My Lords, I will speak to Amendments 177A and 178A. Amendment 177A in my name and that of my noble friend Lord Willis of Knaresborough returns to the subject of the ability of research councils to enter into funding partnerships. We discussed this extensively in Committee. We had two key questions. The first was, under UKRI, would there be any additional requirements above those already existing for research councils in forming these partnerships? The second question was, are there circumstances in which such partnerships would require explicit prior approval from UKRI?
The Minister addressed the partnership issue in his letter to us all of 8 February. He acknowledged that the councils currently engage in many partnerships, nationally and internationally, to significant effect. He quoted from a letter that Sir John Kingman had written to me in which he had said:
“The individual councils of UKRI will of course have delegated autonomy and authority to agree these arrangements within their areas of expertise”.
This was helpful but did not quite seem to answer our two questions explicitly.
I explored this further in a subsequent meeting with the Minister and his officials. The essence of our discussion was over the meaning in practice of “delegated autonomy and authority”. In particular, I was anxious to have an explicit answer to the two questions. I thought that it would be helpful for everyone involved, especially the councils, to have maximum clarity. What differences, if any, would the councils see under the new regime when it came to forming partnerships? Amendment 177A allows the Government to answer these questions and to put the matter beyond doubt.
Amendment 178A is in my name and that of my noble friend Lord Willis of Knaresborough, who regrets that he cannot be present today, having urgent family business to attend to. As with amendment 177A, this amendment looks for clarity and confirmation from the Minister. The context is set out in the letter of 8 February that the noble Lord, Lord Prior, sent to us all. On the penultimate page, the Minister addresses the concerns of the noble and learned Lord, Lord Mackay of Clashfern, over the employment by UKRI of the “relevant specialist employees” to which Clause 9 refers. Government Amendment 178 deals with that matter.
However, in his letter to us, the Minister also referred to the research councils’ role in appointing some relevant specialist staff in line with the principles of autonomy. As he reminded us:
“A package of flexibilities for research council institutes was approved by Her Majesty’s Treasury at the 2015 Budget”.
There were five flexibilities. Two of them are of concern to my noble friend Lord Willis, who is a member of the NERC, and to the CEO of the NERC. These are the exemptions concerning pay and the rollover of commercial income.
The CEO of the NERC has pointed out that neither of these exemptions is in practice available to research councils. They do not form part of the councils’ agreed delegations and there is no mechanism within BEIS for their approval, so they do not happen. For example, to address the 20% pay gap that now exists between NERC institutes and the HEIs requires a multiyear strategy. NERC as an employer must have confidence that this can be adopted without being placed in annual jeopardy by being subject to annual BEIS approval. There is no real sense in which the councils have the freedom to manage payroll within existing budgets as agreed at the 2015 Budget. Neither does the rollover flexibility work. In practice, an offer is made to HMT to consider a rollover of commercial income in January. NERC did this but had received no reply by the second week in March. If no answer is received, the money will be lost. Accordingly, NERC has now committed the relevant expenditure in this year. That means that in reality the rollover flexibility does not work either.
Our amendment addresses this problem. It seeks to impose an obligation to have regard to the agreed package of flexibilities and it seeks to give the Minister an opportunity to explain if the freedoms granted to the research councils in the 2015 Budget will in fact be available after the introduction of UKRI and the reorganisation of the councils.
I acknowledge that we are raising these rather complex matters at a late stage. I apologise for that. I should entirely understand it if the Minister preferred to write to us in response.