, chancellor of Cranfield University. I was very pleased to be a member of the Science and Technology Committee working on this report and I thank the noble Lord, Lord Patel, for his excellent chairmanship. However, this report is almost ancient history; it was published over a year ago, and much has changed since the government response in October.

Research, development and innovation, building on the excellence of science in UK universities, has always been incredibly important, and is even more so now, when we need urgent solutions to serious problems—Covid, climate change, security and, most particularly, rebuilding our economy post Covid. The Government have recognised this in the R&D road map, as the noble Lord mentioned, with its commitment to public investment reaching £22 billion per year by 2024-25. But this would take it only to about 0.8% of GDP; the target of spending 2.4% of GDP by 2027 will need big changes to bring in institutional and business investment in research. I hope that the Minister can tell us how the Government intend to do this. The road map has high ambitions, which are much to be welcomed, but it is really still a series of asking absolutely the right questions without yet filling in the answers. We need to see the colour of the money, particularly in the spending review.

Universities are still experiencing many of the problems that we outlined in our report. University research is cross-subsidised from other sources, with a particular one being overseas students’ fees. It remains to be seen, as we will do very shortly, whether those students will turn up this year—or, indeed, possibly next.

As the noble Lord, Lord Patel, outlined, Brexit puts at risk not only access to European funding sources such as Horizon Europe. The Government have committed to meet any funding shortfalls, but Horizon Europe is as vital for open and free collaborations with the brightest and best across Europe as it is about the money. The Government must land an association agreement with Horizon Europe. The changes that the Government have offered to the visa system for researchers still leave visas as a potential barrier, due to their high cost.

I hope upon hope that there is one silver lining in Covid—that it has killed Augar. I mean the report, not the man; at least, I think I mean the report not the man but, when he gave evidence to the Committee, I felt decidedly homicidal towards him. Funding further education properly is important for our economic future; the last thing that hard-hit universities need right now is for the funding of further education to face a reduction in student fees. Can the Minister assure us that this frankly bonkers idea is now officially dead?

I turn to the dual funding system, which must be preserved, with a reversal of the quality-related funding stagnation of the last 10 years that the noble Lord, Lord Patel, talked about. This is particularly important, not only because of the funding levels but because dual funding gives universities important flexibility in creating research collaborations and developing research infrastructure. That ability should not be eroded.

Lastly, we must find ways of ensuring that the fruits of UK university and other research benefit the UK. All too often, as was shown by a previous report from the Science and Technology Committee, innovations researched and developed in the UK are snapped up and grown up by US investors and leave these shores. This is one of the things that we ought to learn about from the US. Can we not import that, rather than chlorine-washed chicken?

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My Lords, I declare an interest as chancellor of Cardiff University, and my husband is part of a research team which receives Research Council funding. I congratulate the noble Lord, Lord Patel, and the committee on an excellent and very clear report. I am particularly pleased by its perceptive analysis of the dangers inherent in the recommendations of the Augar review, where there was a strong risk of a race to the bottom. The problem is that this report is from a different world: a pre-Covid world, in which we still expected to get an agreement with the EU for a post-Brexit deal.

So the problems that this report sets out are compounded and magnified, first, by the lack of any sign of an agreement with the EU—for instance, on our future involvement in Erasmus or in Horizon Europe. Given the lack of progress and the short time left for a solution, the lack of firm plans from government on replacement funding is already putting UK research on the back foot, as it takes a long time to plan and work up a research proposal. That cannot be done until you know the terms of the funding you need to apply for. Eleven per cent of research funds have come from the EU—enough to create a major gap—and most of these projects were by definition international collaborations, providing kudos and intellectual reach for our universities.

Secondly, there is the massive impact of Covid, which is serious for universities for several reasons. They use fees paid by foreign students to cross-subsidise their research, and this has been encouraged by successive Governments. We do not yet know how many foreign students will actually arrive to start courses this year, or return to complete them. The next month or so will tell, but it is very likely that there will be far fewer of them. Universities were already at an international disadvantage in attracting foreign students. The report quotes £1,200 for the cost of a visa for foreign students wanting to do a PhD here, compared with around £300 in Canada or Australia. Despite promised changes, there will still be huge costs.

I remind the Government that prior to the pandemic we were already struggling to maintain our international competitiveness and our reputation as an open and welcoming country, which has taken a huge knock as a result of the rhetoric surrounding the Brexit debate. As an aside, the A-level results fiasco has been an additional cost for universities, particularly those already struggling to balance their books.

On other sources of funding, charities have funded 15% of research over past years but they have been badly hit by the virus. Demand for their services have gone up but donations have gone down. Many charities have seen a big drop in donations. Four per cent of university research income comes from business, mainly big business—companies such as Rolls-Royce and Airbus. We all know what has happened to them during the pandemic. At a time when they are making thousands of workers redundant, they are unlikely to take up the slack left by our departure from the EU. So we rely on government as a source of funding, and that government funding has stagnated in recent years. The Government now have to take up that challenge, increase funding in real terms and fill the gaps left by the other traditional sources of funding. We cannot take our position at the head of world research for granted.

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My Lords, I am delighted to have the opportunity to contribute to this debate. I begin by declaring my interests, particularly as the chancellor of the University of Leicester, a visiting professor at King’s College, London, and a member of the board of UKRI. It really is an excellent report and I congratulate the noble Lord, Lord Patel, and the other members of the committee on it. Of course, this report appears already to have had an influence. When it was written, there was unhappiness that QR funding had not been increased; it has now been increased by almost £100 million. We have also had an excellent R&D road map, produced by my successor as Science Minister, Minister Solloway, which has been widely recognised as an important document identifying all the key issues facing our research system.

I would like to put three points to the Minister. First, there is an assumption in the widely used language of “top”, “leading” or “best” universities—the ones which tend to get the articles in the prestigious journals and score most highly on the REF—that they are the be-all and end-all of excellent research. We can be very proud of those universities, but if we are to get to 2.4% of GDP going on R&D and apply it, as several Members of the Committee have already said, we need a range of types of research and a range of types of institution. That includes the training of technicians—people who are expert in maintaining and innovating in the equipment that researchers use. It would therefore be a mistake to think that we can get anywhere near 2.4% if our research activities are concentrated in a small number of elite universities. The system as a whole needs to be healthy and well funded, with universities coming in many different shapes and sizes.

Secondly, I welcome the statements from the Government and No.10 about the importance of continuing to attract international talent. I fear that we have reached the point where the costs of our visas and, even more, the immigrant health surcharge will be a major barrier. Perhaps I can give just one example. A postdoc researcher with three dependants coming to work in the UK for three years would, given the proposed increase in the immigration health surcharge per person and their visa costs, over those three years face a total bill of approximately £9,900. A typical postdoc researcher might be earning £34,000, so 10% of his or her gross income would go on paying for visas and the NHS surcharge. This is therefore a barrier to the very job mobility and attraction of workers from overseas which the Government rightly call for.

Thirdly and finally, where do we go on our ODA spending? There is a lively debate about this but, even without any change to the 0.7% target, if GDP falls that 0.7% will be a percentage of a smaller sum. There must inevitably be a debate on priorities. One of my frustrations in my time was that the DfID culture was very much to focus on the poorest people in the poorest countries. That is admirable, but it cannot be the full story of ODA expenditure. I was very aware of the resentment among low to middle-income countries, such as South Africa and India, which no longer passed the DfID test as being the poorest countries and therefore faced the loss of any ODA funding. Along with the then Foreign Secretary, I was able to go to those countries and say, “You may no longer be getting DfID money, but we are now offering you a partnership in research and development”. I hope that offer will be retained and very much hope that the Minister will be able to acknowledge these points in his wind-up.

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My Lords, it is always a privilege to speak after my noble friend Lord Willetts, who is a source of wisdom, experience and intellectual authority. I strongly agree with him on the ODA point, having been a PPS at the ODA with my noble friend Lord Patten of Barnes when Geoffrey Howe was Foreign Secretary and it was part of the Foreign and Commonwealth Office. In my opinion, it had a great deal of merit.

Let me congratulate most warmly the noble Lord, Lord Patel, and the distinguished Science and Technology Committee. They add real authority and integrity to scientific debates in this place. I need to declare my interests. For the past 14 years I have been chancellor of the University of Hull, in which I take enormous pride. I took over from Lord Armstrong of Ilminster. For 30 years I have been a governor or an emeritus governor of the London School of Economics. For many years I was a pro-chancellor at Surrey.

Perhaps I should also declare that I have always been strongly under the influence of my noble and close kinsman, the noble Lord, Lord Hunt of Chesterton. All families have their snobberies. When I became a Cabinet Minister—I think only the eighth woman—my family members were pleased and congratulated me. But when the noble Lord, Lord Hunt of Chesterton, became a fellow of the Royal Society—the third in the family to do so—there was jubilation, waving of flags and massive celebration. It was evident that being a fellow of the Royal Society was very much more significant than being a Cabinet Minister—so there you go.

As has been said, this report was published a long time ago, and the response by the right honourable Chris Skidmore MP, again, was just on a year ago, and much has happened in that time. I hope that we can all still agree with the Minister’s closing points in his response then that the UK remains committed to creating mutually beneficial opportunities for research collaboration, including in our universities, with both our European and international partners.

Since then, as has been said, the tectonic plates have been shifting. Covid-19 has had a profound effect, but it has also generated a showcasing of the quality of British science, whether in research towards a vaccine or in providing critical recommendations for quarantining and lockdown. So I hope that it has reinforced the public and media appetite for promoting research and innovation.

A key theme of my early work was trying to make sure that the London teaching hospitals were closely related to the medical schools and their local universities. Each time the noble Lord, Lord Oxburgh, who was then rector of Imperial, made another step forward in his research or innovation programme, he would write and say that closing hospitals is never popular for a Minister, but that if I had not done it they would not have been able to make the progress that they had made. I took great comfort in this, and also at that time worked most happily with the chair of the committee, the noble Lord, Lord Patel.

As a social scientist, let me continue to reinforce the importance of social science. The University of Hull is not one of the great, elite global universities but is always hugely committed to and serious about specific areas of research. It is world leading in applied health research, incorporating wider areas such as education, criminology and environmental sciences. Its insights are extraordinarily important in the development of policy formation. Hull, like so many others, has had an excellent track record in EU research. With others, I ask the Minister to update us on the Government’s ongoing discussions with the EU concerning Horizon 2020. It really has been the generator of a vast amount of research, innovation and collaboration.

Collaboration is the hallmark of the best research. Professor Dame Nancy Rothwell, one of our most outstanding vice-chancellors, speaks in this month’s FST magazine about the importance of national and international collaboration, and I pay tribute to my noble friend Lord Willetts for his work as chairman.

Finally, I will say that, along with the responses we await on many subjects, the noble Baroness had unkind things to say about Dr Augar. More important perhaps is Dame Shirley Pearce’s independent review of the Teaching Excellence and Student Outcomes Framework. She and her team were commissioned by the former Secretary of State. There has been no response whatever for more than a year. It was a tremendous report, with an ONS survey and expert committees. It has been a gross discourtesy not to respond for more than a year. As we make our plans to go forward, there are many encouraging signs and there is more to do. We need a coherent road map if we are indeed to become the scientific superpower that the Government claim is our aim.

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My Lords, it is a pleasure for me to follow the noble Baroness, Lady Bottomley. I have been a follower of hers since we were under- graduates together and she said some very interesting things again today. I declare my interest as a former general secretary of the AUT and a Minister for some time for higher education, attending to issues of quality, and I have various fellowships from UK universities.

I too congratulate the noble Lord, Lord Patel, on his lucid and accurate introduction to an excellent committee report. Two issues flow from it that I will address briefly. The first, along with the noble Baronesses, Lady Bottomley and Lady Young, is the issue of co-operation. The EU joint research funding programme, Horizon Europe, has been an incredibly important feature of higher education in this country—as its likely successor will be next year. The Government have said frequently that they want to ensure that conditions are right. But I too ask the Minister, what possible reasons could there be not to do it—not to give the universities the confidence that we are not going to be ducking and diving in some kind of ideological thing about this?

It is about the money, of course, but even more it is about collaboration. It is about the culture of friendly co-operation and what I sometimes call the “mood music” of higher education. We are seeing it very strongly at the moment in the work that is being done on Covid-19. The best work is being done when people are working together and not relying on exceptionalism in their own countries. Sir Jeremy Farrar, the head of the Wellcome Trust, made this very point in articles during the week.

The second issue is of course the issue of funding—alongside the issue of retaining the independence of universities—some of which we committed ourselves to in 1997 in a UNESCO treaty that this country signed. I share with others the view that the Augar terms of reference were too narrow to provide a credible proposition for higher education. Whatever insights there might be into further education, it is a seriously inadequate report. Of course it would be desirable to see a decrease in the grip of student tuition fees on an early working life, and indeed on much of the working life, of people who are in debt. But there are no alternatives being expressed to meet the shortfall. The Science Committee is 100% right about this, and cross-subsidies are a poor model—but the question is bound to arise and I hope that the Minister will answer it. How will we make good these gaps?

The key to the Dearing report was essentially that those who benefit from higher education should contribute. Students benefit and they make a contribution. It is important that they make a similar contribution and that we do not penalise the more expensive subjects such as science, medicine and others. We do not want to disincentivise anybody. The public benefit. We have doctors, nurses and medical specialists—any number of people whom Mariana Mazzucato, in her excellent research work at University College, London, has described as the “significant public investment” in the sorts of specialties that we need.

Business also benefits. I argued with the then Sir Ron Dearing that a hypothecated bond might be a way of looking at another stream of funding for higher education. I understand that the Treasury does not like hypothecated bonds, and Sir Ron made the point that, if it was to be done, we should try to make sure that it was not the Government who did it but the private financial institutions. Be that as it may, the purpose was to create an entirely different stream that had to be applied to higher education.

I conclude by saying that we cannot leave this, I am sad to say, to the vice-chancellors. Their discussions have been very narrow and they have been focused on the competitive interests of their own universities, and that trumps everything else. There has also been a lack of imagination. But we are now in a position where we can look at alternatives, and indeed we must do so.

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My Lords, I will start by declaring not so much an interest as a prejudice, which is in favour of research in STEM subjects —given that I am a physicist and former university researcher myself.

In my subsequent career as a patent attorney, I came face to face with the inability of our universities to build on technical developments that came from their research. In a country that prides itself on financial services and capital markets—something that has occupied me for the last 15 years of my career—we are still broadly incapable of finding the domestic investment that means innovation can get much beyond start-up before it is sold on to foreign companies. That is not just my sentiment—it was said by the head of Cambridge Enterprise, and similarly just now by the noble Baroness, Lady Young.

No doubt such buyout counts as “foreign direct investment”, just as takeover of our companies does, but it does not retain control of profits or allow the scale-up in British industry that is so desired in numerous policy statements.

We rightly flatter ourselves on our university research but, until we transfer the 15% of most highly cited papers into 15% of the world’s most productive technology, we are failing. We can reap only what we sow, which means that until the industrial strategy White Paper target of 2.4% of GDP being spent on R&D happens, we waste potential economic benefit and end up paying to buy back our own innovation. It certainly flows in the wrong direction not to have quality-related funding that reliably keeps up so that the true economic costs of research are covered. The various impacts of Brexit will also need addressing.

Right now, our universities are under the threat of reduced income as the number of international students falls. As the committee’s report explains, it would be very damaging if the Augar review were cherry-picked for a headline of reducing the cap on student loans without correspondingly increasing the government teaching grant, the full package of which is not Treasury-friendly.

The Economic Affairs Committee, of which I am a member, had a jolly good stab at unravelling the intricacies of student loan financing in its 2018 report, Treating Students Fairly: The Economics of Post-School Education. Giving students value for money and not treating tuition fees as cash cows was a primary concern. A squeeze on university finances would push that in the wrong direction and away from the more expensive STEM subjects that the economy requires.

The committee also proposed removing the various fictions and anxieties surrounding student loans—my paraphrase—by lowering interest rates and removing the deferred recognition of loan losses used in the national accounts, which differs from international corporate norms—a correction which has now been made. So, if a headline student debt cut is needed, go for the interest rate: it causes alarm and is unfair, yet significantly adds to the amount that is not eventually repaid, serving little purpose now other than appearing as a loan loss in the national accounts.

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Our research universities are major assets because of the collective expertise of their faculties and the consequent quality of the graduates they feed into all walks of life. They are a seedbed for new ideas, some of which have major potential impact, but our top institutions will not retain their standing unless they continue to attract top talent from this country and abroad. Some nerds—I am one of them—will become researchers come what may but a world-class university cannot survive on just these weirdos. It must attract a share of ambitious young people with flexible talent—the kind who are savvy about their options and increasingly associate academia with uncertain prospects, bureaucracy and undue financial sacrifices, as measured by this report.

Even if we continue to generate 10% of the world’s best science, 90% of clever new ideas still germinate elsewhere, so we should not overfocus. The system as a whole must retain enough across-the-board expertise to sustain a “watching brief” across all global science, and thereby seize on a new idea from anywhere and run with it.

Achieving the social and economic benefits of research is a prolonged process. The inventors of lasers in the 1960s used ideas that Einstein had developed decades earlier; they could not themselves foresee that their invention would be used in eye surgery and in DVDs. Likewise, the pay-offs from, for instance, quantum computing and graphene still lie ahead.

Research universities are not optimised to spearhead long-term R&D, especially when they are constrained by perverse incentives such as the REF. That is why it is good that they are embedded in an ecosystem of small companies, NGOs and so on; that is why the catapult centres were set up. Government research establishments provide, in some areas, valuable long-term programmes. Indeed, such establishments already exist for fusion research, biomedicine and environmental science, but we need more. For instance, the new Faraday Institution for battery research—a welcome step—could be the nucleus of a larger venture, meshing public and private funds and encompassing other energy technologies.

There is an especially compelling case for prioritising energy R&D. Without innovation, we will not meet our 2050 net-zero target, but that in itself cuts global emissions by less than 2%. It is more important that these innovations could have a benign multiplier effect and perhaps accelerate the developing world’s efforts to leapfrog to clean energy. Then—I suspect the noble Lord, Lord Willetts, would approve of this—we would reduce global emissions by far more than 2% and help the developing world.

Likewise, our leadership in plant science could facilitate the switch to the sustainably intensive agriculture that is needed to feed the world’s 9 billion people by 2050. It is hard to envisage a more inspiring challenge for young scientists than providing food and energy for the developing world. We need to ensure that these scientists are educated, motivated and supported. Our schools, universities, and high-tech businesses—supplemented by national laboratories—must all match the international best if we are to prosper.

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My Lords, I am delighted to have the chance to contribute to this debate. There are so many things in this report. I really want to speak about the disastrous impact of the dysfunctional system of tuition fees, the impact of Brexit and the failure to resolve so many relevant issues as the Brexit transition period comes to an end, many of which are clearly highlighted in this report and, in the year since, have only become more pressing.

What I have chosen to focus on, however, is the scope and approach of the whole report. I understand that it is the Science and Technology Committee, and that this was a report about science research. A limited scope is therefore, on one level, fair enough, but what is lacking in this report is even a hint of understanding that to assume that “science” can be walled off as a separate area of study, relying on test tubes and instruments rather than being integrated as part of systems thinking about the goals of the whole of society, is disturbing. I am also very concerned to see this in government thinking often. I am glad that the noble Baroness, Lady Bottomley of Nettlestone, referred to the excellent social science at the University of Hull—something I encounter regularly as a resident of the region.

We hear some rhetoric from government and official sources about the need for systems thinking, the removal of silos and importance of cross-disciplinary research, but everything I hear from researchers and academics on the ground is that it is just that: purely rhetoric. I am told time and again that is very hard to get funding for truly cross-disciplinary work and get full professional credit for it.

I encounter many in “science” who treat the economic, social, cultural and political environment as a given—the permanent, unchanging reality in which they have to work—rather than as a constantly shifting landscape where they need to work with economists, sociologists, political scientists and many others so that they can understand the interaction of their activities with broader society. That limits and damages the quality of their work and its effects.

Excellent work is being done in the UK in some of these areas. Some that I have encountered include the Grantham Centre for Sustainable Futures at the University of Sheffield, the Centre of Understanding of Sustainable Prosperity at the University of Surrey and the sadly discontinued Centre for Research into Economic and Socio-Cultural Change, which did brilliant work on everything from care homes to pig farming. There are also independent organisations such as Forum for the Future. But when I look around the world, leadership chiefly rests elsewhere. One example of the kind of work we need far more of is that done by the International Institute for Applied Systems Analysis in Vienna.

What does this lack of systems thinking mean in practical terms? With the Agriculture Bill before the House, that is a good area to focus on. A very useful Food Ethics Council research paper reports that the direction of research funding has remained almost unchanged for 20 years, despite the huge global shifts in thinking about agriculture, particularly the importance of soils, agroecology and systems thinking. There is an “obsessive focus on wheat” rather than crop diversity, which could feed into a healthier food system, centred particularly on fruit and vegetables.

The UK is not on track, as the world is not, to meet any of the sustainable development goals to which it signed up. At the heart of the goals, their whole structure is the understanding that we operate in a complex, chaotic, shock-ridden world that needs to be thought about holistically, not in silos. I hope this will be taken as a constructive contribution and I suggest to the committee that it turns serious attention to these issues. I ask the Minister to address these issues on this or a future occasion.

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My Lords, I too congratulate the noble Lord, Lord Patel, and other colleagues on a report that, even before we have debated it here, has impacted government thinking in this area. I declare my interests as detailed in the register, particularly as pro-vice-chancellor of the University of Bolton, visiting professor at St Mary’s University, Twickenham, an adviser to the Bridge Initiative at Georgetown and a member of the advisory board of the Glynn Institute at the Australian Catholic University.

I will particularly focus on chapter 3 of the report on the findings and comments relating to the Augar review, and on the changes proposed by the review as commented on in the report. I am not sure whether the review is still supported by the current Government but, in the light of the issues raised in the report, I will speak to these two issues: the proposed way in which we determine the value of a university education, with reference to its social and economic outcomes; and the proposals for future funding.

Can my noble friend detail the Government’s approach to the value placed on a course, and indeed on an individual university? When the latest figures put the BAME attainment gap at around 13%, where white pupils and BAME pupils entering a university at the same time and who attain the same degrees achieve markedly different outcomes, and where the Government’s own race disparity audit identified a pay gap post education, how can we accurately assess the value of specific subjects and outcomes when the system has a level of inequality, irrespective of subjects, for a large and growing cohort of our undergraduates?

The pupil premium, introduced in 2011, was a way that the coalition Government, of which I was a part, implemented a levelling-up agenda long before it became a much-used catchphrase. The premium and the various levels of support given to schools as part of it acknowledged disadvantage and recognised that additional funding goes some way to help institutions support those who face additional barriers and challenges. Yet, the review appears to suggest exactly the opposite: a decrease in funding, described by some as a “pupil penalty”.

On my second point, there is a lack of clarity on the dual aspect of the review’s recommendations, namely that a new cap of £7,500 would be accompanied by an increase in government funding. Various proposals had been floated about how the gaps could be plugged. Some of them have been mentioned today, such as increasing the international student intake. However, limiting capacity for domestic students by increasing international students would impact on social mobility, a point made in the report, which argues that due to the funding gap and the financial consequences that a decrease in tuition fees would create:

“The immediate casualties … will … be widening-participation programmes”—

the very programmes the Government seek to support as part of their levelling-up agenda.

I am afraid that the review did not focus on the overall way in which institutions are run, particularly where students’ needs, whether because of background, because they are mature students with dependents or due to complex health and well-being needs, mean that the cost to provide the overall educational experience and support is more than the precise measurement of a specific course’s delivery cost. As the report cites, even in the report done by KPMG and commissioned by the Government, the baseline costs of a course exceed the proposed Augar cap. I wholeheartedly support the report’s finding that the review’s recommended process of attributing value to a subject is far from straightforward and will be fraught with difficulties. Could my noble friend confirm the status of the Augar review and the Government’s current thinking on the review’s proposed recommendations?

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My Lords, I declare my interests as set out in the register. I am pleased to have the opportunity to consider this report, which sets out so succinctly the issues that need to be addressed to sustain the UK’s international excellence in research. I would be remiss not to compliment the committee on the clarity of the report, which starkly highlights the dilemma facing our universities in delivering the success of the UK’s research base.

It has taken some time to get here, as other noble Lords have said—the report was published in August last year—but given what has happened in the interim, this is an opportune moment to seek to influence the Government’s thinking in advance of the spending review in a couple of months’ time. I pay tribute to the determination of the committee’s chair, the noble Lord, Lord Patel, in pressing for time for this debate.

The report makes it clear that the UK is home to some of the world’s most respected researchers and that our universities are recognised globally as some of the best places to conduct scientific research. In 2017, the Government recognised this in their industrial strategy White Paper by setting a target of investing 2.4% of GDP in research and development by 2027—a big ask.

The report helpfully reminds us that 62% of research in UK HEIs is publicly funded. It also reminds us that this publicly funded research is, in fact, underfunded and cross-subsidised by the entrepreneurial success of each university, including the recruitment of international students. The financial and social consequences of Covid-19 have hit universities hard and some of these sources have dried up. The Government have promised to increase spending on research in the UK. The package recently announced by the Government is a response in part to the decline in international students. The overall decline is not yet clear, but can the Minister assure us that the 80% support offered will be sufficient to fill the gap?

In setting the conditions for the distribution of the package, will the Government ensure flexibility so that universities can allocate funds where they think best, in line with local needs and an institution’s priorities? I echo the comments of the noble Lord, Lord Willetts, on the breadth of research in our universities. I urge the Government to boost collaboration with local partners, such as local government, local businesses and public services, in which so many of our universities excel.

A major issue highlighted by the report is the need to address the falling full economic cost return on research. I echo others in asking the Minister what steps the Government will take to improve the financial resilience of university-based research and innovation activities. Will they assist in persuading funders to increase the contribution they make to the cost of research? What plans do they have to halt the outflow of research talent as universities are forced to end research projects? How will the Government help to address the loss of early career researchers, who are so fundamental to maintaining the stream of long-term research?

I will make one final point on the future of our links with the European Research Council, in particular its funding for discovery research, which is so important for furthering the UK’s status as a science and technology superpower. Access to the ERC requires full association, as opposed to third-country status, so the current apparent impasse on the wider negotiations is worrying. I realise that the negotiations about full association with Horizon Europe are separate from the UK’s wider negotiations, but can the Minister assure the Committee that our negotiators will seek to ensure that the wider challenges with the UK-EU negotiations will not lead to tensions that might endanger our access to the ERC?

Research and innovation are essential to diversify our economy and drive growth and productivity. Now more than ever, could be Government forgive themselves if they did not heed the clear messages in this report?

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My Lords, I was not a member of the Science and Technology Committee, but I read the report and the Government’s reply with great interest.

My first concern relates to the availability of public money for research. Cross-subsidising research budgets by individual universities could never be a long-term solution to pressure on those budgets. There is now, at least in theory, a welcome commitment by the Government to increase research funding to 2.4% of GDP by 2027. The problem is that if GDP declines, so does research funding. This is unwise, because if the economy is stalling, investment in research becomes increasingly important to drive future growth. The GDP figure to be used for 2027 should be the 2019-20 GDP figure—before the coronavirus pandemic began—plus annual inflation. That seems a reasonable way of approaching the problem and it would give universities greater clarity on future funding streams.

This takes me to Horizon funding. A no-deal Brexit will imperil our leadership status in global research because we will not be part of Horizon Europe, worth £85 billion in 2021-2027. I cannot understand why the Government have failed to show clearer leadership on this vital issue. Associate status is a weak position to be in, and to secure awards will require us to contribute to the pool anyway. We should note that in Horizon 2020’s proof of concept awards, UK applicants secured 13 awards, the largest number of grants. In the current Horizon round, the UK has secured a fifth of the awards.

This is clearly of enormous benefit to our spending on research, the research status of our universities and the geographical areas that they are in. The Government rightly are committed to a levelling-up agenda across the whole country. Many universities play a central role in their local and regional economies, notably in jobs, research and investment. The Government’s industrial strategy talked of the importance of place and it is important to remember that this relates directly to the levelling-up agenda. I do not argue that research money should be spread thinly, because investment must relate to specific sectors and to excellence, but it is the job of a Government to lead research capacity building across the whole country.

Last week, the annual world rankings of universities were published in Times Higher Education. They showed a drop in the positions of some UK universities. The comparative improvement of some non-UK universities is an obvious reason, but we should not underestimate the importance of investing to maintain our world rankings.

In the early summer, London Economics reported that the five north-east universities could lose £118 million as a result of a predicted downturn in student numbers, both domestic and overseas, caused by coronavirus. Things may yet turn out a bit less severe, but the importance of the local income generated from students should not be underestimated, and nor should Horizon income, which in my own city of Newcastle-upon-Tyne alone has generated some £90 million over the past seven years.

I look forward to hearing the Government’s proposals for solving the problems that the committee has so clearly identified.

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My Lords, I declare my interests as I hold an honorary professorship at Cardiff University and chair the board of Cardiff Metropolitan University, which has climbed 41 places in this year’s Guardian University Guide and was the highest-ranked post-1992 university in the 2014 REF. I congratulate my noble friend Lord Patel on his introduction to this important debate on his report.

International student income has supported research intensive institutions, but Covid-19 puts this at great risk. Tuition fees are essential. Cuts will decrease research activity and student exposure to it. Understanding how to experiment and innovate will be the driver of economic survival for the UK.

The Government’s proposed UK advanced research projects agency could bolster responsive investigations, promote interdisciplinary high-quality research in higher risk novel lines of inquiry and boost impact through its non-bureaucratic programme approach. To support the Government’s levelling-up agenda, demonstrate UK commitment and avoid culture capture, Cardiff could welcome hosting the agency.

Quality-related research—QR—funding is essential in developing and sustaining research and innovation centres. Examples at Cardiff Met, a small post-1992 university, include the food industry centre and the product design research centre, designing from concept to production. In Russell group universities such as Cardiff, QR funding sustains infrastructure, particularly as UK Research and Innovation funding of university research has gradually decreased relative to full economic costs over recent years, so QR funding must be maintained and increased.

Brexit means that we now need a domestic alternative to Horizon Europe, the ERC, Marie Curie and other funds. Can the Minister assure us that the new discovery fund is intended to replace these sources in the event of no deal, with no time gap between when European funding ends and domestic replacement starts in the event of a no-deal Brexit? Can he also confirm that the UK shared prosperity fund will match in real terms the EU and UK funding streams it replaces and be allocated to narrow prosperity differences across the UK, not only in England, with framework-agreed guidelines that ensure the devolved nations can target areas of strength in university research?

Cardiff has strong regional collaborations: the GW4 Alliance, with its unique assets, the data innovation accelerator, using data assets, and the world’s first semiconductor cluster in CSconnected. Cardiff University’s ambitious “moonshot” approach in translational neuroscience brings together research strengths in genetics, genomics and brain research imaging. The net-zero regional collaboration aims at swift socioeconomic transformations, R&D growth and increasing business investment. Major projects include stability of the national grid, the built environment and equitable energy systems, yet these will all slip if we are left behind in new government funding sources.

After the hit of Covid, which decimated charity research funding, we must focus on rebuilding the economy and reshaping society through five key priority areas: developing a new approach to deliver place- based economic growth; turbocharging investment in fundamental research; launching strategic science-based missions for high-risk, high-return; strengthening the high-level skills talent pipeline; and maximising opportunities for global collaboration. To achieve any of this means heeding not only the recommendations of the Science and Technology Committee, but also noble Lords’ comments today.

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My Lords, I welcome this debate on the important report from the committee. It is a wide-ranging report covering a large area, so I will confine my remarks to two elements.

First, I refer to the useful co-operation that has existed for many years between our academic institutions and those in the EU, and programmes such as Erasmus, Erasmus+, Horizon 2020—from which we had considerable billions of euros in support—and next, the Horizon Europe programme, which has been referred to already and will be very highly funded in Europe. The exchange of expertise, ideas and student experiences between nations across the continent has been a great help, especially in the field of scientific research and development. The Government have indicated their strong intention to seek an ongoing relationship to the EU programmes. Perhaps the Minister can update us on exactly how that aim is progressing.

Not only have we benefited greatly from the various EU programmes, which we get back substantially more from than we pay in, but we have done well from our joint research work with other EU institutions and exchanges of students and research fellows from neighbouring states. How we maintain this momentum is of great concern to vice-chancellors across the UK.

There are also genuine concerns about the Immigration Rules and the funding position post-Brexit. We must continue to attract the best researchers and research students from Europe to remain in the forefront of international work in many scientific fields. Currently, non-UK EU citizens still provide a high proportion of our academic workforce. As has been referred to already, it is likely that we are going to lose a lot of these people after December, especially if our new Immigration Rules make us less attractive.

As the committee’s report suggested, in order to meet the Government’s desire to see investment in R&D rise to 2.4% of GDP by 2027, and ultimately to 3% to retain a world-leading position, we will need to increase the number of those involved in research by at least 50%. This can be achieved only by greater international exchanges and a focus on the appropriate subject teaching and encouragement in our schools, as well as academic institutions.

The second area of interest to me is that of ongoing funding in more general terms. The committee heard that the division in funding sources was roughly two-thirds from public funds to one-third from other sources—interestingly, only 4% was from UK corporate entities. In view of the vital benefit to our businesses and the overall effect for UK plc of much of our sharp-end higher research projects, surely we could and should look for a much bigger contribution from businesses. The University of Cambridge fills its research costs gap partly from philanthropy, but not all universities are as well-endowed as Cambridge. Also, as the report states, because of complex cross-funding, many institutions do not separately ring-fence funds for research.

There are some notable relationships between businesses and higher academia, often established to mutual advantage, but much research cannot be so polarised. Often, more speculative work ultimately produces results—sometimes world-beating—which become available for wider benefit. It should be possible for government intervention to produce a fiscal climate that would encourage greater investment in research by our business community and help to fill the current shortfall experienced by the institutions, especially in these pressured times. Many people respect and even envy the UK’s scientific research. We must do our best to try to keep that leading position.

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My Lords, I too congratulate the noble Lord, Lord Patel, and his committee on producing the excellent report. It is not his fault that it is now more than one year old. So much has happened since 2019 and we now have many new issues crowding in on us.

I want to focus my remarks on the devastating impact of Covid-19 on the medical charity world and how that now affects our capacity to undertake much important medical research. I express my interests as a past professor of medicine, as past scientific adviser—for almost 20 years—to the Association of Medical Research Charities and now as a trustee of a number of medical research charities, including the Wolfson Foundation. I should say that the Wolfson Foundation is relatively protected because it is an endowed charity and is doing its best to be as flexible as possible. But among the other charities, a huge number are suffering the most. Among the biggest, Cancer Research UK, the British Heart Foundation, and Diabetes UK are suffering, but a large number of smaller charities are finding it even more difficult to keep supporting niche areas of research that are ill-supported from other sources. I fear that research into childhood leukaemias will suffer, as will that into mental illness, tuberous sclerosis and the many rare and congenital disorders that rely on a single source for research support.

The figures are frightening. The 150 member charities of the AMRC expect a 40% fall in income. They currently offer almost £2 billion of support for medical researcheach year—more than the Medical Research Council and National Institute for Health Research put together. They will have a shortfall of several hundred million pounds. Noble Lords can imagine the impact that will have if they recognise that charities support 17,000 research workers’ salaries. It is little wonder that universities are facing redundancies in their research staff and that over half the 1,300 clinical trials they support are being stopped or delayed. These are devastating figures and facts. The problems caused to university research are exacerbated by all the other pressures being borne in on them by Covid-19 and a potential no-deal Brexit. Research collaboration across Europe is being threatened, as we have heard, and the longer-term future of the Horizon Europe and Erasmus schemes is far from clear.

The prospect that the UK will be able to afford to fill the gap as we emerge from a Covid-induced depression is diminishing by the day. It is certainly encouraging that the Government produced a £250 million grant extension in June and some longer-term low-interest loans. However, that was when the Chancellor was distributing largesse like there was no tomorrow. Now tomorrow is looming and it is payback time, when the UK has a £2 trillion national debt and the prospects for longer-term support are receding.

It is therefore of interest that the AMRC is proposing a joint funding programme with the Government. It calculates that if each side contributes £310 million per annum in matched funding, it will go some way to filling the gap in medical research charity funding that seems inevitable during the next four or five years.Will the Minister give careful consideration to this proposal? Now is certainly the winter of discontent in our precious university research, unless we do something more to support it. Will healso tell us how the Government will encourage the international research collaboration that we will certainly need post-Brexit? What efforts are being made to remove barriers to joint research with such research-active countries as the USA, Singapore and Israel? I use the example of Israel with its remarkably innovative life sciences, where enhanced co-operation would give added value to research in both countries. As we lose European research support, we need to spread our net.

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As a member of the committee which produced the report, I pay tribute to the chairmanship of the noble Lord, Lord Patel. It was always fair, enthusiastic and intellectually rigorous. It had a light touch but nevertheless a strong hand. It was a pleasure to serve under him and with others on the committee. I declare my interests as a visiting professor at the City University and a senator of the University of St Gallen.

I wish to make only one point today about what I believe was the thrust of the whole report: that if government policy on science research funding in universities is to be successful, it must focus on making the case for its long-term benefits. I say this because the Government are under tremendous pressure to focus on the short term, because of Covid; so are universities. Clearly, the short term is important but the real benefits of investing in science research are long term, leading to increased productivity and sustained growth. They are crucial to job creation and prosperity for our children and grandchildren.

That is now abundantly clear, with scientific research being the basis of new technology and new ways of advancing healthcare, tackling climate change and making things—just think of lithium, graphite, new vaccines and electronic cars. As the noble Lord, Lord Rees, mentioned, these are also examples of fundamental research, which will raise productivity in a future decade. The report recognises that UK universities are some of the best in the world, but even those which are one rank below the best contain departments which are world class. We also have a tie-up between university research institutes and business, which provides a unique opportunity.

The report makes a strong case for increased funding. The Government have stated that they want to reach 2.4% of GDP by 2027. That is a huge aspiration. Raising a percentage point of GDP takes enormous commitment by government. At present, we are 11th among the European countries.

The report was published in 2019. Since then, universities have faced much greater uncertainty. Foreign students are a key source of income. The pensions deficit is huge for universities. In recent years, foreign students have subsidised research. The key test in terms of the Government’s commitment to universities will come in the October Budget and the economic review. We should all feel sympathy for Rishi Sunak, but what is needed at present is some sort of medium-term financial plan in the context of a long-running commitment. Only on that basis will universities feel that they can play a real part in contributing to future prosperity and jobs.

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My Lords, I must first declare an interest. It is a financial interest; I am not an eminent vice-chancellor or visiting professor. Two of my children—my son, Bertie, and my daughter, Clementine—are at university or are going to university. I mention this not just as a point of paternal pride that they have managed to do something I really am not intelligent enough to have managed myself, but because they are both studying mechanical engineering.

As a side point, despite the complete nightmare of the grading system, which seemed to cause particular problems for those taking sciences, my daughter has a place at Manchester. During the open day visits, it was clear from the people in the audience how we are failing at dealing with the gender gap in the STEM subjects. We should be looking at that.

I raise this as a financial issue because the report talks about differentiation in fee structures. It is a not inconsiderable amount considering that many students will come out the other end with considerable debt. It is also an issue because many of those debts are met by families. For the poorest students, that will be a real issue. It will be an issue of whether they can take a STEM subject or will have to look for a humanities course at a cheaper price.

Universities are clearly caught between a rock and a hard place on this, but I found the report an interesting example of just how schizophrenic universities are. The problem is, are they there for the teaching of students or are they bodies for the creation of new knowledge? They cover both, obviously, but universities’ finances are based far more on the first, although they are subsidised by the second.

I will not go into research, because that has already been covered a great deal. It is something of a perennial. I remember being a member of the Science and Technology Committee when it looked at this subject back in 1993. But obviously we are living in a new age now.

I do not believe that the Minister will be able to answer any questions on Brexit, because we seem to be heading straight for a no-deal situation where all bets are off, but I will say that we are in a new world not just because of Covid but because, as my son’s course has shown, almost all the courses and lecture notes are now online. We are moving to a situation where universities may in future be far more on the web than in person.

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My Lords, it is a pleasure to take part in this debate, so comprehensively introduced by the noble Lord, Lord Patel, the committee’s excellent chairman. It was my real pleasure to serve a full term as a member of the committee; it was always stimulating and enjoyable. I was a member for this report. I draw attention to my entries in the register, specifically as chairman of Royal Brompton and Harefield Trust and master of Fitzwilliam College, Cambridge—I was previously at King’s College.

Of course, this report was written in a previous world, pre Covid, but the pandemic has served only to emphasise the vital importance of the UK’s science base and the main things that we highlighted in our report. It might be useful to look briefly at some of the themes partly from a Cambridge perspective, because sometimes tangible examples can help—others, frankly, probably know more about Cambridge than I do yet, and of course there are other fantastic examples around the country.

First, on impact, I will start with Covid. Cambridge is conducting hundreds of research-intensive projects. Specifically, there are 41 projects on Covid R&D, 36 on therapeutics, 16 on the effect on mental health, 15 on social behaviour during Covid, 15 on diagnostics, 14 on NHS demand, capacity and health, 11 on PPE and front-line facilities, 10 on Covid modelling and, crucially, 25 on post-Covid recovery, including 10 based on the economy. So they go much wider than just a narrow view of science.

There has also been a partnership with AstraZeneca on testing. Today, the university announced that it will be able to offer weekly Covid-19 testing for all students in college accommodation, to give confidence to them and to Cambridge more widely, as recommended by SAGE. One hopes that work will help in working out whether this is effective more widely across the HE sector.

Secondly, on place, we all know that we must enhance the role of universities in city and regional economies. Obviously, that has to fit with the Government’s industrial strategy—I confess that I am not completely clear where that is now up to, but it would be good to hear from the Minister how they fit together. Practically, it seems to me that universities have to provide cultural networks and professional expertise, financial support and market expertise to help nurture IP into commercially viable products, recognising however that there is still a capital gap, which the noble Baroness, Lady Young, talked about. We also need hard infrastructure and innovation districts, and, crucially, a resource and recruitment pool of highly-skilled students—that is fundamental.

Thirdly, innovation—a sort of magic dust—is very important in Cambridge, as it is everywhere else. Great universities need to attract and retain great people. In the Cambridge cluster, for example, 61,000 people are employed by more than 5,000 knowledge-intensive firms, with a total turnover of £15.5 billion. New initiatives and long-lasting initiatives both contribute to keeping great people. I cite the Whittle Laboratory, which has long done work with aviation and power, and, much more recently, Cambridge Zero, a new interdisciplinary climate change research project.

However, none of this research, impact and innovation is inevitable; it needs constant and consistent support from government, business and society. It is not a tap that can be turned on and off. Competition is global and fast-moving, and we need confidence for the future. Obviously, the spending review will be crucial. We have to maintain a focus on the funding of research and innovation, and broader investment in R&D. We need to maintain central funding and innovation funding—the whole, broad ecosystem. We need to strengthen existing partnerships and forge new ones around the world, and to be ambitious and global in our reach. Crucially, we have to invest in people, domestic and international; in STEM and STEAM at school; in post-16 high-quality pathways, teachers and technicians; and in high-quality HE courses. We have to be open and eager for international talent. We have to deal with the issues around visa and health costs, and consistently we have to mean what we say—and that means being joined up across government.

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My Lords, I draw attention to my interests on the register. In particular, I am an emeritus professor of engineering and director of research at Cambridge University. It has been a privilege to be a member of this House’s Select Committee on Science and Technology under the expert chairmanship of the noble Lord, Lord Patel. Our report had recommendations focusing on three key areas: current funding issues, the Augar review and the effects of Brexit. I shall address the effects of Brexit and its implications for future science research funding.

A number of noble Lords have referred to Horizon Europe. Our report urged the Government to associate the UK with Horizon Europe, which will operate 2021-27, as soon as possible. This will ensure certainty and stability for researchers in universities and industry. We strongly recommended that the Government should communicate to the EU and the rest of the world that the UK is committed to continuing international research collaborations after it has left the EU.

Soon after completion of our report, the excellent Smith-Reid review of international research collaboration was published. Their report concluded that research and innovation were towering strengths of the UK, and that the country’s reputation for outstanding research is respected throughout the world. The review rightly drew attention to the crucial importance of international collaboration for successful research and innovation. The UK’s previous association in successive EU research programmes has proved to be a highly productive and effective way of creating pan-European partnerships.

The review highlighted the consensus of the academic, business and charity communities that the UK should fully associate with Horizon Europe. Full association with Horizon Europe will ensure access to the European Research Council, which has been crucial to the success of UK science in recent decades, but whether this will happen will depend on negotiations with the EU, which may or may not lead to the UK associating with Horizon Europe. The science community is increasingly concerned by this lack of certainty in the UK’s position on seeking an association agreement with the EU. Europe is our biggest and fastest-growing scientific collaborator. The possibility of the UK falling out of European research programmes at the end of 2020 carries significant risk to UK science.

The Smith-Reid review makes the important point that, whatever the final arrangements with the EU, continued participation in EU research programmes will require additional financial justification within the UK, and there are a number of options. The R&D road map recently published by the Government addresses the relationship with the EU, as well as many other aspects of science research funding. The Government’s intention to cement the UK as a science superpower is to be welcomed. The road map also provides welcome assurances of funding to replace EU research support in the event that the UK does not associate with EU programmes. It says:

“If we do not formally associate to Horizon Europe or Euratom R&T, we will implement ambitious alternatives as quickly as possible from January 2021 and address the funding gap.”

Can the Minister confirm what is indicated in the R&D road map: that whatever option is chosen, science research funding of international collaborations with EU researchers and others will not be diminished post Brexit?

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My Lords, first, I thank the committee for its excellent report. I declare an interest as a former university chancellor. I was honoured to be the first black chancellor of a British university at Bournemouth University, which rightly prides itself on equipping its students for the world of work, in particular in technology. I was especially privileged during my time as chancellor to open a new business school there to encourage even more local and international partnerships with companies.

I was also privileged to present in this House the Bill that created Britain’s first ever DNA database. Over recent years, the importance of data and data protection has become increasingly apparent. The present Covid-19 situation emphasises the need for accurate and up-to-date data. This requires people with the rights skills in that field. Further, the search for a safe and effective vaccine is reliant on the scientific research currently being carried out in our leading universities.

In a different context, for 10 years I was vice-president of the British Board of Film Classification. Some of the more eccentric films that we had to censor had a very happy ending, in that you were very happy when they eventually ended, but there were many excellent films. What became apparent was the increasing influence of special effects and CGI technology; they have helped to keep the British film industry at the forefront of the entertainment world, which is so vital to the British economy.

Artificial intelligence and automation are fast changing the nature of work. One of employers’ biggest complaints, as we all know, is the lack of job applicants with sufficient technical skills, but it would be wrong to think of scientific knowledge as only a modern revelation. One of the gospels was written by Luke, a physician and scientist. Indeed, there are several references to science in the Bible as being important to the progress of man.

I am sure that the Minister will comment on the committee’s claim that public funding has not kept pace with inflation since 2010, which has led universities to subsidise research from other funding streams, such as funding for teaching. I also share the concern expressed in the report that the Government did not include science research in the terms of reference for the review of post-18 education and funding by Philip Augar, published in May 2019. That seems a surprising omission.

The committee made an important recommendation that the Government should ensure that any new post-Brexit immigration laws do not prevent UK universities being able to recruit and retain researchers. The Government responded by arguing that their new fast-track immigration scheme, announced last August, would ensure that “elite scientists and researchers” can work in the UK. However, since then, we have had Covid and air travel restrictions. The support package announced in June is welcome but it will still leave a funding gap—and, of course, part of that package are loans that will have to be repaid.

Some very high-profile and wealthy internet companies, in particular Amazon, Google and Twitter, have made vast profits from the British people. Surely some sort of formula could be found. There could be targeted taxation, whereby such companies can help to fund research in science and technology. After all, those companies would benefit themselves.

Although we are living in an uncertain world, one thing that is certain is that the need for science and technology will only increase. Research is vital to that progress and funding is vital to that process. There is no such thing as a free launch.

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My Lords, because of Covid-19, we are in a different university world from that envisaged in the flurry of recent reports on science funding in our universities. I take this opportunity to make two points. One is that we all acknowledge the pre-eminence of Oxford University research in the urgent quest for a vaccine and drugs to beat Covid—indeed, the university was recently ranked number one in the world league tables. We must pray that the reported adverse reaction we heard about today is not a setback.

It is time for Oxford-bashing to stop. We have had too many ill-informed and damaging statements, largely from the Opposition, implying that Oxford discriminates in admissions and ought to abandon its painstaking quest for excellence in intake and consequent outcome. Oxford has invested in building up internationally leading teams over the years and providing the right environment for them; this has paid off. The whole world cannot afford to let this go. We need to prepare for other pandemics to come. The UK can provide the leadership in Covid treatment that has not come from the US, the EU—which has chosen to cut Horizon funding—or the World Health Organization. Oxford’s recent success points to its integrity in seeking and retaining the brightest from all over the world and from every quarter. It is time to dispel the clouds of distrust.

Secondly, I recall that at a meeting of vice-chancellors a few years ago, I commented that we were taking too many Chinese students and that, if there were ever a reversal of policy, many universities would be in trouble. One particularly naive and woke vice-chancellor called me a racist. I rest my case.

Colleagues in Oxford tell me that there should be priority for their research into the repurposing of drugs for antiviral and anti-inflammatory use in Covid cases—a particular Oxford innovation. Oxford is leading in the science and technology of fusion energy, which needs a 15 to 30-year perspective on support. It advised me that the UK should not spread its support too thinly but should pick a few renewable technologies and aim to be world leading at those with, for example, generation, storage and transmission of energy.

Universities such as Oxford turn away hundreds of really excellent graduate students every year because there is no funding for them. Many are international. With the Government’s help, we need to do as well as Singapore and Germany in supporting non-EU graduate students here. I hope that the Minister will respond to that.

Finally, there are Chinese students, on whom we are so dependent by way of cross-subsidy. We need to treat them properly—because sometimes they suspect they are cash cows—and integrate them with other students, but we cannot rely on them as we used to. We have to welcome Indian students and others from all over the world. But a word of warning: the Chinese Government are perfectly capable of using their students as a bargaining chip, reducing the outflow to put pressure on the countries that take most of them, which is us, Australia and the US.

We also have to be careful about which Chinese students are admitted here, especially into the sciences. China is trying to curb criticism of its regime on British campuses; senior administrators have been pressured into censoring speakers who would be critical of the Chinese regime. Chinese students emerged en masse at Warwick University to vote down a student union motion supporting democracy and freedom of speech in Hong Kong, and it is thought that the Chinese Government carry out surveillance over their students in Britain. Partnerships between British universities and Chinese companies may pose a risk to national security. This could involve the theft of intellectual property and sensitive technology. We must be aware of their penetration into UK research, no matter how attractive it is financially.

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My Lords, I congratulate the noble Lord, Lord Patel, and his committee on an excellent report, to which I would like to add some side notes about the importance of keeping a healthy research culture in UK universities, particularly in those areas where the Government have some ability to influence it. That may particularly be through the REF but also through UKRI, OfS and other routes.

I turn my attention first to replicability. Even in physics, the subject that I studied, the level of replicability is well below what it ought to be. This is a matter of great concern to the Royal Society and others. We must insist on full publication of results, data and methods so that it is possible to accurately replicate what has been done. We must also up the status of replication; we must fund it properly and ensure that the scientists doing it find that it adds to their reputation. We must ensure that we are supporting publications which support reports of replication and do not just consider them too boring. I am encouraged that UKRI has recruited a head of research culture in the excellent Dr Francis Downey—mind you, if you search for her name on its site you find nothing. Perhaps she does not exist, but there are at least rumours of her existence.

Secondly, we must up the quality of statistics in UK research. Too many research publications have basic statistical errors in them. There is no reason for this; there is a plethora of good statisticians and statistical organisations ready to help. All research institutions ought to insist on it.

Thirdly, we really need to move on better public access. I am delighted to see that UKRI is tied in with Plan S. However, to take our own situation, when we are asked to take political decisions on things such as the dangers of particulates or microplastics, or whether you are actually doing anything valuable if you recycle glass with paper, let alone the efficacy of vaccines, we need to have access easily to the truth in a real, quality fashion. We should not be party to a system that hides the truth unnecessarily.

Lastly, there is diversity of thought. When it comes to funding research, we should be prepared, in small quantities, to fund research that seems to challenge the very rules of nature. I would be quite happy to see us put a bit of money into EmDrive, cold fusion, or even into critical race theory. We must never allow our universities to get bound into dogma, in the way James Cook University in Australia has been in its persecution of Professor Peter Ridd, just because he was extremely rude about the quality of its Great Barrier Reef research. That ought to be welcomed; one ought to look for critics. Science ought to be a matter of trying to find people who disagree with you and trying to understand why they are wrong, not sacking and prosecuting them.

I am keen that we support UKRI in its interesting research that falls between silos. I shall be very interested to see whether the Government opt for an advanced research projects agency going elephant hunting for big ideas, or whether they will follow my noble friend and kinsman Lord Ridley’s excellent book How Innovation Works and treat innovation as something that happens in lots of small diverse places, rather than large leaps into the unknown. That is a pretty good formula for Lords reform, but it also brings us back to where I started on the importance of having replicable-based science on which to advance.

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My Lords, the UK’s universities are internationally recognised as some of the best, along with America, in the—[Inaudible]—scientific research. The dual funding system that people have spoken about, including QR funding since 2010, has led to a deficit in funding that universities have had to make up by cross-subsidising, as the noble Lord, Lord Patel, said in his excellent introduction. I thank him and his committee for this superb report. We have seen a decrease in the percentage of research costs that universities have been able to recover from funders, including research councils and charities. The report says right up front that the Government need to address this deficit and commit to

“increasing QR funding each year by at least the rate of inflation.”

Can the Minister say whether this will happen?

I am proud to say that Cambridge University is the recipient of the highest number of Nobel prizes in the world. The University of Birmingham, of which I am proud to be Chancellor, has 11 Nobel prizes. We are fantastic. However, the international student fees that we are so dependent on need to be addressed, which I will come to.

The report also examines the Augar review’s recommendations. I was really surprised that the Augar review did not look at research. The report again says right up front that the committee is

“sceptical about the impact of many of the proposals made by the Augar Review on research funding in universities.”

Brexit is of course key, and the report highlights how much of a benefit Horizon 2020 has been for the UK and recommends that

“the Government should commit to associating the UK with Horizon Europe”.

Will the Minister commit to this, and that we will continue to receive the same amount of funding the we currently receive from the EU?

To date, we have spent 1.7% of GDP on research and development, compared with Germany at 3.1%, America at 2.8% and Israel at 4%. It is wonderful news that the Government have a target of 2.4% of GDP on R&D by 2027, but this will happen only if there is enough funding for the research. That needs to be addressed.

I have seen time and again how much more powerful collaborative research between universities is, with the weight of impact increasing by two or three times. Professor Alice Gast of Imperial College has said:

“The EU is the UK’s largest and fastest growing collaborator in research; over half of the UK’s international publications are with European partners.”

The report Brexit: the Erasmus and Horizon Programmes, published last year, says:

“The UK is the second largest recipient of Horizon 2020 funding and has received 15.2% of grants”.

It is therefore paramount that now we have left the European Union we continue to partner with Horizon Europe even as a third country.

On international students, I am president of UKCISA, which represents the interests of all 450,000 international students in the country. International students include EU students, who have brought in almost 15% of total income for UK universities. Could the Minister assure us that the EU students will still come in the numbers that we have had—130,000 of them—with the Immigration Rules being changed?

That brings me to immigration. We have to have Immigration Rules that are friendly to students. I am delighted with the reintroduction of the post-graduate work visa, which is wonderful news. I thank the Government. Could they make sure that the Immigration Rules are also fair and attractive for researchers, academics, academic staff and laboratory staff? Can he reassure us that those will also be good, let alone the fees that noble Lords such as the noble Lord, Lord Willetts, have spoken about?

International students bring indirectly or directly £26 billion into our economy, so there is no question about it—we need to invest in our R&D and we need to have that commitment from the Government that, if this investment shortfall is going to be there, we retain the fact that, with 1% of the world’s population, we produce 16% of the world’s leading research papers.

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My Lords, I join other noble Lords in thanking my noble friend Lord Patel for his leadership of the Science and Technology Committee, for the thoughtful way in which he led this inquiry into science research funding in our universities and for how he introduced this debate. In so doing, I declare my own interest as professor of surgery at University College London, chairman of UCLPartners, and an active biomedical researcher.

We have heard during the debate that the future funding of the research base in our universities is important not only to the universities themselves, but to our country more generally. It is our ambition that we become an economy driven by technology and innovation, and to be able to deliver that we have to have the appropriate science base in our universities. We have seen in recent months, with the Covid-19 pandemic, the importance of the science base to protect our population and drive forward innovation. Life science, as it has been described in this debate and in previous debates in your Lordships’ House, is, after the financial services industry, the second most important part of our economy. It employs directly some 250,000 people, with a further 250,000 jobs dependent on life sciences in our country.

The United Kingdom has been at the forefront of research developments in the Covid-19 pandemic, demonstrating the importance of the availability of an effective and mature research base in our universities to address critical questions at a moment’s notice. This report, as we have heard, was published over a year ago, before the Covid-19 pandemic and its implications for our universities, and, of course, before the withdrawal agreement from the European Union had been concluded —and, indeed, before the current trade negotiations have run their course. The impact of our departure from the European Union and the broader impact on our economy that it will have on our research funding remain most pertinent.

I will focus on two issues. With Brexit, as we have heard during this debate, it is essential that Her Majesty’s Government commit to three principal areas. Yes, of course, one is funding to ensure that the shortfall that will arise as a result of our no longer being able to participate directly in European funding schemes is met by Her Majesty’s Government. However, that funding shortfall must also facilitate collaborative research within the European Union—that is, our own university collaborative participation—as well as collaboration with research networks elsewhere in the world. Of course, we must also do everything to ensure that mobility of researchers is maintained. In this regard, the points made by the noble Lord, Lord Willetts, are critical, on ensuring that the visa system facilitates the ability of not only researchers to come to our country, but their families too.

Secondly, on public funding for research, we have heard about the importance of ensuring that QR funding, that second important element of the dual support mechanism, is maintained at levels that guarantee an inflationary increase. We need also to ensure that the shortfall in funding provided by charities to support research in our universities, particularly biomedical research, is addressed. Charities are responsible for some 15% of research funding. As we have heard in this debate, a 1% reduction in support for universities is expected this year.

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My Lords, this has been a wide-ranging debate and I congratulate the noble Lord, Lord Patel, and the committee on an excellent speech and report. I was not a member of the committee when the report was written, but I am now. Nor am I chancellor of any university, which puts me in a minority today. Leaving aside the fact that it has been more than a year coming, this debate is timely in other respects. University funding has been hard hit by Covid-19. A London Economics report suggests an average loss of income per higher education institution of approximately £20 million, with some potentially losing £100 million. This could lead to approximately 30,000 job losses in the sector. The noble Lord, Lord Patel, outlined the other shortfalls in research funding, which can only cause us to lose valuable researchers. Today, students are returning to university, with consequent worries about contagion entailing extra cleaning costs, and the end of the EU transition phase is upon us without a deal yet, with all the uncertainties that brings for the university research sector.

The committee strongly regretted that the Augar report on post-18 education suggested lowering the cap on tuition fees for UK students but did not address the fact that student fees often have to cross-subsidise research. Such cross-subsidy has been a result of quality-related funding not keeping up with inflation since 2010, so a deficit has built up. Can the Minister confirm the rumours that this idea has been shelved? If not, can I join my noble friend Lady Bowles of Berkhamsted in asking the Minister to confirm that the teaching grant will be increased to cover the shortfall in funding from students? If not, as the noble Baroness, Lady Warsi, warned, important spending areas such as widening participation programmes could be affected. This consequence could not be described as “levelling up”. It is vital that funding covers the full economic cost of research or else the resilience of the sector will be adversely affected as subsidies will not be available from elsewhere.

On foreign students, as the noble Baroness, Lady Young, mentioned, several factors have affected the number of these high-fee-paying students starting this year, among them the Covid pandemic and the uncertainties over our exit from the European Union. This is bad enough, but also to lower the domestic fee cap would be pretty disastrous unless it was compensated.

The Augar review also proposed wider powers for the Office for Students to rule on the value of courses. The committee was very sceptical about this, suggesting that it would erode university autonomy. It rightly emphasised that funding should be based on research excellence. I strongly agree that we need to be very careful about this. I hope that we will be given details of the criteria very soon, with an opportunity to question Ministers about them, because they could badly affect pure scientific research. During the Covid-19 pandemic, we have greatly benefited from research about the nature of the virus itself. This has underpinned the work on vaccines, treatments and mitigations and public behaviour recommendations. It has been vital and therefore I would not want any system that disadvantaged discovery research.

Noble Lords have received briefings from several medical research charities warning that their share of funding for research and clinical trials will be reduced by at least £310 million this year because the pandemic has badly affected their ability to fundraise. The noble Lord, Lord Turnberg, gave us some detail about this issue. Although the Government have offered some money to charities, for some strange reason medical research charities have been left out. I join the noble Lord in asking the Minister whether the Government will consider the AMRC’s proposal to rectify this.

The pandemic has highlighted the strength of our scientific and medical research sector. Our rapid progress in understanding, modelling and predicting the nature and spread of the virus, and ongoing work to develop treatments and a possible vaccine, is the result of investment in research over many decades allowing the build-up of highly-skilled teams of scientists collaborating across the globe. It is likely that many lives have been saved through this research, so it is vital that the resilience of the sector is protected.

In its response to the committee, the Government repeated their manifesto commitment to increase investment in research and development to 2.4% of gross domestic product by 2027. Total R&D spending is currently 1.7%, so one might be encouraged by this commitment. However, as my noble friend Lord Shipley pointed out, GDP has been badly hit by the pandemic and it is anticipated that this will continue for several years, so there would be a consequent reduction in the absolute amount of money which would become available through the commitment. He suggested the solution that the baseline for the 2.4% should be 2019 GDP before Covid-19 hit it. Will the Minister recommend this idea to the Chancellor?

During our membership of the EU, the UK has been particularly successful in attracting EU scientific and medical research funding, as well as bringing collaborators here from EU countries. In order to address concerns about the loss of such funding, the noble Lord, Lord Mair, strongly supported the committee’s recommendation that the UK Government negotiate strong association with Horizon Europe so that UK research groups would not be disadvantaged by our exit. I heard this week that Canada, Australia and other countries are applying to join this excellent programme and yet, despite 40 years’ close relationship, the UK Government have not yet been able to negotiate membership or association. Indeed, with the way things are going and the Government by their own admission planning to break international law and renege from elements of the withdrawal agreement, I would be surprised if the EU wanted us as a member of something as vital as Horizon Europe. How can anyone trust a country that tries unilaterally to change elements of an international agreement signed only eight months ago? Can the Minister therefore say what progress has been made in negotiations to enable the UK to take part in the benefits of Horizon Europe?

Several noble Lords mentioned international mobility, and the committee expressed great concern that new immigration laws should not prevent or deter researchers and technicians from other countries from coming to the UK to join international teams. They particularly mentioned science technicians, who may fall below the salary threshold. It is not just getting the visas that matters but the costs. As my noble friend Lady Randerson pointed out, up-front visa costs here are four to six times higher than in other leading science nations. Besides that, as the noble Lord, Lord Willetts, emphasised, a researcher wanting to come to work in our NHS on clinical trials, for example, and to bring their family would have to pay thousands of pounds to use the very NHS in which they are working. That is a deterrent. What do the Government propose to do to correct this?

It is tempting at this time of the Covid pandemic to focus on medical research and the contribution of our university researchers to tackling it, but another crisis is looming—the climate crisis. It is vital that our universities are enabled to provide us with information about the progress and effects of global warming and to develop innovative ways of preventing it going any further and mitigating the effects it is already having on our planet. I was fascinated to read one example in the briefing from Imperial College about Dr Qilei Song, who is researching cost-effective redox flow batteries which are energy storage devices large enough to power cities. This research aims to accelerate developments in renewable energy, mitigate climate change, and solve the mismatch between intermittent supply of renewable energy and the variable demands of the power grid. The noble Lord, Lord Rees of Ludlow, mentioned the work of the Faraday Institution on battery research, an example of the diversity of research institutions for which the noble Lord, Lord Willets, was calling. This vital work must not be put at risk.

Finally, I return to the next immediate crisis, Brexit. As the UK has been so successful in the past at attracting EU funding for scientific research, the Government must take into account that to replace that funding they are going to have to put in more than our former contribution to the Horizon programme and not just match it. Can the Minister assure the Committee that they will provide sufficient funds to avoid a shortfall?

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My Lords, we are all indebted to the noble Lord, Lord Patel, and other members of the Science and Technology Select Committee, for the comprehensive manner in which they examined such an important sector of the economy, and for the clarity of their report and its recommendations.

A year may have passed, but many of the issues highlighted by the committee are now even more pressing, as many noble Lords have demonstrated today. The UK’s world-leading university and research institutes and their academic staff, researchers and students are a national asset, which is why it is so important that steps are taken to ensure their future and its future. As the report makes clear, if the Augar review recommendation of reducing the tuition fee cap in England to £7,500 was ever implemented, then without compensating direct government funding, the financial consequences for universities would be serious. As my noble friend Lady Young said in colourful terms, it is to be hoped that Augar’s proposal remains just that.

A recent Institute for Fiscal Studies report stated that the Covid-19 crisis posed a significant financial risk to the UK higher education sector, predicting that 13 universities would end up with “negative reserves” and would be at risk of insolvency without a bailout. Yet for those institutions, such assistance is by no means a given. The Government have recognised the threat to universities by establishing a higher education restructuring regime board. Alarmingly, however, at the board’s launch, the Secretary of State said that he is prepared to see universities go to the wall. Perhaps the Minister could let us know the circumstances in which that would be allowed to happen.

In part, the threat to some institutions stems from the impending drop in the number of international students, but it emanates also from threats to research funding, and of course, the two are linked. University research is underfunded against its true costs—the latest official figures showing a gap of some £4.2 billion across the UK—and as the noble Lord, Lord Patel, said, universities close this gap using the international student fee cross-subsidy. Each international student pays an average of £5,000 more than it costs to educate them, so this contribution will be severely reduced by the inevitable fall in numbers this year.

In recent years, domestic student numbers have remained static, with international students responsible for overall growth. The UK higher education sector had almost 350,000 international students in 2018-19—14% of all students at UK universities—so the effect of the reduction in numbers will be stark and the resulting drop in funding will carry through the system for several years.

Regarding research, capacity must be maintained in the face of competitor countries already actively and aggressively pursuing UK academics with offers. The noble Baroness, Lady Randerson, said that we cannot take the UK’s pre-eminent position for granted, which is absolutely the case, and the noble Lord, Lord Willetts, graphically illustrated the constraints on post-doctoral researchers coming to the UK. The research community extends worldwide and if researchers have their contracts terminated because of short or medium-term funding issues due to Covid-19, they will find work elsewhere and be unavailable whenever the sector regains strength.

In the Government’s response to the committee’s report, the then Universities Minister, Mr Skidmore, said:

“We have asked UKRI to provide formal advice to BEIS … on the balance of funding across the functions of Research Councils and Research England in preparation for the Spending Review.”

That was 11 months ago and under a different Government, but what formal advice did UKRI subsequently provide to the Minister’s department, and what decisions were taken as a consequence? Perhaps I should have directed that question to the noble Lord, Lord Willetts, as a UKRI board member.

On the subject of the spending review, is it still the Government’s intention to proceed with one this autumn? If so, will it be comprehensive or, perhaps, a curtailed version in response to the particular effect on the economy of the coronavirus pandemic? I hope that the Minister can enlighten us.

International students, which will now include those from EU member states, provide £6 billion a year to higher education institutions, with a further £7 billion spent in the UK economy. Exact numbers, and therefore losses, will not be known until later this month, but analysis for the University and College Union by London Economics forecast a reduction of around £2.5 billion. The British Council’s survey of international student intentions produced a similar figure.

There is an urgent need to protect—indeed, enhance—domestic and international research. Under the EU’s Horizon 2020 project, UK research received £3.5 billion and was a crucial part of hundreds of international research projects. I add my name to those of the many noble Lords who have urged the Government to follow the committee’s recommendation that the level of funding that the UK currently receives from the EU for research be matched in full.

Currently, 62% of research in UK higher education institutions is publicly funded. The committee report noted that public funding has largely not kept pace with inflation over the past decade, which it said has led universities to cross-subsidise research from other funding streams, such as resources for teaching. Public funding for research in universities after we leave the EU should seek to replace not just the total amount of funding but other areas it supports in quality-related unhypothecated research.

Earlier this year, BEIS and the DfE established the snappily titled Ministerial University Research and Knowledge Exchange Sustainability Taskforce. It has an impressive membership, including representatives of the devolved Administrations, so can the Minister say what consideration the taskforce has given so far to the most pressing issue facing university research, namely the future of funding when Horizon 2020 comes to an end?

Horizon Europe uncertainties must be resolved. In June, the Government confirmed that continued participation in that programme formed part of the negotiations currently being conducted with the European Union. We know all too well that those are not exactly going swimmingly and that the situation is unlikely to improve now that, as the noble Baroness, Lady Walmsley, cited, the Prime Minister is planning to act illegally by reneging on his own treaty—a treaty on which he successfully fought a general election just nine months ago. That sort of tactic—if indeed that is what it is—is hardly likely to increase the likelihood of the UK being welcomed as participants in Horizon Europe. It is a matter of trust.

In a Written Answer on 6 August, the noble Lord, Lord Callanan, stated this in relation to ongoing negotiations:

“If we do not formally associate to Horizon Europe we will implement ambitious alternatives as quickly as possible from January 2021.”

He suggested that a new discovery fund might be introduced. I hope that he will be able to say a bit more when he comes to reply about such a venture and how the funding attached to it would measure up against the opportunities available through Horizon Europe. Research teams are entitled to know the likely extent of the funding pool to which they will have access from next year.

In their response to the committee’s report, the Government committed to increasing levels of R&D to at least 2.4% of GDP by 2027. That is to be welcomed, although the research community is rightly sceptical, given that, according to the Office for National Statistics, the current figure is just 1.71%. I wonder whether the Minister can say something about the manner in which he and his department foresee that figure increasing towards 2.4% between now and 2027.

I must say, the Government are due some credit for their support for the higher education sector in reaction to the coronavirus pandemic. In May, they brought forward the relatively modest amount of £100 million of research finding as well as £2.5 billion of advance tuition fee payments. In June, they announced a support package for university research and a pledge was made to increase public funding for R&D to £22 billion a year by 2025. That is welcome and is all well and good, but what will the sector look like by 2025 if the pandemic is not brought under control and the UK’s universities remain unable to admit international students in significant numbers?

No deal with the European Union looks increasingly likely. The cost of that in terms of jobs and the general standard of living, particularly for those least able to withstand it, will be filed by government zealots under the heading “collateral damage.” That collateral damage is very likely to include the excellence of the UK’s research base, and with it would go the sector’s international reputation. The Government must decide whether that is a stain on their record that they are willing to accept.

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My Lords, I am supremely grateful to the noble Lord, Lord Patel, for securing this important debate and for the excellent contributions made by other Members, demonstrating once again the wide range of expertise that exists in this House. I also thank the committee for its inquiry and report, and for raising the important issues affecting science research funding in universities.

I also pay tribute to the universities themselves, which have played and continue to play a vital role in the national response to Covid-19. If I may offer a few examples, we have seen our world-class science and research base in universities across the UK support our Vaccine Taskforce by working tirelessly to research a vaccine for coronavirus. It is thanks to their valuable medical and research expertise that vaccine candidate clinical trials are now taking place at the University of Oxford and Imperial College London. I take a moment here to echo the strong praise of the noble Baronesses, Lady Deech and Lady Walmsley, for the outstanding work of these two world-leading institutions.

In addition, universities have offered vital services such as lab space and accommodation, applying research capabilities to develop the medicine and equipment needed to combat this terrible virus. Many have also repurposed their facilities to carry out testing on those with coronavirus symptoms, and collaborated with industry partners in producing ventilators, PPE and testing equipment for our National Health Service. As of 13 August, UKRI has committed more than £95 million to new research aimed at tackling Covid-19. It has also repurposed research grants of around £80 million to address the effects of the pandemic.

The UK’s world-class universities will continue to play a critical role in delivering local and national economic prosperity, but of course they have been hard hit by Covid-19. That is why we have announced a range of measures to support universities at this difficult time. We have established a joint BEIS-DfE ministerial taskforce on the sustainability of university research, to identify and assess the risks and impacts of Covid-19 on universities and to consider approaches to help manage these risks. A reprofiling of quality-related research funding in England also brought £100 million forward as a short-term measure to help to safeguard university research and as a reassuring signal to the research sector. Some £280 million of funding will sustain UKRI and national academy grant-funded research and fellowships affected by the Covid-19 pandemic.

In sharing responsibility for the future of science and research with our world-leading university system, from the autumn the Government will provide a package of grants and low-interest loans through the sustaining university research expertise fund, or SURE, to cover up to 80% of a university’s income losses from international students for the academic year 2020-21, up to the value of their non-publicly funded research activity. The noble Baroness, Lady Walmsley, the noble Lord, Lord Turnberg, and other noble Lords highlighted the importance of research funding from charities and the impact of Covid-19. Ministers in BEIS and the Department of Health and Social Care have met the Association of Medical Research Charities. Officials continue to engage regularly with the AMRC to discuss these issues and the challenges that the sector faces. The SURE fund aims to help sustain the research capacity of the university research base as a whole. Universities will be asked to demonstrate how they will use that funding to sustain research in areas typically funded by charities and business. Ultimately, we want critical university research capability, including charity-funded medical research, to be sustained and able to contribute to our future R&D ambitions.

We have also announced the pulling forward of an estimated £2.6 billion-worth of forecast tuition fee payments to ease cashflow pressure this autumn. This is on top of the unprecedented package of support for which higher education providers are eligible, previously announced by the Chancellor, such as the Coronavirus Job Retention Scheme and a range of business loan schemes.

In addition, in July, the DfE also announced the establishment of a higher education restructuring regime for those institutions at risk of financial failure. This regime can be deployed as a last resort if a decision has been made to support a provider in England, when other steps to preserve a provider’s viability and mitigate the risks of financial failure have proved insufficient.

Last month we published our R&D road map, which my noble friend Lord Willetts rightly highlighted as a key document, to ensure that the UK is the best place in the world for scientists, researchers and entrepreneurs to live and work, while helping to power up the UK’s economic and social recovery and level up the UK, which the noble Lord, Lord Shipley, rightly highlighted as a key part of the Government’s agenda. The road map builds on the ambitious commitment set out in the Budget to increase public spending in R&D to £22 billion by 2024-25. I therefore assure the noble Baroness, Lady Young, that this puts the UK on track to reach 2.4% of GDP being spent on R&D across the UK economy by 2027.

Through the road map we will test in detail how we can increase our investment in research, unlocking new discoveries and applying research to solving the most pressing problems in government and industry, and across society. In the longer term, we will review how we fund and assess discovery and applied research to cut unnecessary bureaucracy, pursue ambitious “moon shots”, and ensure that institutional funding and international collaboration can support our ambitions. I also assure the noble Lord, Lord Patel, that we are working with a wide range of stakeholders, including universities, to develop the proposals in the road map into a comprehensive R&D plan.

We also recognise that research and innovation are global endeavours, as the noble Lords, Lord Triesman, Lord Mair and Lord Bilimoria, all rightly emphasised. Our aim is to sustain, improve and grow opportunities for international collaboration. Our R&D road map sets out our wider ambition and the steps we will take to deliver this goal, including our relationship with Europe and the next EU research and innovation framework programme, Horizon Europe.

The noble Lords, Lord Patel, Lord Mair, Lord Bilimoria and Lord Shipley, and my noble friend Lady Bottomley all raised points on Horizon Europe and international partnerships. Let me reassure them that fostering international partnerships and global collaboration will play an important part in helping to achieve our ambitions to make the UK the international partner of choice for cutting-edge scientific and research discovery. We have made it clear in the road map that we aim to maintain a close and friendly relationship with our European partners, seeking to agree a fair and balanced deal for participation in Horizon Europe and Euratom research and training programmes.

The noble Lord, Lord Triesman, asked what conditions would prevent association with Horizon Europe. The Government have set out that any agreements relating to Union programmes should contain fair terms for UK participation. This should include fair treatment of participants, a fair and appropriate financial contribution, provisions allowing for sound financial management by both parties, and, of course, appropriate governance and consultation. We will make a final decision once it is clear whether such terms can be reached.

The noble Baroness, Lady Finlay, asked about alternatives to the Horizon programme. As a responsible Government, we are developing alternative schemes to support international research and innovation collaboration, in tandem with the Horizon Europe negotiations. If we do not formally associate with Horizon Europe, we will quickly implement ambitious alternatives as soon as possible from January 2021 and therefore address the funding gap.

We know that universities value research collaboration with the EU and beyond. We are grateful to universities for their ongoing policy insight and engagement with government, including convening round tables for the Smith-Reid review, which considered the future funding landscape, including our relationship with EU research and innovation funding.

Alongside international co-operation, we also want to send a global signal that the UK welcomes scientists and researchers. Our new global talent visa will help this skilled cohort of individuals to access the UK, empowering them to significantly enhance our knowledge base and make critical contributions to scientific and medical research.

The noble Baroness, Lady Randerson, my noble friends Lord Willetts and Lord Kirkhope, and the noble Lord, Lord Rees, all raised the important issue of attracting talented graduates to the UK. We have announced changes to the graduate route to make it easier for some of the best young international graduates to secure skilled jobs in the UK and contribute to our economy and society. The noble Lord, Lord Bilimoria, rightly raised the contribution of international students to the UK. That is why the Government are offering those who complete a PhD from summer 2021 a three-year visa after study to live and work here. Students who have successfully completed undergraduate and master’s degrees will be able to stay for a further two years following their studies.

These reforms are just the start. We will now radically improve our approach to attracting global talent to the UK by setting up a new Office for Talent. This will make it significantly easier for top global science, research and innovation talent to come to the UK and make it their home.

Over the coming months, we will work with the devolved Administrations and key stakeholders, including the major funders of research such as UKRI and the national academies, to develop a comprehensive new R&D people and culture strategy.

Looking ahead to the spending review, we will set out details of this historic investment for our universities. As the noble Baroness, Lady Morgan of Huyton, suggested, this will be critical in giving our researchers and innovators the confidence that they need going forward. I can reassure the noble Lord, Lord Watson, that the Chancellor launched the 2020 comprehensive spending review in July, and it will be published in the autumn.

The noble Lord, Lord Patel, raised an important point about improving the financial resilience of universities and adjustments to QR funding. As part of the spending review and taking advice from UKRI, we will consider the scale and balance of funding for university research and innovation, including funding for QR, and will take financial sustainability issues into account. We will continue to look at the balance of dual support for universities and the role of QR, and we will work with other funders to consider what proportion of the full economic cost of research projects in universities they should be funding.

The R&D road map also sets out our ambition to develop a new compact between government and universities in England which could strengthen accountability for discretionary funding, potentially bringing together existing separate higher education research concordats and reducing bureaucracy for institutions and their staff. It also highlights our commitment to research culture, research integrity and open access to research.

Many excellent points were made during the debate and a number of questions were posed. I hope that noble Lords will understand that it is impossible for me to respond to all of them, but I will go through as many as possible in the available time and hope that noble Lords will accept my apologies if I do not get around to their particular point.

The noble Lord, Lord Patel, asked when the Government intend to publish the terms and conditions of the SURE fund. I can assure him that work continues on the university research support package, with officials working closely with the sector to ensure that the fund is in place by the winter. We hope to share more details with universities in due course, including guidance on how they should apply as well as the terms of the loan. I can also reassure the noble Lord that the SURE fund will provide funding which is in addition to the £280 million announced in June for costed grant extensions from UKRI and the national academies.

Along with the noble Lord, Lord Shipley, and the noble Baroness, Lady Morgan, the noble Lord also raised the issue of the Government’s place-based strategy for research. We are engaging widely with industry, universities, the research community and civic organisations from across the country to help develop an ambitious place strategy for R&D that supports the priorities of areas and communities across the United Kingdom.

My noble friends Lady Bottomley and Lord Kirkhope, the noble Baroness, Lady Warwick, the noble Lords, Lord Shipley, Lord Watson and Lord Bilimoria, and others asked about the Government’s ongoing discussions with the European Union surrounding Horizon 2020. I can tell noble Lords that we aim to maintain a close and friendly relationship with the European Union to participate in the next generation of European research and innovation programmes starting in 2021—that is, both Horizon Europe and Euratom R&T. Negotiations with the Commission are constructive and we are open to participation but, as I said earlier, only if we can agree a fair and balanced deal.

The noble Baronesses, Lady Randerson and Lady Walmsley, and my noble friend Lord Willetts asked me about high visa costs. The Government recognise the importance of a vibrant and successful science, research and innovation sector to the UK’s continued prosperity, and acknowledge that attracting, retaining and developing research talent is at the heart of the R&D road map. We will look to build on existing initiatives by setting up the new office for talent, driving forward further visa reform by reviewing the uptake of different routes by established talent and those on the cusp of success, and reviewing the restrictions and costs that it brings about.

The noble Baroness, Lady Warwick, asked how we will stop the loss of early career researchers. Again, our R&D road map sets out the key commitments already mentioned to ensure that we attract, retain and develop top talent to ensure that the UK is the best place to work, offering careers at all stages that attract a diverse range of people.

The noble Baroness, Lady Finlay, referred to the shared prosperity fund. The 2019 Conservative manifesto committed to creating this UK shared prosperity fund, which binds together the whole of the United Kingdom, tackling inequality and deprivation in each of our four nations. The UK shared prosperity fund will be driven by domestic priorities with a focus on investing in people. At a minimum, it will match current levels of funding for each nation from EU structural funds.

In response to questions from my noble friend Lady Warsi, the noble Baronesses, Lady Walmsley and Lady Young, and others on the Augar review, we have considered the report and its recommendations carefully. We know that post-16 education has an essential role to play in driving economic recovery and future prosperity, so we plan to respond to the Augar report alongside the spending review. We are determined to pursue high-quality educational opportunities that meet our skills needs, fuel our economy and create world-leading outcomes for students.

As many noble Lords have commented, we are right to be proud of the strength of our research and innovation base and the quality of our universities. Research, innovation and knowledge are the drivers of our global competitiveness and a key source of economic advantage. I assure noble Lords that we remain committed to maintaining the UK’s position as a global science superpower, and that we will continue to invest in our universities and in the science and research that will deliver the long-term economic growth and societal benefits, that my noble friend Lord Griffiths of Fforestfach alluded to, enriching the UK for many decades to come.

Once again, I thank everyone for the learned contributions from many Members across the House, and I thank the noble Lord, Lord Patel, for securing this important debate.

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First, I thank the Minister. It is always possible to pick out negative comments in the response to the Minister at the end of a debate, but I shall try to be generous and not do so. I will concentrate on the many positive things that he said. Clearly, the message that he gives us is that the Government understand the needs of the research community and the necessary funding. I look forward to details of the road map, and I am pleased to hear what he has to say about the SURE fund and place-based research. I thank him for that.

I also thank all noble Lords who took part. There have been excellent, well thought-out speeches. I will not pick out any particular speeches—there will be no golden triangles. They have all been golden. One thing I will say is that I have never thought of the noble Lord, Lord Rees of Ludlow, as a weirdo. Someone who has spent a lifetime gazing at stars cannot be regarded as a weirdo. But I am only joking.

I thank you all most sincerely for joining this debate. We look forward to the spending review and what the Government have to say about funding research. Thank you all.

Motion agreed.

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My Lords, that completes the business before the Grand Committee this afternoon. I remind Members to sanitise their desks and chairs before leaving the Room.

Committee adjourned at 6.14 pm.