Above all, growth. The new government knows that none of its ambitions will be achievable without a recovery from the last decade and a half’s economic stagnation. Everything will be judged by the contribution it can make to that goal, and research and innovation will be no exception.
The immediate shadow that lies over UK public sector research and innovation is the university funding crisis. The UK’s public R&D system is dependent on universities to an extent that’s unusual by international standards, and university research depends on a substantial cross-subsidy, largely from overseas student fees, which amounted to £4.9 bn in 2020. The crisis in HE is on Sue Gray’s list of unexploded bombs for the new government to deal with.
But it’s vital for HE to be perceived, not just as a problem to be fixed, but as central to the need to get the economy growing again. This is the first of the new Government’s missions, as described in the Manifesto: “Kickstart economic growth to secure the highest sustained growth in the G7 – with good jobs and productivity growth in every part of the country making everyone, not just a few, better off.”
To understand how the government intends to go about this, we need to go back to the Mais Lecture, given this March by the new Chancellor of the Exchequer. As I discussed in an earlier post, the questions Reeves poses in her Mais Lecture are the following: “how Britain can pay its way in the world; of our productive capacity; of how to drive innovation and diffusion throughout our economy; of the regional distribution of work and opportunity; of how to mobilise investment, develop skills and tackle inefficiencies to modernise a sclerotic economy; and of energy security”.
Reeves calls her approach to answering these questions “securonomics”; this owes much to what the US economist Dani Rodrik calls “productivism”. At the centre of this will be an industrial strategy, with both a sector focus and a regional focus.
The sector focus is familiar, supporting areas of UK comparative advantage: “our approach will back what makes Britain great: our excellent research institutions, professional services, advanced manufacturing, and creative industries”.
The regional aspect aims to develop clusters and seeking to unlock the potential agglomeration benefits in our underperforming big cities, and connects to a wider agenda of further English regional devolution, building on the Mayoral Combined Authority model.
There is “a new statutory requirement for Local Growth Plans that cover towns and cities across the country. Local leaders will work with major employers, universities, colleges, and industry bodies to produce long-term plans that identify growth sectors and put in place the programmes and infrastructure they need to thrive. These will align with our national industrial strategy.”
Universities need to at the heart of this. The pressure will be on them, not just to produce more spin-outs and work with industry, but also to support the diffusion of innovation across their regional economies. There are no promises of extra money for science – instead, as in other areas, the implicit suggestion seems to be that policy stability itself will yield better value:
“Labour will scrap short funding cycles for key R&D institutions in favour of ten-year budgets that allow meaningful partnerships with industry to keep the UK at the forefront of global innovation. We will work with universities to support spinouts; and work with industry to ensure start-ups have the access to finance they need to grow. We will also simplify the procurement process to support innovation and reduce micromanagement with a mission-driven approach.”
Beyond the government’s growth imperative, its priorities are defined by its other four missions; in clean energy, tackling crime, widening opportunities for people, and rebuilding the healthcare system. Research and Innovation, and the HE sector more widely, need to play a central role in at least three of these missions.
A commitment to cheap, zero carbon electricity by 2030 is a very stretching target, despite some advantages: “our long coast-line, high winds, shallow waters, universities, and skilled offshore workforce combined with our extensive technological and engineering capabilities.” Here the “strategy” part of industrial strategy is going to be vital – getting the balance right between the technologies that the UK will develop itself and those it imports from international balance will be vital. The call is to double onshore wind, triple solar, and quadruple offshore wind. There is a commitment to new nuclear build, including small modular reactors, and recognition of the importance of upgrading the grid and improving home insulation. R&D will need to be focused to support renewables, new nuclear and grid upgrades.
In health, commitments to address health inequalities imply higher priority on prevention, with high hopes placed on data and AI: “the revolution taking place in data and life sciences has the potential to transform our nation’s healthcare. The Covid-19 pandemic showed how a strong mission-driven industrial strategy, involving government partnering with industry and academia, could turn the tide on a pandemic. This is the approach we will take in government.” This statement gains more significance following the appointment of Sir Patrick Vallance as Science Minister, as I’ll discuss below.
There’s long been a tension between the high hopes that a succession of UK governments have placed on a strong life sciences sector, and a perception that the NHS is an organisation that’s not particularly innovative. So it’s unsurprising to read that “as part of Labour’s life sciences plan, we will develop an NHS innovation and adoption strategy in England. This will include a plan for procurement, giving a clearer route to get products into the NHS coupled with reformed incentive structures to drive innovation and faster regulatory approval for new technology and medicines.” I am sure this is correct in principle, and many such opportunities exist, but it will be difficult to take this forward until the immediate funding crisis faced by most parts of the NHS is overcome.
The new government’s fourth mission is to “break down barriers to opportunity”. A big part of this is to reform post-16 education (in England, one should add, as education is a devolved responsibility in Wales, Scotland and Northern Ireland). Universities will need to get used to there being more focus on the neglected FE sector, from which specialised “Technical Excellence Colleges” will be created, and should ready themselves for a more collaborative relationship with their neighbouring FE colleges: “to better integrate further and higher education, and ensure high-quality teaching, Labour’s post-16 skills strategy will set out the role for different providers, and how students can move between institutions, as well as strengthening regulation.”
There’s one important priority that wasn’t in the original list of five missions, but can’t now be ignored: the threatening geopolitical situation inevitably means a renewed focus on defence. The new government is explicit about the role of the defence industrial base in this:
“Strengthening Britain’s security requires a long-term partnership with our domestic defence industry. Labour will bring forward a defence industrial strategy aligning our security and economic priorities. We will ensure a strong defence sector and resilient supply chains, including steel, across the whole of the UK. We will establish long-term partnerships between business and government, promote innovation, and improve resilience.”
As the MoD budget grows, defence R&D will grow in importance. It’s perhaps not widely enough appreciated how much, following the end of the Cold War, the major focus of the UK’s research effort switched from defence to health and life sciences, so this will represent a partial turn-around of a decades-long trend.
How is the new government actually going to achieve these ambitious goals? Much stock is being placed on “mission led government”, in which Whitehall departments effortlessly collaborate to deliver goals which cross the boundaries between departments. In its first day, the new government made one unexpected announcement, which I think offers a clue as to how serious it is about this. That was the appointment of Sir Patrick Vallance as Science Minister.
Vallance, of course, has an outstanding background to be a Science Minister, as a highly successful researcher who then led R&D at one of the UK’s few world-class innovation led multinationals, GlaxoSmithKline. But, in the context of the new government’s ambitions, I think his most significant achievement, as Government Chief Scientific Advisor in the covid pandemic, was to set-up the Vaccine Task Force. If that’s going to be a model for how “mission led government” might work, we might see some exciting and rapid developments.
Research and innovation has a huge part to play in addressing the pressing challenges that face the new government, which necessarily cross Whitehall fiefdoms. The ambition in setting up the Department of Science, Innovation and Technology was to have a department coordinating science and innovation across the whole of government; it’s difficult to imagine anyone better qualified to realise this ambition than Vallance.
Quotations from the 2024 Labour Manifesto.