Ministers warned off labs

May 17, 1996

The Government should reconsider moves to privatise public sector agriculture and plant science laboratories, ministers have been told. A confidential report argues that privatisation could cost more than Pounds 200 million and damage Britain's science base.

The report is from an agriculture and plant sciences committee of scientists, industrialists and civil servants charged by the Government with investigating the privatisation of 11 laboratories under the Government's "prior options" review. It concludes that in seven of them no benefits can be identified for the science base in such a move. There are also big financial obstacles.

The seven establishments are allied to the Biotechnology and Biological Sciences Research Council, the Ministry of Agriculture, Fisheries and Food and the Scottish Office. They include the BBSRC's John Innes Centre and Institute of Arable Crops Research, the Scottish Crop Research Institute, and MAFF's Horticultural Research International.

Teams reviewing these facilities considered the removal of all public sector liabilities for staff, including pensions and redundancy payments, and physical assets, as a means of privatising them.

As a worst-case scenario the cost of redundancy payments and transferring pensions to the private sector could be Pounds 260 million, according to the report. This is beyond the funding capacity of the BBSRC, MAFF and the Scottish Office. "All three consider that such expenditure cannot be justified on grounds of value for money," says the report.

The committee told ministers that some review teams do see some advantages to privatisation. Establishments would be freed from public sector controls and have access to new sources of research funding and the ability to borrow capital from private sources.

But, according to the Department of Trade and Industry, several review teams expressed "serious worries" about drift in research missions and the duplication of expertise and facilities that could result from privatisation. They also fear that privatisation could give rise to a short-term research culture that would clash with the aims of the 1993 science White Paper and damage the United Kingdom's science and engineering base.

The report urges ministers to consider whether more work should be done on the feasibility of privatisation.

The review covers 43 public sector research laboratories, employing more than 20,000 people with an overall turnover of nearly Pounds 800 million per annum. Deputy Prime Minister Michael Heseltine is pushing for privatisation of as many establishments as possible.

Two more tranches of reviews of facilities allied to the Medical Research Council, the Natural Environment Research Council and the BBSRC have yet to be considered by ministers.

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