Hansard

I begin by saying thank you to all those who participated in the preparation of the Enterprise and Lifelong Learning Committee's report. My thanks go first to Simon Watkins and the committee's clerking team, who have done their usual excellent job. I thank the Scottish Parliament information centre for its support, and I thank all those who gave evidence to the committee during its inquiry. My special thanks go to Professor Sir John Arbuthnott, who acted as adviser to the committee in the preparation of its report and worked with the committee throughout the summer, as the report progressed through various drafts. I welcome him to the VIP gallery this morning.

I also thank the Minister for Enterprise and Lifelong Learning for her co-operation in responding to the report within such a short time frame. Normally the time frame for responding to reports is about eight weeks. This report was published about 10 days ago and we expect a fairly detailed response from the minister later in the debate.

I thank SHEFC for its co-operation. We have criticised aspects of SHEFC's work, particularly in relation to teaching funding, but we recognise that it had a difficult job and that it made an effort to bring the teaching funding system up to date, even though we believe that that needs further thought.

I have been quite astounded by the reception that has been given to the report in the 10 days or so since it was published. I will offer members a selection of quotes. The first is from Professor Sir Bernard King, the principal of the University of Abertay Dundee, whom I also welcome to the gallery this morning. The day after the report was published, he wrote in The Scotsman:

"The enterprise and lifelong learning committee's report into SHEFC's recent funding reviews is to be warmly welcomed on many grounds, not least for its clear and far-sighted view of how university teaching and research should integrate with the wider economic, cultural and social life of the nation."

I will quote also from an e-mail that I received from Gordon Millan, chair of the University Council of Modern Languages. He congratulated the committee on the profound way

"in which you ‘handled' your Enquiry".

He said that he was

"delighted that our message on modern languages was listened to",

and that all the evidence that was given by the UCML was incorporated into the committee's report.

My final quote is from a letter that I received from Universities Scotland, which states:

"Universities Scotland warmly welcomes the Committee's report, and congratulates the Committee on the thoroughness of its analysis. It believes that the main findings are sound, and that the principal recommendations form a good basis for addressing a number of vital issues in connection with the funding of both teaching and research."

However, the report has not been welcomed universally. At a meeting yesterday of the senate of the University of Strathclyde, a comment was made about "Alex Neil's committee rampaging" through the universities of Scotland. First, our purpose is not to rampage. Secondly, I do not think that other members of the Enterprise and Lifelong Learning Committee would be happy with its being described as "Alex Neil's committee". Thirdly, the kind of stuffy attitude that the comment that I quoted reflects is for the days before devolution, when there was practically no scrutiny of these matters. The purpose, remit and responsibility of the Parliament is to bring the funding of public bodies under proper scrutiny and to ensure that taxpayers are getting a fair return on their investment in higher education.

The debates that have taken place since the publication of the report have tended to focus on teaching funding, rather than on research funding. I want to rebalance the debate by highlighting the key issues that relate to research funding. I remind members that in Scotland's universities about £370 million a year is spent on basic and applied research. Roughly one third of the funding for that comes through the Scottish Higher Education Funding Council. Research is absolutely vital to both the economic and the social and cultural life of Scotland.

Scotland has an excellent record in academic and scientific research. I could quote examples from many universities in Scotland: the work that is being done on cancer at the University of Dundee; the work that is being done at the University of Abertay Dundee; the work that is being done on lasers at Heriot-Watt University; and work that is being done at the University of St Andrews and other universities. However, traditionally we have been poor at translating research into commercial opportunities that can be of wider benefit to the Scottish economy. In this inquiry the committee—its remit is enterprise and lifelong learning—was naturally very interested in how we can improve commercialisation of Scotland's research for the benefit of the nation as a whole. This is the country that produced the telephone and the television, only for those products to be produced, by and large, furth of Scotland, with minimal direct economic benefit to Scotland.

Our report makes three fundamental points. First, we say that the current formula that is used to determine research funding requires to be refined and improved to make it more relevant to the need for the development of research into downstream economic activity. Although over the past 10 years the research assessment exercise has improved markedly, it still has some way to go toward serving the nation's needs. When an academic has a paper published in a prestigious magazine, he or she is given a substantial number of brownie points in the research assessment exercise. Somebody who patents a new product is given substantially fewer points in the research assessment exercise and somebody who sets up a spin-off company that is of benefit to the wider community by creating jobs gets no points at all. We need to change that, so that somebody who sets up a spin-off company is regarded as a national hero, rather than as somebody who is undeserving of reward. The irony of that situation, which was pointed out by a number of witnesses in the inquiry, is that the publication of papers in prestigious journals sometimes results in people in other countries taking out patents for the products of which we have revealed the secrets in those papers. That is an absurd position that needs to be rectified.

The second major point that the committee made about the research assessment exercise concerned the recommendation by SHEFC—which the committee rejects totally—that funding for level 3-rated departments should not be included in research assessment exercise funding. If that recommendation were implemented, it would have a number of detrimental effects. First, it would be particularly detrimental to our new universities. Secondly, much level-3 rated research will become the level 4 and level 5-rated research of tomorrow. If we cut off funding to the seedcorn research, which is often level 3-rated research, we will not be able to enhance our excellence in future years.

We also found in evidence that level 3-rated departments are often the most innovative in terms of subject areas. Examples of that are in music and—if I may refer again to the University of Abertay Dundee, given that Bernard King is in the gallery—games technology. Abertay started from virtually nothing and people laughed at the idea of a university undertaking games technology as a serious subject. Now, however, Abertay is a world-renowned centre of excellence in games technology, which is one of the fastest-growing industries in the global economy.

Technology Ventures Scotland, which was set up to promote commercialisation in Scotland, told the committee that

"three star research departments are currently better aligned to the needs of business",

particularly to small and medium-sized enterprises. The committee's members therefore believe—unanimously, I think—that funding for such departments should be included in the research assessment exercise funding.

That presents a problem, however. Our excellence is growing at an almost exponential pace while the available funding is growing at an arithmetic pace. I am not criticising the Executive—as the committee convener, I would never do that—but there is a fundamental policy issue that needs to be addressed. If we are fully to realise our potential and ensure that the nursing of research at levels 3 and above on the research assessment exercise scale is properly funded, in order to ensure that those ratings are improved, there will have to be substantial new funding from the private and public sectors in the years ahead.

The three key issues that the committee identified in relation to the research assessment exercise are: the need to fund level 3 research; the need to ensure that spin-offs and patents are rewarded at least to the same extent as academic papers; and the need to ensure that the seedcorn funding exists to provide for the excellence of tomorrow.

On research, the committee addressed the scale of funding. I believe that the committee and the minister agree that there must be exponential growth in funding for research. If I were asked to summarise what the national economic development strategy for Scotland should be in the 21st century, I would say that we should make ourselves the scientific research capital of Europe. That is the area in which we have outstanding ability and can compete on a more than equal footing, and from where we will generate the wealth of tomorrow. In order to do that, we need the private and public sectors to invest significantly more in long-term research in our universities and in our industrial base. Often, the debate concerns only public funding; however, my message to the private sector is that it, too, has failed. The percentage of funding that is spent in the private sector in Scotland on research and development is about one third of the European average for the private sector. One company in Finland—Nokia—spends more on research and development than does the whole of Scotland. That is not a healthy situation for us and we need to address it seriously.