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Private good, public bad?

Miriam Frankel attended a seminar that saw LibDem economic liberals find common cause with the Conservative party’s One Nation wing

Former Conservative deputy prime minister Michael Heseltine last week added his support to a Liberal- Democrat-leaning think tank’s report that argues for more private involvement in public research laboratories.

At a seminar organised by the Centre Forum think tank in London on 22 February, Heseltine helped pitch the report, Getting Better Value from Public Sector Research Establishments, to an invited audience including senior representatives from both public and privately owned and operated research labs, research councils, and government. Quentin Maxwell-Jackson, the report’s author, spoke at the event, which was chaired by Centre Forum’s chief executive Chris Nicholson.

The report, first published in November 2011, compares the 10 public research establishments that have been fully or partly privatised since 1979 with the seven still owned or operated by the government [see RF 30/11/11, p1, via link below]. It argues that privately owned or operated labs achieve better value for money, make decisions faster and have lower overheads compared with public labs. They also have more access to capital and “industry best practice”.

Heseltine said that the report, which he called “brilliant”, vindicated his ministerial decisions. “I guess I’ve probably privatised more individual areas of activity than any other minister,” he added. “I’m thrilled to see such a meticulous report supporting all of those judgements that I made when I was in government.”

Heseltine’s vote of confidence was echoed by Richard Worswick, director of analytical technology at the private company LGC, formerly the Laboratory of the Government Chemist. “I have to say, running an organisation…within the civil service is extremely difficult,” said Worswick, who was LGC’s chief executive at the time of privatisation. “Ministers come and go, they have a slightly different perspective on things, and you always have to get permission before you do anything. So when Lord Heseltine decided to privatise LGC…it was a huge sense of relief”.

Further support came from Simon Bennett, chief executive of the Forensic Science Service, which is due to close in March. However, Bennett added that the report had perhaps not recognised that the FSS had improved its efficiency and was on the cusp of breaking even when it failed to cope with a “25 per cent collapse in the [forensics] market in the space of three months”.

The panel faced some tough questioning from the floor. John Dodds, director of innovation at the Department for Business, Innovation and Skills, wanted to know whether more privatisation could reduce long-term investment in basic science. “We have seen…organisations that have been private-sector run for many years in a number of cases stepping back from these long-term investments,” he said. Maxwell-Jackson, however, countered by saying that funding for blue-skies research was a fundamentally different thing from the work done by public-sector research agencies.

Heseltine added that it is difficult for politicians—unlike academics and research-council staff—to evaluate blue-skies research. “Once you’re in to blue skies [research] there is no way of evaluating or getting agreement. The professor, Mr or Mrs Blue-Skies, is actually obsessed—maybe a madman or maybe a world visionary—but nobody knows. So you have to make uncomfortable decisions.”

Meanwhile, Hugh Pelham, the director of the Medical Research Council’s Laboratory of Molecular Biology, argued that one answer to the report could be to remove the “suffocating influences” of government and keep organisations at arm’s length without privatising them.

Heseltine responded by saying it wouldn’t work in practice. If problems with government labs were identified, he said, the government would still be interfering in the solutions. “I don’t know how you get away from that except to get them out of the system”.

“I’m afraid the public sector is at the mercy of parliament, the public accounts committee, The Daily Mail, and a whole range of other worthy organisations,” he added.

Another point raised by the audience was that more research agencies could be taken over by universities, as they are moving away from being fully public bodies. However Nicholson urged caution. He said the National Resources Institute, which was privatised by sale to the University of Greenwich in 1996, had become one of the least successful privatised agencies and had reduced its size dramatically. Maxwell-Jackson, however, argued that although the institute had indeed been struggling, it was the university that had set it back on its feet.

On 23 February, the scientists’ trade union Prospect issued a statement claiming the report could not be neutral as it was funded by organisations that already run former public sector research establishments, including the logistics multinationals Serco and Battelle. “We need to get beyond simplistic public sector bad, private sector good arguments and this report fails to do that,” said the union’s head of research Sue Ferns.