Scrutinising Science: The Changing UK Government of Science

Scrutinising Science The Changing UK Government of Science

Rebecca Boden, Deborah Cox, Maria Nedeva and Katharine Barker

Transforming Government General Editor: R. A. W. Rhodes, Professor of Politics, University of Newcastle This important and authoritative new series arises out of the seminal ESRC Whitehall Programme and seeks to fill the enormous gaps in our knowledge of the key actors and institutions of British government. It examines the many large changes during the postwar period and puts these into comparative context by analysing the experience of the advanced industrial democracies of Europe and the nations of the Commonwealth. The series reports the results of the Whitehall Programme, a four-year project into change in British government in the postwar period, mounted by the Economic and Social Research Council. Titles include: Rebecca Boden, Deborah Cox, Maria Nedeva and Katharine Barker SCRUTINISING SCIENCE The Changing UK Government of Science Simon Bulmer, Martin Burch, Calitríona Carter, Patricia Hogwood and Andrew Scott BRITISH DEVOLUTION AND EUROPEAN POLICY-MAKING Transforming Britain to Multi-Level Governance Nicholas Deakin and Richard Parry THE TREASURY AND SOCIAL POLICY The Contest for Control of Welfare Strategy Oliver James THE EXECUTIVE AGENCY REVOLUTION IN WHITEHALL Public Interest Versus Bureau-Shaping Perspectives David Marsh, David Richards and Martin J. Smith CHANGING PATTERNS OF GOVERNANCE IN THE UNITED KINGDOM Reinventing Whitehall? B. Guy Peters, R. A. W. Rhodes and Vincent Wright (editors) ADMINISTERING THE SUMMIT Administration of the Core Executive in Developed Countries R. A. W. Rhodes (editor) TRANSFORMING BRITISH GOVERNMENT Volume One: Changing Institutions Volume Two: Changing Roles and Relationships Martin J. Smith THE CORE EXECUTIVE IN BRITAIN Kevin Theakston LEADERSHIP IN WHITEHALL

Kevin Theakston (editor) BUREAUCRATS AND LEADERSHIP Patrick Weller, Herman Bakvis and R. A. W. Rhodes (editors) THE HOLLOW CROWN Countervailing Trends in Core Executives

Transforming Government Series Standing Order ISBN 0–333–71580–2 (outside North America only) You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address, the title of the series and the ISBN quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England

Scrutinising Science The Changing UK Government of Science

Rebecca Boden Professor of Accounting, Bristol Business School, University of the West of England, UK

Deborah Cox Research Fellow, PREST, University of Manchester, UK

Maria Nedeva Research Fellow, PREST, University of Manchester, UK

and

Katharine Barker Research Fellow, PREST, University of Manchester, UK

© Rebecca Boden, Deborah Cox, Maria Nedeva and Katharine Barker 2004 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorised act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2004 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN 0–333–74969–3 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Scrutinising science : the changing UK government of science / Rebecca Boden … [et al.]. p. cm. – (Transforming government) Includes bibliographical references and index. ISBN 0–333–74969–3 (cloth) 1. Science and state – Great Britain. 2. Research – Government policy – Great Britain I. Boden Rebecca, 1958– II. Transforming government (Palgrave Macmillan (Firm)) Q127.G4S47–2004 338.941⬘06—dc21 10 9 8 7 6 5 4 3 2 1 13 12 11 10 09 08 07 06 05 04 Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham and Eastbourne

2003054919

Contents List of Tables

vii

List of Figures

viii

List of Abbreviations

ix

Acknowledgements

xi

Foreword

xii

1 The Changing Nature of Scientific Organisation 1 Introduction 2 Science, society and change 3 Science dynamics and conceptual frameworks 4 Science dynamics: a different viewpoint 5 The structure of this book

1 1 2 3 13 27

2 Historical Context 1 Introduction 2 Science in Britain before 1939 3 The post-war era 4 Some conclusions

28 28 29 34 44

3 New Public Management 1 Introduction 2 The concept(s) of new public management 3 New public management in Britain 4 New public management and science in the UK 5 Some conclusions

47 47 47 52 56 72

4 The Organisation of Science 1 Introduction 2 The nature and diversity of services and customers 3 A typography of reform 4 The reformed organisations 5 Some conclusions

75 75 75 78 87 106

5 Science and Markets 1 Introduction 2 Market failure and states

109 109 112 v

vi

Contents

3 4 5 6

Perceptions of state failure A model of marketisation and privatisation Privatisation and marketisation Some conclusions

115 120 125 135

6 Scientific Knowledge Production Processes 1 Introduction 2 Knowledge production processes defined 3 Phases of knowledge production in the UK 4 ‘Shared visions’ and commodified science? 5 Of cost codes and other things 6 Some conclusions

136 136 137 141 145 153 155

7 Lab Reports 1 Introduction 2 Accountability discussed 3 New accountabilities in science 4 Discussion and conclusions

157 157 158 165 183

8 The Future of Science? 1 Introduction 2 3-D change 3 Change 4 Scenarios for science

185 185 186 189 191

Notes

194

Bibliography

196

Index

204

List of Tables 1.1 Argued differences between Mode 1 and Mode 2 knowledge production 2.1 Annual rates of industrial growth 3.1 The first wave – outcome of the first tranche of Prior Options Reviews 4.1 Examples of the range of science and technology services procured by the UK government 4.2 Government Research Establishments, agency status and subsequent status

vii

9 30 73 77 80

List of Figures 2.1 3.1 5.1

Traditional model of science Establishment mission areas A model for marketisation

45 58 121

viii

List of Abbreviations AA ADAS BBSRC BRDC BRE BSE C&AG CEFAS DEFRA DERA DES DoE DoT DRA DSIR DSTL DTI EU FMI GoCo GRE HMSO HSE IPCS IPMS LGC MAFF MINIS MoD MRC NAMAS NATO NEL NIS NPL NPM

Automobile Association Agricultural Development and Advisory Service Biotechnology and Biological Sciences Research Council British Research and Development Corporation Building Research Establishment Bovine Spongiform Encephalopathy Comptroller and Auditor General Centre for Environment, Fisheries and Aquamarine Science Department for Rural Affairs Defence Evaluation and Research Agency Department for Education and Science Department of the Environment Department of Transport Defence Research Agency Department of Scientific and Industrial Research Defence Science and Technology Laboratory Department of Trade and Industry European Union Financial Management Initiative Government-owned, Company-operated Government Research Establishment Her Majesty’s Stationery Office Health and Safety Executive Institution of Professional Civil Servants Institution of Professionals, Managers and Specialists Laboratory of the Government Chemist Ministry of Agriculture, Food and Fisheries Management Information System for Ministers Ministry of Defence Medical Research Council National Measurement Accreditation Service North Atlantic Treaty Organisation National Engineering Laboratory National Innovation System National Physical Laboratory New Public Management ix

x

List of Abbreviations

NRDC NRS OECD OST PPP PREST PSRE R&D RAC RAF RGU RN ROE S&T SO TRL UK

National Research and Development Corporation National Research System Organisation for Economic Co-operation and Development Office of Science and Technology Public Private Partnership Policy Research in Engineering, Science and Technology Public Sector Research Establishment Research and development Royal Automobile Club Royal Air Force Royal Greenwich Observatory Royal Navy Royal Observatory Edinburgh Science and Technology Scottish Office Transport Research Laboratory United Kingdom

Acknowledgements We would like to acknowledge the financial support of the UK Economic and Social Research Council’s Whitehall Programme (grant number L124251011) for financing the three-year study of government laboratories in the United Kingdom on which this book is based. We are also indebted to Professor Philip Gummett for his tireless help and assistance in the fieldwork phase of this project and in the production of this book. We are grateful to Professor Rod Rhodes, the architect of the Whitehall Programme for his academic leadership during this project. Finally, it would not have been possible to undertake the research on which this book is based without the numerous scientists and members of relevant civil service departments and government research laboratories who so kindly agreed to act as respondents and who were invariably generous with their time and thoughts.

xi

Foreword There are few areas of public policy that do not in some way depend upon the input of sound, balanced and independent scientific advice. For decades, and in some cases even centuries, the first port of call for government to provide this advice was that of its own research establishments. In areas as diverse as defence procurement, building regulations, weights and measures and food safety, a reservoir of accumulated expertise was assumed to be needed ‘on tap’. The same or similar establishments also undertook promotional roles in the support of industry or agriculture and other functions. This important book tells the story of how long-standing assumptions came to be questioned as the forces of new public management and of public sector reform more generally came to be applied to the government scientific sector. It derives from a long-term research programme encompassing several funding bodies and projects, which allows the authors to follow-through from the immediacy of policy changes to at least their intermediate consequences. The resulting analysis of change is approached from several directions: ●

●

●

A contextual view grounded in recent models of the dynamics of science; A developmental view which demonstrates the path dependency of many of the changes and their origin in the histories of individual establishments; and A political view showing the sometimes chaotic and rarely systematic way in which new public management was applied in this sector.

With this base the book is then able to explore the emergent system and to show how the provision of science and technology is spread across a variety of models without any sense that particular ownership or governance structures are fit for purpose in a given context. The dissection continues with a consideration of the role of the market and marketisation or commodification of science, which again emphasises the discontinuity between theory and outcome even if real efficiency gains were realised. These new market or quasi-market structures imply new forms of accountability, a topic subject to cogent analysis in this volume. A particularly valuable feature is the way in which several chapters begin with a broader conceptually based account but then return to the xii

Foreword xiii

concrete situation of real laboratories and their problems. This structure enables the messiness of policy outcomes to be captured. Although focused on the United Kingdom I am sure that Scrutinising Science will be a valuable handbook for readers in any country undergoing political reform, particularly but not necessarily in its science and technology support system exclusively. The cost of failing to get it right in terms of scientific advice can be catastrophically high but not be manifested for some years after critical decisions are made. For all of these reasons I thoroughly commend this book to the reader. PROFESSOR LUKE GEORGHIOU

1 The Changing Nature of Scientific Organisation

1 Introduction This book is about change and specifically, the wide-ranging changes experienced by Government Research Establishments (GREs) in the United Kingdom (UK). During the last two decades, the GREs in the UK have been subjected to a process of rapid policy initiated transformation, the dimensions and social consequences of which are still largely unclear. The concept of public administration driving this process of change has been New Public Management (NPM). The NPM underpinning this transformation reflects the fact that it is an integral part of a broader transformation process encompassing the nature and organisation of government, the institutions of science and their relationships with the state, and industry, the practices of scientists, the nature of scientific enquiry, and the concepts of what is science and what is deemed at particular points in time to be ‘good’ science. In this chapter we introduce and critique the concepts and theories currently dominating the analysis of science and its institutions, set out the foundations for our analysis and interpretations and propose an analytical framework to facilitate the exploration of this change. Thus, Section 2 makes explicit the rationale and the main ambitions of this book and the difficulties in attempting to achieve these within established analytical frameworks. In Section 3, some of the concepts currently dominating the analysis of science are presented and critiqued. In Section 4, we set out our alternative analytical framework used in the rest of this volume. 1

2

Scrutinising Science

2 Science, society and change An interest in science and knowledge is neither new nor original. If anything, analyses of science and its place in society are as old as scientific enquiry itself and there have even been claims that after Kant, all philosophy has been about science and cognition. Given that, it is only to be expected that numerous accounts of science would have been produced across the centuries. While having a common subject, these accounts diverge substantively in terms of their focus and both conceptualisation and contextualisation of science. Thus, whilst philosophers have attempted to explain the nature of scientific knowledge and the ‘ways of knowing’, sociologists have concentrated on understanding the boundary conditions of (scientific) knowledge production and utilisation and comprehending the institutional structures involved in these processes. Whereas, economists have adopted another approach and have usually concentrated on the economic value of new knowledge. This book aims to interpret the latest transformations affecting the GREs in the UK and to assess some of the implications that these have had for their structure, the nature of (scientific) knowledge, the meaning of ‘science’ and for the ‘visions’ of science. Fulfilling the main promise of this work demands the use of a conceptual framework that facilitates the simultaneous discussion of the institutional, structural and cognitive aspects of what is commonly referred to as ‘science’. Reference to the literature, however, yields little by way of an existing single conceptual framework that meets these conditions. Existing and dominant conceptual frameworks appear to focus on one or other of the attributes of science without providing a consistent framework for analysis of its various manifestations and dynamics. Moreover, the study and analysis of publicly funded research organisations, including GREs has not been a central focus of the science and innovation literature. Researchers in science, technology and innovation have tended to concentrate their research efforts on discussion of the other major performers of publicly funded research: the universities. Lately, however, there have been signs of increased research interest in the organisation of research (Musselin and Vilkas, 1994; Faulkner and Senker, 1995; Joly and Mangematin, 1996; Boden et al., 1998; Gummett et al., 2000). It is likely that a variety of factors can be seen as contributing to this interest, but some of the most influential are: ●

The most recent wave of transformations of the national research systems.

The Changing Nature of Scientific Organisation 3 ●

●

●

Emerging new (and dormant) policy concerns regarding the place and functions of the research organisations and their links with other performers of research (such as universities and private research labs). The accelerated process of ‘commodification’ of research and research results and the role of research organisations in it. Attempts by governments to influence the establishment of links between research producers and users of research and to speed up the commercialisation of research results.

However, the increasing attention that research institutions have started to attract is pragmatic rather than analytical and the quest is for practical, policy-related solutions rather than for better understanding of the complex dynamics of the research organisations and their relationships with other actors on the national (and transnational) research arena. Our intentions, on the other hand, are to make explicit the dynamic processes in which the GREs in the UK have been involved during the last decade and to explain their origins and expected effects. The inadequacies of theory and the predominantly pragmatic, if any, interest in the GREs bring to the fore the necessity of the development of a middle range analytical framework that will allow us to meet our promises for this book. We believe that the framework suggested here does not constitute a radical break with the existing concepts but rather provides the initial steps towards a much needed synthesis of analytical assumptions. Hence, in the context of the analytical framework used here, science is viewed as a social activity manifested in a particular type of knowledge and embodied in social institutions. Scientific knowledge and scientific/research institutions are involved in complex and multifaceted interrelationships, which are a powerful source of dynamisms and change. Another source of change is the intentional interventions (usually in the form of policies) of particular social agents. Any transformation is therefore the result of a number of different, and sometimes opposing, social forces. At any rate, the framework discussed below helped us shape our understanding, sharpen our explanations and organise the material so that the discussion conveys the complexities and intricacies of the social transformations that have been/are still taking place.

3 Science dynamics and conceptual frameworks A number of theories, derived from different disciplines and allied to various analytical assumptions, have been used in attempts to explain the complex and multifaceted nature of science. Some theories, such as

4

Scrutinising Science

the developments within the structural functionalism in sociology, viewed science as a social institution. These theories were not particularly concerned with explaining the external relationships of science but rather focused on its ‘institutional imperatives’ (Merton, 1968, 1973, 1976). Within the structural functionalist school, science was discussed as an exchange system where the ‘legitimate’ exchange is of ‘gifts of information for recognition’ (Storer, 1966; Hagstrom, 1972). Despite some variations, the structural functionalists invariably saw science as a clearly identifiable and drastically different sphere of social production that functioned according to its own norms and developed following its internal dynamics. In the context of this understanding of science, a strong belief that non-scientists should not intervene in the internal affairs of science was also widespread (Cole and Zuckerman, 1975; Barber, 1990). In other words, the ‘ideology of science’ precluded any intervention from outside its institutional boundaries. Governments/ politicians were expected to fund science generously but they could not expect any tangible returns. The structural functionalist theories of science and the corresponding ideology of non-intervention dominated discourse and social practices until the 1970s, when another, rival intellectual stream gained influence. By the mid- to late 1970s a major change in the epistemological and ontological status of sociology as a discipline and in the sociology of knowledge had occurred. This change could be detected in the fact that structural functionalism, with its positivist programme, lost the epistemological battle to the school of constructivism, which in some of its incarnations was founded on an extreme relativist epistemological platform (Barnes, 1974, 1977; Collins, 1975; Bloor, 1976; Mulkay, 1976, 1979). Where science and knowledge are concerned, the relevant transformation was from sociology of science to sociology of knowledge. These diverged significantly in their epistemological assumptions. Thus, while the sociologists of science took for granted claims such as: ‘scientific knowledge is objective and it reflects a fixed reality’, ‘science discovers truth’, ‘science is a sphere of social production drastically different from (and better than) any other’, ‘science has its own criteria and social norms’, the sociologists of social knowledge questioned all of these. Sociologists of knowledge believed that reality is not fixed but continuously constructed, that science and scientific knowledge are no exception, that the institution of science and the knowledge produced by it are not different (and the knowledge is definitely not more reliable) from other social activities and that social norms in general and those of science in particular do not exist but are part of a discourse.

The Changing Nature of Scientific Organisation 5

Probably, this general shift from positivist to constructivist epistemology made sociology somewhat more intellectually exciting. At the same time, it marked the beginning of an overall drift away from sociology and towards other disciplines (most notably economics) in general discussions and reflections. The advent (and domination) of the relativist platform shook the blind belief in the, a priori, infallibility of science. This questioning led sociologists to lose their influence in wider discussions. Policy making is (usually) founded on expertise and expertise is provided by science/research. Following from its main epistemological assumptions it was impossible for the sociology of knowledge to provide the expertise needed by policy makers. Somebody had to fill in the gap, and the economists were only too happy to oblige. This probably accounts, to a large degree, for the picture existing today where the area of science, technology and innovation studies is dominated by concepts, which are a (sometimes eclectic) combination of multidisciplinary approaches. While providing an exhaustive and profound critique of the existing theories about science is not among the objectives of this book, it is important to critically explore the concepts that are first, currently dominant in the area of analysis of science, research and innovation and second, relevant to and influential for our analysis. Three such concepts are discussed in some detail below, namely the ‘National Research/ Innovation System’, the ‘Modes of Knowledge Production’ and the ‘Triple Helix’. These coexisting concepts have dominated the analysis of science, technology and innovation for the best part of a decade. At the most general level, they all reflect the realisation that science and society are in a relationship of interdependency, namely that science is not exempt from or immune to social and political influences as well as it ought to contribute to the development of the society.

National innovation systems and national research systems The concept of the National Innovation System (NIS) has largely dominated the analysis of science and technology innovation for the best part of two decades. Since the 1980s, when Freeman (1987) introduced and Lundvall (1988) developed the concept of the ‘national innovation system’, it has been used widely to describe the institutions and procedures considered relevant for innovation in a particular nation state. The term ‘national research system’ (NRS), on the other hand, was first used in relation to science policy, and more precisely in Organisation for Economic Co-operation and Development (OECD) studies (OECD,

6

Scrutinising Science

1972, 1974, 1976) from the early 1970s. While both use systems terminology to conceptualise science, technology and innovation, their central concerns diverge. Hence, while in the context of the NIS analyses of technological innovation in firms takes centre-stage, the NRS concept aims to provide a framework for the understanding of the research process and the practices of a large variety of knowledge producers (Rip and van der Meulen, 1995). Of course, there have been attempts at defining the innovation/ research system. These differ significantly depending on the characteristics of the ‘system’ they emphasise. According to Freeman (1987), for example, the NIS is ‘the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies’. Lundvall in his later work (1992) distinguishes between two different possibilities for demarcation of the NIS – the narrow system consisting only of knowledge producers and a broader system incorporating knowledge users as well as education. Nelson (1993) prefers to offer a working definition of NIS whereby each of the constituent terms is discussed separately. Thus, the NIS is the ‘set of institutional actors that, together, plays the major role in influencing innovative performance’ and ‘innovation’ is interpreted broadly as including all processes by which a firm masters products and processes new to them (even if ‘not new’ to the universe or even to the nation). Others, like Trute (1993) for example, when working towards a definition of the NRS, emphasise the importance of ‘the different national frameworks of institutions, norms and cultural traditions formed in the history of the states’ as well as ‘the different models of the relationship between government and science, and different principles of the structure of the public sector and its constitutional and administrative basis’. No fewer than three claims of the concept can be distinguished. These are first, that scientific knowledge is produced (i.e. innovation occurs) in a systematic way within a particular social system, namely the National Innovation/Research System. Second, the appropriate level for analysis of research and innovation and the level at which policies relating to these are possible and make sense is the ‘nation state’. Third, the concept contains a clear shift of focus from ‘science’ to ‘research’ and ‘innovation’. In addition to the three explicit cognitive claims of the concept distinguished here, a fourth claim can be identified. This is that there seems to be a veiled assumption that understanding the ways in which research and innovation occur will facilitate higher levels of social control. In an attempt to assess the cognitive and practical validity (i.e. significance) of this concept we start by examining in detail its key claims.

The Changing Nature of Scientific Organisation 7

Following this we discuss its methodological status and practical implications (in relation to different participants in the process of knowledge production and utilisation). One does not need to look far and hard to find arguments and/or empirical evidence against all three main claims of the National Innovation/Research System concept. It can be argued, for example, that scientific knowledge production is not systematic but to a great degree a random process. This process can, and indeed does, occur within different social and institutional contexts, which do not necessarily have systemic characteristics. Following from broader changes, the emergence and role of the European Union, for example, and the overall tendency towards globalisation, the national level is only one of a number of possible levels of social aggregation at which policy for research makes sense. The terminological shift from ‘science’ to ‘research’ and ‘innovation’ is intended to convey the message of activity and dynamics. In contrast to the more traditional Mertonian vision of science, where the main function of science (and by implication, scientific institutions) was ‘… to preserve and enlarge the accumulated body of certified knowledge …’, research is a dynamic and active participant in the process of social production. It is only logical to ask whether a radical and all encompassing transformation of ‘static’ science into ‘active’ research has really occurred and whether such transformation can/does affect all aspects and disciplines of science. Thus, the major (or even all) claims of the National Innovation/Research System (NIS/NRS) can be contested. In terms of providing a framework for carrying research in the area of science and technology studies (a set of assumptions, research agenda and sets of methodologies), the impact of the NIS/NRS concept is two sided. On the one hand, through providing a framework that brings science outside its own institutions and linking both knowledge production and research institutions to a broader social, economic and political environment, it has acquired a sizeable following. One particular expression of this is the extensive use of systems terminology in science and technology research (e.g. national systems and regional systems). On the other hand, the NIS/NRS concept, in being predominantly descriptive, has only limited importance in providing the methodological foundations for research. Thus, while it provides a sufficient basis for comparative data collection and structured ‘thick’ descriptions, it lacks the rigour to provide frameworks for analysis and explanation. Where practical importance is concerned, the significance of the NIS/NRS concept exceeds by far its methodological virtues. It is

8

Scrutinising Science

important in two main ways, namely as a concept allowing some cross-disciplinary interactions in the studies of science, technology and innovation, and as a concept facilitating change in policy thinking. Today, governments usually think about science, with regard to both funding and policy making, in systems terms and science is viewed as inextricably linked with other areas of social life such as education, economy and culture. To summarise, the NIS/NRS concept has become one of the three concepts dominating the analysis of science, technology and innovation. While its value as a conceptual framework is limited to providing structured ways for carrying out descriptive research, its practical significance is extensive, spanning across research communities and policy makers. A major strength of the concept is that contrary to more traditional sociological views about science here both scientific knowledge and its institutions are being viewed as parts of broader systems. The strengths of the concept suggest virtue in trying to remedy some of its inherent faults. One way to do that is to conceptualise the NIS/NRS as involving three different aspects: the institutional, the structural and the cultural/ideological (Nedeva, 1997). Analysis of phenomena within these aspects of the NIS/NRS, using specific analytical methodologies and techniques, allows the researcher to go beyond the purely descriptive.

‘Mode 1’ and ‘Mode 2’ knowledge production This concept was announced by a book published in 1994 entitled ‘The New Production of Knowledge’ (Gibbons et al., 1994). As indicated by the title of the book, it argued that there was an emerging dominance of a new mode of knowledge production referred to as ‘Mode 2’. This mode of knowledge production, it was argued, is distinctly different from the more traditional ‘Mode 1’. The mode-ist concept quite quickly came to dominate the science and technology studies discourse and, judging by citations and references, established itself as one of the most influential concepts in the research area (Shinn, 2002). At the most general level this concept is about change as it announces a drastic transformation in the way knowledge is produced and used (Gibbons, 2000). No fewer than four claims of the concept can be identified. First, it is claimed that two different modes of knowledge production can be clearly identified – the more traditional ‘Mode 1’ and the new ‘Mode 2’. Second, the authors argue that ‘Mode 2’ is a new mode of knowledge production, which has emerged relatively recently. Third, ‘Mode 2’ is becoming the dominant mode of knowledge production. Last but not

The Changing Nature of Scientific Organisation 9

least, even in the language that has been used (‘new’ is often equated with ‘progressive’ and ‘socially desirable’) there transpires an assumption that this is a welcome (and probably logical) development in the organisational existence of science and research. ‘Mode 2’ knowledge production was conceptualised in terms of five attributes, namely ‘knowledge produced in the context of application’, ‘transdisciplinarity’, ‘heterogeneity and organisational diversity’, ‘enhanced social accountability’ and ‘more broadly based system of quality control’. These same attributes were used to compare Mode 1 and Mode 2 knowledge production and distinguish between these with some clarity. Table 1.1 provides information on the argued (claimed) differences between the two knowledge production modes in some further detail. The ‘mode-ist’ concept of knowledge production established itself quite quickly and quite firmly as one of the leading developments in the area of science studies and science and technology policy. According to Shinn (2002) the book that announced the ‘mode-ist’ approach had 266 citations between 1995 and July 2002 and the concept itself was/is frequently referred to in conference presentations and policy contexts. Looking in more detail at the references, however, it transpires that in its eagerness to embrace this conceptual development the research community did not carry out a critical assessment. Hence, while being commonly used in the area of science studies and science and technology policy research, the concept has not been seriously tested and is thus part of the researchers’ vocabulary rather than a methodological foundation. The widely diverging use and understanding of the meaning of ‘Mode 2’ is a further expression of the fairly uncritical manner in which

Table 1.1 Argued differences between Mode 1 and Mode 2 knowledge production Mode 1

Mode 2

Agenda setting in academic context Problem solving in academic context

Agenda setting in broader contexts Knowledge produced in the context of application Flat, flexible structures Network based (transient) Knowledge production can occur anywhere High level of accountability and reflexivity Peer review involves other constituencies

Organisational structures are hierarchical Institutions based (permanent) Knowledge production occurs in specialised institutions Low level of accountability Peer review involves only academic community

10 Scrutinising Science

it was accepted. Another expression is that while some criticisms of the concept have been voiced, its main claims have not been tested to date. This can be partly explained by the nature of the ‘mode-ist’ concept and the form in which it was announced. Here, we agree with Shinn that the book ‘… raises few questions about the evolution of science and technology or about changes in their relations with enterprise and society … No questions, but lots of answers. On a parallel plane, almost no concrete evidence is given for the assertions advanced; and no provision is made for future empirical historical or sociological work’ (Shinn, 2002: 606). In fact, Shinn goes a step further to pose the question: ‘… is the New Production of Knowledge a metaphor, or just a catch phrase?’ The assertions made by the new production of knowledge are almost impossible to test directly in their present form. Consequently, it is almost impossible to confirm or reject their ontological status. This probably accounts for the fact that the few criticisms levelled at this concept tend to question whether the two modes of knowledge production can be really distinguished, whether ‘Mode 2’ is really new and/or whether it is really becoming the dominant mode of production. The very nature of the argument does not allow for much constructive criticism or even discussion to occur. It is also not possible for its main claims to become proper methodological foundation for further research and move beyond being the fashion statements of a particular research community. The relationships between the new knowledge production concept and social practice, most notably policy making, are again not simple and straightforward. On the one hand, there is a strong message that the concept has drawn on social practice through its claim that a set of significant transformations in the ways in which knowledge is produced has been identified. At the same time, as already pointed out, the book does not offer much empirical evidence to support its claims. The language used to describe the changes affecting science and research makes the concept very attractive to policy makers. The changes are ‘separate’ and these are ‘new’ where novelty conveys a mixed message of progressiveness and desirability. As a consequence, the new knowledge production concept has entered the political and policy domain either as a part of the discourse (in other words to justify, some times dubious, policy developments) or as an ideological driver for policy change. One example of the latter is the ever increasing share of public funding for research allocated to distributed networks founded on the ideological belief that ‘networks are good while institutions are somewhat deficient’. Assessing the whole range of possible consequences of such and

The Changing Nature of Scientific Organisation 11

similar developments for the research and innovation system is not among the aims here. It is clear, however, that the relationship between the new knowledge production and policy making is one of ‘self fulfilling prophecy’ – Gibbons et al. announce the increased importance of networks in knowledge production; policy makers take this as a message that this is the ‘way to go’ so they direct an even higher proportion of the research funds to networks. In conclusion, we argue that, whilst being potentially useful in discussions about change, regrettably this conceptualisation falls short of providing the analytical framework necessary for the discussion of institutional change. The mode-ist concept is not particularly useful for the purposes of our work – if nothing else it in effect proclaims the end of institutions thus denouncing the very existence of the subject of our investigation. The ‘Triple Helix’ In the mid-1990s the emergence of a Triple Helix (Etzkowitz and Leydesdorff, 1995) of university–industry–government relations was announced. The Triple Helix concept is an attempt to model the complex system of innovation in the knowledge-based economy. Using as a starting point the fact that nation states at different stages of development share an innate interest in ‘… fostering knowledge-based economic and social developments requiring the creation of boundaryspanning mechanisms’, the authors go on to assert that modelling innovation in such a global system should account for three dynamics. These are: the economic dynamics of the market; the internal dynamics of knowledge production and governance of the interface at different levels. Leydesdorff and Etzkowitz proposed to model the complex system of innovation as a Triple Helix between university, industry and government. Or in their own words: The Triple Helix model takes the traditional forms of institutional differentiation among universities, industries and government as its starting point. The evolutionary perspective adds to this historical configuration the notion that human carriers reflexively reshape these institutions. The model thus takes account of the expanding role of the knowledge sector in relation to the political and economic infrastructure of the larger society. (Leydesdorff and Etzkowitz, 1996: 280) Where the main claims of the concept are concerned, the Triple Helix has methodological rather than ontological ambitions. In other words,

12 Scrutinising Science

the authors of the concept do not claim to have discovered and/or explained a new social phenomenon but to have provided a model, a methodological framework, assisting researchers in studying a complex social system (e.g. the institutions involved in the process of innovation). In fact that is the main claim of the concept – that it is a methodological tool and that it is formulated not at the level of phenomena to be explained but to help with the explanation (Leydesdorff and Etzkowitz, 1998: 358). Given that the main claims of the Triple Helix concept are methodological, its impact on the research field as measured by tools such as the Science Citation Index is an indicator for its successful penetration. In his article, however, Shinn (2002) points out that in contrast with the ‘modist’ concept ‘… the impact of the Triple Helix perspective is negligible – almost non-existent’. For a seven-year period (1995–2002), he found only a total of 35 relevant citations. While Shinn goes on to question the ‘… relationship between the growth of ideas and reputations, on the one hand, and what citation counts tell us, on the other …’ (Shinn, 2002: 602) he also contends that the very general nature of the concept as well as the, in some cases, excessively specialised language (impenetrable for researchers not belonging to the inner circle) can partly take the blame for that. We decided to go a step beyond the immediately obvious, namely citation counts, and check whether in cases where the Triple Helix concept has been referred to, this reference expressed substance or if it was simply mentioned. We looked at several papers published in science and technology policy journals (excluding the papers of its main protagonists). It appears that, where a reference to the Triple Helix has been made, it was simply mentioned or used as a metaphor, rather than being employed for its methodological foundations (van Duinen, 1998; Erno-Kjolhede et al., 2001). At the same time, the Triple Helix concept has provided a useful ‘umbrella’ for organising a group of practitioners researching issues arising at the boundaries between research, industry and government and using more sociological analytical frameworks. A number of international conferences and workshops have been organised under this umbrella, and the contributions have been published in prestigious journals. The effect that the Triple Helix concept has had on the positioning of communities reaches beyond the research community as narrowly defined. It has the support of major players in the field of politics of science (e.g. US National Science Foundation) and also prides itself on

The Changing Nature of Scientific Organisation 13

a large geographical coverage – practitioners from all continents take part in the Triple Helix conferences. To summarise, the Triple Helix has not delivered on its promise to provide a methodological foundation for the analysis of change that has been occurring in the area of innovation and the links between research, industry and government. Failing to attract considerable following (this includes conceptual acceptance and methodological dependence) it has succeeded in providing a much needed and very popular platform for social researchers working on boundary issues. In conclusion, it is worth mentioning that while recognising the failings of the concepts currently dominating the analysis of science and its relationships with society, we do also recognise their strengths. Aiming to avoid their shortcomings our analytical framework builds on these strengths.

4 Science dynamics: a different viewpoint Our discussion of the main concepts dominating the analysis of science and its interactions with the society at large has helped to illuminate some of their shortcomings from the point of view of the analysis upon which we wish to embark. Hence the necessity to attempt a conceptualisation of the latest developments affecting institutional science, accounting for the complex interdependencies between institutional change, change in the knowledge and practices of science and the shifting visions of science. It should be noted that while benefiting our interpretation and analysis of the changes that the GREs in the UK have been undergoing, the analytical framework discussed here is still emerging. Its two main features are that it distinguishes between two ‘ideal’ types of change, namely organic change and policy-introduced change, and that it attempts an analytical synthesis between the institutional, the cognitive and the ideational dimensions of science. Organic change and policy-introduced change That change is a universally recognised feature of life is reflected in the development of both science and social science. In the social sciences, for example, attempts to explain social change became particularly prominent in the context of the classical sociological tradition of the nineteenth century. This fascination with the issues of social change reflected the massive changes that societies were undergoing at the time. As Tilly (1988) points out ‘… The discipline of sociology grew from the

14 Scrutinising Science

encounter between worried bourgeois and the massive changes of the European nineteenth century’. Numerous theories of social change have been developed. These theories vary in their ambitions and explanatory frameworks whereby some attempt to explain how society and its different parts change, while others have even more serious claims to predict social change. Boudon (1986) distinguishes four main types of theories of social change. The first group comprises theories the aim of which is to make explicit the existence of more or less general and irreversible trends. Examples here are Comte’s ‘three stages of development’, Rostow’s ‘stages of growth’ and Parson’s ‘trend towards universalism’. The second broad group of theories of social change are those searching for the laws of change. Theories of this type take the form of what is generally known as ‘conditional laws’ or propositions of the type ‘if A then B’. A famous ‘law’ that originates in Parsons suggests that the effect of industrialisation is to make the nuclear family the normal or modal type. A third group refers to theories that do not discuss the content but the form of social change. The theories united under this umbrella do not answer the question what will change but how the change occurs. An example of such theory is that of Kuhn. The last group is formed by the theories that deal with the causes or factors for change. It is apparent that a number of widely varying theories of social change have attempted to conceptualise different kinds and types of social change. For the purposes of this book an important distinction is the one between social change that does not include explicit intentionality and usually occurs as the aggregate effect of a large number of social actions and social change that comprises intentionality and can be traced to/attributed to particular social actions/policy decisions. Further down in this text we refer to the former type of change as ‘organic change’ and to the latter as ‘policy-introduced change’. While in the context of this work, distinguishing between organic and policyintroduced change has clear cognitive and analytical value, its practical relevance can be questioned. In other words, while thinking about the two types of change aids the analysis in practice, these can and usually do converge.

Organic change Organic change refers to a process where no clear intentionality can be identified. The process of historical development of science can provide an example of what is meant by organic change. Taking into account the specific features of the institutional and cognitive organisation of

The Changing Nature of Scientific Organisation 15

science, three overall periods in its development have been identified. These are ‘pre-science’, ‘science for gentlemen’ and ‘professional science’. ‘Pre-science’ refers to the scientific ideas developed in Ancient Egypt, Mesopotamia and Ancient Greece and their corresponding social and institutional structures. A lack of very systematic scientific ideas and a relatively low level of theoretical development are two of the defining features of this period in the development of science. If a more everyday terminology were to be used, following Dunbar (1995), this stage in the development of science could be referred to as predominantly ‘cook book science’. In other words, people at the time knew that ‘things’ happen, they realised that certain events occur sequentially and they also realised that on a number of occasions the events are causally related (e.g. thunder and rain or the flooding of the Nile at certain times of the year). But they could not explain why things happen as they do or the type of relationships that exist between these. Thus discoveries were more a matter of trial and error than the expected outcome of systematic enquiry. On the institutional side, science during this period was characterised by low level of institutionalisation and proto-professionalisation. There were no scientific institutions as we know them today and what in ancient Greece were called ‘academies’ referred more to a relatively stable group of people rather than to established institutional practices (an example of that is the Academy of Plato). During the period of the development of science commonly referred to as ‘science for gentlemen’ (roughly between the fifteenth and nineteenth centuries), scientific theories were developed. The discoveries of science started to be seen as having some practical relevance and science itself became more sensitive to practical problems and issues. In terms of institutionalisation of science, the first mature, modern scientific institutions were established and practising science became a profession (Kearney, 1970). This was the time of Newton, Leibnitz and Boyle, and theoretical developments that had been formulated back then are still used as cognitive frameworks. Science, during this period, aimed to explain the world/universe although scientists used to claim that they were simply reading and interpreting God’s will. During the ‘science for gentlemen’ period, the first mature scientific institutions began to develop. Two examples of scientific institutions that had emerged during this period and are still vibrant are the Royal Society of London and the Paris Academy (Purver, 1967; Hahn, 1971). These institutions were established at the same time and share a number of characteristics: both the Royal Society and the Paris Academy specified clearly their conditions for membership;1 both institutions held regular sessions at which their members reported on their latest work

16 Scrutinising Science

and discussed developments elsewhere; with the establishment of specific scientific institutions clear publications patterns and communications channels also started to develop; and last but not least, both institutions benefited from state patronage. The Paris Academy was the first to introduce salaries for its members. In the mid-nineteenth century, in Britain, as a result of a number of developments (among which are the concerns regarding the perceived decline in British industrial competitiveness, the budding needs of industry for research and trained personnel and the inability of the Royal Society to respond to these needs) a new organisational form, namely the civic university, started to emerge. ‘Professional science’ is characterised by a high level of theoretical development. At this stage of the development of science, not only have theories about natural and social phenomena been established, there is also an acute epistemic interest and a drift towards cognitive reflexivity (Fuller, 2000). Science is characterised by a high level of codification and intellectual coherence. Institutionally, the development of science has reached its peak. A large variety of institutions are involved in knowledge production. Some of these are knowledge producers, others use knowledge and yet another group support research by finance and policy. Moreover, research networks counterbalance the stability provided by institutions by increasing the level of fluidity and change at national, regional and transnational levels of social aggregation. Directly following from its unprecedented level of development, science has become very powerful and all pervasive, and we live in an overwhelmingly ‘man-made’ and scientifically justified world. Professional science demands (and is able to offer) extensive and prolonged professional education and clear career structures have emerged. Today’s science has developed strictly established communication patterns where a clear shift away from books and towards more journal papers can be observed. Science is not simply ‘useful’ but a major contributor to ‘wealth creation’ and ‘quality of life’. Reviewing the stages in the historical development of science, we draw attention to some significant differences that help distinguish between these. Interestingly, in the context of this book, it is not so much what these differences are, but the fact that the transition from one stage in the development of science to the next one cannot be explained by referring to particular policy decisions or intentionality. As a rule this transition is a result of a complex interplay between large numbers of apparently random social factors. The first civic university in the UK, the Victoria University of Manchester, for example, was founded to reflect a social need but its foundation and future development

The Changing Nature of Scientific Organisation 17

were made considerably easier by the personal friendship between Henry Roscoe and Thomas Ashton2 (Sanderson, 1972). The Kaiser Wilhelm Gesselschaft in Germany emerged following a change in the patent legislation as a consequence of which the universities with their inflexible structures could not meet the demands of the textile industry and although, as its name clearly indicates, it received the blessing of Kaiser Wilhelm there was no political intentionality involved (Harwood, 1994). The broad historical transformations of science, both cognitive and institutional, happened as a result of the aggregate effect of a large number of individual social actions. To complicate matters even further, some of these social actions are not visibly connected and can be geographically and temporally distant. The transformations described above cannot be attributed to any particular policy and were not a result of implemented policy decisions. As a result this type of (organic) change does not involve axiological statements and assumptions – there is no statement about ‘good’ or ‘bad’ and so on. Lack of explicit intentionality also means that this type of change ‘simply happens’. Most if not all theories of social change have focused on studying and attempting to explain and predict this type of change. Where the New Public Management transformations affecting the GREs in the UK are concerned, however, entirely different processes were involved. The change was initiated as an integral part of a much broader political and policy programme of NPM. In other words, the change that the GREs are undergoing cannot be explained satisfactorily by relying on existing theories of change. Policy-introduced change This type of change differs from ‘organic change’ in that it usually involves a high degree of intentionality. Apart from being intentional, such change is usually also perceived as desirable. In other words, if policy-introduced change is to be initiated, there ought to be a pre-existing belief or a strong conviction that another, different state of affairs is ‘good’, ‘useful’ or ‘right’. While believing that something is ‘good’, ‘useful’ or ‘right’ is a necessary precondition for the initiation of this type of change, it is by no means sufficient. Some further preconditions are associated with power, for example. The social agent(s) – individuals and/or groups – can initiate the change of a social system (or any kind of social entity) only when they are in a position of power or, in other words, they have the ability and influence to do so. To go back to our discussion of the historical development of science, one of the major changes that occurred in the mid- to late twentieth

18 Scrutinising Science

century is that organic change gave way to policy-introduced change. At the most general level it is possible to identify two groups of factors that contributed to this shift. First is a group of factors relating to and following from changes in science and second, a group of factors relating to changes in society as a whole. Where changes in science are concerned, it suffices to mention its ever increasing complexity, the escalating costs required for its support and its increased social importance. As a result, science from a fairly chaotic endeavour for devotees became an organised enterprise for highly trained professionals. Moreover, following from the emerging expectation that science can contribute to increases in the level of national industrial competitiveness and the proven record of science in delivering military advantage it became a governmental concern. The second group of factors reflects the fact that government perceptions regarding possibilities to exert control have also changed. This resulted in a general increase in policy making, directing and control. In fact there have been voices proclaiming the advent of the ‘audit society’ (Power, 1997). As a particular expression of this, the beliefs regarding the possibilities of influence over the development of science – both institutional and cognitive – have also changed. There was a notable shift from ‘science is autonomous and cannot be controlled’ to ‘science is no different to any other sphere of social production’ during the late 1970s. We believe that three issues associated with policy-introduced change deserve particular attention here. One of these is associated with the axiological nature of this type of change. Being predicated on beliefs regarding desirability, it is very hard to ensure that the level of desirability will remain unchanged in time. In other words, it is almost impossible to ensure that something that sounds like a good idea today will be a good idea tomorrow. The second issue refers to a different aspect of desirability. Change of this type usually aims to achieve a desired outcome(s) in the context of social systems. Due to the extremely high level of complexity, it is not possible to predict all possible outcomes and even less possible to ensure that the desired outcome is among these. In other words, every time policy-introduced change is initiated, it is highly likely that the desired outcome is not going to be achieved and that at least some of the outcomes will be unexpected, undesired or both. The third and very important issue is that policy-introduced change should account for ongoing organic change if it is to succeed. If there is

The Changing Nature of Scientific Organisation 19

no congruence between organic change and policy-introduced change it is very likely that the forces contravening the policy-introduced change would be so strong that it would become impossible. The discussion in this book focuses on a particular case of policyintroduced change, namely the intended transformation of the GREs in the UK. We believe that our analysis of the processes involved in this transformation will illustrate the main points made here. For the purposes of this book, we have conceptualised science as a social activity/process occurring within particular institutional forms that have evolved over time. These forms produce particular types of knowledge, particular practices are used in the process and different social groups also view science in different ways at different times. The changeable nature of science as institution, knowledge and practices, and visions, is almost by necessity one of our fundamental assumptions. The dynamics of science have been conceptualised in terms of three interdependent aspects, namely its institutions, the knowledge that is being produced and the visions of science. Science and its institutions Previously, in this chapter, we furnished examples illustrating how during different historical periods of its development, different institutional forms have accommodated the development of scientific knowledge. While it was quite acceptable in Ancient Greece to develop philosophical theories at the market (the agora) as Socrates did, today scientific activity is carried out within the boundaries (or across these) of specific institutions, by a clear-cut group of professionals. It is worth mentioning that, during different periods of the development of science and society, different institutional forms have provided a home for the production of new knowledge. To complicate matters even further, due to a variety of broadly historical and cultural factors, which are not discussed here, different institutional forms have come to dominate the organisation of science in different national contexts. Thus, while in the UK the universities are considered to be the major performers of publicly funded research, this is not the case in Germany, France and a number of other European countries. This institutional organisation should be expected to affect the nature of the GREs – their structures, their relationships with the state and industry, their participation in the scientific division of labour. Accounting for variations of this kind is necessary if policy-introduced change is to be assessed.

20 Scrutinising Science

Moreover, today the view of science extends beyond science itself to include policies for science as well as measures encouraging the implementation/commodification of research results. Translated into the language of institutions, this means that a number of diverse organisations are currently involved, directly or indirectly, in the affairs of science. At least three broad groups of institutions directly or indirectly involved in the production of knowledge can be identified. These are state organisations, universities and research organisations. During the last two decades or so, all these institutions have undergone quite profound changes. Particularly explicit are the changes affecting the knowledge producing institutions such as the universities and the research organisations. A European level study found that the universities and research organisations (including GREs) have changed in terms of at least five facets of their institutional structures (European Commission, 2001). These are: employment structures, resources and resource management, quality of research and evaluation, research agendas and priorities, and institutional cohesion and networks. For the purposes of this book, these institutional structures have different relative significance where the employment structures, the resources and resource management and evaluation mechanisms have dominance. Lately, a body of evidence about the ongoing change of the employment structures in knowledge producing institutions has been accumulating (Waterton et al., 2001). This change is particularly pronounced within the university sector where studies have found that tenure has all but disappeared and academics and researchers are hired on short-term contracts. This, in turn, affects career paths, employment benefits and career choices. Comparing the changes of employment structures in universities and research organisations, the European study found that, contrary to intuitive expectations, the research organisations are less affected by the process of casualisation of research than universities, that both employees of universities and of research organisations are mainly employed on temporary research contracts, that researchers believe that they have become ‘overworked and underpaid’ and that a higher proportion of good graduate students chose alternative careers outside research. The distribution of resources for research is a powerful lever for influencing directly the social and cognitive strategies of research institutions. The way in which funding is distributed can affect the priority areas of research, the established evaluation mechanisms, the whole mode of operation of the institutions and their social structures.

The Changing Nature of Scientific Organisation 21

Two tendencies in this respect appear to be fairly universal – they have been registered in different national and institutional contexts. These are the tendency towards a declining proportion of core institutional funding and an increasing proportion of national funding that is subject to open competition. While these two tendencies are universal, there is some evidence that research organisations have experienced this change more sharply than universities (European Union, 2001). The institutional changes that have occurred or are expected to occur as a result of the changed status of the GREs in the UK, are discussed in more detail in Chapter 4 of this book.

Science as knowledge and practice In congruence with, and sometimes following from, the transformations affecting the institutions of science, deep changes that sometimes affect the nature of what is referred to as scientific knowledge can be clearly detected. These changes include the blurring boundaries between basic and applied science as well as the advent of topic oriented, multidisciplinary science. Until relatively recently, researchers and policy makers assumed that intellectual innovation occurs at three clearly defined stages. This assumption was reflected in the development and wide use of the Frascati definitions of research as basic, applied and research development. A natural extrapolation of this assumption was that different types of research institutions do (and ought to be doing) different types of research. Hence, basic, highly theoretical research was considered to be the domain mainly of the universities in the UK, while more strategic and applied research, and research-related services were assigned to the research organisations such as the GREs. More recent developments in theory and social practice seem to reject the view of research as a largely sequential activity occurring at these three stages. There have been arguments that the distinction between basic and applied research, for example, is becoming increasingly blurred (Proctor, 1991; Webster, 1991). Moreover, as Webster points out: … the distinction between basic and applied research begins to look less and less useful as the research team’s efforts pull in both directions at the same time, indeed as a recent report of the UK’s Advisory Board for the Research Councils said, this distinction was ‘a meaningless dichotomy’ in a growing number of research fields.

22 Scrutinising Science

The research environment may reflect this: academic departments are increasingly being restructured to accommodate basic and applied interests … (Webster, 1991, p. 4) And later: At a more general level, the distinction between ‘science’ and ‘technology’ also begins to lose its relevance in practice even if in principle it is still possible to distinguish the two. (Webster, 1991, p. 4) Proctor (1991) also points out that this process of blurring of boundaries is particularly advanced in the case of the ‘new’ research area such as biotechnology and computer sciences, where it is virtually impossible to distinguish between basic and applied research. That different types of research institutions – universities, research labs, GREs and industrial research units – compete for resources within the same research space is one particular expression of this process of blurring of boundaries between different kinds of knowledge. Moreover, there are clear indications that not only the types of knowledge that are being produced by the different research institutions have changed but that the expectations of users have changed also. Thus, universities are expected to provide research-related services (Howells et al., 1998) and research laboratories are expected to do more basic, fundamental research. Another important change in the context of new knowledge production is that investigative effort has shifted from ‘research themes’ to ‘research topics’. This is a particular expression of a more general conceptual and practical shift from science to research. Underpinning this process is the concept and practical implications of multidisciplinarity (Jantsch, 1970; Kohler, 1991; Schmoch et al., 1994; PREST, 2000). This has clear implications for the practices of the scientists and for the research culture. In terms of research practices, probably most clear are the implications in terms of managing one’s career. Today, every researcher has to manage a portfolio of short-term research projects. One study (Waterton et al., 2001) found that researchers usually identify a core interest pervading the portfolio of projects as a whole. In particular, university researchers try to observe a very fine balance between more ‘fundamental’ work funded by the research councils and projects funded directly by research users, which by necessity have a more applied, service-related character. In conclusion, we should like to point out that the changes of science as knowledge and social practice are in strong interdependency with the

The Changing Nature of Scientific Organisation 23

transformations of science as institution. Any change in institutional structures is very likely to result in altered knowledge producing practices and different types of knowledge being produced. Altered knowledge producing practices, in turn, are likely to impact upon the speed and depth of change in institutional structures. These changes in knowledge production processes are discussed in Chapter 5. The visions of science It is worth emphasising that the dynamics ensuing from the first two aspects of our analytical framework, those of science as institution and science as knowledge, are present irrespective of the nature of change that is being discussed. This is not the case with the dynamics linked to the third aspect, namely the visions of science. This aspect becomes significant only in the context of policy-initiated change. The visions of science consist of a complex hierarchy of elements such as values, norms, ideas and general beliefs, which provide paradigms for social action. People structure their social space according to their comprehensive patterns of belief (Durkheim, 1915; Marx, 1964; Weber, 1968; Ziman, 1978). According to Shills, ‘… these comprehensive patterns of belief comprise outlooks and creeds (“suboutlooks”), movements of thought, and programs, as well as ideologies’ (Shills, 1972, p. 23). Shared and/or dominant patterns of belief regarding the nature of research, its role and place in society and the ‘optimal’ social conditions for its functioning not only define the way in which national research systems are structured but also the way in which their problems are defined. These beliefs function at different levels of social aggregation and can be detected at the levels of the individual, communities, institutions and society as a whole. Patterns of belief or visions of science become a force for change only when individuals or groups in position of power share them. The vision of science as ‘… autonomous and apolitical, concerned solely with the objective pursuit of truth, for example, as “pure academic science” ’ ( Johnston and Jagtenberg, 1978) dominated the research and policy domains for several decades. The vision of science as ‘pure academic science’ is based on the nineteenth-century distinction between ‘pure’ and ‘applied’ science and: … was designed to recognise that whereas technical invention or innovation is almost always goal oriented, there is also pure science – science pursued ‘for its own sake’, not just for its applications. (Proctor, 1991)

24 Scrutinising Science

Pure science is by definition free. It is free both in the sense that it is ‘neutral’ and in the sense of ‘freedom from political, economic and broadly social interest’. As Ravetz points out, science perceived as ‘pure, academic science’, … is totally inward looking, its only offerings to the outside world are general contributions to knowledge and culture, unpredictable technological applications, and the example of its endeavour. (Ravetz, 1973) However, beginning during the middle to late 1970s the vision of science as ‘pure’, ‘autonomous’ and ‘free of social influence’ in the UK has been diminishing in significance and considerations regarding its ‘freedom’ and ‘autonomy’ have considerably changed their meaning. First, by the 1970s, there was considerable evidence that ‘useful science’ where ‘the results and methods of science are applied directly to technical and practical problems; and those external tasks provide stimuli, goals and partial justification for scientific work’ (Ravetz, 1973) is the most appropriate description of contemporary science. The significance of ‘useful science’ was asserted by the concentration of research in industrial and government laboratories and by the sharp increase of in-house R&D expenditure in particular industries. ‘Useful science’, however, is conducted in social environments demanding profit, growth and accountability, which require that the research be directed towards the general objectives of economic development. Second, science and technology became a central concern for the state and ‘all governments … are involved in the large scale funding, management and regulation of science and technology’ (Webster, 1991). Third, the notion of science as ‘free’ crucially depends on the distinction between ‘pure’ and ‘applied’ science, between ‘passive, disinterested science’ and ‘transformative, engaged technology’. In recent years, the boundaries separating science and its application have become blurred and it has become increasingly difficult to distinguish between pure and applied science along traditional lines. Governments have recognised the ‘usefulness of useless research’. The consequence has been not just a shortened time lag between discovery and application, but entirely new relations of science and industry. In the modern industrial laboratory discoveries are sought in areas of anticipated applicability; the establishment of biotechnology firms to explore recombinant DNA techniques is a recent example of

The Changing Nature of Scientific Organisation 25

industries sponsoring ‘basic research’ with the expectation of applying the knowledge gained to medicine and agriculture. (Proctor, 1991) At policy making level the visions of science in the UK and their evolution could probably be most clearly deduced by looking at official documents. Explicit expressions of the core beliefs that underpin the British research system can be found in the Government’s response to the report of the House of Lords Select Committee on science and technology Civil Research and Development (1987) and the White Paper Realising Our Potential: A Strategy for Science, Engineering and Technology (1993). On reading the Civil Research and Development Paper (1987), it becomes evident that the British Government considers science and technology to be central to economic performance, and that its new institutional structures and instruments should improve the effectiveness of the contribution of science and technology to economic performance. Thus, according to this document, the central criteria to be used in allocating funds and determining the main directions and focus of research are ‘selectivity’ and ‘exploitability’. In 1987, a blueprint for the future of basic science, A Strategy for the Science Base, was published by the Advisory Board for the Research Councils. This document … was the first serious attempt to come to terms with the facts of life: a science budget that would at best stay constant in real terms, a scientific establishment that had been conditioned to believe that its income would always grow and that recent history was but a temporary aberration, and a university system in disarray … The Advisory Board’s aim was to encourage scientists to think harder about the management of research in the new era of ‘steady-state’ budgets. (Wilkie, 1991, p. 115) The White Paper Realising Our Potential: A Strategy for Science, Engineering and Technology was published in May 1993 by the Office for science and technology. Its main themes emerged from a wide consultation process involving some 800 organisations. The White Paper aims to help the scientific, engineering and business communities secure the maximum economic benefit from science and technology, while continuing to support excellence in basic research. Its focus is on developing a closer and more systematic partnership between the scientific and engineering communities, industry and commerce, and government. The purpose of this partnership is the strengthening of the contribution of

26 Scrutinising Science

science and engineering to wealth creation and quality of life (Nedeva, 1995). As Hilary Rose wrote in The Guardian in 1995: The curious paradox of Conservative policy for innovation is that intervening in the science base presents no ideological problem, while intervening in industry does. In consequence, SET policy has been charged with mission impossible: to transform British industry’s technological future. Such a project should be the task of an industrial policy in which SET plays a carefully thought through part. (The Guardian, 1995) A certain continuity between the Civil Research and Development paper and the White Paper on science and technology can be identified in that both documents express the vision that science should contribute to wealth creation and quality of life. Hence, due to the perceived significance of exploitability of research, arguments and policy measures centre on considerations regarding prioritisation, selectivity and competitions for research funds. As Rappert comments on the public sector research base (PSRB): While the commercial exploitation of the PSRB is nothing new, in the past the connections between industry and the PSRB took place in indirect routes. Earlier this century, for instance, the relative autonomy of scientific researchers in the UK was protected by awards from government supported Research Councils, designed to buffer universities from direct political interference. Researchers were held accountable to the public but only implicitly … By the 1970s, however, commitment to scientific autonomy gave way in favour of an explicit and utilitarian emphasis on accountability, primarily as a result of continuing economic difficulties. (Rappert, 1995) The change in visions discussed here has necessarily led to profound transformations of the institutional structure and the knowledge producing practices of science in the UK. Some of these transformations and the concrete visions that led to their initiation are discussed in more detail in Chapter 6 of this book. Based on the three aspects of science discussed here we have outlined three stages in the development of modern science. ‘Academic’ science is characterised by the Mertonian vision shared by policy makers and scientists alike, by well developed autonomous institutions funded by public funds (grants), and by the complementary conviction that

The Changing Nature of Scientific Organisation 27

science cannot and should not be interfered with. ‘Useful’ science is described by a more pragmatic vision of science (which in the case of scientists appears to be a justification for further funding rather than deep conviction), expectations that science contributes to ‘wealth creation’ and ‘quality of life’, scientific institutions expected to meet users’ demand and funded by public and private funds (public funding is competitive) and the belief that science can and ought to be steered. The vision of ‘useful’ science, however, still assumes that science is the domain of particular specific institutions and artefacts (results) produced by these are being transferred to users. ‘Commodified’ science goes further exactly in this assumption. Science is not the exclusive domain of scientific institutions, and scientific knowledge is produced in the context of its application rather than its potential transferability. The institutional expression of this is the privatisation of some research institutions and much higher reliance on private funds overall. These three stages of development and the visions that make these distinctive are discussed further in Chapter 6.

5 The structure of this book The structure of this book broadly follows the logic of the conceptual framework discussed in the previous sections. Hence Chapter 2 sets out the historical context of policy-driven change with explicit emphasis on research organisations and GREs. Chapter 3 complements Chapter 2 in presenting the concept of NPM and the ways and mechanisms through which it pervaded government practices, visions and management approaches. Chapter 4 introduces the nature of science and technology services demanded by the UK government and discusses the diversity of organisational forms, governance models and ownership structures that the GREs might adopt or have imposed on them. In Chapter 5 we deal with the different visions of science, the way these have changed and the impact this change has had on the institutional structure’s knowledge producing process in the context of the GREs. Chapter 6 explores the change in the knowledge production processes in detail. Chapter 7 explores the accountability aspects of the triple shift in public sector science. Chapter 8 presents our conclusions.

2 Historical Context

1 Introduction In Chapter 1, we explored the differences between organic scientific change and policy-driven change. We also explained that this book was about just such a shift from organic to policy-driven change, and the consequences of that. We suggested that a shift from organic to policydriven change could be complicated, or even frustrated, by a failure to achieve congruence between organic change processes and new desired policy outcomes. That is, if the change is too violent and pays no heed to past practices and cultures then policy-driven change will be difficult to achieve. A particular and recurrent theme of this book is that policydriven change was indeed complicated and frustrated by echoes and resonances from the period of organic scientific change and development. In 1675, King Charles II established the Royal Greenwich Observatory. One of the principal tasks of this new institution was to resolve the problem of determining longitude at sea for the benefit of the navy and Britain’s mercantile fleet. The establishment of the observatory therefore marked the formal beginning of British government resolve to procure scientific and technological assistance for both administration and the public good (Sobel, 1996). Between 1675 and the election of Mrs Thatcher’s Conservative Government in 1979, successive British governments recognised the need for, and strove to supply, a wide range of scientific and technical services to itself directly and other beneficiaries (such as the public). Government traditionally sought to do this by means of a complex web of publicly owned or funded research organisations. The period from 1675 to 1979 therefore frames the historical context of subsequent change. 28

Historical Context 29

This period is marked by particular institutional forms and structures for science, visions of science and scientific knowledge production processes. These form the organically grown legacy inherited by the incoming Conservative Government of 1979. In this chapter, it is therefore important to set out the historical antecedence of the policy-driven change under examination by way of setting the context. As we explained in Chapter 1, we discuss this change in terms of the changing institutions of science, the visions of science and the nature of the knowledge production processes. Similarly, we pick up these three themes in this chapter.

2 Science in Britain before 1939 The European Renaissance, characterised as it was by Modernist thinking, prompted the development of science as a distinct practice. Science was usually a discrete activity with its own mores, culture and discipline. It was a largely individual pursuit of cultivated individuals. Lacking any institutional basis, individual scientists from the Renaissance until well into the industrial revolution, were financed and protected by the patronage of the church, governments, universities or the aristocracy. Surprisingly, the ancient universities of England did not act as the loci of the development of science at this time – they were fundamentally religious institutions and new scientific philosophies challenged contemporary theology. As Scott (1984) puts it Three great intellectual movements, the Renaissance of the sixteenth century, the scientific revolution of the seventeenth, and the philosophical ‘Enlightenment’ of the eighteenth, seemed to pass the universities by. (p. 28) As industrial capitalism began to take root in the sixteenth and seventeenth centuries so science became more organised. The growing sophistication of knowledge required the formation of a professional community, working within a professional institution, since knowledge and methodologies had to be transferred from generation to generation. The need for the growing number of scientists to communicate with each other led to the establishment of some 220 scientific societies by 1790 (Rose and Rose, 1969). Scott (1984) does not underestimate the importance of these: Sir Isaac Newton may have been a Cambridge University professor but the most powerful intellectual institution of his day was the

30 Scrutinising Science

newly formed Royal Society … Furthermore, it can be argued that a fourth great movement, the industrial revolution, that reshaped the intellectual contours of society as decisively as the first three, also took place far away from the world of university. (p. 28) As social organisation shifted and coalesced around new forms in this time of turmoil, so the new scientific organisations had to seek new patrons. They did so most often with governments, who were generally ready to assist. Britain’s Royal Society was founded in 1662, with Royal patronage. At the same time, as society embraced modernism, so the study of science took firm root in the ancient universities. These new organisations and sites of scientific practice were not part of the developing industries. State support was given because the benefits of science were readily apparent to governments: in the newly industrialising world scientific knowledge implied technological development that meant success in developing capitalism. Throughout the nineteenth century, science increasingly sought to assert itself as an organised social activity and to define its role in society. But whilst scientists generally worked with industry and government, they did not work as an integral part of it. Many new institutes and colleges were created with public patronage as science came to be seen by governments as an essential precursor to the development and maintenance of Britain’s industrial pre-eminence: a position science was to hold until well into the twentieth century. Concern over Britain’s competitive position vis-à-vis other major states was well founded, as Table 2.1 shows. The mid-nineteenth century saw the start of an increased recognition by central government in the UK of the need for scientific research and technological development to support statutory, regulatory, procurement and policy activities. Traditionally, this need was met through support to research establishments that belonged to and served government departments. Thus, the Geological Survey was established in 1832, followed by a Laboratory of Table 2.1 Annual rates of industrial growth Period

UK %

Germany %

USA %

World %

1860–80 1880–1900 1900–13

2.4 1.7 2.2

2.7 5.3 4.4

4.3 4.5 5.2

3.2 4.0 4.2

Source: Surendra, 1961.

Historical Context 31

the Government Chemist in 1843. In 1900 the National Physical Laboratory was established. Gummett explains that: Following German example, the Laboratory was devoted to the task of bringing scientific knowledge to bear upon everyday industrial and commercial practice. It opened the way to substantial State support for scientific research … and research which, moreover will be conducted in State-owned laboratories. (Gummett, 1980, p. 22) The setting up of the antecedent of the Royal Aircraft Establishment followed this in 1905. In 1909, a Development Fund was created to provide for the scientific development of forestry, agriculture and fisheries. By 1914 this had resulted in the establishment of 12 major agricultural research institutes in England and Wales. Under the National Insurance Act of 1911, one penny per insured person went to a fund for medical research administered by what later became the Medical Research Council (Gummett, 1980). However, this financial support was not as generous as that given to German scientists. By the late nineteenth century the most important centres for industrially orientated research were the newly emerging civic universities, such as that at Manchester, which positioned themselves by stressing that they wished to work with industry. The contribution of the civic universities to industry, even in their early days, was remarkable and of considerable importance. These were becoming and later became a leading source of innovation for industry. The importance of the civic universities was further enhanced by the fact that there were no state centres for industrial research, no research associations, and that research within the firms was in its infancy in the 1880s and 1890s (Sanderson, 1972). By 1914 the UK lagged behind her continental industrial competitors and military adversaries and received a rude awakening during the First World War. The crisis generated by the sudden awareness of Britain’s relative weakness in vital war technologies such as explosives, dyes and lens making led to a rapid increase in government funding of science. In 1915, the government established the Haldane Committee to distribute funds for scientific research or, more specifically, ‘to develop and organise the knowledge required for the application of science to industry’ (DES, 1981). Eventually, Haldane’s committee developed into the Department of Scientific and Industrial Research (DSIR) with a brief ‘to promote and organise science research with the view especially to its application to industry and trade’ (DSIR, 1962). The DSIR was possibly

32 Scrutinising Science

the world’s first government department specifically devoted to the development and diffusion of science and technology. It did this by running its own laboratories, administering the Joint Government– Industry Research Associations Scheme and awarding research and postgraduate training grants to universities. The DSIR attempted to stimulate industrial-based scientific research by promoting and subsidising the formation of research associations where firms would pool resources and share scientific results to the mutual benefit of all. As early as 1920, the eminent scientist Sir Frederick Soddy was criticising the public subsidy of private gain. Nor were the research associations a success as envisaged. Manufacturers entertained mutual suspicions of each other and the envisaged financial independence from government funds never materialised (Rose and Rose, 1969). This failure to stimulate industry into funding scientific research and development provided the government with an imperative to act as a proxy customer on its behalf. Thus, GREs such as the National Physical Laboratory and the Building Research Establishment developed a strong public (i.e. industrial) service ethos from this time. The DSIR became the chosen vehicle for government sponsorship of science in the inter-war years. It began to acquire responsibility for a number of existing laboratories and for setting up new ones. Reflecting its wartime origins, the Department had a penchant for encouraging research that aided military competencies, but failed to promote much funding of the universities for the training of scientists. By 1965, it was responsible for 15 laboratories, the administration of the industrial research association scheme that provided support for co-funded government–industry laboratories and awarded research grants to postgraduate students and academic staff in universities. A council of eminent scientists and industrialists directed DSIR activity from its inception. This unusual constitutional status was designed to leave scientific decisions largely to scientists themselves. It was placed under the aegis of a small committee of the Privy Council chaired by the Lord President of the Council, a Cabinet minister. The Committee rarely met and the Lord President lacked the resources to take much interest in the DSIR’s work. This arrangement enabled DSIR to receive public funds whilst permitting it to think and act largely free of the kind of ministerial control that constitution as a more traditional department of state might have entailed. This arrangement received further endorsement in 1918 in the formative Haldane Report on the Machinery of Government (Cd 9230, 1918). A key point stressed by the report was the need for government to access

Historical Context 33

‘intelligence and research’. The Haldane Report distinguished between research that was needed for specific departmental purposes and that which was for more general use. The former, the Report said, should be done under departmental supervision, whilst the latter was best not supervised by an administrative department because of its more general utility. Moreover, the report went on, an arrangement such as that of DSIR’s Privy Council committee placed responsibility to Parliament in the hands of a minister who ‘is in normal times free from any serious pressure of administrative duties, and is immune from any suspicion of being biased by administrative considerations against the application of the results of research’ (Cd 9230, 1918, para 67). The suspicion that departmental ministers might sometimes find it inconvenient to support certain kinds of research or to publish or use the results, became the basis for the distinction between departmental research establishments serving their ministries and the research institutes (which later became the Research Councils) with their greater degree of autonomy. Indeed, it has even been used as the basis of what some in later years called the ‘Haldane principle of research council autonomy’. However, Haldane himself never used such a phrase. His intention was not to exclude all government-funded research from direct ministerial control, but only that which was of general value – what, in modern language, we might call ‘basic’, or ‘curiosity-oriented’ research. This distinction held sway for several decades but was not always clear cut – the departmental establishments also retained a strong ‘public good’ element in their work that went beyond their departmental responsibilities. Following the Haldane Report, further research councils were set up for support of agricultural, medical and nature conservancy research. Science–government relations did not otherwise change significantly until the Second World War, beyond a steady growth in state support for various areas of science and technology. A number of these new establishments were not exactly new, having grown by adventitious extension of testing facilities to incorporate experimental work. Others grew out of the slightly more systematic approach that followed the First World War: for example, the Admiralty Research Laboratory and the Armament Research Establishment were set up to fill gaps identified during the War. This approach continued during the Second World War with, for example, the establishment in 1943 of the Naval Construction Research Establishment to do experimental work on underwater explosions and their effects on ships’ structures. Yet others owed their existence to the foresight and vigour of particular individuals. One such

34 Scrutinising Science

was the Admiralty Experiment Works, set up in 1870 at the instigation of the distinguished naval architect, William Froude, in order to conduct tests of model ships. The other, the organisations which were the forerunners of what later became the National Gas Turbine Establishment, comprising the private firm Power Jets Ltd and the government owned firm of Power Jets (Research and Development) Ltd. These were set up in the 1930s under the influence of Air Commodore Whittle and became the main centres for work on jet engines. Some, finally, took shape under political pressure. For example, during the First World War aircraft manufacture became a commercial proposition. Industrial disapproval of government involvement in this business led to a decision to discontinue the design and manufacture of aircraft at the Royal Aircraft Factory. The Factory was reconstituted as the Royal Aircraft Establishment, with the dual role of technical adviser to the commercial designers and actual designer of aircraft equipment. A reverse example was perhaps the case with the Admiralty Engineering Laboratory, which was set up in 1915 to break the Vickers company’s monopoly in the design and development of submarine engines.

3 The post-war era By the outbreak of war in 1939 Britain was in a much stronger position than it had been in 1914 to fight what has often been described as the ‘Scientists War’. The imperatives of the Second World War generated state-led innovation in the fields of the jet engine, radar (and the birth of the electronics industry), atomic weapons (and the start of the nuclear industry), and polythene (and the plastics revolution). The War saw the introduction and application of new analytical techniques, such as operations research, to government and military planning. There was a growing appreciation in government of the value of scientific advice. Much of the scientific work done during the War promoted British scientific and technological developments afterwards, further enhancing the general regard for science. For instance, the mathematician Turing’s work at Bletchley Park on the German code machine Enigma laid the basis for his later work at the University of Manchester in building the first electronic computer. In addition, after the War, new senior scientific advisory bodies were introduced to assist with policy making on both the civil and the defence fronts. The close association between science and war performance helped to cement the relationship between science, government and society. In 1945, the UK was left with an appreciation of the value of scientific

Historical Context 35

knowledge, a plethora of government committees and councils with responsibility for science policy. Thus the war reinforced the distinct institutional character of British science (Stewart, 1999). This experience also helped secure further government funds and the UK soon had an ever-expanding state science budget (Stewart, 1999). Government support for science found voice in government funding of laboratories and universities and in the subsidy of projects with industry. Government support for science and technology came through the research councils, university expansion, new organisations such as the Atomic Energy Authority and also, the lion’s share, through the Ministry of Defence (MoD) and associated supply ministries (notably those responsible for aviation). The only civil departments of government with significant R&D outlays were the agriculture departments. There is some suggestion that government funding was particularly important because of its industrial or end-user orientation. As Zuckerman was to put it: a kind of intellectual barrier developed between ‘Royal Society’, ‘Research Council’, and ‘University Science’ on the one hand, and the scientific laboratories of government and industry on the other, the former assuming a far higher prestige. (Zuckerman, 1971) Or, as a vice-chancellor put it in 1958: The crude engineer, the mere technologist are tolerated in universities because the State and industry are willing to finance them. Tolerated but not assimilated. (Ashby, 1958) Government also continued to provide the major share of the total national R&D outlay, although the industrial share had grown from a little under a quarter in 1955–56 to just over a third in 1961–62. Civil science spending rose fivefold between 1945 and 1950, from £6.5 m to £30 m. The formation of the National Research and Development Corporation (NRDC) in 1949 marked one of the first of many attempts by successive post-war governments to promote linkages between scientific research and prospective industrial end-users of the knowledge product (DES, 1981). None of these efforts can be classed as great successes. Under the Conservatives, from 1951 to 1964, science received only distracted governmental interest, but continued to be generously funded, especially in defence related areas. The work of the DSIR was codified in law 1956, including an emphasis on university research and

36 Scrutinising Science

its role in the advancement of trade and industry (DSIR, 1962). Science, however, remained a discrete activity with little integration with the processes of technological development. By the end of the 1950s, however, questions were being asked about the apparent failure of this growing financial commitment to yield economic results. Questions included: was the balance of priorities (heavily weighted towards atomic energy, aviation, defence, and the research councils) appropriate? With facilities in fields such as high energy physics and space now costing significant amounts by overall governmental standards, were the arrangements for settling priorities appropriate? Was the machinery of government, in particular as it bore on the question of technological innovation in industry, in need of change? Major enquiries were conducted into the organisation of civil and defence science (Office for the Minister for Science, 1961; Cmnd 2171, 1963). Party political debate about the management and use of science and technology also grew, and became a central issue in the 1964 general election (Vig, 1968). From 1961 to 1964, scientists began to work closely with the Labour Party, then in Opposition, to address what were seen as critical issues. They concluded that Britain had a messy science policy and infrastructure and that there was a parlous slippage between scientific knowledge production and its eventual exploitation. The perceived solution was a government-generated scientific revolution, with government actively promoting increased technological development in industry. Science was highlighted as the modernising force of socialism at the heart of Labour’s 1964 campaign, and they returned to power. Support for independent science lay at the heart of a desire to modernise Britain’s ailing industries and thus ensure economic development (Rose and Rose, 1969). Implementation of this idea principally took the form of the new ‘Mintech’: a Ministry of Technology charged with spearheading the modernisation of British industry through the promotion and application of advanced technologies (Vig, 1968; Rose and Rose, 1969). Mintech initially took over responsibility for the industrially oriented laboratories of DSIR, the Atomic Energy Authority and the sponsorship of a limited range of high technology industries. Recognising, however, that Mintech’s ability to influence industrial behaviour was limited in comparison with that exerted through the purchasing power of the Ministry of Aviation (with its huge defence responsibilities), the two ministries were soon merged. The merger brought with it the Ministry of Aviation’s defence electronics and aircraft laboratories, making Mintech responsible for the largest R&D force under one financial control in Europe (Clarke, 1973).

Historical Context 37

In 1965, a book describing a range of mostly governmental or industrial research establishments was published (Cockcroft, 1965). It is remarkable that the editor, Sir John Cockcroft, a man with considerable highlevel experience in government service, wrote an introduction in which no reference was made to governmental customers or the requirements of Whitehall. Cockcroft et al. discussed problems of internal management of establishments, and noted that the director had to produce an annual budget: and work within it when approved … trimming the estimates of his senior staff to a total which is likely to be approved by his management board. With regard to Whitehall, Cockcroft did say that there was a: not inconsiderable danger that as establishments grow they may be over-administered. A great deal of the valuable time of scientists can be wasted, for example, by detailed costing of basic research projects when the information is not, in fact used. In the same book Sir Edward Bullard (Cockcroft, 1965), wrote a concluding chapter entitled ‘What makes a good establishment?’. Describing the functions of senior staff, he wrote: It is only in the extremest emergencies that one can say, ‘Let us write down what has to be done, estimate the staff required, engage them and get on with the job’. Nearly always one has to say, ‘For the next year at any rate I have such and such staff; what are the most useful things for them to do’. Of course, Cockcroft and Bullard must have been fully aware that government establishments existed to serve the interests of their parent ministries. Nevertheless, what is so striking, 30 years later, is the implicit unimportance of the paymaster in determining what the establishments should actually do and how their resources should be allocated. One could not imagine such attitudes prevailing in the current culture of government. Bullard did, however, recognise that the future would not be like the past, observing that: the doubling of scientific activity every five or ten years which we have come to regard as normal cannot continue much longer.

38 Scrutinising Science

We shall be forced to discover means of maintaining the efficiency of establishments, the size and expenditure of which does not increase rapidly. Indeed the roles of the government research establishments, as indicated earlier, had never been entirely clear cut. Of particular importance has been a long-running debate about how best to connect them, not only to departmental customers, but also to the wider community of real, as opposed to proxy (departmental) users of their work. In the context of the 1960s, these issues came up in two forms. The first was what to do about those laboratories where demand for their services was likely to fall. The second was how best to put the laboratories in general, especially once concentrated under the aegis of Mintech, to the task of national economic modernisation. Both issues can be illustrated from the experience of the Atomic Energy Research Establishment, Harwell (see Gummett, 1980). This laboratory was set up in 1946 as part of Britain’s nuclear weapons programme but later refocused its work entirely on civil nuclear power. By 1956 it had grown to 6000 staff. In 1965, at the start of the programme for the second generation of nuclear power stations, it was clear that future demand for research into what was now deemed to be a relatively mature technology would be reduced to about one third of the then current level. Yet, the establishment’s managers believed that to reduce the scale of its activity by such an amount would destroy its organisational viability. They therefore sought a new role for the establishments and established a new mission for Harwell – to help industry with research and innovation. Significant progress was made towards this objective between 1966–67 and 1974–75. Within declining staff totals, the proportion of staff employed on work outside the atomic energy programme grew from 5 to 50 per cent, and non-atomic energy earnings reached a similar proportion. About 60 per cent of the non-atomic energy income came from other government customers, notably (in the early 1970s) the Department of Trade and Industry (DTI) rather than from industry directly. In developing its capacity to conduct commercial work, Harwell had to learn how to market itself. This meant not only understanding what its customers wanted, but also getting its staff to work within the constraints of cost and time that customers required. In part, this meant setting up a marketing department deliberately designed to support marketing and industrial liaison by the scientific staff themselves. It also meant developing close links and understandings with private sector

Historical Context 39

firms. Here, in contrast to the then traditional civil service practice of making knowledge available to all comers, Harwell adopted what its director from 1968 to 1975, Dr (later Lord) Walter Marshall called the ‘Principle of Maximum Unfairness’. This entailed working with single customer companies in conditions of commercial confidentiality. This was justified on the grounds that companies would be more likely to place contracts with government laboratories if this led to a commercial competitive advantage.1 Harwell was a specific instance of a general concern about overcommitment to government laboratories and a perception that the large UK investment in science and technology appeared not to have paid off in economic terms. As the Permanent Secretary at the new Ministry of Technology later observed: It was reasonable enough to believe that a relationship existed between R&D, innovation and industrial performance; but this did not tell the Ministry where it should push. (Clarke, 1973) None of the other major western governmental spenders on science and technology had made as heavy an investment, relatively speaking, in government laboratories as the UK. Some suggested that Britain may have ‘taken the wrong road’ immediately after the war by putting too high a proportion of her research and development into government laboratories and not enough into industry (Blackett, 1967). By 1967, such thoughts were being echoed by the Minister of Technology. He expressed his wish to break down the barriers between research and industrial production. But rather than curtail his own research establishments and put research programmes out into industry (which was the US model of the contract mechanism as applied to science policy), he proposed to encourage his establishments to undertake confidential contract research for firms (Wedgwood Benn, 1967). The Institution of Professional Civil Servants – the professional association of scientific civil servants – supported such developments. They argued that although most staff within government establishments did not work within commercial terms of reference, they were perfectly capable of doing so if required. They cited in evidence the case of the Hydraulics Research Station, where there had long been such a requirement. Moreover, according to the IPCS, there was scope for government research establishments to take the initiative in selling their ideas to firms and performing research for industry with payment being made for services on a royalty basis. The IPCS also saw scope for establishments to

40 Scrutinising Science

discriminate between firms as a necessary means of ensuring successful commercial exploitation of research (IPCS, 1968; Lyons, 1969). These ideas continued to evolve. In January 1970, a Green Paper, issued by the Minister of Technology, proposed placing the overwhelming majority of government research establishments into a centralised research and development (R&D) organisation called the British Research and Development Corporation (BRDC). This was to work on a customer–contractor basis for both government organisations and the private sector. The BRDC was to be jointly financed by general government grants, specific government contracts and the sale of services, royalty income, joint ventures, and other contract work from industry (Ministry of Technology, 1970). As Sir Richard Clarke later put it: The size and health of the organisation was intended to depend upon its ability to provide economically and commercially for industry’s needs; and it [the proposal] was an attempt to introduce a market test into predominantly government-financed research establishments. … If BRDC could not sell its services, its scale of operation would have to be cut down. (Clarke, 1973) The idea of a test for market relevance for civilian industrial-related research (at least for that which fell outside the aerospace and nuclear sectors) became central to thinking about research policy within the Ministry of Technology and its successor, the DTI. It represents an attempt to grapple with the problem of how, as ‘proxy’ customers, they should spend public money on research that was intended to benefit industry and the economy as a whole. This idea found further expression in the 1970 Green Paper: No Government department can decide centrally what research programmes are best designed to serve the needs of industry. As a general rule, only the ‘customer’ knows what he wants, and by his readiness to pay for it, makes the ‘supplier’ aware of his requirements. (Ministry of Technology, 1970) The BRDC lapsed in 1970 when a Conservative Government, under Edward Heath, was returned. The Ministry of Technology, for Conservative free marketeers such as Sir Keith Joseph, had come to represent the worst sort of socialist interventionism. Mintech was transformed into a new DTI by the addition of most of the responsibilities of the Board of Trade and the loss of some aviation responsibilities. The latter

Historical Context 41

went temporarily to a new Ministry of Aviation Supply. This Ministry was in turn incorporated into the newly formed Procurement Executive of the MoD. The establishment of the Procurement Executive, following a report by Sir Derek (later Lord) Rayner (an executive with Marks and Spencer plc), represented the culmination of moves in the previous decades towards centralising responsibility for defence policy and defence procurement within the MoD (Cmnd 4641, 1971). The Procurement Executive became responsible for defence R&D at its own research establishments. These establishments were therefore removed from the possibility of closer linkage with civil establishments that they had enjoyed when at least some of them were part of Mintech. The Procurement Executive was also responsible for contracts placed with industry and universities and for the procurement of all defence equipment. As such, it became responsible for about half of government expenditure on R&D. It also became the biggest single customer of British manufacturing industry, especially in high technology products. The emphasis on strengthening lines of responsibility and accountability, and on programmatic analysis, did continue under the Conservative Government. Thus, Programme Analysis and Review, in the early 1970s, was an attempt to try to set clear governmental objectives, backed by thorough appraisal of outcomes. Lord Rothschild, head of the newly created Central Policy Review Staff, conducted a review of the organisation and management of government research and development (Cmnd 4814, 1971). One of his recommendations was that applied research, which he defined as ‘R&D with a practical application as its objective’ (in contrast to basic research, where no such immediate application was envisaged), should be governed by the ‘customer–contractor principle’. This principle was simply stated as ‘the customer says what he wants; the contractor does it (if he can); and the customer pays’. In applying this principle not merely to GREs, but also to the applied research of the nominally autonomous research councils, he opened a furious debate about scientific independence and government interference (Williams, 1972, 1973). There was a warmer welcome for the recommendation that all departments with a significant interest in science and technology should have a Chief Scientist with access to ministers and responsibility for formulating departmental R&D policy. Responsibility for implementing those policies, however, was to lie with a separate official – the Controller R&D. This division of responsibilities was intended to clarify lines of accountability and to separate the responsibility for managing a ministry’s laboratories from that for determining what tasks, if any, were required of them.

42 Scrutinising Science

In the event, few ministries adopted the recommended pure Rothschild model. In particular, most did not truly distinguish between the roles of Chief Scientist and Controller R&D. Moreover, and at least as regards the implications of Rothschild for the Research Councils, time saw a gradual return of the initiative over science and technology programmes to the Councils themselves. Nevertheless, in most cases, systems were introduced that began to develop a culture of bidding for funds attached to defined activities, rather than establishments receiving an undifferentiated block grant for distribution at the discretion of the establishment director. Prior to 1971, science and technology services were typically supplied to ministries by GREs, which were an integral part of the ministry. The only significant exception being, MoD, which also drew extensively on industry. Following Rothschild, customers and contractors were somewhat more sharply differentiated, although in general they remained within the same ministry. By early 1972, the Chief Scientist of the DTI was to claim that the department was moving: to quite a different concept of determining the programme and monitoring it. We have, indeed, moved quite a long way toward the customer–contractor relationship. (HC 375, 1972, Maddock) Changes made to the systems included the introduction, for example, of research requirements boards intended to specify the programmes in different fields of activity. Despite these changes and developments the basic shape of the government system for funding and drawing upon science and technology services was not fundamentally altered. In particular, the civil service culture within the establishments, and the dominance of the director and the establishment over the ministry in the formulation of programmes, do not seem to have changed dramatically. For the most part, the government research establishments continued to receive funds in ways that were not closely monitored and with the laboratory defining much of the work to be done (Boden et al., 1998). These rather loose regimes of control were to remain in place until the 1980s. The steam seemed, at least for a time, to have run out of the movement for bold organisational reform. What marks the period from 1945 to 1979 is a reverence for science and a commitment to its public support through government laboratories, universities and publicly funded projects with industry. A new rhetoric justified a largely state-driven supply and allocation of economic

Historical Context 43

resources for science (Nelson, 1959; Arrow, 1962). These arguments stressed the high degree of uncertainty attached to the economic payoffs of fundamental scientific research. Allied to this, the rents from such scientific work are difficult to establish and defend because of the open nature of science as a social practice. This led to the conclusion that science is subject to market failure: markets cannot efficiently allocate resources because of the mismatch between social and private returns (Dasgupta and David, 1994). Such economic analyses provided a rationale for government funding of science from 1945 to 1979. Of course, up until 1979 most science was a product of a particular set of social circumstances and decisions that led to it occupying an independent and discrete social location. As such, it was not part of the market economy and therefore it is of little surprise that a classical economic argument should find it market dysfunctional. This economic/market reasoning reflected and reinforced a prevalent ideology that science expenditure could not be controlled in quite the same ways as other activities. For instance: Research, more especially basic research, is often a gamble. The working out of imaginative ideas, sometimes on the basis of slight clues, or perhaps just intuition, may lead to whole new fields of knowledge, or to nothing. On the other hand, it is contrary to custom and tradition to encourage speculation with public money, in view of the very proper requirement of answerability to Parliament, and yet it is at the early uncertain stages of research that help is most necessary and most valuable. (DSIR, 1962, p. 129) Whilst science was becoming inordinately more expensive, no processes or techniques appeared to exist in government to control or monitor spending. Rose and Rose (1969) describe how one 1950s government committee on the management and control of R&D concluded that: some research projects could not be justified and that Directors of research establishments should consider carefully before embarking upon them, and should ensure that a rough timetable of progress should be maintained. When it is considered that the period covered by this committee included such scandals in the administration of defence research as the £100 million lost on the Blue Streak [a rocket] following a sixfold escalation in estimated costs the propriety of these delicate conclusions may well be pondered. (p. 84)

44 Scrutinising Science

There were sporadic efforts to impose control. In 1968 the Fulton Committee (Cmnd 3638, 1968) recommended that executive agencies be set up for certain government functions and that they should have: clear objectives and their performance should be judged by their results. … Wherever measures of achievement can be established in quantitative or financial terms, and individuals held responsible for outputs and costs, accountable units should be set up. (Cmnd 3638, 1968) Yet, despite these recommendations and those of Rothschild (Cmnd 4814, 1971), there was little real shift in actual practice.

4 Some conclusions We turn now to an analysis of this history in terms of the three central arguments of this book – the institutions/structures of science, the visions of science and knowledge production processes. During the period prior to 1979, we argue, government-funded science went from being perceived as largely ‘academic’ in nature to a concern to ensure it was somewhat ‘useful’. However, the completeness of this transformation is less marked in some areas than others. Institutionally and structurally, GREs were largely autonomous. Physically distinct and distant from their host departments, they enjoyed considerable funding support largely free from any accounting control. The laboratories had their own hierarchies and control mechanisms, again largely distinct for the mainstream civil service. Simultaneously, the GREs evidenced real commitment to the public service ethos that had led to their founding. In many instances, they were there to do work that, it was felt, could not and would not be done privately. Towards the end of this period, there were moves towards making the GREs more closely controlled by their departments, through measures such as customer–contractor arrangements. Whilst the impact of these was of a limited nature, what is in evidence from the 1970s onwards is a concern to make such science and technology services useful to the departmental customer (proxy or otherwise). It is interesting here to contrast the scientific control and management exercised over the DSIR and the new forms of control mooted by the Green Paper in 1970. The vision of science that is hegemonic throughout this period is that of the Mertonian ideal. That is, science as an activity is discrete and independent. Management and funding controls did little to impugn this independence. Nevertheless, as with structures, some shift in

Historical Context 45

Funding applied research minor source of funding

Codifiable open knowledge public good The public

Industry and commerce

Science Scientific knowledge for commercial benefit

Accorded status and recognition generally trusted

Independent scientific knowledge products for policy advice

Government

Major (main source of funding)

Figure 2.1 Traditional model of science

emphasis from academic science to useful science is in evidence here. For instance, it is certainly the case that, increasingly throughout this period, there was concern over the perceived lack of direct utility of science being funded and undertaken by government. This suggests a real shift in time with regard to perceptions of what science was for and a desire to move more towards demonstrable usefulness. However, this shift did not go as far as to endorse the full commercialisation of scientific knowledge production. Finally, the scientific knowledge production processes during this period were traditional and Mertonian. For the most part, the GREs saw themselves as producing public good knowledge, funded by government. Towards the end of the period, in instances such as Harwell, there is some indication that GREs (usually to ensure their own existence) were willing to compromise this public service ethos and engage more actively in producing knowledge within a commercial environment. However, for the most part these were isolated examples. In summary, the GREs inherited by the incoming Conservative Government in 1979 were very much public sector organisations, in every sense of the word. They were Mertonian science institutions imbued with a public service ethos. At the same time, the norms of the institutions and the absence of any real managerial or accounting controls meant that they enjoyed a very significant degree of autonomy from the rest of government. Figure 2.1 sets out diagrammatically the

46 Scrutinising Science

position enjoyed by the GREs. The winds of change were, however, already blowing. Numerous commentators and government reports had indicated that there were misapprehensions about this situation. However, attempts at reform had been somewhat half-hearted and prone to only marginal success.

3 New Public Management

1 Introduction The driving forces of the public sector reform processes to which GREs were subject from 1979 onwards are collectively and generically known as New Public Management (NPM). In Section 2 of this chapter we define, insofar as possible, NPM in general terms. In Section 3 we contextualise this general discussion by critically documenting and describing the manifestations of the NPM reform process in the UK generally. In Section 4, we detail how that process of reform was operationalised in the field of government funded scientific services. This chapter therefore presents contextual material of a conceptual or, some might argue, ideological nature. It therefore complements the historical contextual material discussed in Chapter 2, the two together facilitating our analysis of the change process in Chapters 4 to 7.

2 The concept(s) of new public management Since 1945, public administration in Western countries has undergone two major periods of change. In the first phase, states grew with rapidity, inexorably expanding their functions and budgets in a relentless attempt to compensate for what was seen as widespread market failure in the provision of services and the allocation of resources. In the UK, this expansion saw widespread nationalisation of core industries and utilities and rapid increases in the level of public expenditure in areas such as health, education and, to a lesser extent, science. This was the era of the so-called ‘Big State’. For science, the roots of such changes are discernible from the experiences of the Second World War, often referred to as the ‘Scientists’ War’, when science had proved itself invaluable to the war effort 47

48 Scrutinising Science

(Rose and Rose, 1969). Britain’s wartime experiences keenly emphasised the necessity of maintaining a strong and independent science base. The work of Arrow (see for instance, Arrow, 1962) and others in the 1960s provided an intellectual justification for the argument that science was inherently susceptible to market failure and therefore future economic and social well-being depended upon generous state support free from commercial imperatives. A second paradigm shift occurred towards the late 1970s as budgets were squeezed and concerns expressed about the efficiency and efficacy of the Big States. Critics came to see the Big State as too large, consuming resources with an insatiable appetite and providing poor return for the wealth of nations consumed. The new mantra was that, by emulating and learning from the commercial world, states could be run more economically, effectively and efficiently. Unsurprisingly, this critique also came to be directed at science. The result of such a shift in thinking has been tangible. The practice of public administration underwent major reforms in the 1980s and early 1990s across all policy domains. Informing these reforms was a widely shared belief that the modern state was overlarge and inefficient, and that practices drawn from private sector management could be applied with benefit to the public sector. Above all, the boundaries of the Big State were seen as needing to be rolled back and the soft underbelly exposed, as far as possible, to the rigours of the marketplace. The generic term applied to the particular techniques used in these reform processes is New Public Management. With a vocabulary, and associated concepts, drawn from accounting and business practice, the prospect was offered as a toolbox that could be used for the efficient management of virtually anything, public or private. Since such tools were said to work at the level of process rather than content, they carried with them the promise of political neutrality, thus making them available to governments of all persuasions. As if mirroring this change, the study of public administration in Britain (and elsewhere) went through troubled times in the 1980s and 1990s. Rhodes (1995, 1997) describes these travails in terms of a continued decline in the critical, institutionalist theoretical tradition coupled with invasion by other social sciences. This, he has argued, has led to a loss of focus and an erosion of the institutional base, with academic public administration departments merging with business schools under the higher education funding crisis. Epitomising this process, the Royal Institute of Public Administration passed into receivership in 1992. The intellectual territory of public administrationists was captured

New Public Management 49

by managerialist and rational choice doctrines and at times dogma, suggests Rhodes. It became, he argues, a bystander to the changes in governmental practice of the 1980s and 1990s, and by 1995 ‘had no coherent intellectual identity’ (1997, p. 23). Boyne (1996) queries whether there has been a paradigmatic shift in the discipline, theories and concepts of public administration, towards a new theory of public management. He concludes, however, that there has been no revolution in our theoretical apparatus: it is not the interpretation of the world that has changed, but the world itself. Instead of the traditional pattern of large line bureaucracies providing services directly, the public sector began to consist of markets and contracts. In much the same way that the wider political science community failed to predict the fall of communist regimes at the end of the 1980s, so public administration was taken by surprise by the decline of bureaucracy. (Boyne, 1996, p. 687) This chapter both discusses these new practices and theoretical responses and contextualises them with special reference to the case of science and technology in the UK. We explicate how science and technology became subject to the general pattern of administrative reform in Britain and identify features of this particular policy domain that, from the outset, distinguished it from the norm, thus raising questions about the applicability of these approaches in this context. Against this background, we then outline the specific phases of reforms that have swept over science and technology organisations in the UK, focusing in this chapter on the nature of these waves, their form, and the arguments deployed. A central feature of this chapter is the consideration of the impact of NPM reforms on the fundamental nature and functioning of science as a social activity in the UK. New Public Management is an umbrella term, which captures a diversity of administrative tools, concepts, and changes that were deployed by many countries in the 1980s (Hood, 1990). These sought to subvert traditional bureaucratic ‘public service’ approaches to public administration by approaches that were argued to be more dynamic and efficient (du Gay, 2000). These approaches developed an idiosyncratic language and conceptual toolbox, including a commitment to downsizing the state, cost-cutting, marketisation, competition, the devolution of executive functions to quasi-autonomous agencies, a commitment to customer–contractor and other quasi-commercial policy making and management principles. All of this was heavily overlaid with both the

50 Scrutinising Science

language and the practice of management by accounting, with the emphasis on explicit standards and measurements of performance, and on output controls (Hood, 1991; Rhodes, 1991; McSweeney, 1994; Pollitt, 1995). Dunleavy and Hood (1994), argue that NPM involves a shift in the two basic design co-ordinates of the public sector. First, it is moved ‘downgroup’, making the public sector less distinctive from the private in terms of personnel, reward structures and methods of doing business. Simultaneously, it is moved ‘down-grid’, reducing the extent to which discretionary power over staff, contracts and money is limited by uniform and general rules of procedure. Hence it emphasises budgetary transparency, with costs attributed to outputs, and outputs measured by quantitative performance indicators. Organisations come to be viewed as a chain of low-trust principal/agent relationships. There is a disaggregation of separable functions into quasi-contractual or quasi-market forms. Provider roles are opened to competition between agencies or between public agencies and private organisations. Finally, provider roles are ‘deconcentrated’ to the minimum feasible sized agency, allowing users more scope to ‘exit’ from one provider to another, rather than relying on ‘voice’ options to influence how public service provision affects them. Central to all NPM reform has been a fixation on the so-called three Es: economy, efficiency and effectiveness. Economy can be defined, quite simply, as satisfying oneself that, relatively speaking, no more money is expended than is necessary. Efficiency reflects the relationship between inputs and outputs – the more outputs there are for any given unit of input the more efficient the organisation. Effectiveness has always been a difficult concept for public organisations. Reflecting the fact that the public sector is not, in the main, profit oriented, effectiveness measures seek to indicate the extent to which public sector organisations have achieved their objectives and met social need. These developments have been geographically widespread, especially among OECD countries. At the same time, national variants are also apparent. Or, to put the point differently, what some have called NPM ceases to exist, if it ever did, as a clearly defined approach to administrative reform once national boundaries are crossed. Pollitt and Summa (1997) observe that it is fashionable to think of NPM as a tide of basically similar management changes sweeping through Western Europe, North America and Australasia, with British ministers proclaiming that the UK is an admired and copied leader in public sector reforms. In a study of 15 years of reforms in Finland, New Zealand, Sweden and the UK, they found not only significant differences between each of the countries,

New Public Management 51

but also a more general and persistent distinction between the two Nordic countries on the one hand, and the UK and New Zealand on the other. In the ‘Westminster system’ countries, they argue, the aim appears to have been to minimise the extent and distinctiveness of the state sector, whereas in the Nordic countries much greater emphasis has been placed on modernising the state apparatus so that it can deal better with a changing environment. Reform was led from the Right in Britain, but from the Left in New Zealand, by Social Democrats in Sweden and by a conservative-led coalition in Finland. Pollitt and Summa (1997) explain these differences in terms of the nature of the pre-existing institutions rather than party ideology: the most convincing explanations of the trajectories observed in our four countries appear to rest not on economic performance or party doctrines … but … upon the characteristics of the political and administrative systems already in place. (p. 15) Pollitt and Summa suggest that it was these system characteristics that most significantly influenced what was actually possible in terms of the scope, process and speed of reform. Ideological shifts may be a starting point for radical change, but in themselves they cannot account for the extent and nature of any change, which they stimulate. Ridley (1996) likewise resists the notion of a uniform body of practice sweeping across Western Europe. He notes that the standard explanation of the managerial wave in public administration derives from economic pressures, expressed in some drive for economy, efficiency and effectiveness. Yet, in practice, he finds the environmental factors leading to the reform of bureaucracy to have been more complex than this explanation suggests, and have combined differently in different countries. In partial contrast to Pollitt and Summa (1997), he finds ideology to have been as strong a force as economic need, at least in the British case. Of particular interest to our study is his conclusion that: Moves to ‘deprivilege’ the civil service were a clear example of Mrs Thatcher’s hostility to civil servants. The redefinition of the role of top civil servants from policy advice to management also reflected her preference for advice from other sources. The Efficiency Scrutinies were intended to save money, which they did but not on a scale that really mattered in the circumstances: they reflected an absolute conviction that business was efficient, public administration was not. … The more

52 Scrutinising Science

dramatic reforms that followed, the split between policy making in ministries and policy implementation through agencies headed by chief executives, reflected a political philosophy as much as a search for efficiency driven by financial constraints. (p. 17) Ridley further stresses that ‘there is nearly always a personal element in reforms, depending on who is making policy at the time’ (1996, p. 19). The largely uninterrupted continued development and application of new public management in the UK under successive Labour Governments since 1997 under the guise of a Giddensian ‘Third Way’ (Giddens, 1998) illustrates the mutability and near-universal appeal of the techniques.

3 New public management in Britain The current phase of reform in the UK began clearly with the election of the first Thatcher Government in 1979, supporting Ridley’s (1996) perception that NPM variants are dependent upon, inter alia, ideology and personalities. McSweeney (1994) argues that this Government, ‘described the “public sector” in almost exclusively pejorative terms’ (p. 237). However, as McSweeney acknowledges, to place the reforms solely at the feet of Mrs Thatcher is to ignore the antecedent conditions pertaining that made reform not only possible, but also attractive. The 1968 Fulton Committee Report on the structure, recruitment and management of the Civil Service (Cmnd 3638, 1968) was the first such review of the Home Civil Service since the nineteenth-century Northcote–Trevelyan Report. A basic tenet of Fulton was that a modernisation of the Civil Service should encompass improved accountability of civil servants, who should be set clear objectives and their performance measured against these. An essential tool in this modernisation was to be accounting. Accountancy was seen as the means by which resources consumed could be matched with outputs, facilitating the measurement of performance. As McSweeney (1994) notes, this mooted reform was not motivated by a desire to shrink the state by resource constraint. Rather, it was seen as a desirable management tool, the ultimate aim being ‘accountable management’. Despite the saliency of the Fulton Report, to a significant extent the call for accountable management was not acted upon. Yet, the accelerating economic crisis into which Britain was plunged throughout the sixties and seventies united both Labour and Conservatives in a desire to control public expenditure. They successively deployed and abandoned techniques such as management by objectives and programmatic analysis in

New Public Management 53

this unsuccessful quest (McSweeney, 1994). As we discussed in Chapter 2, the reforms along these lines proposed by Rothschild for science were only very partially successful (Cmnd 4814, 1971). The 1970s were dominated by arguments about economy and efficiency. More transparent accounting reporting requirements were advocated and the imposition of ‘cash limits’ was seen as a way of promoting the efficient use of resources. However, the accounting data deemed central to not only verifying economy in public expenditure but also to addressing issues of effectiveness and efficiency was simply not available (McSweeney, 1994). More fundamentally, reforms mooted in this period were based on the expectation that efficient and effective management could be achieved through the use of accounting data rather than any root and branch reform of the structures and processes of the public sector itself. The most immediate effect of the Thatcher Government assuming power in 1979 was the imposition of very strenuous cash limits in support of monetarist policies to control money supply. But these were stopgap measures. Later that year, Thatcher appointed Sir (Later Lord) Derek Rayner, of Marks and Spencer, to lead a series of Efficiency Scrutinies, the immediate aim of which was to eliminate waste and do more with less. Confident assertions were made about savings achieved. McSweeney (1994) argues convincingly that this proving of savings pointed to the need for wholesale reform of the public sector in order to achieve lasting reform. A commitment to reduce the size of the public sector followed the Pliatsky Report (Cmnd 7797, 1980). The first such reform was closely associated with Michael Heseltine whilst he was Secretary of State for the Environment. Later, at the DTI, the home department for many government research establishments, Heseltine was to have a significant impact on the application of NPM to the laboratories. The so-called management information system for ministers (MINIS) was aimed at providing effective decision making information at senior levels in the civil service. MINIS was quickly followed and built upon by the introduction of the Financial Management Initiative (FMI) in 1982, conceived inside the Efficiency Unit headed by Lord Rayner. The aim of FMI was to ensure that managers would have clear objectives, and the means to measure performance against them; well-defined responsibility for making best use of their resources; and appropriate information, training and advice. For the Treasury, FMI was double-edged (Thain and Wright, 1995). It did offer better management information in departments, and hence improvements in the efficiency and use of resources. But the disadvantage

54 Scrutinising Science

was ‘the expectation that it nourished in departments that it would give them more freedom’ (Thain and Wright, 1995, p. 68). From the Treasury’s perspective, therefore FMI was intended less to promote the radical management change thought necessary by the Efficiency Unit and some others in the Government, and many outside Whitehall; rather it was designed for the more limited objective of promoting changes in departmental management systems to achieve better value-for-money, to improve financial discipline, and to enhance the Treasury’s capacity to control expenditure. (Thain and Wright, 1995, p. 69) Hence, while the FMI came to symbolise ‘management change’ in the period up to Next Steps, Thain and Wright (1995) argue that this was a mistaken attribution. Criticism that FMI failed to deliver the radical ‘holistic’ management reforms desired by the ideologues and zealots of the ‘new right’ at the Efficiency Unit and elsewhere was misconceived – because it was never designed to do so. The Treasury’s aim, in other words, was always a limited financial management revolution. Moreover, McSweeney (1994) maintains that it was one with very limited success. More fundamental management reform had to await the Next Steps initiative. In 1988, a report of the Efficiency Unit (Efficiency Unit, 1988) maintained that the civil service had lacked accountable management responsibilities and precision about expected outcomes. It further argued that the civil service was focused on inputs at the expense of outputs and handicapped by uniform structures and procedures, including pay. The overall conclusion was that it had a real need for sustained pressure for continuous improvement. The Efficiency Unit review advocated a new management structure (as opposed to new accounting regimes) to address these issues. Recognising that much public sector work was in fact associated with the execution rather than the formulation of policy, the report recommended that executive functions should be hived off into ‘agencies’. Agencies were to operate under specific contracts with host departments and to be freed, to a significant extent, from bureaucratic constraints. Contracting was seen as meeting the needs of control whilst permitting flexibility in finding economic, efficient and effective means of meeting those demands placed on them. The Prime Minister accepted these proposals in early 1988 and a new process of reform began. By September 1998 there were 138 executive

New Public Management 55

agencies, employing over 75 per cent of all civil servants. Agencies operate within a framework document that sets out key responsibilities and targets. Targets are defined as quantifiable objectives to be attained by a specified date (Jones and Pendlebury, 2000). The introduction of the Next Steps Initiative proceeded in the face of Treasury resistance: … the implications of the [1988 Efficiency Unit] review were potentially so radical that vested interests within Whitehall were affected, pre-eminently the Treasury with its legitimate concern to maintain control of public expenditure. It only reluctantly accepted the decision to go ahead with the Next Steps programme … At stake here was the Treasury’s responsibility for controlling pay and expenditure, the source of its authority in Whitehall. (Thain and Wright, 1995, pp. 73–4) It is interesting, as indicative of this caution, to note that the initial 12 nominees for Agency status (which included the Driver and Vehicle Licensing Centre, the non-nuclear defence research establishments, the Meteorological Office and Her Majesty’s Stationary Office) were selected mainly because they already had a degree of distinctiveness from mainstream departmental business and therefore less day-to-day ministerial involvement; they already had a great deal of managerial independence and autonomy, or the potential for such independence. (Thain and Wright, p. 80) Spending departments, on the other hand, were quick to see Next Steps as a lever to win from the Treasury greater financial autonomy for the managers of their services. While the Treasury continued to fight hard to retain central control through the financial framework agreements negotiated with the sponsor departments of the new agencies, the principle of decentralised budgeting and more financial autonomy for line managers had been conceded. (Thain and Wright, 1995, p. 509) As Next Steps moved forward, the Treasury came under increased pressure to grant more autonomy to the new agencies. It did so by adjustment to the running costs regime, increased scope for virement, and, most far-reaching, extension of trading fund status. Similarly, in some

56 Scrutinising Science

instances departments were reluctant to cut the new agencies loose from traditional controls. There were criticisms by chief executives of both departments and the Treasury for ‘undue interference in the discharge of their managerial responsibilities’ (Mellon, 1993). As greater numbers of agencies began to be established so pressure mounted to privatise them. In fact, by 1998, some eleven original executive agencies had been privatised and a further three had been completely contracted out (Jones and Pendlebury, 2000).

4 New public management and science in the UK Government organisations with scientific and technological functions also became subject to the NPM reform process. This sector represents an area of special interest in this process because of its endogenous diversity and exogenous distinctiveness. Endogenously, the science and technology sector, whilst often perceived as a collectivity, in fact encompassed considerable diversity, making wholesale standardised approaches to public sector administration especially problematic. Despite this endogenous diversity, exogenously the sector as a whole might be said to constitute a discrete part of the public sector, with very distinctive issues and problems. This again makes the generalised application of NPM approaches problematic. Diversity within the sector is in the range and nature of activities, of organisational forms and in terms of customers or end-users. Research activities encompassed everything from routine investigation to strategic and perhaps highly speculative work whilst services included routine testing, consultancy work involving either evaluations of the work and products of others and the dissemination of technical advice and expertise. Organisational forms varied from high security establishments undertaking advanced high technology research through to test farms or field offices for agricultural consultants. For some establishments the only customer was a Whitehall policy maker, or some government executive function (e.g. testing urine samples for evidence of drug abuse on behalf of the armed services). Whitehall departments also acted as proxy customers, securing services for industry generally (such as metrology) or for the public good (e.g. road safety). Some advice services procured and facilitated by government were delivered directly outside government (e.g. agricultural advice to farmers). Exogenously, a number of inherent characteristics distinguished this group from the rest of the public sector. These characteristics may not have been unique amongst public sector organisations, but their

New Public Management 57

particular combination and dominance in this sector is marked and especially problematic under NPM regimes. First, science and technology can involve a range of cognitive skills, practices and expertise that distinguishes them from the more prosaic functions of government. For instance, scientific and technological work frequently involves contracting (implicitly or explicitly) for work where there is no certainty as to results or outcomes. The risky aspects of this work may have implications for the applications of NPM techniques: the writing of meaningful contracts, their audit and the setting of performance indicators in such circumstances is obviously problematic and may make traditional scientific and technological practices difficult to capture within an accounting framework. Second, difficulties of specification in areas of specialist expertise where there may be low certainty in outcomes may render close co-operation between providers and users essential. Yet such ‘shared visions’ or ‘partnerships’ may conflict with NPM notions of strict separation between customers and contractors in arms length relationships. The complexity of specification combined with the degree of expertise involved in some (but by no means all) of this work means that it may be inefficient or even impossible to give purchasers choice by ensuring a range of competing providers. This again conflicts with NPM principles. Third, some work may have no discernible or immediate impact on the core visible activities of government, such as research designed to maintain the longer term national science base. And some activities may have some of the characteristics of public good: for instance, road safety or metrology (Metcalfe and Smellie, 1991). In such circumstances government acts as a proxy customer to secure wider commercial or social benefits. Yet NPM techniques imply the shrinkage of the public sector away from functions, which have no direct and discernible paying customer. Some may argue that if a public administration technique is applied which is inappropriate to the functions of government in this regard (e.g. the maintenance of the science base) it may lead to a failure of government to fulfil its primary purposes. Fourth, some of this work involved giving policy advice to Whitehall policy makers, often in circumstances where the Whitehall department was entirely reliant on the laboratory in respect of its specialist expertise. Science and technology services must be both appropriately responsive to government needs and seen to have impeccable impartiality. These twin imperatives inevitably constrain government from choosing alternative ‘suppliers’ in an open market if public trust in government action is to be maintained. If the government laboratories are

58 Scrutinising Science

required to sell their expertise elsewhere as part of an NPM inspired marketisation, they may come to regard the execution of government policy advice work as either less pressing or, conceivably, the advice they give may be influenced by their plans in other areas. Finally, the physical practicalities of this work, and the specific skills required to undertake it, have meant that both virtually and physically the laboratories tended to be sited away from the Whitehall policy departments. This in itself may have served to make these establishments ‘different’ and distinguished as a group. For instance, Shore and Wright (2000) describe how specific professional groups within the public sector may have been more successful than others at resisting NPM strategies. At a more mundane level, the number, functions and affiliations (organisational and scientific) of these establishments made for bewildering complexity, inevitably making any reform process problematic. To illustrate, an attempt by one of the government reviews to classify them simply in terms of mission areas led to a diagram (Figure 3.1).

Figure 3.1 Establishment mission areas Notes: * ⫽ Research Council Institute/Unit or Scottish Agricultural Research Institute. LGC and IVEM appear twice. Source: Efficiency Unit (1994), Multi-Departmental Scrutiny of Public Sector Research Establishments, London: HMSO.

New Public Management 59

What the organisational acronyms stand for is irrelevant here; the important point is the complexity of the picture. Moreover, the diagram addresses only one of the dimensions on which these organisations could be classified – it does not begin, for example, to address the functional differences between the establishments. Following the acceptance of the Next Steps Initiative, Whitehall departments worked throughout the summer of 1988 to identify candidates for agency status. This new agenda was pursued energetically within various ministries with significant science and technology elements, particularly the DTI and the MoD. Simultaneously, pressure mounted for the implementation of competitive tendering for funds and for the measurement and audit of outcomes utilising performance indicators. These pressures for change occurred in the context of downward pressure on levels of public spending on science and technology. Between 1989 and early 1996, some 18 science and technology establishments were transformed into Next Steps Agencies with funding allocated using customer–contractor mechanisms. In many senses, the government research establishments were easy targets for such reform. They were already somewhat distinct from their mainstream Whitehall departmental homes, and had acquired something of a reputation, deserved or not, for harbouring inefficiency. Certainly, in the context of cash-straitened Whitehall departments the prospect of disciplining idiosyncratic departmental outposts into greater efficiency and conformity with immediate departmental objectives was extremely attractive. Agencification gave individual establishments substantially greater freedom in terms of appointments, investments and activities. However, the quid pro quo was the transformation of substantial budget lines, traditionally given as block grants, to Whitehall ‘customers’ who mounted tendering exercises for contracts and the imposition of significant audit and performance measurement regimes. These appear as significant changes, but the reality is far more complex and subtle. For instance, although the shift in budgetary control was significant on paper, in reality Whitehall departments were often far from ‘intelligent customers’ – that is, customers with an acute appreciation of what services they needed to procure. This led, in some instances, to the situation where newly created agencies were contracted by their Whitehall customers to tell them (their customers) what services should be contracted for. The reality behind these policy changes forms a significant focus of the rest of this book. Concomitant with these developments, in 1988 the Government’s Chief Scientific Adviser in the Cabinet Office, Sir John Fairclough, set

60 Scrutinising Science

out the broad principle that public spending on R&D should be directed to work which was far from the development of a marketable product or process. Consistent with notions that government expenditure and interventions should only occur in areas of market dysfunctionality, ‘near market’ R&D was to be left to industry. Government expenditure was to be confined to areas where the market would ‘fail to operate to produce maximum benefits to the economy as a whole’ (Wilkie, 1991). This decision led to the withdrawal of most government support for civil near market and single company R&D, the main exception being in aerospace. In 1989, Fairclough also restated the customer–contractor principle with the aim of encouraging development of an internal market in which public sector research providers would compete for public funds for R&D (Levene and Stewart, 1993). By April 1992 some 15 science and technology establishments had been translated into Executive Agencies. However, it appears that ministers were dissatisfied with the progress made and wished to push on the pace and extent of reform further. In 1993, ministerial sights turned once again to science and technology in general, and the research establishments in particular. A series of reports and a white paper between 1993 and 1995 demonstrates the policy emphases of the time:

●

●

●

●

●

1993: A Review of Allocation, Management and Use of Government Expenditure on Science and Technology conducted by the Efficiency Unit. The authors of the report were the Prime Minister’s Adviser on Efficiency, Sir Peter Levene, and the then new Chief Scientific Adviser, Professor (later Sir) William Stewart (Levene and Stewart, 1993). 1993: Realising our Potential: A Strategy for Science, Engineering and Technology, a white paper that led to the wholesale restructuring of publicly funded science and technology in the UK (Cm 2250, 1993). 1994: the Multi-Departmental Scrutiny of Public Sector Research Establishments, conducted by a multi-departmental team attached to the Efficiency Unit (Efficiency Unit, 1994). 1995–97: a series of Prior Options Reviews of those organisations within the Scrutiny that had not already been privatised. These reviews were announced in September 1995 and performed in three tranches, all initially due for completion in 1996, and actually completed in early 1997. In a further round, some of the establishments examined in the first tranche of Prior Options Reviews were referred to in yet another review by a committee chaired by Sir Peter Levene.

New Public Management 61

This means that some of the organisations concerned were under repeated review from 1992 until 1997, when the incoming Labour Government announced the suspension of the process. Nevertheless, few close observers of the subject could believe that a new equilibrium had been reached. The position over agricultural and biological establishments that had been the stimulus to the first of the reviews that we are about to consider, evidently continued to require attention. And by early 1998, discussions had reopened about the future of the Defence Evaluation and Research Agency (DERA), with privatisation mentioned as one of the options to be considered, albeit more probably within the framework of some form of public–private partnership than a privatisation in the normal sense. Revisiting these reviews not only provides detailed contextual data but also the very terms in which they were presented, and the reactions that they provoked, reflect the processes of the application of NPM to British science at this time.

The Levene–Stewart Review The Review of Allocation, Management and Use of Government Expenditure on Science and Technology was published in May 1993 (Levene and Stewart, 1993). It adopted a classic NPM approach in addressing issues of resource allocation, customers, suppliers and questions of the ownership of research providers. The Review subsequently strongly influenced the restructuring of science and technology in the public sector. In considering resource allocation, the Review recommended a strengthening of arrangements, through the Office of Science and Technology (OST), for identifying objectives and priorities for expenditure on Science and Technology. It also sought to ensure that these priorities were reflected in departmental spending plans, in advice to the principal Cabinet committees on overall spending priorities for science and technology and in the balance of spending across departments in order to inform final public expenditure settlements (pp. 2–3). The Review emphasised the need for customer capabilities to be properly resourced in order to ensure effectiveness (para 4.15). This reflected the difficulty experienced by policy customers in developing as ‘intelligent customers’ capable of defining their own priorities and controlling the contracting process rather than abrogating this responsibility to their (publicly owned) suppliers. The Review found that relationships between departmental customers and in-house suppliers put a premium upon co-operation. This included the development of ‘shared visions’,

62 Scrutinising Science

co-ordinating programmes to minimise overlap between work allocated to preferred suppliers, ‘working co-operatively to ensure intelligent, contractor-educated status for the departmental customer’ and long-term contracts offering close working and continuity (para 4.17). Such closeness was ‘compared’ (presumably favourably, and by the suppliers and customers, not the Review group) with the private sector’s use of partnership sourcing, and ‘contrasted’ (presumably unfavourably) with ‘allegedly more adversarial relationships considered inappropriate to the procurement of science and technology. In criticism, the Review went on to note that the features of partnership sourcing which the private sector used to ensure value for money (such as switching suppliers or intervening to restore value) were not much in evidence in government departments (para 4.18). In short, the Review team was not satisfied with the steps taken to shake up existing supplier arrangements. The Review highlighted the claims of the DTI that it had made serious efforts to build up the informed customer capability in order to be able to seek out alternative suppliers and to be in a position to challenge bids and to develop competitive tendering. In such instances, it was argued, the benefits in terms of savings considerably exceeded the costs (para 4.20). On the supplier side, the Review focused yet more sharply on the perceived need for the development of an internal market for science and technology services. The Review noted that, despite widespread awareness among departments of the benefits of the internal market, ‘we found widespread ambivalence among departments about the application of competition to their GREs’ (para 5.6). Even a customer such as the Department of the Environment, which had substantially increased the proportion of its science and technology work put out to tender, felt constrained in its ability to move towards an arm’s length relationship with its own Building Research Establishment (BRE). Expressing what the authors saw as a ‘widely held attitude towards in-house suppliers’ whose primary role was support for departmental policy and executive responsibilities, the Department of the Environment was quoted as describing its relationship with BRE in terms of maintenance of a broadly-based set of high quality research and consultancy capabilities able to link effectively together, familiar with policy requirements and available to meet immediate needs for investigations or new policy initiatives. (para 5.6) Departments, unsurprisingly, saw advantage in developing co-operative arrangements with in-house suppliers who could develop ‘specialised skills and facilities dedicated to the demands of their customer–owner’, who

New Public Management 63

could be ‘encouraged to give particular [science and technology] programmes continuity of resources and direction’ and could be called on urgently at short notice, rather than in developing competitive arrangements (para 5.7). The Review team was unimpressed with overall progress towards competitive tendering. Despite exceptions, they ‘saw little evidence of market liberalisation gathering pace’ (para 5.9). Where it had been tried, for instance in the DTI and the MoD, significant savings were claimed. However, in some instances ‘improvements’ had been short-lived: for instance, police demand for the Forensic Science Service dropped sharply for a year after the introduction of direct charging, only to return to preAgency levels in the second year of operation (para 5.11). Data on the distribution between intramural and extramural spending indicated, with the exception of the Department of the Environment, increasing spending with owned suppliers at the expense of extramural suppliers (para 5.18). In analysing why progress to greater marketisation was so slow, the Review argued that the benefits of clearly defined customer–contractor relationships and of competition were seen as less immediate and tangible than the costs and risks that government customers and their in-house suppliers believed they would incur by moving from traditional practices. The Defence Research Agency and the DTI agencies were seen as exceptions in this regard. Barriers to the development of internal markets that were identified included ●

●

●

●

●

‘The value placed upon continuity and co-ordination of work, closeness of the supplier–customer relationship and preservation of capacity on a “just in case” basis.’ The Review conceded that there were facilities that it would not be sensible to replicate and work of a long term or periodic nature that called for continuity and co-ordination of effort. ‘The cash cost of change’, in particular, the fact that departments, being owners as well as customers of their GREs, would be left with a problem if their in-house supplier failed to win a competitive tender. ‘The costs of running competitions’, both on the customer side, where there were staffing implications, and on the supplier side, where effort spent on marketing and bidding was often seen as unproductive. ‘Level playing field concerns’, with the key issues being the uneven extent to which customer-owners were prepared to expose in-house suppliers to competition, and the comparability of the costings upon which prices were based. ‘Perceived risks to the excellence of the Agencies/Institutes, or even to their continuation, if departments pursue competition.’ Suppliers were particularly concerned that their principal customers might fail to invest in new

64 Scrutinising Science

●

●

●

●

capital programmes and personnel policies; or defer funding of the efficiency gains needed to enable them to compete. Government suppliers also feared that their owners might give them the least stimulating work. ‘Reliance upon owned suppliers for independent policy advice.’ This was the service that departments regarded as the most important provided by suppliers and was said to be the principal reason for wishing to control the availability of such expertise. Some departments argued that only in-house expertise could be authoritative, independent or objective, while others took the view that ‘assurance of quality and of supply can be achieved without owning or tightly controlling the activities of important suppliers even where work is politically sensitive or urgent’. ‘Reliance upon owned suppliers for impartial procurement advice.’ This was a concern principally of the MoD, whose Defence Research Agency was said to contribute to its ability to get value from large, technologically complex procurement. Nevertheless, MoD was moving the DRA towards fixed price, fixed rate and other incentivised terms of trading. ‘A need for high levels of responsiveness.’ This was something regarded as especially important in conditions of crisis – a good example here might be the Foot and Mouth crisis of 2001. ‘Preservation of unique experience or facilities.’ That is to say, from the perspective of advocates of internal markets, government science and technology customers tended, perversely, ‘to regard the replication of capabilities as duplication of effort or the creation of over capacity, rather than an alternative source likely to create value through its competitive impact’. (Levene–Stewart, 1993, para 5.21)

The Review considered suppliers’ responses to these concerns (para 5.22). It noted the strategies of setting of performance targets where change was measured against past performance rather than a competitive benchmark and the adoption of a variety of remuneration and other personnel practices designed to make public sector scientists and engineers more ‘commercially-rounded and customer-oriented’. Some research establishments intended to introduce commercial incentives for key managers, but no plans were identified to substantially reward individual scientists for the exploitability of their work, although it was frequently put to the Review team that such schemes were desirable. ‘One or two departments’ also reported their belief that in-house contractors were ‘colluding’ to avoid competition.

New Public Management 65

The Review team had been unable to carry out an audit to quantify the savings or additional science and technology output that an open market might generate. Nevertheless, it noted that ‘comparisons with the private sector and examples we were given of the scope for overhead reductions’ indicated considerable scope for improvements (para 5.23). The Defence Research Agency (DRA) was cited as a ‘telling example’ of what could be achieved. Having compared its practice with commercial practice, DRA was cutting its overheads through the closure of a large number of sites and the reduction of around 2000 posts. The Review went on ‘we see no reason why savings and performance gains should not be achieved among the civil GREs where there is considerable variation of utilisation and widely admitted overcapacity’ (para 5.25). There is something of an elision of argument here: nothing in what DRA had achieved had been shown necessarily to be the result of agency status or of marketisation. It could as plausibly have been attributed to better management and a tougher financial environment. DRA might also have had more scope than some other GREs to cut overheads because of a large number of sites. That is to say, an uncritical assumption that the perceived benefits were due to marketisation, points to the difficulty of correctly attributing the outcomes of reform processes (Pollitt, 1995). The Review concluded that there had been an impetus since the late 1980s to a more market-oriented approach to the management of science and technology but that the introduction of competition was slow. Whilst the transformation of most GREs to agencies had given them the opportunity to develop a more commercial focus, at the same time links and dependencies between GREs and departments appeared to have strengthened. The Review at this point starts to address the question of how to accelerate reform. The Review argued, syllogistically, that competition over the provision of science and technology services was the key to savings and greater output and that current ownership arrangements were impeding the spread of competition. The conclusion was that ownership arrangements must be changed. Thus it was suggested that it seems to us that segregation of the market, rather than bringing about competition within it, is contributing to [science and technology] oversupply. While it would take more work to say which of the wide range of monopoly–monopsony Government [science and technology] relationships are ‘natural’, and which may be artificial, it is not difficult to imagine how artificialities arise. (para 5.30)

66 Scrutinising Science

Hence, the introduction of ‘more demanding customer–contractor relationships’ was urged. The Review considered the common parlance term ‘Internal Market’ to be unclear because it implied restriction and protection. Instead, the term ‘Open Market’ was proposed (para 5.31), within which there should be a presumption in favour of open competitive tendering. To achieve this goal, the Review team recommended the separation of the ownership of science and technology capabilities from procurement functions (para 5.32). By securing a ‘clean divide between customership and ownership’ they hoped to achieve an improved ability to rationalise government-owned science and technology capacity. It was felt that reform would give increased credibility and chances of success in competitions within the Open Market, with associated assurances that government customers would award work solely on supplier merit. It was further felt that reform offered greater opportunities for providers to search more widely for work, to work more closely with industry and to improve competitiveness by market testing non-core activities (para 5.33). Against this background, the Review advocated that serious consideration be given to privatisation (para 5.37). Where this was not an early option (i.e. within about 3 years), they recommended instead transferring ownership of civil GREs away from customer departments by consolidating them into a small number of, or perhaps only one, Civil Research Agencies, possibly owned by the Office of Public Service and Science (paras 5.42–5.45).1 This conclusion had been reached after examination of a range of ownership options, which were all rejected (para 5.47). The Review did recommend that the defence research agencies be left in their present relationship with the MoD, even though this failed to separate customer from contractor. It was noted that ‘a price may well be paid for this’ (para 5.49). Two reasons were given for this proposed exemption. First, the potentially counter productive consequences of making major changes to the DRA’s relationship with MoD while the DRA was already working energetically to make itself competitive. And second, the ‘exceptionally high degree of sensitivity’ of the work of another of the defence agencies, the Chemical and Biological Defence Establishment, which made it ‘akin to MoD’s nuclear establishments’ and seemed to rule out distancing it from its department (para 5.48). This may seem an anomalous comment given the previous decision to place the Atomic Weapons Establishment under contractor management (para 5.48).

New Public Management 67

Realising our potential The broad thrust of the recommendations of the Levene–Stewart Review, though very little of the detail, and much less of the tone of zealotry, were carried through into the white paper Realising our Potential: A Strategy for Science, Engineering and Technology of May 1993 (Cm 2250, 1993). This white paper prompted major change in the nature of publicly funded science and technology in the UK: for instance, restructuring the research council system with an enhanced emphasis on responsiveness to users reflected in the new mission statements with which they were equipped. We do not consider here all aspects of the white paper, only summarising those that relate to the development of the old government research establishments. Echoing the Levene–Stewart Review, the white paper asserted that: many of the services currently provided by Government research establishments could be carried out in the private sector, and that privatisation is a realistic prospect for a number of establishments. (para. 1.18 (9), p. 6) The white paper said that where privatisation was ‘not currently a realistic option’ and establishments were therefore to remain ‘for the time being’ in the public sector, ‘careful consideration will need to be given to holding the level of such capacity to the minimum necessary to meet the Government’s statutory responsibilities and other essential requirements.’ The Government announced its intention therefore to ‘undertake a scrutiny of the public sector research establishments to review, sector by sector, the future status of establishments, looking in depth at privatisation, rationalisation and different options for ownership’ (para 5.12–13). The review fell within the Prior Options process of Next Steps. It was announced too that it would also take account of a separate review into the establishment of the DTI, announced at the same time by the President of the Board of Trade, Michael Heseltine, who was evidently keen to press ahead independently of the outcome of the wider review.

Multi-Departmental Scrutiny of Public Sector Research Establishments These passages in Realising our Potential naturally created considerable uncertainty, not to say anxiety, in the scientific community. Such anxieties

68 Scrutinising Science

were not allayed by the short time span allotted by the Efficiency Unit to the review (about 90 days), despite the complexity of the task (involving around 50 establishments, with staffs of between 48 and 8000). The report was published in June 1994 as the Multi-Departmental Scrutiny of Public Sector Research Establishments (Cm 2991, 1995). It concluded that a number of science and technology organisations should be privatised (particularly those, such as the Agricultural Development and Advisory Service (ADAS) that were not providing ‘front-line’ services to departments). It also argued that the Prior Options review of the scope for privatisation should be extended to all Research Council Institutes and Scottish Agricultural Research Institutes. The report also asserted that where privatisation was deemed inappropriate, there should instead be significant rationalisation of the then existing pattern of public sector research establishments. Much provision, it was suggested, could take place either on a ‘market sector’ or on a geographical basis, pulling together on the one hand Scottish establishments, and on the other, a new Ministry of Agriculture, Fisheries and Food agency covering all food and agriculture research in England and Wales. For instance, the creation of new organisations concerned with marine resources and environment, environment (non-marine), biotechnology, and food and agriculture was suggested on account of these being the sectors in which the report found the greatest duplication and overlap between existing public sector research establishments (see Figure 3.1). The market sector approach would have resulted in some geographically curious lines of accountability – transferring, for example, the Plymouth Marine Laboratory to the Scottish Office, and the Scottish Office’s Macaulay Land Use Research Institute to Natural Environment Research Council, which was based in Swindon. The geographically based model, in contrast, would have broken the links between, for example, MAFF laboratories in Scotland, and England and Wales, or between the northern and southern Forest Research Stations of the Forestry Commission (para 5.22; para 5.23). As with the Levene–Stewart Review, the need to separate clearly the ownership and customer roles, to ensure that these were properly resourced and to require owners and customers to take a long-term view of departmental needs and the part to be played in them by suppliers was emphasised. The issuing of the report was followed by a four-month period of consultation. During this period, reports were also produced by the Science and Technology Committees of both Houses of Parliament (HC 19, 1994; HL5-1, 1994). The tone of these Parliamentary reports, and of much of

New Public Management 69

the associated debate in the scientific press, was heavily critical of the proposals. One concern was the sheer speed of the scrutiny relative to the scale and complexity of the task. According to the Lords report, the scrutiny team began on 13 December 1993, produced a working document at the end of March 1994 and published their report in July 1994 (para 2.7, HL5-1). The Commons report cites Dr Michael Elves (a senior manager from the Glaxo company) as unhappy with the time scale (HC 19, 1994, para 13). For so complex a set of organisations of major importance this appeared to many to be acting with unseemly haste. Another criticism was the apparent arbitrariness with which the sample of 53 public sector research establishments had been selected. There was also concern over the fact that what most observers had imagined would be a inquiry restricted to the government research establishments turned out to include a number of research council institutes also. Whilst the sample included all the major civil government research establishments, thereafter the criteria for inclusion were less evident. Witnesses to the Parliamentary enquiries wondered why some Medical Research Council (MRC) institutes but not others had been selected. Others questioned the appropriateness of reviewing together such differently focused organisations as government research establishments and research council institutes, the former being oriented towards support of departments and the latter to maintenance of the national science base. A third criticism was the apparent presumption that privatisation was the preferred option, other options to be considered only where this was deemed inappropriate. This assumption was indeed axiomatic in the Prior Options review process. In emphasising this point, the Lords report added that, in a comment which challenged another tenet of the narrowly accountancy-based tone of the report We do not believe that sufficient attention has been paid to the question of the effectiveness of public sector science in the pursuit of wealth creation and quality of life as laid down in the White Paper, without which any study of the efficiency of the management of that science has little value. (para 2.6, HL5-1) The House of Commons Select Committee on Science and Technology raised three main criticisms of the Efficiency Scrutiny. The first was that privatisation could only be supported if it did not lead to a reduction of the country’s scientific and technical knowledge base. The Committee quoted the external adviser to the scrutiny team, Dr Elves, of Glaxo: ‘[science and technology] is unlike many other commodities and cannot be switched off and on to suit short term objectives’ (HC 19,

70 Scrutinising Science

1994, 1995 para. 24). Second, the Committee reasoned that repeated reviews detracted from the morale of those working in the establishments. And third, it was argued that the scrutiny team had failed to understand the crucial differences between the departmental laboratories and the research establishments operated by the research councils as an integral part of the fulfilment of their mission. The Lords committee substantially agreed with the proposals for privatisation, although they also argued that it was essential not to break up the BRE. The Commons also noted that no members of the construction industry had supported the scrutiny report’s proposal for the partial privatisation of the BRE. The industry believed in the need to maintain an independent arbiter of standards and that the building industry was too disparate to provide the facilities for all the research that it needs (HC 19, 1994, para. 31). The recommendations for rationalisation proved highly controversial. The Lords rejected them, bluntly stating We reject the idea of reorganising PSREs [Public Sector Research Establishments] on either disciplinary or regional lines. We believe that large-scale reorganisation is very costly, involving very high risks. (HL5-1, para 3.14) The Lords expressed a preference instead for the particular approach that had been followed in the case of horticultural research. This had arisen as a result of the identification of industrial need rather than from any general organisational blueprint. The Commons were similarly sceptical that a case had been made for the benefits that such a reorganisation might yield (HC 19, 1994, para 22), and that the appointment of proposed Directors of Rationalisation would be of any real benefit (HC 19, 1994, para 23). Of the geographical rationalisation model, the Lords noted that horizontal integration of Scottish institutes was already taking place and should be maintained. However, the Committee argued that it should not be pushed to the point of separating the ‘Scottish system’ from the rest of the UK (HL5-1, para 3.15). The Multi-Departmental Scrutiny of Public Sector Research Establishments raised more problems than it resolved. The complexity of the picture that it uncovered was far greater than had been anticipated, beginning with the misconception that the organisations under review were all concerned solely with research. The Government’s response came only in September 1995 (Cm 2991). By this time plans had been laid by DTI

New Public Management 71

(driving ahead under the influence of Michael Heseltine) to privatise the work of AEA Technology, the National Engineering Laboratory (NEL) and the Laboratory of the Government Chemist (LGC) and to contractorise the operation of the National Physical Laboratory (NPL). In addition, the Department of Transport (DoT) planned to privatise the Transport Research Laboratory (TRL) and the MAFF, planned to move a range of its Agricultural Development and Advisory Service’s (ADAS) activities towards privatisation. The Government’s eventual response to the Scrutiny Report acknowledged that there had been ‘concern about the specific proposals to group establishments, in terms of the disruption that would be caused and the complex lines of accountability which could result’. The Government had therefore decided not to proceed with these particular proposals, but rather to continue to seek ‘more co-ordination and co-operation in managing research establishments across Departments and Research Councils’ (Cm 2991, 1995). A further Prior Options Review was to be set in train, extending the review process to include all public sector research establishments, including research council establishments. The aim was to complete this process by the end of 1996, with departments and research councils reporting in the meantime, in the May 1996 Forward Look, on steps taken to strengthen co-operation between research establishments. Prior Options The Government duly set in train another Prior Options Review, extending the process to include all the public sector science and technology research establishments included in the previous Efficiency Scrutiny with the exception of those already privatised, merged, or on their way to being so. Whilst the initial expectation had been that this latest review would take a broad view of the problem of rationalisation, the guidelines actually issued focused primarily on the option of privatisation. They asked two key questions. First, ‘must the public sector be responsible for the function?’ and second, ‘must the public sector provide the function itself?’ (IPMS, 1996, p. 2 and annex 1). The review procedure to be followed was complex. The 37 institutions under review were to be examined in three tranches, each with different reporting dates (March, July and December 1996). There were to be a set of review teams, each with steering committees made up of officials from various departments, the research councils and with the occasional independent member. The committees were on fisheries; plant science and agriculture; physical sciences; police and forensic science; animal

72 Scrutinising Science

science; marine and non-marine environment; food and nutrition and, finally, health. The first four subjects constituted tranche 1; the next two, tranche 2; and the last two, tranche 3 (IPMS, 1996, annex 2). Further complexity was added by the decision to overlay this structure with an additional review by a small committee led by Sir Peter Levene from the Efficiency Office. Its terms of reference were ‘to give further consideration to the practicalities of extending the scope for private sector involvement in the operation of research establishments’ (IPMS, 1996, p. 5). In particular, according to the Institution of Professionals, Managers and Specialists (IPMS), the Levene group was concerned to explore ways of resolving the problem of ‘crystallising pensions’, which was a particularly troublesome roadblock in the path of any proposed privatisation. The outcome of the first and largest tranche, comprising 18 establishments, was announced in May 1996 and is summarised in Table 3.1. From this report flowed the privatisation of the ADAS research and development establishments alongside the advisory service and a decision that the Central Science Laboratory was to be subject to yet a further review, this time by consultants, to determine whether it should remain an agency, be contracted out as a GoCo or privatised totally. The HSE laboratory remained as an agency and it was determined that the BRE should be privatised. A number of research council and Scottish Office (SO) institutes were referred to Sir Peter Levene to examine further the feasibility of privatisation. The outcomes of the Prior Options Reviews resulted in only two of the 37 laboratories that were studied being moved to the private sector. This seemingly radical reversal of policy was widely attributed to the fact that the government envisaged difficulties in finding the cash to create adequate pension funds for staff transferred into the private sector (New Scientist, 1997).2 It was in this fashion that the momentum behind the greatest upheaval in the organisation of central government provision for science and technology petered out.

5 Some conclusions It is evident from the description of the reform process undergone by GREs outlined above that they were subject to NPM reforms of the types variously described by Hood (1991), Rhodes (1991), McSweeney (1994), Dunleavy and Hood (1994) and Pollitt (1995) and described in Section 2. It is also very evident, as Boyne (1996) argued, that this was real change

New Public Management 73 Table 3.1 The first wave – outcome of the first tranche of Prior Options Reviews* Institution

Sponsor

Future

Agricultural Development and Advisory Service Building Research Establishment Central Laboratory of the Research Councils Central Science Laboratory

MAFF

To be privatised in 1997

DoE

To be privatised in 1997

DTI/OST

To remain in public ownership

None

MAFF

Possible privatisation

MAFF

Next Steps Agency 1.4.97

Referred to PA Consultants, since referred to Levene None

SO

Next Steps Agency 1.4.97

None

MAFF

No indication

Levene

HSE BBSRC

No change Possible independence from the public sector Possible independence from the public sector

Directorate of Fisheries Research Forestry Commission Research Division Horticultural Research Institute HSE Laboratory Institute of Arable Crops Research Institute of Grassland and Environmental Research John Innes Centre Macaulay Land Use Research Establishment National Weights and Measures Laboratory Police Scientific Development Branch Scottish Agricultural Science Agency Scottish Crop Research Institute Scottish Fisheries Research Services Silsoe Research Centre

BBSRC

BBSRC

Further action

Levene Levene

Levene

SO

Possible independence from the public sector Possible privatisation

DTI

Next Steps Agency

None

Home Office SO

Statement deferred

Levene

Scottish Office

SO

To remain in public ownership but possible merger/rationalisation Possible privatisation

SO

Next Steps Agency

None

BBSRC

Possible independence from the public sector

Levene

Levene

* Table compiled from IPMS report on the Prior Options Review, HC 643 and HC71-I.

74 Scrutinising Science

as opposed to some conceptual shift in perceptions of how government works. Ridley (1996) counsels against regarding NPM reform as homogeneous. Certainly, with regard to the laboratories, the diversity of outcomes indicates that single solutions were not ubiquitously successfully applied. Indeed, it is clear from the messy and turbulent period of successive reviews that this was something of an ad hoc process driven by a clear, some would say ideological, commitment to the rectitude of free market ideas. Certain individuals, especially Michael Heseltine, played a central role in much of this reform process. Both the complicated and messy nature of the reform process and the diversity of outcomes indicates that it is difficult, contrary to what its advocates implied, to have a ‘one size fits all’ NPM agenda. Yet science was neither the first nor the only part of government to come under such reforming pressures. It may well be that the somewhat distinctive nature of scientific activity at that time contributed towards the problematic path that reform took. In our meetings with various civil servants we asked why the lens of NPM was only turned on science and technology service providers comparatively late in the day. The answer, when we got one, was that science was a relatively minor part of government, which had concentrated in the first instance on those parts of itself where much bigger financial issues were at stake. A subject for consideration is what the drivers for reform have been, as these may determine outcomes. There appears to be two main drivers: administrative rationality and/or (for the two are not mutually exclusive) the existence of opportunity. Tentatively, we would suggest that the application of managerial rationalism, driven by a commercial ideology, led to the establishment of the laboratories as agencies and in particular the introduction of customer–contractor relationships. These reforms led to change in the laboratories that have, in the main, been widely welcomed by both departments and the agencies (Boden et al., 1998). Privatisation outcomes appear to have resulted from less planned processes and are more reliant on opportunity and indeed political personality. The availability of buyers and government willingness and determination to manufacture a sufficiently attractive package appear to have been particularly important here. Whilst the biggest changes for the newly privatised laboratories have tended to come with agency status, there may yet be impacts from the change of formal ownership. When existing work guarantees expire or major facilities run the risk of closure or obsolescence then the implications of ownership may become apparent (Boden et al., 1998).

4 The Organisation of Science

1 Introduction In Chapter 3 we explained the context of new public management within which UK government S&T service providers have been transformed. In this chapter we specifically address three issues related to the organisational reform consequent to these public management transformations. In Section 2 we explore in general terms the nature of science and technology services demanded by the UK government, emphasising their diversity. We do this in order to indicate the sort of functional requirements placed on organisations supplying such services. This leads, in Section 3, to a discussion of a typography of organisational forms, governance models and ownership structures (all of which we see as interlinked) that service suppliers might adopt or have imposed on them. The aim here is to indicate the organisational models available for meeting the functional requirements placed on suppliers. In Section 4 we introduce the specific service providers that formed the basis of our study group. We describe their organisational form and governance structures in the context of our typography. The objective here is to provide a description of the nature and context of the organisations to inform our discussion and analysis in the following chapters.

2 The nature and diversity of services and customers The range and nature of science and technology services demanded by government is extremely diverse. Until the NPM reforms of the 1980s and 1990s, such services were usually provided by government organisations collectively known as the GREs. However, this collective noun 75

76 Scrutinising Science

was something of a misnomer as they provided a range of services that included, but extended well beyond, narrow notions of scientific research. Research services demanded by government vary from routine investigation to strategic and, often, highly speculative work. Other services may include such activities as routine testing, consultancy work involving either evaluations of the work and products of others and the dissemination of technical advice and expertise. These services encompass the full range of scientific disciplines. The ‘customer’ range is diverse too. For some areas the only customer is a Whitehall policy maker or a government executive function. Thus policy makers may need advice on BSE (Mad Cow Disease) or the risks of agricultural pesticides. But Whitehall departments may also act as proxy customers, securing services for industry generally (such as metrology) or for the public good (for example road safety). Some advice services procured and facilitated by government are delivered directly outside government (for instance, agricultural advice to farmers). Table 4.1 indicates the range of science and technology services procured by government. Despite this diversity, there are a number of general characteristics in the supply of science and technology services to government, all of which have implications for the organisational and governance forms adopted. These characteristics have been detailed in Chapter 3 but to summarise: scientific and technological activities can often involve cognitive skills and expertise that distinguish them from more prosaic government executive functions. Difficulties of specification in areas of specialist expertise where there may be low certainty in outcomes may render close co-operation between providers and users essential. Some work may have no discernible or immediate impact on the core visible activities of government. Science and technology services must therefore be appropriately responsive to government needs and be seen to have impeccable impartiality. Government may therefore sometimes be extremely constrained in its choice of ‘suppliers’ by virtue of an imperative need for a high-trust assured-response relationship or a shortage of alternative sources of expertise. Attempts to develop alternative sources of advice may be constrained by the availability of relevant expertise and a consequential diminution of trust in impartiality. If the providers are required to sell their expertise elsewhere they may come to regard the execution of government policy advice work as either less pressing or, conceivably, the advice they give may be influenced by their plans in other areas. As ever, this matter is one of degree. However, a situation where a government department was wholly reliant on highly specialised technical advice on the safety of a product from either the

The Organisation of Science 77 Table 4.1 Examples of the range of science and technology services procured by UK government Service needed

Example of supply

Pure scientific research to support the national science base

Astronomical research by the Royal Observatory

Strategic policy related research

Research by the Defence Evaluation and Research Agency into the fighting soldier of the twenty-first century

Routine testing

Testing of vehicle safety features by the Transport Research Laboratory

Forensics

Analysis of suspected drugs

Consultancy

Advice on building materials to the construction industry by the Building Research Establishment

Information to support executive functions of government

Weather forecasts and data supplied by the Meteorological Office to the armed forces

Services to industry

Metrology calibration services offered by the National Physical Laboratory

Regulatory functions

Checking of live fish imports by the Centre for Environment, Fisheries and Aquaculture Science at points of entry

Public information services

Weather forecasts by the Meteorological Office

Policy advice to Whitehall Departments

Advice on defence procurement to the Ministry of Defence by the Defence Evaluation and Research Agency

Reference and standards

The Veterinary Laboratories Agency is a world reference laboratory for a wide range of infectious and non-infectious diseases in farm animals

Archives

The Veterinary Laboratories Agency maintains a bank of BSE (Mad Cow Disease) and scrapieinfected material

product provider or a government laboratory, which, under NPM-type pressures, had contracted with the private sector to test the product, might give rise to justifiable concern. In addition, some of this work may involve the utilisation of highly specialised and perhaps unique instruments and other facilities. The nature of these instruments and facilities may make them unsustainable as commercial operations.

78 Scrutinising Science

Scientific and technological support and advice to government in the UK therefore takes a variety of forms, requires sophisticated instruments and expertise, can involve complex inter-disciplinary and interinstitutional relations and depends upon the application of specialised skills and knowledge to both routine testing and non-routine advice and investigation. This is true whether the substance of policy be international negotiations over product standards, provision of an appropriate infrastructure for industry and services, participation in the international environmental debate, evaluation of military threats or an assessment of the safety of medical technologies or agricultural practices. It also depends for its effectiveness upon close mutual understanding between customers and contractors of needs in a context where these may be difficult to specify in advance in a contractually rigorous way. Consequently, and significantly for NPM, it may be intrinsically difficult to assess value for money ex post facto.

3 A typography of reform The GREs providing science and technology services to government until 1979 were, despite a great deal of diversity in their customers and work, generally homogeneous in organisational form. Most laboratories were adjuncts to specific Whitehall departments, with their location often following some functional logic. For instance, the TRL was a part of the Department of Transport. On occasions, the location within departments was sometimes historical accident – for instance the Meteorological Office was part of the MoD. As geographically distant and functionally idiosyncratic departmental outposts they were frequently rather semidetached from their home Whitehall department. The scientists and engineers therefore enjoyed a very high degree of autonomy in terms of the definition of work. Funding was usually by a block grant included in the annual Parliamentary Vote and the specific application of resources was most often left to the laboratory chiefs, who therefore enjoyed some considerable autonomy. There is little evidence of the development of the principle of the customer saying what they wanted, and the provider supplying it, if they could, as was recommended in the Rothschild Report in 1971 (Cmnd 4814, 1971). The reform of the GREs as a result of the application of new public management policies during the period of successive Conservative governments from 1979 to 1997 led to radical change in the formal organisational arrangements and governance structures of the laboratories.

The Organisation of Science 79

Almost all GREs now fall into two principal types: those that have been privatised and those that remain within government as executive agencies. But, within those two types, there is a significant variety in actual organisational outcomes. We now explore the complexity of these forms of public and private ownership and governance that have evolved since 1979.

Agencies Distinguishing between public and private organisational forms can be problematic. Ogus (1994) sets out three principal forms of public ownership. First, the organisation may be constituted as a government department subject to ministerial control – for instance, the Post Office until 1969. Second, organisations may exist as companies registered under the 1985 Companies Act in which the government retains all or a substantial majority of shares. These organisations are subject to all of the usual principles of company law. Third, there are statutory public corporations in which functions and powers are determined by Parliament (Ogus, 1994, p. 271). The government department form is comparatively rare and has usually been used for the supply of goods and services, which are ‘traded’, and where an attempt is made to charge a price related to cost (Ogus, 1994). Ogus suggests that NPM-type executive agencies allow a separation of such trading activities from core government itself. This not only exposes the ‘business’ elements of government activities to commercial rigour but also allows politicians to distance themselves from what might be unpopular actions or decisions. During the 1980s the GREs, which form the focus of our study were progressively distanced from their departments. In a significant semantic shift, their work was relabelled as ‘business’ and the organisations were reconstituted as executive agencies formally supplying services to Whitehall customers. Table 4.2 lists some of the GREs that became executive agencies and their status in 2003. This list does not cover all the GREs that were reviewed under Prior Options but includes those that we were most concerned with for the purposes of our study. The stated rationale for the transformation to executive agency status was to enhance efficiency by exposing the ‘businesses’ to quasicommercial governance and management mechanisms. For a number of GREs, agency status was to become a staging post to privatisation and it is probably fair to say that the exposure to commercial pressures inherent to agency status assisted that subsequent transformation.

80 Scrutinising Science Table 4.2 Government Research Establishments, agency status and subsequent status Government Research Establishment

Agency launch date

Departmental owner at launch

Status in 2003

Building Research Establishment

1990

Department of the Environment

Privatised in 1997

Centre for Environment, Fisheries and Aquaculture Science

1997

Ministry of Agriculture, Executive agency of the Fisheries and Food Department for the Environment, Food and Rural Affairs

Central Science Laboratory

1992

Ministry of Agriculture, Fisheries and Food

Central Veterinary Laboratory

1990

Ministry of Agriculture, Executive agency of the Fisheries and Food Department for the Environment, Food and Rural Affairs and known as the Veterinary Laboratories Agency

Chemical and Biological Defence Establishment

1991

Ministry of Defence

Since July 2001 part of the Defence Science and Technology Laboratory, an executive agency of the Ministry of Defence

Defence Evaluation Research Agency

1995

Ministry of Defence

In July 2001, 25% became an executive agency named Defence Science and Technology Laboratory, 75% became a government owned company called QinetiQ. In December 2002 the Carlyle group acquired a 33.8% share of QinetiQ

Forensic Science Service

1991

Home Office

Executive agency of the Home Office

Laboratory of the Government Chemist

1989

Department of Trade and Industry

Privatised in 1996

Executive agency of the Department for the Environment, Food and Rural Affairs

The Organisation of Science 81 Table 4.2 (Contd.) Government Research Establishment

Agency launch date

Departmental owner at launch

Status in 2003

Meteorological Office

1990

Ministry of Defence

Executive agency of the Ministry of Defence

1990

Department of Trade and Industry

Privatised in 1995

National Physical Laboratory

1990

Department of Trade and Industry

Government-owned contractor-operated (Serco) since 1995

National Weights and Measure Laboratory

1989

Department of Trade and Industry

Executive agency of the Department of Trade and Industry

Natural Resources Institute

1990

Overseas Development Agency

Became an Institute of the University of Greenwich in May 1996

Scottish Agricultural Science Agency

1992

Scottish Office

Agency of the Environment and Rural Affairs Department, Scottish Executive

Transport Research 1992 Laboratory

Department of Transport

Privatised in 1996 and now owned by the Transport Research Foundation

Veterinary Laboratories Agency

1995

Ministry of Agriculture, Executive agency of the Fisheries and Food Department for the Environment, Food and Rural Affairs

Warren Spring Laboratory

1989

Department of Trade and Industry

National Engineering Laboratory

Closed in 1993

Under executive agency arrangements the agency and the government both commit to a Framework Document: essentially an explicit, formal contract that defines the general functions, financial arrangements, performance measures and resources of the agency. Agencies are held responsible for delivery of services within the arrangements defined by the Framework Document. Periodically, annual work programmes and performance targets are set and resources agreed.

82 Scrutinising Science

A major qualitative difference between agencies and departments is that the former have more overt performance measures and accountability regimes. This is exemplified by the fact that agency chief executives can be, and have been, removed or allowed to leave before the expiry of their fixed term contracts when their agency’s performance is regarded as substandard. But agencies are not run as commercial businesses. Performance is not judged by profit, but rather by reference to customised performance indicators. Some of these indicators may be very general (for instance, to recover 100% of full economic costs from the sale of services). Others may be more specific – for instance, to complete a certain percentage of work programmes undertaken for government within the agreed time limits. Agency status did tend to presage full privatisation where this was feasible. The setting of targets for winning work from nongovernment customers often marked such intentions. Financial controls over science and technology agencies vary. However, in every instance there was an abandonment of the old block grant system under which the laboratories tended to receive large and undifferentiated amounts of cash with regard to which little financial accountability, with the exception of cash probity, was demanded. In some instances, agencies received agreed payment for work done. Others were on a Net Vote basis: that is, running costs over and above those recovered from ‘customers’ (who may be governmental or private) were reimbursed by government within agreed operating parameters. Both of these types of financial control were ‘annual’ in that each financial year was treated as a distinct and bounded financial episode. As such, surpluses, deficits and unused cash were returned to the Treasury each year rather than treat the ‘business’ as ongoing. The subsequent introduction of resource accounting by the UK government has somewhat alleviated the unhelpful pressures (for instance, to spend allocated budgets by the end of each year) generated by annuality. Some agencies operate on a trading fund basis under the Government Trading Funds Act 1973. The accounting methods and reporting format of trading fund accounts compare with those of private sector commercial undertakings. Thus they have different Treasury rules, are allowed to generate a surplus on activities and have regular accruals budgeting (i.e., surplus and deficit can be carried from one year to the next within the organisation). Trading funds generally are required to demonstrate a specified return on capital assets. Annuality still has an impact on agencies that have trading funds: although they may be free of the constraints of annuality, prior to the introduction of resource accounting in

The Organisation of Science 83

central government in 2001, their major customer may not have been. This affected the pattern of cash flows in the business, with departments often holding back expenditure to the year end in order to ensure that they did not go overbudget and then spending anxiously before the year-end to avoid the claw back of cash by the Treasury. Unsurprisingly, this customer spending pattern proved financially disruptive for many agencies. Executive agencies therefore constitute a new form of public ownership, organisational form and governance. Although still publicly owned, the business is separated from the core of government and is defined as a service to be delivered under the terms of a formal contract. Agencies are given greater autonomy and encouraged to act in a commercial way to generate efficiency gains. Yet they may also be more accountable: they have formally defined tasks and explicit performance indicators against which they are measured and held answerable. Finally, governance mechanisms may also be more formal: they follow the route of contracts for services (against which performance is judged) and more formal financial accountability, often on a commercial basis. Finally, separation from the core of government facilitates the winning of work from other, non-governmental, customers. However, such freedoms may mask an underlying continued substantial dependence on and allegiance to government customers.

Privatisation A number of the GREs that were turned into executive agencies were subsequently privatised. Privatisation, like public ownership, can be difficult to define. It is a process that organisations undergo, rather than a state or condition of itself. It involves the transfer of the ownership and/or legal control of a government owned organisation or function out of the public sector in whole or in part to the private sector. The private sector organisational form commonly employed to supplant public sector ownership and control is that of a company, bound by company law. Privatisation can therefore be defined, for our purposes, as the transfer of some organisation or function of the public sector to a company governed by company law, that company not being legally controlled by government. In some privatisations, government may retain an interest in the company by, for instance, a shareholding. For executive agencies, privatisation can therefore be seen as constituting a change not just in ownership but also in the organisational

84 Scrutinising Science

form (i.e. a private company) and governance mechanisms adopted. ‘Governance’ can be defined as the systems and practices that determine the nature of decision making and control with regard to policy making, executive actions and the delivery of objectives within an organisation. Privatisation therefore, indubitably, affects the governance mechanisms of the privatised organisation. In the majority of companies, the members in general meetings exercise formal governance. There may be instances where voting rights are unequal. By law, auditors, who examine the financial accounts of the company and issue a certificate regarding the extent to which they give a true and fair view of the company’s financial position, assist the members. Neo-classical liberal economic arguments suggest that the market for corporate control will sanction inefficient directors. That is, if a company underperforms it will be subject to takeover attempts as shareholders ‘exit’ rather than exercise ‘voice’ (i.e. they sell underperforming shares rather than press the directors to improve matters). The Cadbury Committee (Cadbury, 1992) concluded that in the UK these governance mechanisms were not working well, with too many members distant from the affairs of the company, preferring to exit rather than to exercise voice. Moreover, Cadbury concluded, the auditors may be rather too close to the directors and thus inhibited from giving an independent opinion on the financial position of the company. As such, doubts have been raised about the efficacy of the market for corporate control. Finally, externalities such as regulation may also affect the corporate governance of companies. Considerations of corporate governance extend beyond this formal and general level. Companies also have stakeholder communities: parties who have an interest in the manner in which the company is run. Stakeholders may include creditors, principal customers, employees and even the general public. All of these interests may, to some extent or another, be able to play a role in the governance of companies. For organisations being privatised then, the transition is much more fundamental than a change in ownership. Change brings with it new organisational forms and also new governance arrangements and conditions. The company forms and governance methods available for government in its privatisation of science and technology executive agencies were diverse. However, because of the comparatively small size of these organisations, none were privatised by public flotation (in which shares are offered for sale through the capital markets such as the London Stock Exchange). We explore below the most common forms of privatisation adopted in practice.

The Organisation of Science 85

Government owned–contractor operated – the ‘GoCo’ GoCos are a hybrid form on the privatisation scene. Under these arrangements, government enters into a contract for the operation of a business, or part of it, for a fixed number of years with a private sector outsourcing specialist. Staff contracts of employment are transferred to the contractor, along with the small assets of the business whilst government retains ownership of the basic business and the larger assets, which are leased to the contractor. Such contracts aim to share the risks and rewards of the business between the public and private sectors. The outsourcing contractor’s risks are limited as the amount of capital investment involved is minimal compared with the size of the business. It is reasoned that, despite such minimal risk transfers, government benefits because the contractor contributes its skills and expertise in running commercial ventures in an efficient, effective and cost-effective way. Contracts can be written between government and contractor to ensure that such efficiency savings are shared. Thus the government may let a contract with the contractor for the operation of the business providing x amount of a service for y years for a payment of z. If the contractor manages to provide 1.5x for z because of efficient working, the arrangements should ensure that the rewards are shared. Thus the government may get 1.2x in work done for the same payment of z and the contractor will be free to sell the other work capacity elsewhere at zero cost. One of the major contractors for government under such operations is Serco plc, a major public company. Governance in such situations is both interesting and complex. The contractor will control executive operations of the company in the usual way. Yet the highly specific nature of the complex contractual arrangements, their limited duration and the retention of ownership of the business itself by government might all be expected to have a major impact on the ability and willingness of government to exercise stakeholder control over operations. Companies limited by guarantee All companies have members. In most companies those members contribute capital in return for ‘shares’ (which usually implies a right to share in profits by way of dividend or other distributions). However, in companies limited by guarantee the members do not contribute share capital, but instead agree to guarantee the debts of the company in some nominal sum (usually £1). Such guarantors have no right to

86 Scrutinising Science

receive a profit share because they have not made any investment. Instead the surpluses of such companies may be applied in accordance with the criteria set out in their memorandum of understanding and articles of association. Although such companies often attract a ‘notfor-profit’ label this does not mean that they are necessarily not committed to generating a surplus. Charities are frequently constituted as companies limited by guarantee, as are the companies that manage leasehold flats. Major examples of companies limited by guarantee include BUPA and The Big Issue. In the summer of 2001, following the entry of Railtrack plc into receivership, the government announced plans to reconstitute the business of running the UK’s rail network as a company limited by guarantee. Other than matters related to the distribution of profits, companies limited by guarantee are largely subject to the same company law as companies with share capital. Being a member of such a company can bring no direct financial reward in the form of dividends. It might therefore be fairly assumed that members participate because of some vested interest or public duty to exercise voice within the company. Companies limited by guarantee have increasingly been used for privatisations where the business might be seen as having limited commercial value or where matters of public interest mean that it is seen as imperative that stakeholders have a formal mechanism to exercise voice, and are encouraged to do so rather than exit. The inability to receive profit distributions means that the value of membership of such a company lies only in the ability to exercise voice. Membership may be constrained by the articles of association of the company to a specified group. At the same time, such company forms may be perceived as a way of exposing businesses to commercial rigours and pressures thereby encouraging efficiency and effectiveness. In some instances, where the stakeholder group consists of a range of institutional interests in both the public and private sector, this vehicle might be seen as a useful means for facilitating the exercise of stakeholder voice. Trade sales Trade sales are where the ownership of organisations such as GREs is transferred to companies established by government and then the shares in those companies are sold. Some trade sales have resulted in the incorporation of the organisation into a pre-existing business. This occurs when private sector firms buy the majority or all of the shares in the companies created by government to which organisations have been transferred. In such cases, the lines of accountability and control

The Organisation of Science 87

become entwined with those of the purchasing or parent company. But in acquiring the business, the purchasing company may also acquire a new group of stakeholders. This may particularly be the case if the government remains a major customer, or if a condition of sale was that certain long-term undertakings (such as the maintenance of facilities) were entered into. In these circumstances, government may be an influential stakeholder even though the organisation is no longer subject to formal public accountability. Other forms of trade sale have been more in the tradition of management buy-outs, where the existing management of a laboratory acquires ownership and control of the business through a transfer of shareholdings. Such ownership and control may be in conjunction with other shareholders. For instance, the managers may have to raise capital to buy-out the business or may have to take on shareholders deemed desirable by government whose role is to exercise voice within the governance of the business to ensure the representation of wider public interest. Again, such companies may have a complex web of stakeholders, including the government itself if it is a major customer. These types of privatisation may facilitate continuity in relations between the supplier and the government customers because of the persistence in post of former civil service managers and other senior personnel. NPM therefore generated significant organisational, accountability and governance change for the old GREs. A group of broadly homogeneous organisations that were an intrinsic part of Whitehall departments were translated into a variety of new types of public and private sector organisations. In exploring these new organisational forms, we aim to understand what specific reasons, if any, there were for adopting particular ownership, governance and accountability patterns for particular organisations.

4 The reformed organisations In this section we introduce the eight science and technology service providers that constituted our study group. We do so by discussing their original and transformed organisational form. The National Engineering Laboratory In 1948 the government established the Mechanical Engineering Research Laboratory, renamed The National Engineering Laboratory (NEL) in 1959. The Laboratory was located on a 65 acre site with purpose

88 Scrutinising Science

built engineering facilities on the Scottish Enterprise Technology Park in East Kilbride near Glasgow because of political pressures in the late 1940s (Heim, 1988). NEL developed into a business providing engineering technology services in the areas of metrology, lubrication, fluids, materials, plasticity and heat to a wide range of UK and international public and private sector clients in diverse sectors such as oil and gas, energy, transport and defence. NEL has substantial engineering testing facilities, many of which are not replicated elsewhere in the UK. Operations currently include the Centre for Flow Measurement; part of the government’s National Measurements System and NEL maintains the UK standard for flow measurement. The largest customer of NEL was and remains the DTI. As early as the 1980s the laboratory was commonly perceived to be in a state of long-term decline, leading to a government decision principle to sell NEL. A potential buyer, a French company, was found in 1988. However, this sale fell through when the poor state of NEL’s commercial business was made explicit. It is interesting to note that the rigours of pre-sale scrutinies far exceed the levels of public accountability to which such organisations were usually subject, despite the beneficence of public funding. This failed sale led to efforts to streamline operations and move the laboratory to a more commercial orientation. The trade union representing staff members, the Institution of Professionals, Managers and Specialists (a professional association/trade union), claimed that these efforts caused substantial job losses (Nature, 1993). From 1990 until 1995 NEL’s workforce was cut from over 650 to 223 and the calibration service facility was closed (Hansard, 1994).NEL became an executive agency of the DTI in October 1990. NEL had two principal financial targets set by DTI. These were the recovery of the full economic cost of its work from customers and a 50 per cent increase in the number of nonDTI clients generating more than £100 000 annual turnover each year. Despite draconian cost-cutting measures, NEL still consistently failed to meet its financial targets. The laboratory obtained just under half of its £13.5 m turnover from the private sector in 1993–94. Despite its ailing finances, direct closure of the laboratory was seen as potentially damaging to industrial confidence, particularly in view of NEL’s position as one of Scotland’s centres of scientific and technical excellence. This led government to look at the option of privatisation. Pressure for rapid privatisation came from the self-styled President of the Board of Trade (the senior DTI minister) Michael Heseltine. His aim was ‘to get as much as possible of the DTI’s activities into the private

The Organisation of Science 89

sector as quickly as possible’ (Guardian, 1993). The accountancy/ consulting firm KPMG Peat Marwick was engaged to review the DTI laboratories and recommended that NEL should be transferred to the private sector. The use of private sector consultants to produce the case for transfer to the private sector was a hallmark of many privatisations. NEL was advertised for sale in December 1994. A difficult period ensued during which staff overwhelmingly voted against a proposed management buy-out. Concerns were also raised about the ability of a privatised laboratory to provide impartial advice. It was suggested that the sale of such an asset was a dogma driven policy embodying a disregard for the public good and an abdication of public responsibility for science and technology (The Independent, 1995). On 31 October 1995 NEL was ‘sold’ to Assessment Services Ltd, a Hampshire based subsidiary of the German electronics group Siemens involved in test and consultancy work. Almost the whole operation was included. However, when NEL failed to meet its financial targets in the period leading up to the sale, the eventual transaction involved DTI paying Siemens £1.95 m to take over the laboratory (DTI, 1995a). To this dowry was added some £30 m of guaranteed metrology work from DTI over the following five years. In order to privatise NEL, the business was transferred to a specially created company for a short period. Soon after the sale, Assessment Services Limited became a division of a Siemens group called the National Engineering Assessment Group. In turn, in 1996 another German company, TÜV Product Service GmbH, entered a joint venture with Siemens, taking a majority interest in the National Engineering and Assessment Group. This was subsequently renamed TÜV Product Service Ltd. TÜV originated in the 1870s and was formed from a merger of a network of product safety laboratories. In the UK another part of the group offers ‘contractorisation services’ particularly to the MoD. The shares are not separately listed so there are no means of assessing the financial aspects of the privatisation or indeed the financial performance of NEL. The DTI has expressed the view that since NEL is in the private sector, its management is no longer DTI’s concern (Research Fortnight, 1996). The privatisation attracted criticism from several quarters. The Institution of Professionals, Managers and Specialists felt that the impartiality of the laboratory would be called into question: ‘Siemens is a commercial business while NEL is an impartial public body. How can future clients have confidence in its objectivity when they might be in direct competition?’ (The Herald, 1995). Suggestions were made in some

90 Scrutinising Science

quarters that the deal with Siemens was linked to that company’s largescale investment in a microelectronics plant in North East England, which has since closed. The circumstances of this transfer of ownership demonstrate that the privatisation of the GREs cannot necessarily be seen as a cash bonanza for government. Treasury justification for the sale would have had to come in the form of relieving government of future liabilities for the laboratory, especially staff redundancy payments. Such accounting rationales are problematic however, predicated as they may be on an assumption that the laboratory would be run down in public hands and in the absence of (hard to quantify) indications of the benefits of retaining public control over the laboratory. Thus, a rational accounting justification of necessity rests on assumptions about future subjective policy decisions. Paradoxically, the terms and conditions of privatisation meant that NEL was guaranteed more work than a publicly owned laboratory was likely to have received. The DTI remains the largest customer of NEL. The only counterbalancing advantage might be that the laboratory would gain from perceived greater efficient working practices in the private sector, but the loss of lines of transparent accountability makes this hard to gauge.

The Laboratory of the Government Chemist The Laboratory of the Government Chemist (LGC) was established in 1842 to detect adulteration of tobacco on behalf of the Board of Excise. By the 1980s it was a research establishment of the DTI. The Laboratory developed into the provider of analytical, investigative and advisory services and policy support to government departments, public institutions, local authorities and other organisations. Most of the issues it dealt with related to consumer protection, revenue protection and public health. It also co-ordinated government activities in analytical science and has statutory functions as the official reference analyst under various Acts of Parliament. It recently diversified its work into areas such as urine testing for illegal drugs and the sexing of parrots using DNA testing techniques. Despite the centrality of its role, it appears unlikely that the Laboratory provided any substantial services that could not be adequately undertaken at many other UK analytical chemist laboratories. The Laboratory became an executive agency of the DTI in October 1989. Its agency status reflected its reliance on government for its work: in the year to March 1995 its turnover was £15 m, £6.7 m of which was

The Organisation of Science 91

derived from its main customer, the DTI. A further £6 m came from other government department customers and £2.3 m from non-governmental sources (LGC, 1995). The Laboratory’s location within the DTI meant that it was included in the review announced in April 1994, which aimed to facilitate the transfer of all the Department’s research establishments to private sector ownership or management. Consequent to this review, the transfer of the laboratory to the private sector through the use of a company limited by guarantee was mooted. However, this form of privatisation was eventually rejected because of what were described to us as ‘capital structure problems’. In November 1995 it was announced that LGC was to be sold to a management-led consortium also comprising the Royal Society of Chemistry and venture capitalists 3i plc. The Government completed the sale of LGC on 31 March 1996 for a payment of £360 000 by the Consortium. At the same time, the DTI made a payment to the Consortium of £1.96 m for building dilapidation works and to relieve the DTI of the liability for various site remedial works (DTI, 1996). In the event, because LGC’s trading performance failed to meet expectations in the year to March 1996, the DTI had to make a net payment of £329 000 to LGC (Research Fortnight, 1996). In addition, LGC received the benefit of a generous guaranteed five-year programme of government work. It seems likely that the size of this work programme is greater than might have been expected had LGC remained an agency. The Laboratory has retained its name and the new company is known as LGC Ltd. It also continues to carry out the statutory responsibilities of the Government Chemist, acting as the referee in cases where there is a dispute over analytical results or their interpretation. This residual statutory role, whilst statutorily important, is a very small part of LGC’s work by turnover. Nevertheless, the need to meet statutory imperatives led to a perceived need to find an ownership arrangement that could guarantee the impartiality of LGC. This need was met by the involvement of the Royal Society of Chemistry. Any future transfer of share ownership (which could potentially prejudice this built-in impartiality guarantee) could result in government exercising its reserved rights under the sale agreement to terminate the guaranteed work programme. Once again, this case suggests that privatisations can be far from cash bonanzas for government – indeed, quite the reverse. As with the sale of NEL, the rationale may have been saving the public purse future expense, but again this would be contingent on future policy choices. Moreover, the DTI locked itself into a programme of work with LGC

92 Scrutinising Science

when there were plenty of other private sector suppliers, a process that contradicts NPM principles. In this instance, the statutory need for a government reference analyst required the retention of stronger and more open governance controls than might otherwise have been the case.

The Transport Research Laboratory The advent of motorised traffic in Britain before the First World War prompted the establishment of the Ministry of Transport (MoT) in 1919. Early technical and scientific concerns related to the impact on road surfaces of the new traffic and the laboratories of the DSIR conducted research in this area. By the 1930s, the growth in highway expenditure led to the establishment of the specialist Road Research Laboratory, a small outstation of the MoT and the precursor of the Transport Research Laboratory. Whilst it was acknowledged at an early stage that the laboratory was not engaged on pure research, it was perceived as having the potential to be of immense national economic value if it led to the improvement of the road system. It was acknowledged at this time that no individual local authority was willing to undertake substantial expenditure on research (Charlesworth, 1987). The laboratory was renamed the Transport and Road Research Laboratory in 1972 to reflect the increased scope of work being undertaken and eventually became known as the Transport Research Laboratory in 1992. TRL is now the UK’s national centre for road transport research. Whilst its remit is primarily roads, it does have some involvement with other modes of transport. TRL provides research and scientific advice to government, its principal customer, and other customers, mainly local authorities. TRL describes itself as a centre of excellence in surface transport issues providing research and consultancy services to the public and private sectors. The laboratory provides technical help and advice to: enable the setting of standards for highway and vehicle design, facilitate the formulation of road safety, environmental and transport policies and, encourage good traffic engineering practice. TRL operated as an integral part of the then Department of Transport (DoT) until 1992, when it became an executive agency. The first chief executive of the new agency was brought in from the private sector. During the agency period the relationship with the DoT became quasicontractual: departmental customers held the budget and as much work as possible was put out to competitive tender. TRL was guaranteed a fixed element of this budget, reducing gradually to zero over four years

The Organisation of Science 93

(60% in 1992–93, 50% in 1993–94, 40% in 1994–95 and 0% in 1995–96). In practice the actual proportion secured by TRL is in the 70–80 per cent range. To meet the potential competitive challenge from consultants and universities, the laboratory sought to improve its cost base through a reduction in support staff and shifting its human resource organisation from the hierarchical civil service model to a matrix of resource centres. Although privatisation was not foreseen at the time of agencification, the process began the following year under ideological driven pressure from the then Secretary of State, John MacGregor. Pressure from the Treasury led to a competitive sale process with a short timetable. The call for tender stressed the importance of maintaining impartiality and independence in TRL’s work. The impartiality issue became salient because one of the two short-listed bidders was a consortium consisting of two consulting engineers (Pell Frischman Consultants and Mouchell Consultants) and the two main motoring organisations (the Automobile Association (AA) and the Royal Automobile Club (RAC)), both of which were mutual trading organisations1 at that time. The anti-road lobby expressed concern at this group dominating road research because of their vested interests in developing roads (New Scientist, 1996). In the event, the other bidder was successful. This was The Transport Research Foundation, a company limited by guarantee established by the senior management of TRL. The Transport Research Foundation’s members included some 86 transport sector interests and 25 employee representatives. Members ranged from universities, scientific and engineering organisations, consulting engineers to, eventually, the motoring organisations. The management of TRL was given financial assistance by the government to prepare the bid, but had to raise the purchase price of £6 m through bank loans. The sale was completed on 31 March 1996. TRL Ltd, a business with a turnover of £32 m, is now a wholly owned subsidiary of the Transport Research Foundation (Department of Transport, 1996). Ownership of the land and buildings was not included in the sale, apparently to keep the price down. The estate was sold separately in 1997 for £18.2 m with TRL continuing as a tenant with a 14-year lease remaining. The company limited by guarantee form provides a non-profit distributing structure that should allow surplus funds to be ploughed back into long-term research. However, the burden of debt from the buyout prohibits this in the foreseeable future and may have created pressures for short-termism in research. The transaction costs involved in bidding for fragmented work packages from the DoT were found by

94 Scrutinising Science

the laboratory to reduce efficiency and to hamper its ability to support longer term strategy. The general consensus among both customers and the laboratory was that the efficiency gains could have been achieved without privatisation and without the burden of debt.

The National Physical Laboratory In 1902, at the opening ceremony of the National Physical Laboratory (NPL), King Edward VII stated that this was almost the first instance of the state taking part in scientific research. He called attention to the major objective of the laboratory – ‘to bring scientific knowledge to bear practically on everyday industrial and commercial life’ (The Independent, 1995). The foundation of the NPL changed the nature of the relationship between government and science, opening the way to substantial state support for scientific research conducted in state owned laboratories. In contrast, government had previously subsidised scientific work in independent institutes or restricted its own work to the routine application of scientific techniques. By 1990, the NPL had become a research establishment of the DTI. Whilst work is undertaken for other government departments, the European Commission, industrial and other non-public sector customers, NPL’s principal customer was the DTI. NPL was and is the UK’s centre of research in metrology. Metrology is a vital service for industry and the public alike, and in this regard DTI acts as a proxy customer for the rest of government, UK industry and the general public. NPL is also responsible for the maintenance of the UK’s primary standards for measures such as, inter alia, the metre. Maintenance of metrology standards is a vital component in ensuring UK competivity and public safety. NPL became an agency of the DTI in July 1990. In the year to March 1994 NPL employed 740 staff and had a turnover of £48 m, of which over £40 m came from the DTI (Hird, 1996). During the period of agency status from 1990 to 1995 NPL was allowed enhanced autonomy in terms of managing its finances, staffing and the organisation of the laboratory. It operated within a negotiated framework which defined the additional delegations and which was set out in a formal Framework Document. Responsibility for finance rested with the laboratory, which had to produce an annual corporate plan to be presented to Ministers for agreement. Whilst agency status resulted in a certain amount of financial freedom, the control of capital expenditure still lay firmly in the hands of the Treasury. NPL remained subject to annuality and to operating on

The Organisation of Science 95

a Parliamentary Vote. The laboratory found it difficult to ensure that income matched its expenditure on such a yearly basis because of significant fluctuations in public spending. Matters reached a crisis point in 1992 when the government imposed substantial budget cuts. These cuts meant an annual DTI budget reduction from £45 m to £30 m over three years. NPL reacted by cutting a major radiation research programme in preference to the more expensive option of making staff redundant. NPL also sought alternative sources of finance from Europe in the form of Framework IV money for metrology and also funding from industry. NPL were negotiating a transition programme to deal with these cuts with DTI when Michael Heseltine became Secretary of State for Trade and Industry. As a result, the laboratory became involved in the review of options for the reform of DTI research establishments. Accountants KPMG were employed as consultants to assess the possible futures for NPL. The option of abolition was rejected because of the volume of support for NPL and its role from industry, the science lobby and trade associations. Privatisation emerged as an extremely problematic option for several reasons. First the work of NPL is central to UK’s economic competitiveness and in this regard DTI acts as the principal and proxy customer for British industry. Therefore, placing such an organisation in private hands would be extremely contentious. Second, the NPL site itself was extremely problematic: part of the laboratory worked from Bushey Park, a royal palace on royal parkland subject to restrictive covenants prohibiting the operation of any business there. The GoCo option emerged as the favoured option for reform. The consultants advised government that NPL required greater commercial freedom in order to allow it to respond efficiently and effectively to increased competition and also to a declining workload brought about by government’s changing research priorities. The GoCo option would, simultaneously, secure the independence and impartiality of the NPL and ensure that it remained capable of satisfying the national need for metrological standards. Selected bidders were invited to tender to carry out NPL’s work under contract to the DTI. These included a consortium comprised of EDS Scicon, a US software and services giant, the government’s own DERA and Taylor Woodrow. A second consortium was headed by Brown and Root, a leading US engineering contractor, in partnership with Imperial College, University of London. The nuclear engineering division of Rolls Royce and WS Atkins, one of the UK’s major civil engineering specialists also bid.

96 Scrutinising Science

The contract was awarded to Serco plc, an international outsourcing specialist in collaboration with AEA Technology and Loughborough University as subcontractors for particular tasks.2 This consortium has managed NPL as NPL Management Ltd (a wholly owned subsidiary of Serco plc) since October 1995 and was contracted to deliver the DTI’s measurement programmes for the next five years. From 1995 to 2000 DTI-funded work at NPL represented around 75 per cent of planned annual income. DTI made an initial payment to Serco of £1.55 m to take over the Laboratory and stated that, beyond the initial five-year contract, it was likely to want to continue to procure the kinds of services provided by NPL from a UK based institution. The contract agreed the minimum value of work to be placed with the establishment by DTI over a fiveyear period – an arrangement deemed necessary to make NPL sufficiently attractive to potential contractors. There were complicated arrangements in the contract to ensure payment by achievement milestones on various projects, the retention of monies if performance by NPL was below that expected and arrangements by which NPL Management Ltd and the DTI could share efficiency gains. The government will have, in addition, come under heavy cash flow pressures in creating a pension fund for the NPL employees. The benefits to the laboratory of GoCo status were significant. It enjoyed a guaranteed work programme and a long-term programme of expenditure from the DTI. It was also able to compete confidently for market-tested DTI expenditure. NPL also benefited in August 1997 when the Labour government approved a £300 m Public Finance Initiative for the redevelopment of its site at Teddington. The NPL was a government owned, government funded public organisation. It is now a government owned, predominantly government funded but privately operated organisation. It has become profit oriented whereas before this was not an issue. It has become profit making – the benefits of which pass to the shareholders of Serco. Prior to becoming a GoCo, NPL published its own annual reports and accounts. Now the accounts are subsumed into the accounts of the Serco group and are less comprehensive and the amount of money spent by UK government is not discernible from other operator income. Consequently, for the independent observer it is difficult to assess the true costs to the UK taxpayer of the new organisational arrangements on a historical trajectory and subsequently any possible benefits of increased competition inherent in the arrangement.

The Organisation of Science 97

Building Research Establishment The Building Research Establishment (BRE) was founded in 1921 (as the Building Research Station) in order to address technical aspects of the housing crisis that emerged after the First World War. Its establishment as a centrally funded government laboratory was designed to counter the problems of a fragmented industry that lacked scientific knowledge and technical skills in materials and construction. It provided a focus of expertise in the emerging areas of knowledge in construction and building sciences not only for the UK, but also for the Commonwealth and European countries, particularly after the Second World War. From the outset, the Building Research Station (BRS) was concerned with standards and guidelines for practitioners, long-term testing, advisory services for industry and more fundamental research. Its mission was to serve the users of buildings, not the construction industry. Thus, it has always had the character or mission of an applied research institute. A Scottish laboratory was created in 1949 to meet the needs of different construction practices and climatic conditions in Scotland and Northern Ireland. In 1972 the BRE was created from the BRS, the Fire Research Station and the Forest Products Research Laboratory. The new BRE was then transferred to the recently created Department of the Environment (DoE). In 1990 BRE, along with most other central government laboratories, changed in status from being an arm of a government department to an executive agency. Agency status was seen as a step towards full privatisation. BRE gained a chief executive, some financial autonomy and was expected to negotiate specified programmes of work with the DoE. The agency was expected to win a minimum of 10 per cent and a maximum of 15 per cent of its income from private work. Agency status made formal the change which had taken place in 1988, when BRE ceased to be funded directly from the Parliamentary Vote, instead winning its funding through contracts drawn up by the DoE. As an agency, BRE was subjected to more stringent accountability, and operated on a Net Vote basis. The Net Vote basis was one where government organisations were encouraged to recover their costs from customers, with any shortfall being met by government and any surplus being returned to the Treasury. In fact, BRE was a net contributor to Treasury funds. In 1992, after the general election, the DoE formally adopted the role of sponsorship of the construction industry and launched various reviews in order to define the nature of its sponsorship role. The Department’s research programmes, which were mostly placed at BRE,

98 Scrutinising Science

became more driven by industry. This was to be achieved by strategy setting focused on innovation and commercial impacts and including collaborative research sponsorship. However, BRE’s stated mission was still to serve the public interest and to advise the government. Full privatisation took place in 1997. Many thought that this was pushed through with extreme haste because of political considerations and the imminent general election. After a failed initiative to take BRE into an industry-funded ‘National Centre for Construction’, the government announced the sale of BRE by competitive tender. The bid put together by the BRE management team was successful (Boden et al., 1998). BRE Ltd is a wholly owned subsidiary of the Foundation for the Built Environment (a company limited by guarantee). The Foundation’s members are firms, professional bodies and other organisations across the construction industry and building users. They include some universities with built environment research groups. The members are grouped into ‘colleges’ representing interest groups, and each college appoints members to the Foundation’s council. The governing structure aims to prevent any single interest group having undue influence, thus preserving BRE’s independence and impartiality. The Foundation funds research through a managed programme and PhD scholarships. Any profit which BRE makes is passed to the Foundation. The Foundation also owns subsidiary companies concerned with certification, accreditation and loss prevention, research and project management and consultancy. The Foundation is seeking charitable status in order to extend its mission to include educational activities. BRE’s income is around £30 m per year, and this has remained stable since privatisation. Government work has dropped from 95 to 60 per cent of income since privatisation.3 When BRE was privatised, government income was guaranteed for five years. In March 2002, the guaranteed work from government (part of the privatisation deal) expired, and another review of construction industry R&D was undertaken, culminating in the ‘Fairclough report’ (DTLR, 2002). This report explicitly stated that ‘although BRE is widely respected, and has particular strengths in many areas relating to Building Regulations, it must in future win work without any special government support or favour’ (DTLR, 2002). The report recommended that specialist research teams should not be maintained on a ‘just in case’ basis – for example, experts on unvented hot water systems which are liable to explode. Instead, the report recommended government support centres and networks of excellence, including university teams, funded on a longer term basis

The Organisation of Science 99

with industry leading the research agenda. BRE expressed support for this (Research Fortnight, 2002), probably due to its being in a strong position still to claim research excellence and to win this type of research funding. Income from non-government sources has grown significantly and is divided more or less evenly between problem-solving/consultancy and testing/certification work. Income from the European Commission has grown very slightly since privatisation. BRE has partly been able to reorient itself, away from its public service ethos and towards technology based services to industry. It is not clear how renewal of capital and its own knowledge base will be guaranteed in the privatised regime, but it is currently developing linkages and positioning itself to win public funding for research as well as private funding for consultancy. One issue, which is salient in the case of BRE, is how a longstanding organisation with a very explicit public interest focus quite purposively reinvented itself, of necessity, into an organisation devoted entirely to the satisfaction of the needs of paying customers. Thus organisational reform also impacted significantly on the underlying mission of the organisation.

Defence Evaluation and Research Agency UK government has a long involvement in and commitment to defence research. In 1991 the MoD created both the DRA (by amalgamating several of its research establishments) and the Chemical and Biological Defence Establishment Agency (at Porton Down). In April 1995 the Ministry amalgamated these two agencies, together with the Defence Operational Analysis Centre, the Directorate General of Test and Evaluation and a number of smaller organisations, to create a unitary agency known as the Defence Evaluation and Research Agency (DERA). DERA brought together all of the UK MoD non-nuclear science and technology research resources and became the largest of the science and technology agencies. DERA had an important dual role in the service of UK government. First, it provided independent technical advice to government on the evaluation of defence bids and research. Second, it carried out research and development when assessing new military technologies. In 1998 the MoD undertook a strategic review, which recommended a Public Private Partnership (PPP) arrangement as the best means of maximising the strategic value and operational cost-effectiveness of the

100 Scrutinising Science

UK’s defence research capabilities. As a result On 2 July 2001 DERA was separated into two organisations. A science and technology company called QinetiQ and the Defence Science and Technology Laboratory (DSTL), an agency of the MoD. Prior to the split, DERA had an annual turnover of approximately £1 bn. It employed 12 000 people (9000 of them scientists and 1000 with PhDs), and had 17 sites across Britain. At the time of the reorganisation, DERA’s civilian sector innovations, including world-leading computer voice-recognition technology and flat audio speakers, caused its value to soar (Sunday Times, 2000a). DSTL is now located on ten sites in southern England, has approximately 3000 staff and represents almost 25 per cent of the former DERA. It remains an integral part of the MoD and continues to handle the most defence-sensitive areas of research. The focus of the organisation is on the needs of the MoD and the government with an objective of providing impartial and expert technical advice on defence related issues. DSTL covers most of the old DERA’s technical areas of expertise and provides a core competence capability for the MoD in chemical and biological defence, chemical technology, electronics, defence analysis and defence research information. This is work that is still considered best conducted by government. Its purpose remains that of providing an impartial source of advice and specialist research and its mission is to create the edge for UK forces and the government through the best use of science and technology. QinetiQ describes itself as the largest science and technology organisation in Europe. It comprises 75 per cent of the former DERA and is a public–private partnership that provides technology-based solutions and innovations. QinetiQ is a wholly government owned public limited company. In 2002 QinetiQ’s laboratories were located on 18 different sites and employed approximately 8000 people. Eighty per cent of its turnover of £800 m was generated from MoD. Operating profit before exceptional items to March 2002 was £42.7 m (QinetiQ Group plc, 2002). The justification for the adoption of this organisational form is that QinetiQ now has greater freedom and access to private capital, allowing it to exploit its technologies and capabilities into wider markets. There was considerable opposition to this reorganisation of Britain’s public defence research establishment. In the House of Commons concerns were raised about the nature of the division of DERA. It was argued that the divided DERA must retain its research capacity in order to retain top quality scientists on whom the government relied for advice and evaluation. If the research function of DERA was moved entirely to the

The Organisation of Science 101

private sector the scientists would also move to the private sector leaving the government with ‘second- and third-rate people undertaking evaluation and advisory roles’ (Hansard, 2 November 2000). The trade unions were concerned that the part of DERA moving to the private sector would not be financially viable and that the essential strength of DERA as an interdisciplinary team would be undermined (Sunday Times, 2000b). The defence manufacturers fretted about increased competition from a privileged body, the Americans and Members of Parliament worried about military security and the environmentalists were concerned about the chemical warriors of Porton Down. The Pentagon was extremely influential and initially blocked the idea of privatisation, influencing the decision to retain certain elements in the public sector (Financial Times, 24 July 2000). Nonetheless despite the reluctance of previous (Conservative) governments to privatise DERA on the grounds of national security the second term Labour Government decided to go ahead, albeit with a compromise solution. The initial planned stock market flotation of QinetiQ was abandoned due to unfavourable market conditions. Subsequently, in September 2002 the MoD announced it was seeking a strategic investor for the sale of up to 51 per cent of QinetiQ. The MoD planned to hand control of QinetiQ to the strategic investor, but to retain a significant shareholding. It intends to proceed to a full stock market offering within two to four years. The income to be generated for MoD from this part of the privatisation was estimated at £250 m. This action was not without controversy and in particular a political row broke out when the MoD offered QinetiQ a 20-year indemnity for losses it might suffer because of contamination of some of its sites. MPs were concerned that the taxpayer was being made liable for a long-term burden of an unspecified amount. On 5 December 2002 the MoD announced that the Carlyle Group4 would become its strategic partner in QinetiQ, acquiring a 33.8 per cent share. The MoD was estimated to receive between £140–150 m from the transaction, having already received £50 m from Qinetiq. The MoD confirmed its plan to retain a special share in the business for a three to five year period, after which the intention was to sell its entire stake probably through stock market flotation. A small percentage of shares (3.7%) were made available to employees (MoD press notice). Some UK MPs criticised the arrangement, as they were concerned about the possible conflicts of interest arising from allowing a foreign owned investor a stake in the British defence market. However the Defence Minister Lewis Moonie assured that ‘… robust safeguards would be in place to

102 Scrutinising Science

ensure the integrity of the Government’s procurement process is not compromised’ (Hansard, 2002). In March 2003 QinetiQ signed a 25-year contract, known as a long term partnering agreement (LTPA), to provide the MoD with test and evaluation service. The LTPA worth £5.6 bn, came into effect on the 1 April 2003 and covers the management of the MoD’s 22 principal ranges. Up until the later years of the 1990s privatisation had not been considered an appropriate option for DERA due to its pivotal role in providing independent advice to the MoD on technical matters. Thus DERA escaped the privatising pressures felt by other agencies. A trade sale of the whole of DERA was not a serious consideration as there was an awareness that the private sector would have cherry picked certain aspects of the organisation, leaving the rest to wither. Indeed some commentators suggest that one of the key drivers for the privatisation of DERA has been the insight of key players within the organisation to foresee the potential for commercialisation of specific aspects of work carried out by DERA.

The Meteorological Office (The ‘Met Office’) The Met Office was formed in 1854 as a small department within the Board of Trade. It was and remains primarily concerned with forecasting weather. At the end of the First World War it became part of the Air Ministry because of the importance of weather forecasting to air defence. It later moved to the MoD, became an executive agency in 1990 and started operating as a trading fund in 1996 (Meteorological Office, 2002). The Met Office provides meteorological and related services to government, the armed forces, the public, aviation and commercial customers. It is also concerned with the development of the science of meteorology in order to facilitate effective service provision. Staff employed in the year 2001–02 numbered in the region of 2100, 70 per cent of whom were scientists. The turnover for 2001–02 was £154 m of which some £125 m was from the MoD and other government department business. Government was the largest customer accounting for 81 per cent of income. The asset base of the Met Office is just over £100 m of which more than half represents the UK share of weather satellites. Forecasts are provided to the Royal Air Force (RAF), Royal Navy (RN), the Army, DERA and North Atlantic Treaty Organisation (NATO). The Met Office also provides the Public Meteorological Service on behalf of the government for the ‘public good’. This service includes the shipping forecast on BBC Radio 4, the National Severe Weather Warning Service

The Organisation of Science 103

and the Storm Tide Warning Service, together with gale warning and pollution services. This is the agreed range of weather services directly funded by government and freely available to all. In 2002 the Met Office won £1.2 m of funding from the Treasury to develop its work on health forecasting. The Met Office differentiates between information (i.e., its forecasts) and data (the primary weather observations from which forecasts are compiled). In order to project forecasts a large amount of observational data is required. To ensure access to such data, the Met Office is a member of the World Meteorological Organisation. The 179 member countries of this organisation exchange data 24 hours a day, seven days a week without any charge. This data is quite basic and might, for example, state the sea temperature at any given point in the oceans. The Met Office gathers 2 per cent of the data required for its own forecasting and is therefore reliant on 98 per cent of its required data from other countries. The Met Office is also a member of Ecomet, a European organisation which co-ordinates weather forecasting activity within Europe. Data is made available through Ecomet, which operates a set scale of charges. Data coverage can be poor in certain parts of the world, which can be problematic as these sometimes affect the UK weather systems. The move to trading fund status removed the Met Office from the managerial and financial control of its parent department, the MoD, and permitted greater commercial freedom. Trading fund status also meant that the Met Office had to start to meet all its running costs by selling weather services to the MoD and other customers. It was perhaps a more significant step in terms of commercialisation than the introduction of agency status in that it provided a strong imperative to address the issues of charging for information. Under trading fund rules the Met Office must recover the full economic costs (of about £150 m a year) of its operations. This means that customers must be found to buy Met Office information. The Met Office and the New Zealand weather bureau are the only national weather organisations to be subject to such financial requirements. All the other national weather services receive some kind of government grant – although many make charges to private customers in commerce and industry. Met Office funding is complicated and is worthy of note because it reflects the complexity of many of the financial arrangements that exist between government and executive agencies. Funding is divided between what is called core and non-core. The core group of customers consists of government departments, principally the MoD. They fund,

104 Scrutinising Science

through a grant, a core capacity to produce a basic range of weather forecasts. The same core customers are then charged for all the services that they use. This core funding covers almost half the costs of the Met Office. Non-core customers are simply charged for services used. Charges are calculated at marginal cost plus an element for the core costs. This obviates any accusation that the public sector is subsidising private sector usage. The core customers are charged using an old existing formula. The more risk the Met Office carries, the greater the profit it tries to take. The core customers agree to the core programme of Met Office work collectively. The only way the core customers can reduce costs is to persuade the other core customers to reduce the programme. Customers must give three years notice to withdraw from the core programme. The Met Office performance indicator of ‘profitability’ is to obtain a return on capital employed of about 10–11 per cent – about £25 m. Sales to the private sector contribute towards achieving this return. In recent times the portfolio of commercial activity carried out by the Met Office has broadened. Commercial services are provided to all areas of commerce, industry and the media. They include an independent television business unit, which produces the ‘Weather Channel’ in the UK and the Netherlands. Supermarkets are provided with information to link the volume of sales of particular products, such as beer or salads, with the commercial benefits being felt all the way down the supply chain. In 2001 the Met Office took a 49 per cent stake in a weather derivatives company called weatherXchange. Trading in weather derivatives is a hugely successful business in the US. For this business the Met Office makes data available from its weather centres to companies who want to hedge on bad weather affecting their business. This venture has not proven as successful as originally envisaged and this may be due to lack of initial investment. In order to move further into these newer areas of commercialisation the Met Office has to borrow money from the MoD, which may or may not be able or willing to assist. Borrowing from the markets is currently restricted under the trading fund status of Agency. In 2002 the Met Office relocated its headquarters from Bracknell to Exeter. The move was financed through a public–private partnership. In addition, for the first time ever, the Met Office has to lease its new supercomputers, at a cost of £27 m for three years, from the private sector. The Met Office exhibits many of the more interesting aspects of the GREs. It is, undoubtedly, an organisation deeply imbued with a public service ethos producing many services of a public good nature for which government acts as a proxy customer. At the same time, it is a vital science and technology service provider to government (principally the

The Organisation of Science 105

armed forces). In addition, the Met Office provides many commercial and commercially-priced services direct to non-governmental users (such as supermarkets or farmers). The information that it produces is mostly derived from data provided free of charge as a result of public sector international collaborative arrangements. Thus the Met Office is locked into an international mutual (data) trading arrangement that would preclude wholesale commercial exploitation. As such, it is not hard to see why the Met Office, even under Conservative governments, was never a serious candidate for full-scale privatisation. At the same time, the investment restrictions that its agency status brings have required it to find novel methods, through public–private partnerships for instance, to meet its funding needs.

Centre for Environment, Fisheries and Aquaculture Science The Centre for Environment, Fisheries and Aquaculture Science (CEFAS) is a scientific research and advisory centre for fisheries management and environmental protection. It is an agency of the Department of the Environment, Food and Rural Affairs, formerly the Ministry for Agriculture, Fisheries and Food. The origins of CEFAS date back as far as 1902. In 1997 the Directorate of Fisheries Research was reformed and became the executive agency CEFAS. CEFAS provides contract research, consultancy, advice and training in fisheries science and management, marine environmental protection, aquaculture and fish and shellfish disease and hygiene, to both public and private sector clients. Staff at CEFAS also engage in policy formulation and policy development at national and European levels. The agency employs over 550 staff at four sites around the UK and has an annual turnover of around £30 m. It has three main coastal laboratories, Lowestoft, Burnham and Weymouth and two research vessels. In 1995 the Weymouth centre benefited from a new £12.5 m laboratory. The laboratory management sensed that the organisation would be turned into an agency and used this as an argument to win the funding for the new building. The new facilities are capable of competing effectively for commercial work. In the years since agency status was granted, CEFAS staff have increased quite markedly. In 1997–98, CEFAS had 423 staff and by 2000–01 this had risen to 537, of whom 75 per cent are scientists. This growth in staffing is not reflected in a growth in commercial activities – non-UK government income increased from a 7 per cent share (£1.5 m) in 1997–98 to just 9.5 per cent in 2000–01 (£2.5 m). UK government income increased from £21.5 to £26.5 m over the corresponding period.

106 Scrutinising Science

In fact, the introduction of the European Single Market had significant implications for the management of fish disease control in the UK. Recent rises in the number of staff are in part attributable to UK entry into the single market and the consequent introduction of free trade in live fish for the first time since 1937. Thus, CEFAS’ growth is attributable entirely to its governmental regulatory function with regard to fish disease. Government was and remains by far the largest customer of CEFAS and this is a situation that is unlikely to alter (CEFAS annual report and accounts 1997–98; 2000–01). There is resistance by both the parent department and the laboratory to allow commercial pressures to undermine the strong public service culture of CEFAS. The reluctance to embrace privatisation by MAFF (now DEFRA) was evident throughout successive Conservative governments. It was one of the few government departments to successfully resist the trend. In recent years, the department has aligned itself increasingly less with industry, offering it less support, especially financial. The role of the new DEFRA, established in the aftermath of the 2001 foot and mouth crisis (when MAFF was roundly criticised for being only concerned with commercial interests of farmers and those in the food supply chain), has been defined much more in terms of public health and environmental issues. This may shed light on why CEFAS has been retained as an executive agency and not been pushed more forcefully towards privatisation.

5 Some conclusions In this chapter we have explored scientific organisational change in the context of GREs under NPM in the UK. It is evident that, prior to the start of reform, the laboratories all enjoyed a common organisational structure, regardless of their function or tasks. They also had in common, as science and technology service providers, a number of functional characteristics such as the cognitive nature of their work and the reliance of government on their confidential advice. Despite this commonality, the more prosaic characteristics of their work differed markedly. Some were cutting edge research establishments (such as DERA) whilst others largely conducted routine testing (such as LGC). Some served government principally or solely, giving it confidential and reliable advice (such as CEFAS) whilst others served the public, either directly or with government acting as a proxy customer

The Organisation of Science 107

(such as NPL). Some were deeply embedded in international public sector networks (such as the Met Office), others were much more self-contained (such as TRL). The imperative of NPM disrupted the homogeneity of the structures that defined these organisations. The new forms of organisation brought real, deep and lasting organisational change because they embodied radical and fundamental alterations to the concept of what the public sector was. The shift to agency status both liberated these laboratories, for instance in terms of the ability to define pay levels, and made them subject to much increased accountability and control through mechanisms such as contracting and performance indicators. Similarly, privatisation did not just change the ownership of the laboratories but also the governance and accountability regimes as well. Privatisation brought about cultural change in organisations as they realigned their missions to suit the changed circumstances. The diversity of organisational outcomes that resulted from the most intensive period of NPM reform is marked. So complex and indeed ‘messy’ is the range of outcomes that we can only suggest the factors that contributed to such diversity. First of all, it is clear that the nature of the work done was a critical factor in the trajectory of organisational form. Whilst the creation of agencies was relatively straightforward (and in most instances welcomed by the GREs themselves), privatisation represented a quantum change in the fundamental nature of organisations. This should not be surprising – for it was this level of change that was so earnestly sought by successive Conservative governments. However, what became apparent even to Tories during this period is that some organisations simply could not be privatised. This was because the fundamental nature of the ‘business’ – what they did and whom they served was not amenable to this. Thus the Met Office and DERA stayed in public hands. Where businesses were squashed into the private sector box this did, in some instances, result in a real transformation of their core identities – as in the case of BRE. Second, we do not underestimate the role played by prominent politicians and laboratory staff, nor the importance where it occurred of institutional resistance. The old MAFF proved itself remarkably adept at avoiding the privatisation issue whilst Michael Heseltine was a major architect of much reform across many GREs. This in a sense is the reality of supposedly ‘rational’ managerialist reform processes such as NPM – they ultimately rely on humans to implement them or not. Resistance takes many forms, and some GREs seized the opportunities offered by NPM reform to secure significant advantages either for the

108 Scrutinising Science

incumbent organisational leaders (in the form of management buyouts) or for the organisation (as in the case of CEFAS’ new building). Third, in the final analysis, with regard to some GREs there was simply not a suitable opportunity to privatise. Sometimes, where there was no buyer, organisational change was affected by paying groups to take laboratories away – such as with LGC or NEL. Conversely, sometimes the costs were simply too high – as in the case with pension funds. The impact of these diverse outcomes is an even more complex issue to judge, and not a direct focus of this study. Most GREs saw positive outcomes in terms of the shift to agency status. They felt that it had given the organisations focus and purpose together with greater managerial autonomy to get their particular, often unique, job done away from the strict confines of civil service structures. Privatisation outcomes were more problematic. Our observation is that privatisation did indeed lead to a shift away from the public service ethos (even though in all cases the government remained a major customer). Moreover, there was a loss of public accountability for which government contracting mechanisms somehow failed to compensate. At this point in time, it is unclear what the long-term effects on investment of these reforms are likely to be. Nor is it possible to reliably discern whether or not there has been any identifiable impact on the quality of science and technology service provision to government. We would only suggest that the continuing strong reliance of some Whitehall customers on privatised firms implies they have little scope to ‘exit’ from such relationships and one is left wondering about the means by which they are able to exercise ‘voice’.

5 Science and Markets

1 Introduction In Chapter 3 we discussed how privatisation to the maximum extent feasible and marketisation/commercialisation of the remaining public sector were themes central to NPM in the UK from 1979 to 1997. These themes have not been attenuated under subsequent Labour governments. In Chapter 4 we explored how NPM had prompted the development of new organisational forms for science and technology providers. But, as we explained in Chapter 1, change in science was characterised not just by organisational reform but also new visions of what ‘science’ was. In this chapter we will explicate what these new visions were and how they were synergistically related to and underpinning of policydriven organisational change during this period. In Chapter 6, which follows, we demonstrate how new organisational forms and new visions of science have come together to generate new scientific knowledge production processes. At the heart of NPM in the UK lies a belief that markets constitute the optimal form of any sort of activity or organisation. Where service and other product provision cannot be located in the private sector, then public sector providers must be ‘marketised’ – that is, emulate private markets insofar as is possible. Thus, NPM was not just about organisational transformation but necessitated a ‘re-visioning’ of how society, both in part and in whole, could be and should be optimally organised. It follows from this that if science was to be successfully subject to NPM then it too would have to be re-visioned as an activity most suitably organised along free market lines, whether it was situated in the private sector or not. Moreover, that new market-based vision of science would have in some way to be made real; that is, embodied and embedded in 109

110 Scrutinising Science

the organisation of science and its functioning and operation. To put it briefly, the hegemonic vision of science would have to be changed from the academic or Mertonian to the market-based or commodified. Achieving a transformation to a commodified vision of science involved the real development of a market for science and technology service providers. Markets require two basic things – a range of customers and a range of suppliers. Government, in creating a market for science and technology service provision therefore had to achieve a shift in two key regards. First, the government as customer had to seek, through processes of competitive tendering, alternate suppliers for goods and services outside of its own in-house capacities. Second, government as supplier had to be compelled to find a wider customer base. This can be achieved by: privatisation (thereby breaking special links with government); processes of competitive tendering; and performance targets aimed at requiring government organisations to achieve certain levels of non-governmental work in order to prove competitivity and efficiency. The purpose of this chapter is to describe, theorise and evaluate the attempts made to change the vision of government science and technology service provision to a market-oriented one. In doing so we aim to explore the feasibility of the development of such a marketised vision of science and technology and to draw attention to the particular barriers to change that might be encountered here. As ever, the changes that took place with regard to the provision of science and technology services must be and are set within the broader context of public administration and management. By 1945, a widespread perception of the failure of market mechanisms to produce optimum social welfare outcomes across a wide range of socio-economic activities prompted an expansion in the size and range of state activities in the Western world. States increasingly intervened to adjust for market inefficiencies in the production and allocation of goods and services and to correct market dysfunctionalities through increased regulation. Science and technology had of course long enjoyed state patronage. After 1945, the British state considerably widened the range of socio-economic activities it undertook to include health, education and social welfare. However, as we described in Chapter 2, science and technology continued to enjoy a somewhat privileged position; with little real control over work undertaken, compared with these new additions to the state’s portfolio. This general expansion of the role of the state was followed some thirty years later by allegations of state failure. Some commentators

Science and Markets 111

argued that states had grown too large, unwieldy and inflexible to provide goods and services efficiently and that regulation had an insufficiently light touch to ensure that there was no undue interference with market mechanisms. Amongst right wing ideologues in particular, this prompted a renewed espousal of the virtues of markets and an assertion that states should be ‘rolled back’ to the minimum possible size (see e.g. Hayek, 1982). Such thinkers argued that everything that could be done in the private sector should be done there because, ipso facto, markets were more efficient at producing optimal outcomes. Even among the less libertarian, there was a growing acknowledgement that market deficiencies did not necessarily mean that the state was always the most suitable vehicle for taking direct responsibility for the production and allocation of goods and services. Amongst New Labour from the mid-1990s, there was a belief that a ‘Third Way’ might be possible: a reformed public sector utilising markets and market principles where appropriate (Giddens, 1998). NPM, as described in Chapter 3, promised solutions to such perceived problems. In the UK, NPM facilitated the commitment of successive Conservative governments to privatisation where possible and to ensuring that the remaining public sector emulated so-called free markets in order to achieve improvements in economy, efficiency and effectiveness. Thus, NPM was to play an important role in the downsizing of the state and the (re)assertion of market principles. Science and technology was to be eventually caught up in this reform process: new market-based visions of the state and its activities spread to science and technology by virtue of the latter’s positioning within the former. This re-visioning of science paid scant attention to the traditional Mertonian model of science (Baskaran and Boden, 2004). The fact that science and technology was one of the last areas of government sponsored activity to be subject to NPM and the diversity of outcomes already noted in Chapter 4 suggests the persistence of the Mertonian vision of science and its institutional embeddedness. In this chapter we will explain that the persisting resistance of science and technology to marketisation was the result not just of alternative and competing visions but also because of the inherent economic characteristics of Mertonian science as an activity. Section 2, the next section, examines theoretical explanations of market failure and relates these to justifications for state provided science and technology services. Section 3 looks at state failure theories, highlighting the specific position of science and technology service providers. Section 4 presents a model of marketisation and privatisation.

112 Scrutinising Science

Section 5 looks at the increasing marketisation to which these organisations were subject throughout the latter part of the 1980s and into the 1990s. The extent to which this proved feasible is evaluated and we also focus on the extent to which finding specific organisational ways of overcoming barriers to change has resulted in diversity in NPM outcomes. We conclude that the diversity is indeed a product of finding solutions to these barriers. In Chapter 6, which follows, we analyse the customer–contractor relationships that arose as a result of this reform process, thereby demonstrating the newly emerging knowledge production processes in science.

2 Market failure and states As demonstrated in Chapter 2, the prevailing vision of the role and nature of science and technology service provision had been Mertonian rather than market-based. Some examination of market failure theories provides a useful explanation as to why it made rational sense for such work to be part of traditional public administration at that time. There are five generally cited reasons why markets might be seen to have allocative or productive inefficiencies with regard to goods and services (Walsh, 1995). First, some goods and services may have the character of public goods. This means that their value is not diminished by use and it may also be difficult to prevent usage. The general utility and availability of public goods may mean that no private interest is willing to undertake their provision in the quantity required because of free riding by other users. It might be argued that the state, as a unitary decision-maker, might be best placed to determine the true level of demand for such goods and services and make arrangements for their proper provision. True public goods are rare, but a large number of goods and services have public good elements. Public street lighting and defence of a country represent fairly pure public goods. The best examples of the largely impure public goods produced by science and technology providers can be found where the state acts as a proxy customer for society as a whole. For instance, research to improve road safety does not diminish in social value according to usage (in fact, quite the reverse) and it is difficult to stop people gaining the benefits through improved roads and so on. The second reason for market failure is that some goods and services are naturally monopolistic. Natural monopolies cannot be prevented (but can be regulated) and cause market failure because they prevent the

Science and Markets 113

entry of competing suppliers. Natural monopolies commonly arise because of the capital expenses associated with supply: the provision of domestic water supplies is a classic example here. Some natural monopolies may arise as a result of the domination of sources of expertise, or limited market opportunities. In the area of science and technology service provision, metrology provides a good example of a natural monopoly. The purpose of metrology is to provide measurement standards that are as widely accepted as is congruent with economic and other social activity. So, a doctor in Birmingham will require the certainty that the ultrasound equipment they are using has the same calibration as the equipment they were trained on in Glasgow. This implies a natural monopoly in the supply of ultimate reference standards, or metrology, as a practical science, would disintegrate into chaos. Given the social and economic value of metrology, and the implied natural monopoly, the good sense of having a single responsible body to supply ultimate reference standards is selfevident. Moreover, such a body must act in a socially optimal way if the full benefits of metrology are to be enjoyed and competivity and public welfare not compromised. The imperatives placed on such a body mean that, if extensive regulation is to be avoided, it is best kept in public hands. The argument for state control is even greater when the social and economic arena of the metrological system widens. Thus, as the UK has entered increasingly into the European market place, there has been a harmonisation of metrological work across the European Community (EU) through organisations such as EUROMET and the European Cooperation for Accreditation body, with individual national bodies taking responsibility for specific areas of metrology. Such co-ordination and cooperation might be difficult to achieve if the bodies were competing commercial private sector organisations. A third dysfunctionality is that there may be external costs or benefits, known as externalities, in decision making that may lead to sub-optimal decision outcomes. For instance, a production decision that requires choice between a (more expensive) non-polluting and a (cheaper) polluting process may vary in outcome according to whether or not there is a charge levied on the polluter to compensate society for the pollution caused. If there is not, then the costs of pollution are external to the decision and may well not be factored into commercial decision making. The argument for state intervention is that the state can force the factoring in of such externalities (e.g. by levying pollution charges), taking a broad view beyond that of narrow individual or organisational interests. Building research is an interesting case in point here.

114 Scrutinising Science

The BRE was first established because of poor standards in construction. Part of the reason for this was that individual building firms could not individually bear the costs of research, which could be rapidly copied by competitors, and did not bear the social costs of poor housing. This dilemma was resolved by the State intervening to provide the necessary research capacity for the benefit of the entire industry and society as a whole. Fourth, some goods may be merit goods: these are goods which it is a good thing for the public to have access to, but which might enjoy only limited take-up because of lack of understanding and interest if they were only available through a market. Compulsory education is a good example of a merit good. If uptake of such goods was left to the private markets then people might, arguably misguidedly, decide to spend their money elsewhere. Certain meteorology services are examples of such merit goods. The Met Office provides severe weather warnings free of charge because of the obvious social and economic benefits implied. Because of the infrequency of such warnings, it is hard to conceive of a situation where the public would subscribe to such a service in the same way in which, say, they might utilise a premium rate telephone weather information service if they were planning a sailing trip. Fifth, markets may not be perfectly efficient in that there may be information asymmetries between the customer and the contractor. Contractors may be profit-motivated to provide more of particular goods or services than is essential or desirable and the customer may be unable to discern an efficient level of utilisation. This may be particularly problematic where the provider has specialist expertise. Defence technology represents a good example of information asymmetry problems. Weapons systems utilise advanced technologies. The infrequency with which the customer assesses true demand or quality (i.e. by using them in a combat situation) creates information asymmetries between the state (who may be uncertain of demand or quality) and the suppliers (who have specialist expertise that may well be commercially confidential). This can be remedied, to some extent, by building up a significant in-house technical capacity in organisations such as DERA. Finally, all but the most extreme of libertarians, would agree that even the most optimal of real markets require some level of regulation to protect public and individual interests – remedies not always being available through the law of tort. This is a further justification for state intervention. A good example here in the science and technology area is in health and safety. Organisations might find it economically optimal to let their workers endure dangerous conditions at work and to pay

Science and Markets 115

compensation rather than institute costly health and safety regimes. However, this is not socially acceptable. Thus, there is a social and moral obligation on the state to regulate conditions. Some science and technology service provision is therefore in support of this regulatory function. A case in point here is the Health and Safety Laboratories of the Health and Safety Executive. Because of the key support, forensic and judicial role played by these laboratories in support of a regulatory function it might be deemed inappropriate to procure such services from the private sector, where conflicts of interest might arise. It can be argued, therefore, that market failure arguments represent a strong justification for the carrying out of at least some science and technology services in the public sector rather than in the private. There are, of course, other reasons why these activities might be better placed in the public sector – such as the need for sensitive unimpeachable policy advice, but these issues are considered elsewhere in this book. The long history of these laboratories points to the early recognition (well before the growth of states after 1945) that their activities could not originally have been adequately undertaken in the private market. Not only the nature of the function, but also the limited nature of available forms of public management and private suppliers will have made state intervention imperative at the time the laboratories were established. However, solutions that appeared appropriate some years ago were being seen as less appropriate by the 1980s in the UK.

3 Perceptions of state failure As states grew in the post-war world so perceptions and accusations of inefficiencies mounted, often from right wing thinkers. One strand of state failure theorists argue from a public choice perspective (e.g. see Niskanen, 1991). This perspective rests ultimately on the premise that individuals will behave as rational self-interested individuals and that, as such, state activities are doomed to inefficiency and failure because there is an absence of market discipline to ensure socially optimal decisions are made by rational self-interested individuals. Thus, it is argued, politicians will logroll votes and bureaucrats will empire build, leading inexorably to inefficiencies. Because of the initial assumptions in public choice theory, which are not verifiable, the theory has serious intellectual weaknesses. Nevertheless, it has been utilised by many politicians of the right as a means of implementing major governmental reform (see for e.g. Froud et al., 1998).

116 Scrutinising Science

A second strand of state failure theory, epitomised by Hayek (1982), asserts that states suffer from an inherent information deficit, which will always prevent them from making efficient well-informed decisions. Hayek maintained that states could never achieve the efficiencies of markets because of these information failures. There are more moderate state failure arguments that have merit and which also address the issue of the information flows essential to the efficient functioning of markets. These argue that states suffer from the same problems of imperfect information as large private organisations do. That is, it is difficult for states to make efficient decisions because they work on insufficient information. Difficulties in measuring outputs and indeed outcomes are identified as particularly problematic here and may be exacerbated by imprecision in policy definition designed to avoid accountability. Performance measures in the public sector are notoriously difficult to construct and there is no equivalent of the bottom-line profit figures used in the commercial arena (although, of course, such measures are themselves problematic and ambiguous). There are few external measures available to states to help them to gauge performance equivalent to share price movements in the private markets. There are other issues that might make the public sector particularly predisposed to inefficiencies. Traditionally the public sector has offered few incentives to individual employees to increase efficiencies and effectiveness because they do not share in the rewards. Fixed salary scales typical of bureaucracies make it difficult to build in incentive payments based on organisational performance, even if this could be measured with certainty. Resource utilisation within states may also be inefficient because of institutional factors. Wildavsky (1964) argued that budgets become entrenched as a result of bureaucratic strengths and that they only subsequently alter at the margins, making it difficult to reform underperforming areas and to abandon unsuccessful programmes. The introduction of resource accounting into the UK public sector represents an attempt to force government to critically address the efficient use of resources as part of the budgeting process. Of course, this critique is predicated on the implicit (and almost inevitably fallacious) assumption that budgetary processes within the private sector are rational and objective. It might be seen from the above that states may, in theory at least, be subject to some failures in efficiency and effectiveness. This does not mean that they are predestined to fail, merely that there is a potentiality

Science and Markets 117

there. The origins of NPM approaches can perhaps be discerned from these diverse theories of state failure. In the UK the right wing ideologues of successive Conservative governments took the view that states were inherently less efficient than the private market and that privatisation was therefore always the most desirable option. Only if this option failed to prove practicable would some form of reformed and marketised public sector be deemed acceptable. In other states, most notably the Nordic countries, there was a similar acceptance of the desirability of public sector reform, without the predisposition to privatisation wherever possible. Both strands of NPM reform have their origins in the recognition of the potentiality for state failure. In the UK, the ideological commitment was founded on the inherent inferiority of the state as opposed to the private sphere, whilst in other countries there was a greater desire to use NPM to improve the functioning of states. Objective evidence that the unreformed science and technology service providers in the UK were ‘failing’ in the sense of embodying large-scale inefficiencies is largely missing. The argument for public sector reform becomes tautological at this point. Arguments for NPM reform rest partly upon assertions that states have an information deficit that leads to inefficiencies. That same information, of which there is a deficit, is also used to measure efficiency. Moreover, the measures are predominantly of a private market commercial type. Therefore, in the terms of NPM, it is impossible to judge whether there is inefficiency at the outset of reform. Success or failure under NPM is ultimately measured in self-referential terms. It might therefore be argued that the improvement in information flows associated with privatisation and marketisation are in fact about developing alternative criteria for evaluation and are inherently socially constructing. For instance, a laboratory may lack information about the ‘true cost’ of its services. It may be turned into an executive agency and as a consequence forced to institute a new system of management accounting that ‘accurately measures’ costs so that these can be driven down. Costs, as measured by the new system, are reduced and this is credited to the marketisation/ commercialisation attendant to agency status. An absence of measures of outcome and output in the traditional UK State made it almost impossible to gauge the efficiency and effectiveness of existing operations and hence the desirability or necessity of reform. The argument for reform becomes, in such circumstances, essentially normative. Pro-reformers would argue that, given the potential for failure and the inherent inferiority of the public sector vis-à-vis the private market, it is sensible to organise activities on the ‘best’ possible lines in

118 Scrutinising Science

order to minimise risk. The critical task is to evaluate whether the reforms really do constitute an improvement (however defined) although no objective comparators will be available. In the UK under successive Conservative governments arguments for privatisation or marketisation quite often did not rest on any analysis of the relative merits of either form of management and ownership, but more on an ideological commitment that the private sector was inherently desirable over the public. At the heart of such commitment lie normative assumptions grounded in liberal market economics. Certainly such an approach dominated the thinking of both Thatcher and Heseltine, the latter being a driving force in the reform of much of the science and technology service sector. Therefore the successive reviews detailed in Chapter 3 tended to concentrate on finding those institutions which could be privatised, not those which should be. The virtues of privatisation were taken as a foregone conclusion, and the advantages of marketisation were deemed to be self-evident. Reports such as the Levene–Stewart Review (1993) were more about evaluating the extent to which privatisation and marketisation had been achieved than about assessing their suitability as management–ownership practices. This lack of critical debate evidences the crisis in public administration thinking detailed by Rhodes (1995). What we can do here is to review, ex post facto, the extent to which the laboratories that we studied were organised along the lines criticised by state failure advocates. We can also report the extent to which those working within the system see the reforms as an improvement and detail what the greatest changes have been. Reliance on accounts by serving civil servants and other laboratory staff may not be valid: some have only limited experience of the old regime and, in many instances, the process of reform produced a rush of early retirements and other resignations by staff anxious not to be part of the reform process. Before the application of NPM, public sector science and technology service providers may well be seen as exemplars of the state failure thesis. They were headed by career bureaucrats (albeit usually of a scientific or technological background) who did not share in a directly personal way in the risks and rewards of the organisation. The signifiers of influence and measures of success of these people may have been the resources accreted for the purposes of research. Many had been established for considerable periods of time and not subject to periodic review as to their purpose and continuing utility. In fact, in the manner described by Wildavsky (1964), their budgets had become largely entrenched and were not subject to rigorous programmatic review.

Science and Markets 119

When a critical gaze was turned on these laboratories some suffered serious fates: for instance protests over the sale of the site of the Warren Springs Laboratory led to a review the conclusion of which was the closure of the very laboratory itself. There was no notion of the ‘customer’ in any real, economic sense. One policy maker in a Whitehall department described to us how the departmental laboratory would be given a large sum of money each year. It would go off and do largely as it determined (with little effective control from the department) and then produce reports that would often be of such limited utility that would usually just be shelved. In our interviews, civil servants in the laboratories consistently emphasised that the transfer of budgets to newly designated departmental customers and the ending of the de facto block grant system had been the single most influential factor in causing the laboratory to think critically about their function and to focus on the delivery of services of maximum utility to their customers. There was then a near complete absence of what could be recognised as any market mechanisms. There were no formal contracts, very little competitive bidding for work, money usually came in block grants and there was little or no explicit measurement of performance. Whitehall departments were, in the main, locked into a monogamous relationship with their suppliers of science and technology services. This is not to say that the organisations were necessarily failing. As we shall discuss in Chapter 6, there was a set of deeply embedded long-standing relationships between the laboratories and the Whitehall departments that sponsored them which may have provided their own efficiencies. In this sense it is not therefore surprising that the laboratories had a reforming eye turned on them. Indeed, perhaps what is most surprising is that it came so late in the day of the reform process. We asked a number of departmental civil servants why the reform of the science and technology service providers happened relatively late. The answer was consistently stated to be one of simple priorities: science and technology is a relatively small budget area and, as such, had to wait its turn. This prioritisation on the basis of budget size may not be as rational as it first appears when one considers the relative importance of science and technology activities to Britain’s underlying competitivity and economic efficiency. What is certain is that the reform process did not start because of evidence of inefficient practice, but rather as a result of the acceptance of a normative viewpoint that public sector organisations run in this way must inevitably be inefficient. Our discussions with those involved in the reform process indicate that almost overwhelmingly there is an

120 Scrutinising Science

acceptance that, with the benefit of hindsight, the application of NPM has been of benefit in terms of what NPM seeks to achieve (i.e. efficiency gains) but that the move to privatisation was not essential and largely politically motivated. It was constantly emphasised to us that management practice was of greater relevance than issues of ownership. Measures of change are all ex post – on the basis of no comparators the reformed organisations were deemed ‘improved’ because they now embodied marketised practices that were not evident before.

4 A model of marketisation and privatisation We turn now to consideration of the ways and means by which government sought to actualise this new vision of science as a marketised activity. Government is both a provider and a consumer of science and technology services – a supplier and a customer. This dual role, which varies in mix across the range of services, is a significant factor in shaping the sector. The supplier function may be to the host department, other parts of government, external customers or a mix of all three. In acting as a customer, government may be a real customer (i.e. procuring services to support its own functions), a proxy customer acting in a public welfare function or a customer sponsoring curiositybased research. Reform along market lines suggests a number of shifts in the basic operating parameters of Government. We set out here a model that illustrates the transitions that must be made. A model for markets Any market requires both customers and suppliers, and with regard to science and technology, government may be both simultaneously. Markets exhibit greater or lesser amounts of monopoly and monopsony. In the supply and consumption of science and technology services the UK government exhibits varying amounts of monopolistic and monopsonistic control. We argue below that the relative extents of (sometimes natural) monopoly and monopsony may be critical in determining the extent to which a service can be privatised or marketised. Figure 5.1 models the supply of and demand for science and technology services in monopolistic/monopsonistic and openly competitive scenarios. Conservative government policy dictated that Box A was the worst case scenario for the public sector and Box D the best. In Box B government is a heavy consumer (therefore breaching the imperative to minimise what the state does) but buys in a lot of the work from the

Science and Markets 121 High degree of government supply monopoly

Government >50% supplier by value

A

High level of government customer monopoly

Government >50% customer by value

Low degree of government customer monopoly

Government <50% customer by value

Government <50% supplier by value

C

B

D

Low degree of government supply monopoly Figure 5.1 A model for marketisation

private sector and therefore is perceived to gain from the ‘efficiencies’ which commercial supply brings. Box C implies that government is providing things for the private sector, which that sector should be providing for itself. Change towards Box D obviously implies attention to government’s roles as both supplier and customer. Turning to the supply axis first, government monopolies or monopsonies in any particular area embody two types. Type I is that which the government has accreted to itself for whatever reason. A Type II monopoly is ‘natural’ in the sense that a high degree of government involvement is necessary or desirable (for instance, because there is a significant public good element). If privatisation or other marketisation is to be

122 Scrutinising Science

achieved, then government will have to ensure that it divests itself of these monopolistic supply positions. Under a Type I monopoly, government has to divest its own organisations of their monopoly position by encouraging other players to become suppliers, perhaps by mechanisms such as market testing or contracting out. If a range of competitive suppliers cannot be stimulated and government still proceeds with privatisation, then it will be left with a monopolistic/monopsonistic provider in the private sector. This might be problematic and suggests the need for regulation of some sort. In an efficient market for a genuinely needed service other players will enter to compete for the work once barriers to entry are lowered (e.g. the government starts market testing). But this will not occur if government has only been able to divest itself of something in an artificial manner: for instance by offering financial inducements to those in the private sector who might take the supply work over. Such artificialities may effectively keep up barriers to entry to other private sector players. A good example here is government awarding generous guaranteed work programmes to private sector suppliers. In such an outcome, the government moves from being a monopoly state supplier to creating and sustaining a monopoly private supplier. Under Type II, where the government has a natural monopoly, there are even greater problems. Natural monopolies in the general economy include things such as water supply pipes or metrology reference standards: it will never be efficient to have more than one set of water pipes in a city or set of measurement standards. If a particular science or technology service provision is a natural monopoly then a range of competitive suppliers cannot be envisaged. In such circumstances privatisation or marketisation could only occur if there was regulation of any ensuing private monopoly or if novel solutions to ownership and operation questions were found which utilised private sector efficiencies but also safeguarded the public welfare. Turning to the customer axis, in free markets customers might not willingly divest themselves of a dominant position because this shifts the relative balance of power in favour of suppliers. However, conversely, encouraging other customers may lead to a growth in the diversity of suppliers and better competition between them, which may benefit customers. Dominant government customers may relinquish their advantage either by divesting themselves of work and responsibilities or by placing an imperative on suppliers to develop new markets and, therefore, new customer bases.

Science and Markets 123

It is difficult to identify areas where the government has actually reduced its own need for science and technology services. Any real shift in the public–private balance in the customer base may therefore have come more through the growth in private customer demand prompted by the imperatives placed on suppliers to actively seek new customers. Government did this via targets set for agencies relating to the volume of non-departmentally funded work. Care needs to be taken in interpretation of the shift in customer base: figures are often given for ‘non-departmental’ customers – which of course include new customers in government departments other than the agencies’ own. This persistence of government demand and monopoly customer positions might be because departments were only really buying what they needed anyway and cannot buy less. In some instances, government acts as the proxy customer for public goods in the wider public interest (e.g. metrology services). In such circumstances, government is a natural monopoly customer and there may be severe adverse public welfare effects were government to cease to be the customer. At the same time, such is the nature of much of the suppliers’ work that government is always likely to be the principal customer. This ostensible failure to attenuate the government’s dominant supplier or customer position may make it difficult, if not impossible, to achieve the aim of shifting towards Boxes C or D. There is an interesting synergistic effect here: if government remains a monopolistic customer then it may complicate its attempts to withdraw from being a dominant supplier. This is because few potential private sector suppliers would relish the thought of entering a market where there was one dominant customer. The pre-existing longstanding relationships that existed between government research establishments and their departmental customers might provide further barriers to the government movement towards being a low monopoly provider and supplier. First, much of the work undertaken by government agencies is either security related or of a policy sensitive nature. This might include the work done for the MoD by organisations such as DERA. In addition to problems associated with extending the ‘need to know’ principle to a wide variety of supplier groups, security issues and the need for security clearances may represent an undue entry cost to potential new suppliers. Government departments may have further problems when the advice and assistance they are seeking is of a policy sensitive nature: a good example here might be veterinary advice during the foot and mouth outbreak in 2001.

124 Scrutinising Science

Second, government customers may need to be reassured that the expert advice received is from an unimpeachable source and not subject to any conflicts of interest. For instance, government departments dealing with the licensing of veterinary medicines would need to be satisfied that those same medicines had not been screened and tested on a private contract basis by the government research establishment giving advice to government with regard to licensing. Third, some types of work demanded by government may require expertise or scientific facilities of a unique or highly specialised nature. This may prove to be an effective barrier to entry by competitors and tie departments to existing suppliers. Fourth, in some areas of highly specialised work, the relatively small size of customer demand may disincline alternative suppliers from seeking market entry – the competition, especially against a well-established supplier, may simply be too stiff. Fifth, many government departments and their longstanding government establishment suppliers will have established relationships of trust. In such circumstance it would be imprudent for customers to disrupt those in the hope rather than the expectation of a better deal from another supplier. Sixth, the establishment of new customer/supplier relationships will involve new financial and non-financial transaction costs for both parties. New relationships will have to be established, new suppliers vetted and new contracts entered into, with all the attendant cost of problems such a process implies. This in turn may discourage the development of wider markets. Seventh, scientific work often has inherently uncertain outcomes and it is in many instances notoriously difficult to specify contractual conditions and results. This inevitably will make customers predisposed to depend on long established trust relationships rather than resort to the customer–contractor relationships of the market place. In particular, it is highly likely that existing government suppliers will have a greater understanding of their customers’ requirements and therefore an immediate competitive advantage. Eighth, government departments will need to be assured that, if they are to have legitimacy, the sources of their advice have peer group esteem and this can only be established with long-term core funding and other support that may not be available within the private sector. There is a further issue of responsiveness: in many instances governments require a working relationship with suppliers that ensures instant responsiveness, especially in times of policy crisis. Such contracts, when

Science and Markets 125

written on an arms length basis, might be excessively costly and thereby negate the economic advantages of commercial contracting. In summary, the emulation/construction of markets from a situation of entrenched and close supplier and customer unilateral arrangements in an area as specialist as science and technology is a project fraught with complexity and pitfalls. Yet, successive Conservative governments were staunchly committed to creating new knowledge production processes organised along just such lines. The outcomes, as we discuss below, fall somewhat short of this espoused aim.

5 Privatisation and marketisation NPM reforms re-visioned government science and technology service provision as a market-led activity reaping the benefits of economy, efficiency and effectiveness. Whilst Chapter 4 considered the new organisational forms that NPM gave rise to in this sector, thus far in this chapter we have discussed the feasibility of this re-visioning. We have also presented a model as to what constitutes the actualisation of a new vision of how science should work. Specifically, this includes the widening of customer and supplier bases to embrace non-governmental actors. To effect such a change in the customer and supplier status of government in a situation of inertia, longstanding trust and the host of impeding factors detailed in the previous section, reformers would have to put in place effective imperatives. Government suppliers are unlikely to want to lose a monopolistic supply position. Thus government must force this change by encouraging alternative suppliers and placing work with them. Practically, this usually takes the form of market testing, competitive tendering, outsourcing and other such devices. Government suppliers may sometimes lose their monopoly supplier position in whole or in part simply because government demand for their services declines or ceases to exist. Pre-NPM, such redundancy might not have been evident and acted upon: the supplier may for instance just have continued to receive a block grant without any check on whether the service was needed or used. The creation of customer–contractor relationships, where budgets are transferred to customers may expose this redundancy and lead to the cessation/reduction of the business, forcing suppliers to look elsewhere. Government customers are, similarly, unlikely to want to relinquish their monopoly customer position as this affords them maximum and privileged access to the services that they require. Yet, if they remain monopoly customers, this acts as a barrier to entry for alternative

126 Scrutinising Science

suppliers and thus prevents the development of a market and any economic efficiencies that may result. Monopoly customer positions can be broken by central government insistence that suppliers develop alternative customer bases for example, through setting performance targets for achieving external (to government) work. This runs the risk of work taken having no real commercial benefit but all the trappings of commercialisation. The privatisation of laboratories may also have the effect of reducing the government customers’ dominant purchaser status: privatised firms may have additional commercial imperatives that drive them to seek a wider customer base. We will now explore the extent to which the creation of a less monopolisitic market in science and technology services proved feasible – that is, to what extent could this new vision of science as a market-led activity be made real? In doing so, we seek to demonstrate what the particular barriers to marketisation were and how these were overcome. Our conclusion is that seeking idiosyncratic solutions to these barriers in specific circumstances resulted in heterogeneous NPM outcomes. At least four potential barriers to developing markets can be identified. First, there may be practical problems in achieving privatisation. For instance, the costs of translation from public to private may prove to be so high that they would wipe out any possible efficiency savings. Second, there may be functional problems, such as there being no suitable private market to transfer functions to. Third, some functions may be inherently unsuitable for marketisation in any case. Finally, where there are no pre-existing markets, customers are unlikely to have the capacity to act as ‘intelligent’ customers. Quite simply, customers may have only limited experience in making specifications and to managing contracts to achieve desired outcomes. In such circumstances, and in view of the risks associated with ‘getting it wrong’, they may offer resistance to seeking work at arms length in a market place. We will look now at our eight organisations in turn and, using the profiles in Chapter 4, analyse the drivers and barriers for commercialisation in each case and discuss how those factors shaped the eventual marketisation of the GREs.

The National Engineering Laboratory (NEL) NEL’s specialist and physically substantial facilities tended to make it a monopoly supplier to UK government. Whilst this gave it supplier dominance, NEL was also challenged by the fact that government demand for its services was falling sharply. In short, its main customer

Science and Markets 127

was less and less interested in what it had to offer. There were only two discernible reasons why this organisation should stay in the public sector. First, concerns were expressed that a private sector supplier might not keep the facilities that UK government still required, albeit on a reduced basis. Second, NEL’s geographical location in East Kilbride, an area of economic decline in Scotland, made privatisation politically difficult. Privatisation in this case was ostensibly straightforward and a better option (as far as the workers and the region were concerned) than closure. But, as with many of these organisations, government had difficulty in securing a private sector buyer. At the heart of this difficulty lay the problem that prompted privatisation: this was a business with just one principal customer in an environment of declining demand. In such circumstances, NEL could not have looked like a ‘going concern’ to any private sector organisation considering purchase unless it conveniently met an existing facilities need. There is an information asymmetry here too: the extent to which the facility is a desirable commodity to a specialist purchaser is likely to be known only to the purchaser. Moreover, businesses sold only for facilities and staff expertise rather than because of an existing customer base and ongoing profitable business will attract little premium. In such circumstances, the vendor (the government in this case) is in a weak position with regard to price negotiations. It is therefore unsurprising that the DTI ended up paying Siemens to take the laboratory over and, in addition, gave a guarantee of some £30 m of metrology work over the ensuing five years. Thus, whilst it appears that NEL was successfully privatised, in fact the business was such a poor commercial prospect that its removal to the private sector was costly for government – indeed probably more expensive than retention in the public sector would have been. The subsequent loss of the accountability trail of the laboratory makes it impossible to gauge if the private sector has achieved greater efficiencies from NEL than the public sector did. Finally, NEL, in its new privatised guise, still retains government as a major customer.

Laboratory of the Government Chemist (LGC) The nature of LGC’s work is such that, with the exception of the very small amount of work that it undertakes as the statutory reference analyst, it could have been sourced from any number of chemical analysis laboratories in the UK. It was therefore an obvious candidate for

128 Scrutinising Science

privatisation: it had no unique expertise and its work could be sourced from a large number of private sector suppliers. The invitation to tender for the purchase of the company generated insufficient suitable interest. It is interesting to consider why this might have happened. Despite the existence of a pool of potential private suppliers, up until reform the government was the LGC’s principal customer. This degree of reliance on a single customer is likely to make any business look unattractive. Further, if the government wholly owns an organisation and is its principal customer, any decision to privatise the company might be construed as presaging a decision to widen the supplier base because of inefficiencies in the supplier you own yourself. This sends a market signal that the organisation that you are trying to sell (and of which you are the principal customer) is inefficient and you want to obtain service elsewhere. This does not make it an attractive option for private sector buyers. Following the failure to achieve a trade sale, the government actively encouraged and facilitated a management-led consortium purchase. The purposive involvement of senior managers in such buyouts, often subsidising their tender expenses, was a relatively common feature of such privatisations. The willingness of senior civil servants to enter into management buy-outs should not be taken as an indication of the high value of the businesses on offer – indeed quite the reverse. The senior civil servants were incentivised by two things: they would escape rigid civil service pay scales in any privatised company and they were actually having their tender costs underwritten. They also had a significant advantage: they of all people knew the real likely value of the business, unlike the government. This information asymmetry must have enabled them to drive a hard bargain on price. To say that LGC was sold would be something of a misnomer. The government in fact made a net payment of £329 000 to LGC (Research Fortnight, 1996) and also promised the company a generous five-year guaranteed work programme, which was greater in size than might have been expected had LGC remained an agency. Although the government no longer officially owns LGC, it has the right to terminate the work programme should it feel that future share transfers prejudice the impartiality guarantee provided by the Royal Society of Chemistry’s involvement. Because LGC is now a private company, it is not possible to determine to what extent government remains a principal customer, although any marked change is unlikely. It is difficult to conclude that LGC has been effectively marketised, although the public sector has been relieved, at some initial expense, of ongoing commitments.

Science and Markets 129

The Building Research Establishment (BRE) Building research is a merit good – because of the structure of the construction industry, research will only occur if either industry collaboratively involves itself in it or if government acts as a proxy customer. The latter was the course of action chosen in 1926 when BRE was first established. A barrier to marketisation here is that no single firm or organisation is likely to be acceptable to all industry actors and stakeholders as an owner/controller of the knowledge production process unless it is government. The real customer of BRE’s work is the construction industry. Government attempted to involve these indirect customers directly in the BRE’s work in 1988 when the establishment was told to generate between 10 and 15 per cent of its turnover from private sector contracts. In 1990 this position was formalised when BRE was placed on a Net Vote basis. This meant that it was expected to recover full economic costs from direct customers, with government funds addressing only the shortfall between such income and other expenditure. Subsequent plans to move BRE into the private sector by transferring it to a national centre for construction formed by industry as a not-forprofit company were fraught with difficulty and came to nothing initially. This is because the BRE ‘business’, as offered, came with a large negative dowry. The organisation had a requirement placed on it to maintain a number of vital but loss-making facilities such as the giant Cardington hanger (formerly used for airships). Allegations that accountants Price Waterhouse (now PricewaterhouseCoopers) relaxed these requirements in valuing the organisation when government undertook to sell it to the private sector, points to a certain convenient flexibility of the rules in such transactions. Eventually, BRE was subject to a management buyout. The organisation became a wholly owned subsidiary of the Foundation for the Built Environment, which is a company limited by guarantee. The Foundation, in turn, embodies a wide group of industry stakeholders. Although government funding of BRE remains significant, it has declined. It is likely to decline further, pushing BRE to seeking further private work including beyond the construction industry. Guaranteed work from government expired in March 20021 (DTLR, 2002). It cannot be said that BRE has been marketised in the real sense. Although sold, the organisation is held in a fiduciary capacity by a charity. This has in turn created uncertainty about the long-term nature of work in this area: core competencies may not now be maintained and it is not clear how the renewal and maintenance of major capital assets

130 Scrutinising Science

and the knowledge base will be financed in the future. BRE is likely to remain reliant on government funding. The Transport Research Laboratory (TRL) Transport research can be seen as an impure public good and also a merit good. There are a very large number of transport stakeholders and the likelihood of a free-rider effect is strong. The existence of competition between different transport providers (e.g. between road and rail) suggests a social welfare benefit in public ownership and control of transport research processes. Transport research is an area where government traditionally acts as a proxy customer with a high degree of natural monopoly. In such circumstances, the best market position might be one of the government being a monopolistic customer in a market with many suppliers (Box B in Figure 5.1). However, a number of factors militate against a diversity of suppliers. Much transport research involves large-scale facilities (e.g. the test track at Bracknell) or long-term real-life experiments (e.g. on road surfaces). It is unlikely that suppliers will overcome such market entry barriers in circumstances where there is a monopoly customer and the work involves substantial facilities/investment. TRL enjoys a significant facilities monopoly with no evident redundancy in the demand for its work. Prior to reform, TRL was a largely monopolistic supplier and the government was a monopolistic customer. Private industry has little interest or desire to fund research into matters such as road safety. The work of TRL was essentially a public good. At the time of privatisation the DoT (now Department of the Environment Transport and the Regions, DETR) estimated it funded 90 per cent of transport research in the UK. Most of those funds went to TRL. The work done outside of TRL was usually by universities in areas such as driver psychology. Interestingly, TRL were of the view that competition with universities was not a level playing field: the organisation maintained that costing regimes in universities meant that their work was significantly underpriced. The government made attempts to break the close relationship between TRL and its department by placing work with other suppliers, reducing TRL’s budget and putting more work out to competitive tender. But, despite this imperative to widen their customer base, the DoT still maintained first call on TRL, its time and energies. The customer for transport research has monopolistic power and, confronted with a variety of suppliers, could seek to exercise that to drive down costs. To the

Science and Markets 131

extent and in the areas where there were alternative suppliers there is some evidence that the DoT was doing just this during the period of agency status. When the privatisation of the TRL was mooted, the RAC and AA (amongst others) wanted to become the supplier by purchasing the business. This would have exposed the government, who must carry on buying the service, to a private sector monopoly supplier. Moreover, both motoring organisations have their own distinct, and roadoriented, policy agendas. This formula was bound to prove politically unacceptable. The nature of TRL’s work therefore made a traditional trade sale problematic: few potential purchasers would be keen to buy a company with just one real customer. A management buyout, it was felt, would have undermined the perception of TRL as an impartial provider of goods and services. This left the option of turning TRL into a company run in a fiduciary capacity by a company limited by guarantee – the Transport Foundation. Even then, the land and buildings of the laboratory’s site had to be excluded to make the sale price feasible. There are concerns that pressures to service the debt in the short-term will lead to short-termist thinking. Once again, it is hard to argue that TRL has been privatised. It is now a not-for-profit organisation saddled with quite considerable debt and with no ownership of the land and buildings necessary for its work. Customers continue to be dominated by government with little evident ability to internationalise the business.

National Physical Laboratory (NPL) Metrology research is a natural monopoly essential to economic competivity and is a merit and public good. Government is a monopoly supplier and a dominant proxy customer. A number of barriers exist to marketising such a knowledge-production process. First, its public good nature is likely to give rise to free-rider effects, thereby deterring suppliers from entering the market. Moreover, businesses with one principal customer do not often appear as attractive ventures because of the degree of risk involved. Second, such is the key significance of metrology to competivity and areas such as health that it would be extremely risky to have the work done within the private sector. Third, privatisation of the metrology service would be problematic given the UK’s international role in standards setting and maintenance. Fourth, NPL has unique expertise, which constitutes an important asset. Such expertise is

132 Scrutinising Science

central to the maintenance of the function and would be difficult to replicate with consistency across a range of competing suppliers. Finally, problems with property on the NPL site made a sale by private tender extremely problematic. In particular, there were legal impediments to the sale of parts of the site to private business. In the circumstances it can be of little surprise that government opted for a weak form of privatisation: the GoCo company. The contractorisation of NPL has not created a market for metrology services. Such was the lack of credibility that such a market could be made that the government paid an initial payment to Serco for taking over the organisation. Moreover, the government was forced to give SERCO guarantees of minimum work. When NPL needed new laboratories, this came through a private finance initiative deal with Serco. Therefore, whilst NPL may have benefited from more rigorous management and financial control it cannot really be said that the organisation operates in anything like a free market.

QinetiQ and the Defence Science and Technology Laboratory (DSTL) – formerly DERA From the mid-1990s, the restructuring of the global political map generated a (possibly temporary) peace dividend in Western societies. A consequence of this is that defence industries and organisations had to rethink their role in the reshaped world. At the start of the NPM reforms, DERA presented a number of serious obstacles to marketisation. The monopoly status of national governments as customers for defence technology (in stable societies anyway) needs little explanation. Further, governments will wish to maintain fierce control over suppliers because of the extreme needs for security and secrecy. Such security and secrecy creates its own barriers to market entry because of the costs involved. Government departments are unlikely to want to foster a diversity in supply because of the transaction costs implied by purchasing at this level of sophistication. The high level of technical expertise required meant that it was difficult to encourage alternative suppliers. Moreover, defence technologies are inherently risky long-term businesses of such a nature as to deter market entry by competing suppliers. These onerous barriers to marketisation perhaps constitute the reason that DERA, despite being significantly the largest science and technology executive agency, was not privatised under the successive Conservative or the first New Labour governments. However, the global

Science and Markets 133

political changes that have impacted on defence issues have created a new space within which some degree of marketisation can progress. The greater part of DERA has been reconstituted as QinetiQ plc, with government holding 100 per cent of the shares. QinetiQ is attempting to reform itself as a technology solutions company with less reliance on traditional defence customers. The government’s intention is to move the company into private ownership by encouraging private sector investment. This in itself has not been uncontested: one possible private partner in 2002 was a company with close links to the Saudi royal family. Government has attempted to leave that part of the defence work of the former DERA that is highly secret and central to defence issues with DSTL, which remains as an executive agency. Trade unions were opposed to the idea of the DERA split and have continued to voice concerns about the involvement of the private sector in QinetiQ. They were particularly concerned that QinetiQ lacks the ability to earn a decent income for itself in the private sector and that the essential strength of DERA as an interdisciplinary team would be undermined (Sunday Times, 2000b). It is important to note that QinetiQ is not really about the marketisation of existing activities, but rather the reformulation of an existing organisation to compete in new markets. Unsurprisingly, the defence manufacturers therefore fretted about increased competition from a privileged body. The US Pentagon was extremely influential and initially blocked the idea of privatisation, resulting in the retention of certain elements in the public sector in the form of DSTL. Added to this, the US government and the UK Parliament have expressed concerns about the possible dilution of military security and environmentalists are concerned about the chemical warriors of Porton Down. Whilst the QinetiQ launch at first blush looks like a massive marketisation, careful consideration reveals it to be something rather different. The changing global political situation has meant that the defence requirements of the UK government are no longer as great as they were. This made a significant part of DERA redundant. It is perhaps part of the legacy of NPM that such redundancy was perceived and acted upon. This was perhaps facilitated by the eagerness of DERA’s chief executive, Sir John Chisholm, who was recruited from the private sector, to lead QinetiQ into the private sector. Again, such influences would not have been possible without NPM. In moving into the private sector, it appears that QinetiQ will develop itself as a wholly different company. Thus it is in the process of being sold off in order that it can do something else with its skills and facilities, not so that a more effective market can be created.

134 Scrutinising Science

The Meteorological Office (The Met Office) Much of the work of the Met Office constitutes an impure public good. They have a minimal obligation to provide a public information service, including flood and severe weather warnings. A further important inhibitor to its marketisation (and indeed privatisation) is the fact that it is deeply embedded in data sharing international networks2 with other organisations on a global basis. The Met Office is a monopoly supplier to UK government because of the costs and difficulty of data collection and they already have a wide customer base from which they recover full economic costs. The Met Office moved to its long-term custom-built site in Bracknell in 1961. During the intervening period the organisation has expanded and the building has become less suitable. Two years ago, it was realised that the Met Office needed state-of-the-art accommodation to continue being at the forefront of weather prediction. In November 2000, Exeter was chosen, from a shortlist of four, as the ‘preferred location’ for the new building. Also in 2000 a new corporate identity was launched, signifying a change in direction. The Met Office will no longer be focusing on ‘just the weather’ but will look at the impacts of the weather on the environment and will expand into environmental sciences, such as hydrology and oceanography. However, it remains very much a government agency. Centre for Environment, Fisheries and Aquaculture Science (CEFAS) CEFAS was one of the later laboratories to be turned into an agency and, to date retains that status. Given the nature of CEFAS’ central business, which is river life health, it is difficult to envisage full-scale privatisation. The work is, in essence, of a public good nature. However, CEFAS has been engaged in some quite extraordinary ventures, which are part of a general government scheme to promote ‘wider markets’ for its work. This scheme is designed to ensure that government organisations cash in on unrealised intellectual property. Thus, whilst LGC expanded soon after privatisation by buying a parrotsexing venture, CEFAS has adopted a similar vein of work and went into a private sector partnership with a fish bait firm to produce a product called ‘Ultrabite’. We are reliably informed by the advertising that Ultrabite uses fish pheromones to make the bait smell ‘sexy’ to fish, thereby attracting them. Based on research done at the University of Warwick, CEFAS did further work with a private company and has now

Science and Markets 135

set up a joint venture with them. CEFAS are currently working on an ‘electronic tag’ for fish that might enable whole shoals to be followed by commercial fleets. The Ultrabite venture indicates something of a sea change for CEFAS. Initially an organisation extremely reluctant to go into agency status, this initiative represents an innovative new form of public–private partnership. No doubt, CEFAS will be incentivised by the fact that it can keep cash surpluses generated by such ventures. However, despite the fascination of such ventures, not to mention the allure of their products, it is difficult to see Ultrabite as anything more than an interesting sideline to the core, government-focused, aspects of CEFAS’ business.

6 Some conclusions In this chapter we have explained that NPM reforms of science and technology service providers necessitated not just organisational change but also implied change in the ‘vision’ of what the science was about. Thus an attempt was made to shift the laboratories from a classic Mertonian scientific paradigm to one which saw them as market-led operations responding with economy, efficiency and effectiveness to market pressures and customer demands. This transformation in the vision of science necessitated the real marketisation of these organisations. We have suggested that this transformation needed to occur in one or both of two key dimensions: the customer base needed widening, as did the supply base. Our empirical evidence from the case studies of eight laboratories suggests that actualising this new vision of science was far from being problematic, costly to attempt to implement and, in the final analysis, not terribly successful. In fact, for those organisations privatised, the best one can really say is that they were removed from the public sector. The immediate costs of this were, in many instances, quite high in cash terms. The longer term consequences of potential loss of research and service capacity are hard to calculate. For those agencies that were not privatised, it appears that there has not been a significant degree of marketisation, although as we have said elsewhere, many agencies do appreciate the increased focus and efficiency that they feel agencification has brought. In conclusion, whilst government invented a new vision for the GREs as market-led operators, the reality of much of what they did and what was required of them meant that government was faced with insuperable barriers to actualising such a vision.

6 Scientific Knowledge Production Processes

1 Introduction In this chapter we turn our attention to the third of the principal dimensions of scientific change that has been in evidence in recent years – change in scientific knowledge production processes. Knowledge production processes are defined here as how the vision and organisation(s) of science combine together to actually produce scientific knowledge via some socio-economic process. That is, who produces the knowledge, for what purpose, who (if anyone) owns it and how is it used? Implicit in our argument is that the mode of production has repercussions for how science and its knowledge product are perceived, where power lies and the use that is made of the product. Here we will also pick up on the themes of organic and policy-driven change discussed in Chapter 1. In this chapter we demonstrate how organisations and visions of science have come together in different ways at different times to generate differing scientific knowledge production processes. We argue that the evident transformations in such processes are the traceable product of changes in both the way science is organised and the dominant vision of the nature of the activity. Thus, changes in these areas will lead, inevitably, to changes in modes of knowledge production. Three distinct stages in knowledge production processes have been identified to date in the UK. These are ‘academic’ science (broadly speaking, Mertonian science), ‘useful’ science (which can be equated with Mode-2 science) and marketised or commodified science. The central thesis of this chapter is that the knowledge production processes of UK science and technology service providers have been transformed from academic to a commodified form of production. En route, 136

Scientific Knowledge Production Processes 137

we will argue, there was a period of overlap in which the vision of ‘useful’ science gained some currency but this visionary change did not result in the transformation of the knowledge production process because it was not accompanied by a similar organisational change. As explained in Chapter 1, what we find problematic with the distinction drawn between Mode-1 and Mode-2 knowledge production process by Gibbons et al. (1994) is that it assumes that Mode-2 science can exist within traditional, Mertonian, scientific organisational forms. The growth of academic science, and to some extent the espousal of ‘useful’ science, might be seen as the result of organic change – the slow socio-economic development of scientific practice. But GREs were in a vulnerable position as part of government – vulnerable to the radical reforming policy-driven change of Conservative governments from 1979 to 1997. We argue here that the pace and nature of the changes effected after 1979 could only have been policy-driven in nature, with NPM and neo-liberal economic zeal providing the impetus. Section 2 of this chapter discusses these 3 ideal types of scientific knowledge production processes in greater detail. In Section 3 we discuss the phases of knowledge production in the UK. In Section 4 we turn our attention specifically to the transition from useful to commodified science in the GREs, whilst Section 5 discusses some of the very practical consequences of that shift. This is then followed by some conclusions.

2 Knowledge production processes defined Three archetypes of scientific knowledge production process are clearly discernible in the UK context. There has been a clear shift from academic science to commodified science, via some form of ‘useful’ knowledge production. This section discusses these archetypes.

‘Academic’ science As described in Chapter 1, academic science embodies a knowledge production process in which knowledge is generated in response to problems defined and solved in relation to cognitive and social norms. The commercial or social applicability of knowledge is not a significant imperative in this process. In its pure form, the drivers of such knowledge production are entirely self-referential: they encourage the pursuit of knowledge for its own sake, within the norms of traditional science as an organisational and cultural phenomenon.

138 Scrutinising Science

Academic science can be seen as a product of the vision of science prevalent at the time and its organisational forms. The dominant vision of science broadly equates with the traditional notion of science described by Robert Merton in 1942 (Merton, 1973). Merton’s five principles of science were: communalism, universalism, disinterestedness, originality and scepticism. Science is construed as a public good activity, as opposed to a commercial one. As such, scientific knowledge is made freely available to potential social and economic users. As Hilary and Stephen Rose put it Science is … maintained by a value system which emphasises universality and disciplinary communism and a reward system whereby the scientist, in return for the gift of knowledge to his (sic) readers, is accorded status and recognition. (1969, p. 8) This very distinct vision of science as a social activity is symbiotically associated with distinctive scientific organisational forms. Thus ‘science’ came to be embodied in a series of organisationally, culturally and financially separate institutions that have been called the ‘Independent Republic of Science’ (Dasgupta and David, 1994). It could not be otherwise – it is difficult to conceive of, say, a commercial company that was dedicated to the production of knowledge of this kind. The production of scientific knowledge under the academic model and its possible subsequent usage in commercial and other realms were, for the most part, highly demarcated. Scientific activities would discretely precede any subsequent commercial exploitation of its knowledge products. Science was, as a consequence, relatively free from commercial pressures. The distinctive nature of this knowledge production process was reflected in organisational characteristics such as funding mechanisms. Thus scientists were generally bestowed with grants rather than being subject to tightly specified contracts. Even research with a view to possible commercial usage was not burdened with the rigorous economic feasibility calculations of management control (Baskaran and Boden, 2004). Such was the dominance of the Mertonian vision of science, that it was generally implicitly assumed that science as an activity was not amenable to such disciplining and regulatory devices. Where scientific knowledge production is of an academic type, government both accepts a responsibility for funding science and derives useful knowledge from it, but the level of direction from government is low or non-existent. Scientific knowledge products are public or merit goods. The actual locus of scientific activity (especially ‘pure’ research) was outside commercial organisations, often in government laboratories,

Scientific Knowledge Production Processes 139

research institutes or in universities. This social positioning enabled scientists to maintain a largely independent voice with a reputation for freedom from involvement with vested interests. Within academic science systems, scientists themselves were a distinct professional class, largely independent of the production disciplines and management accounting controls of commercial organisations. Rather, such organisational forms and visionary discourses imply a knowledge production process predicated on a loose form of social contract or partnership, whereby the scientists produce knowledge in return for financial and other patronage, recognition and social esteem: [Scientists’ rewards for] the production of original and demonstrably reliable knowledge [are] publications, tenure and recognition by the elaborate system of honours that the profession has constructed for itself. (Anderson, 2000)

‘Useful’ science The seeds of subsequent criticisms of academic scientific knowledge production lay in the very absence of any genuine compunction to design knowledge production processes in such a way that they were oriented towards the satisfaction of expressed commercial/public expressed needs. In response to western economic decline during the 1960s and 1970s, government sought to encourage greater collaborative working and sharing/utilisation of knowledge between the ‘Republic of Science’ and industry/government. Such synergistic working was described in Chapter 1 as the Triple Helix model. In such conditions, the institutions of science remain unchanged at core, but attempts are made to achieve synergistic relationships between them and ‘user groups’. Gibbons et al. (1994) characterised this as Mode-2 production. Mode-2 implies a quite distinctively new vision of what science is about – principally in terms of the utility of knowledge produced. Gibbons et al. (1994) argue that, under Mode-2 conditions knowledge is always produced under an aspect of continuous negotiation and it will not be produced unless and until the interests of the various actors are included. Such is the context of application … knowledge production in Mode-2 is the outcome of a process in which supply and demand factors can be said to operate. (Gibbons et al., 1994)

140 Scrutinising Science

For Mode-2 production processes to work and work well there must be a strong shared vision of what constitutes useful knowledge. That is, science would seek to ally itself with socio-economic objectives of the state and industry and direct its work accordingly. Ziman criticises Mode-2 knowledge production that ‘arises directly or indirectly in the context of application’ as ‘a misty, unknown – even hostile – territory for academic science’ (Ziman, 2000). He argues that the boundary between ‘academic’ and ‘industrial’ science is delineated by the norm of disinterestedness, and that this boundary has been challenged as academics are forced to forge much closer relationships with industry. There is, we posit, a potentially fundamental flaw in Mode-2 models. Such models rely on changes in the vision of science – what it is for and what its objectives are – but not in the institutions which constitute the scientific community, its organisational basis. If knowledge production processes are the product of both visions and organisation, it appears doubtful that changes in processes can be effected by only changing visions but not the underpinning organisational forms. We argue below that we consider this flaw to have led to two outcomes in the UK. First, much lip service being paid to Mode-2 production processes, but in fact there was little real change in the modes of knowledge production. We would suggest that Mode-2 or ‘useful’ science in fact provided quite a useful legitimising position for scientists anxious to defend budgets, institutions and practices from what they saw as the ravages of NPM reforms. And second, that the changes that come from attempts to implement Mode-2 production can in fact result in the commodification of science (i.e., a change in the organisational form of science as well as its vision).

Commodified science Commodified science implies a knowledge production process that goes beyond the synergistic modus operandi implied by the ‘useful’ science model. Arising directly from increasing accounting, financial and management controls on science, the practice of science becomes increasingly commercialised or marketised and virtually or actually relocated to within the private sector. Science is increasingly constrained from producing open and codifiable knowledge as knowledge is transformed into a commodity owned and controlled by those paying for it and seeking to exploit it. Rewards to scientists are largely measured in financial terms aligned with the economic usefulness of their knowledge and no

Scientific Knowledge Production Processes 141

longer only in terms of social status and position (Baskaran and Boden, 2004). According to Ziman The transition from academic to post-academic science [commodified] is signalled by the appearance of words such as management, contract, regulation, accountability, training, employment, etc. which previously had no place in scientific life. This vocabulary did not originate inside science, but was imported from the more ‘modern’ culture which emerged over several centuries in Western societies – a culture characterised by Weber as essentially ‘bureaucratic’. (Ziman, 2000) For science to be commodified, changes in both the vision or discourse of science and in its institutions/organisations are necessary. This is more than scientists being encouraged to reorientate their objectives to produce ‘useful’ knowledge. Instead, the very institutions of science are ‘captured’ by commercial interests and government in order to ensure that the scientists’ vision and organisation of science are fundamentally altered. A commodified model of science therefore implies radical change in what science is, away from being an independent set of social practices designed to produce public good knowledge, to a much more sharply focused, controlled and private production process. Ziman has developed his own post-Mertonian principles for how he believes science is transformed under such regimes. He characterises these as Propriety (knowledge that is not necessarily made public); Local (focused on local technical problems rather than on general understanding); Authoritarian (researchers acting under managerial authority rather than as individuals); Commissioned (to achieve practical goals rather than in the pursuit of knowledge), and; Expert (researchers employed as expert problem solvers rather than for personal creativity). (Ziman, 2000)

3 Phases of knowledge production in the UK It would be difficult to sustain an argument that the classical typifications of science set out in the previous section actually existed in a pure

142 Scrutinising Science

form, although exceptions can, of course, always be found. However, the historical record suggests that British science has undergone a transition from the broadly Mertonian/academic type, through some sort of ‘useful’ science and is now becoming increasingly commodified. This is unsurprising: these three models are in fact descriptive, not normative. The era before the 1960s is one marked by the relative independence of scientific institutions, a discourse of independence and a mode of production that prioritised knowledge for its own sake rather than some form of utility – in brief, academic science. As we showed in Chapter 2, by the nineteenth century scientific organisations in the UK were largely autonomous establishments. At that time, most science was done within the growing universities and the learned societies. Science, a cultivated man’s (sic) activity, was seen as a good thing in itself and one that could also, but not necessarily, generate real advantages in terms of economic competitiveness or other social benefits. There is little evidence during the nineteenth century of purposive efforts to either establish scientific organisations that would bend the efforts of scientists to industry or the public need or of any reconceptualisation of science as anything other than a genteel pursuit that might possibly be commercially or publicly beneficial. When government did start to set up the GREs, it did so largely at the end of the nineteenth and beginning of the twentieth centuries in response to the perceived military and economic advantages enjoyed by Germany. As we have described, the institutions established did not challenge academic knowledge production processes, but were rather in the same spirit. Thus, until the Thatcherite reforms, the old GREs remained institutionally distinctive, largely free of managerial control and with few imperatives to produce knowledge to a given specification. As such, they embodied many of the Mertonian ideals of academic science. Much of the writing on science and science policy from the 1850s to the 1980s praised the quality of the scientific knowledge produced in the UK whilst bemoaning the inability of ‘industry’ to utilise that knowledge by turning it into profitable technology through innovation (see, e.g., Wiener, 1981). Britain’s accelerating economic and industrial decline, dating from the mid-nineteenth century (Wiener, 1981) and reaching its nadir by the 1980s, has been at least partially attributed to the remoteness of scientific knowledge production processes from commercial and industrial activities. This analysis is not ex post facto – as early as the Great Exhibition in 1861, Sir Lyon Playfair was lamenting the lack of involvement of science with industry and contemporary

Scientific Knowledge Production Processes 143

commentaries saw the Exhibition itself as more of a high water mark than the dawn of a new era (Wiener, 1981). A realisation that the British vision of science and organisation of science were not shared by all of her military and economic competitors abroad came around the turn of the nineteenth century and as a result of a perception of the growing threat from Imperial Germany. Germany had a burgeoning industrial (and especially military–industrial) base that was distinctly underpinned by scientific work. British anxieties over the threat to the UK’s global economic predominance and her national security were evident from the turn of the twentieth century. It was just such fears that led the government to establish institutions such as the National Physical Laboratory at that time. The 1914–18 War was a salutary lesson to the British about the industrial and military value of science. Arguably, the history of UK science through much of the twentieth century demonstrates an attempt to transform the scientific knowledge production process into one that emphasised the creation of (publicly and commercially) useful knowledge. For instance, during the First World War the British war effort quickly became one underpinned by the work of scientists, with money being funnelled in through the newly established Haldane Committee. This influence and concern strengthened, with (particularly socialist) scientists working closely alongside government during the inter-war years. The result is that the Second World War is frequently characterised as the ‘Scientists’ War’. Indeed, the translation of scientific knowledge to practical applications during this period was marked. However, there is little evidence that academic scientific knowledge production processes were in any way disrupted. There was no fundamental change in the organisational form that science took – it remained discrete and independent. Rather, it appears that scientists decided to put their shoulder to the national wheel and government rewarded them with both status and funds. As a consequence, by 1945 British science was enjoying increasingly generous state funding. Yet there was no consequential reform in either the organisation of science or its vision. Indeed, the institutions of science were strengthened by the enhanced levels of funding, not reformed. And so impressive was Britain’s wartime performance as a consequence of the scientists’ efforts, that there seemed no need to rethink the vision of what science was – science was useful. The discourse remained not only unchallenged, but also strengthened. Moreover, the shift that had occurred was largely organic – a result of individuals and their responses to the exigencies of war.

144 Scrutinising Science

By the 1960s, accelerating economic pressures led inexorably to demands for the improved industrial application of scientific knowledge. This reached its apotheosis with Prime Minister Harold Wilson’s drive for a ‘technological revolution’ in 1967, where Britain’s scientists would work alongside a reinvigorated industry to achieving fundamental economic transition. Such demands led in terms to attempts to reform the knowledge production process itself by changing the vision of science whilst leaving its institutions largely untouched. That is, in classic Mode-2 style, the vision of science was to change and industry would ally itself alongside the institutions of science, moving forward together in a joint endeavour. Indeed, the notion of just such a ‘shared vision’ (about what science was to deliver and how industry/government was to make use of it) was to become a much vaunted aspect of the relationship between science and technology service providers and their government departments until the NPM reforms of the 1980s and 1990s were instituted. The national innovation systems at that time were conceived of as facilitating the development of shared visions and co-operative working between science and its wider stakeholder groups. We discussed in Chapters 2, 4 and 5 how this new vision of science and the new presumed ways in which the institutions were interacting did not in effect become a reality. No new harmony was found between science and industry – but that the economic decline continued unabated is attributable to this is contestable and not the subject of this book. We have not explored the reasons for the failure of Mode-2 science to deliver enhanced economic performance. It may be that the desired synergies were never achieved, or that the whole scheme was fundamentally flawed. What is evident is that there was ample rhetoric about the need for ‘useful’ science – the ‘shared visions’ of the new science discourse and espousal of the desirability of closer organisational working through networks and partnerships. This suggests that a new vision for science was much talked about. But Mode-2 production processes imply not only a distinctive new vision of science but also changes in the modus operandi on the part of both scientific institutions/organisations and industry if the desired co-operative working is to be achieved. However, the reality is that government substantially failed to alter the workings or form of its own institutions of science. At times, it is as though lip service was paid to the production of useful knowledge, but that little altered in practice. Thus, accelerating economic decline during the 1970s led inexorably to the Conservative conclusion that such Mode-2 knowledge production

Scientific Knowledge Production Processes 145

processes, if they existed, were simply not delivering, literally, ‘the goods’. The Conservative answer, heavily ideologically invested as they were in notions of the supremacy of free markets, was that it must be science that was at fault, not free-market industrial users of their knowledge product. That is, independent and non-marketised scientific institutions would inevitably suffer the same fate of inefficiency and ineffectiveness as all non-market institutions. What marked these early attempts at reform to ‘useful’ science from those of the subsequent Conservative administrations, is that they were founded in gentle exhortation and, it almost seems, a careful regard for the nature of scientific enquiry. As such, any change, which did occur, was largely organic in nature. The Conservatives represented a diametrically different force – a reforming government with an almost revolutionary agenda that it chose to drive through, amongst others, the scientific establishment.

4 ‘Shared visions’ and commodified science? We turn now to an empirically based evaluation, to the limited extent feasible, of the extent to which Mode-2 or ‘useful’ knowledge production processes ever really existed or functioned well in the UK prior to 1979. We further chart the transformation of knowledge production processes after 1979 with regard to science and technology service providers to government. In doing so, we aim to assess the effectiveness of the various knowledge production processes and also the means by which they were transformed. The Whitehall shorthand term for successful ‘useful’ scientific knowledge production processes was ‘shared visions’. This relates to a real or perceived shared vision of what the purpose of the scientific work undertaken should be – the type of alignment between scientists and users envisaged by Gibbons et al. (1994). ‘Shared visions’ imply trust-based relationships where both scientists and knowledge consumers work together to common aims. That is, both the producers and consumers/users of scientific knowledge and understandings choose to align themselves towards common aims. Under Mode-2 production processes, the nature of science as a largely independent practice remains intact. We have identified five principal characteristics of academic scientific knowledge production processes that might result in a perception of the desirability of such ‘shared visions’. That is, situations where science retains its independence and remains true to the Mertonian ideals

146 Scrutinising Science

(Merton, 1973), but where there is a high degree of congruence between what science does and the utility to government of the knowledge produced. First, science and technology usually involves a range of cognitive skills and high-level specialist expertise that distinguishes it from many of the more prosaic routine government activities. With science in particular, there is often little certainty to results or outcomes. In such circumstances, working in partnership with a high degree of congruence between an independent sphere of science and government and industry might be the best way of providing an optimal solution in circumstances of uncertainty and ambiguity. Second, research agendas may have to develop organically and in response to a lack of certainty in outcomes. As such close co-operation and mutual understanding between providers and users will be essential to the shaping of the knowledge production process. Users are unlikely to have sufficient degrees of expertise or understanding to enable them to drive research agendas and therefore need trust-based relationships to help them understand and define their own needs and also to use any knowledge produced. Third, whilst ‘vision’ implies some notion of ultimate goals, some work undertaken may have no discernible or immediate impact on the core visible activities of government, and may instead be designed to maintain the longer-term national science base. In order to ensure that such work is undertaken, long-term shared visions about overall strategic direction may be essential. Fourth, some of this work involves giving policy advice to Whitehall policy makers, often in circumstances where the Whitehall department is entirely reliant on the laboratory in respect of its specialist expertise. science and technology services must therefore be appropriately responsive to government needs and be seen to have impeccable impartiality. Government may therefore sometimes be extremely constrained in its choice of ‘suppliers’ by virtue of an imperative need for a high trust assured-response relationship or a shortage of alternative sources of expertise. Attempts to develop alternative sources of advice may be constrained by the availability of relevant expertise and a consequential diminution of trust in impartiality. Fifth, some sorts of science and technology service are provided for use in arenas where national security concerns hold sway. In such circumstances, governments will be given added assuredness if they experience the supplier as someone who has a shared vision and trust-based relationships with government.

Scientific Knowledge Production Processes 147

The success of any Mode-2 knowledge production process in relation to government science and technology services therefore depends on making ‘shared visions’ work. That is, on altering the vision of science, the organisation of science and also the response to it by users to such an extent that both sides can work effectively together to achieve common aims. We are concerned here with the extent to which, prior to 1979, ‘shared visions’ were actively managed successful partnerships between science and technology service providers and government. This should allow a judgement to be reached as to the extent to which the criticisms of shared visions raised in, inter alia, the Levene–Stewart Report (Levene–Stewart, 1993) were justified. Of course, the absence of successful Mode-2 production processes does not indicate that the Conservative solution of commodified science was either justified or likely to be more successful. Prior to NPM reform, government departments and government research establishments appeared to have had congruent notions of science as a knowledge production process. Those notions appear to have been (very) broadly of a ‘useful’ science. However, there must be doubt as to whether the knowledge production process was in fact anything other than academic in nature. Thus, funding mechanisms gave undifferentiated block grants to laboratories with little control of direction as to how it might be applied. Organisationally, the laboratories were distinct from their government departments, as befitted their independent status as scientists. This is reflected in the separation of budgets and indeed the frequently remote physical location of the laboratories. But at the same time, the GREs were seemingly inextricably part of their Whitehall departments and shared in the civil service culture. Thus, government departments ‘owned’ their laboratories, with ‘Fraser Figures’ in place to formalise that relationship. Although the laboratories had the trappings of independence, there was a sense of shared working, and of one ‘working for’ the other. As such, some form of ‘shared vision’ existed. However, doubts remain as to how embedded and effective such trust-based arrangements were. As noted in Chapter 5, the NPM process of reform was apparently undertaken on the basis of scant evidence of the economy, effectiveness and efficiency of existing practices. Therefore in our search for evidence of pre-existing shared visionary practices and their efficacy we are largely reliant upon recollection by our respondents. In seeking to evaluate the true nature of the shared vision relationships that did exist, we start by attempting to define what signifiers of

148 Scrutinising Science

a working relationship based on shared visions might be in an abstract form. The factors that we have determined might be significant are: ●

●

●

●

●

●

●

Evidence of joint action to set organisational goals and to define future work agendas. Corresponding processes and structure designed to facilitate joint working and joint action. A fluid and dynamic organisational structure with low internal barriers permitting the flow of ideas, concepts, personnel and resources. Evidence that all parties had a real responsiveness to each other’s needs and capacities. Evidence of a general congruence of mission and purpose where these are explicitly stated. Internal management, accounting and budgeting procedures, evidently based on an agreed shared vision. The whole framed by government policies and procedures designed to ensure the maximum effectiveness of relationships based on shared visions.

In seeking evidence of how and to what extent ‘shared vision’ was a reality, we turn first to government policies and recommendations. The earliest attention paid to the working relationships between government scientists and their departmental owners was in the Rothschild report (Cmnd 4814, 1971). As explained in Chapter 2, by the 1970s government was increasingly concerning itself with framing policies and processes that would ensure the maximum effectiveness in working relationships between the laboratories and their departmental ‘customers’. Rothschild recommended that laboratories and their departmental owners should move towards a customer–contractor principle. It should be noted that this espousal of the customer–contractor scheme was not a true expression of a market principle of the type subsequently developed under NPM, but rather an attempt to ensure closer working between laboratories and departments – that is, that science should be made more useful. Although some systems were introduced to develop a customer–contractor principle, this was by no means ubiquitous or complete. Some research requirements boards designed to specify programmes in different fields of activity were instituted, however their impact was not great. Whitehall policy following Rothschild was also to establish so called ‘Fraser Figures’: nominated individuals within departments who would act as ‘owners’ with the responsibility for ensuring that the laboratories

Scientific Knowledge Production Processes 149

developed in harmony with departmental strategic objectives. However, we have found little evidence to suggest that these individuals ever became influential. We observed variations in the status attached to the role of owner. In some cases, we received the distinct sense that the ‘Fraser Figure’ role was not seen as important: in the case of one very sizeable agency, the effective (but not the formal) responsibility was left in the hands of a relatively junior Whitehall official (Gummett et al., 2000). Whilst Rothschild had some impact on formalising the development of ‘shared visions’, the changes were not significant. There was some movement towards some sort of bidding for funds and research requirements boards were established in some instances to specify the work to be done by the laboratories. This was to be no bold programme for organisational form. Whilst these early attempts at reform indicate little by way of synergistic working, it is important to consider what cultural practices affected the relationship between science and technology service providers on one hand and the government ‘customers’ on the other. Here, as we have said, we are largely reliant on the memory of our respondents, influenced as that is by subsequent events. Our data suggests only limited evidence of any real shared vision or synergistic working between the laboratories and their host departments. One Whitehall civil servant described giving huge amounts of cash to their laboratory each year with reports flowing back the other way. This civil servant reported that, most often, these reports were ‘flicked through’ and then filed on the shelf to be left unused. Other Whitehall staff spoke with gusto about the NPM-led transition to actually holding a budget for and commissioning research in preference to being reliant on negotiations with the laboratories. They felt that the new arrangements, for the first time, gave them the ability to get the work that they wanted. This indicates that the old, pre-NPM arrangements were far from effective in marrying the work of scientists to the needs of their departments. One major department of state was obliged to give its privatised agency a contract to tell it what research it (the department) needed to commission. This inability to function as an ‘intelligent customer’ seemed widespread. Again, reading backwards, if, post-reform, departments were unable to specify and articulate their needs, then it seems unlikely that they were equal players in a relationship founded on ‘shared visions’ before reform. Rather, it suggests (rightly or wrongly) that the department had to trust the judgements of the scientists. Evidence was also found amongst the agencies that suggested they too had experienced something of a lack of well defined work programmes

150 Scrutinising Science

prior to reform. Many respondents spoke of agency status bringing a renewed sense of mission and a clearer picture of what work they were expected to get on with. This tends to suggest that they did not experience this clarity of mission pre-reform. One respondent talked of a certain ‘arrogance’ around the old government research establishments, ‘deigning’ to tell industry what to do prior to reform. One laboratory staff member explained frankly that, prior to agencification, time was ‘elastic’, with projects continuing until the funds were exhausted, with no notion of timely completion or the utility of outputs. As against these suggestions that the relationship between the departments was not dynamic and synergistic, others spoke of the benefits of being in a trust-based and collegiate working environment. In defence in particular, staff on both sides spoke of the difficulties encountered when they could no longer simply pick up the phone and ask for advice from a trusted colleague – they had gone through a period when such conversations had to be paid for via a cost code and plainly found that these new arrangements made their work less not more efficient. The most excoriating critique of the pre-existing partnership working practices was delivered by the Levene–Stewart Review of 1993 (Levene and Stewart, 1993). They found an emphasis had been placed on the development of co-operative relationships between departmental customers and in-house suppliers. This included the development of shared visions; co-ordinating programmes to ensure an overlap between work allocated and preferred suppliers; working co-operatively to ensure intelligent contractor-educated status for the departmental customer and long-term contracts offering close working and continuity. Such closeness was compared (presumably favourably) by the suppliers and customer, not the review team, with the private sector’s use of partnership sourcing and contrasted (presumably unfavourably) with ‘allegedly more adversarial relationships considered inappropriate to the procurement of S&T’ (Levene and Stewart, 1993). The review team were dissatisfied on finding that the features of partnership sourcing which the private sector used to ensure value for money, such as switching suppliers or intervening to restore value were not much in evidence in government departments (Levene and Stewart, 1993). The review team concluded that ‘the value placed for continuity and co-ordination of work, closeness of the supplier–customer relationship and preservation of capacity on a “just in case” basis’ was antithetical to the development of a customer–contractor market style mode of working.

Scientific Knowledge Production Processes 151

Departments were also afraid that competition would lead to a diminution in the excellence of agencies and institutes and expose policy makers to undue risks. They were keen to stress the value of their current arrangements with their laboratories and emphasised these points to the review team. Overall, departments voiced a number of concerns about the potential for disruption to long-established knowledge production processes. The barriers to the development of a customer– contractor culture (and therefore a commodified knowledge production process) were identified as: ●

●

●

●

●

●

‘The value placed upon continuity and co-ordination of work, closeness of the supplier–customer relationship and [the] preservation of capacity on a “just in case” basis.’ The Levene–Stewart Review conceded that undoubtedly there were facilities that it would not be sensible to replicate and work of a long-term or periodic nature that called for continuity and co-ordination of effort. ‘The cash cost of change’, in particular, the fact that departments, being owners as well as customers of their research establishments, would be left with a problem if their in-house supplier failed to win a competitive tender. ‘The costs of running competitions’, both on the customer side, where there were staffing implications, and on the supplier side, where effort spent on marketing and bidding was often seen as unproductive. ‘Level playing field’ concerns, with the key issues being the uneven extent to which customer–owners were prepared to expose in-house suppliers to competition, and the comparability of the costings upon which prices were based. ‘Perceived risks to the excellence of the Agencies/Institutes, or even to their continuation, if departments pursue competition.’ Suppliers were particularly concerned that their principal customers might fail to invest in new capital programmes and personnel policies; defer funding of the efficiency gains needed to enable them to compete; and give them the least stimulating work. ‘Reliance upon owned suppliers for independent policy advice’; this being the service which departments regarded as the most important provided by science and technology service suppliers. It was said to be the principal reason for wishing to control the availability of such expertise. Some departments argued that only in-house expertise could be authoritative, independent or objective, while others took the view that ‘assurance of quality and of supply can be achieved

152 Scrutinising Science

●

●

●

without owning or tightly controlling the activities of important suppliers even where work is politically sensitive or urgent.’ ‘Reliance upon owned suppliers for impartial procurement advice’: a concern principally of MoD whose DRA was said to contribute to its ability to get value from large, technologically complex procurement. Nevertheless, MoD was moving DRA towards fixed price, fixed rate and other incentivised terms of trading. ‘A need for high levels of responsiveness’, something regarded as especially important in conditions of crisis. ‘Preservation of unique experience or facilities.’ That is to say, from the perspective of advocates of the Internal Market, government science and technology customers tended, perversely, ‘to regard the replication of capabilities as duplication of effort or the creation of over capacity, rather than an alternative source likely to create value through its competitive impact’ (Levene and Stewart 1993).

To some extent, the laboratories were hoisted by their own petard in the face of the Levene–Stewart Review. The rhetoric or ‘vision’ of science, for a number of years, had been that the government’s science and technology service providers were there to produce useful, Mode-2 type knowledge. When, on examination, they were unable to provide a robust case to prove that they did in fact work on the basis of ‘shared visions’ they became an easy target for reform. This reform could only take one route given the pro-market bent of the government of the day. Like any other commodity, science and technology services could be bought in an open, market place, it was argued, and the ‘laws’ of economics meant that such production processes were the only ones that could be efficient. The introduction of NPM reforms implied a radical rethink of the acceptance of ‘shared visions’ as the basis on which departments and laboratories worked. It also involved radical shifts in both the vision of science and its organisational form. The basis on which the vision of ‘useful’ science was attacked was from a standpoint of fundamental economic rationalism rather than material evidence. science and technology services were, in short, and as we demonstrated in Chapter 5, to be seen as commodities to be bought and sold in some form of marketplace. Simultaneously, NPM was the lever to exact organisational reform. This was essential to its marketising imperative, as we explained in Chapter 4. The economic argument was that ceteris paribus, close partnership will never yield the same level of economic efficiency and effectiveness as a market-based arms length relationship. The basis on

Scientific Knowledge Production Processes 153

which markets work is that of contracts: a piece of work or commodity is defined and a price agreed for it. Thus, axiomatically, the relationships between the laboratories and the departments were to be placed on a customer–contractor basis. There was no alternative. We argue below that these transitions in both vision and organisational form changed the shape and nature of the knowledge production process. Quite simply, a laboratory that not only is told that it must do as bidden, but also has that request reinforced by the nature of the financial and other management control arrangements it finds itself subject to, cannot function in the ‘Independent Republic of Science’. In academic science knowledge production processes, the emphasis is on the production of science as a good in itself, which may or may not be commercially or publicly useful. Science is independent institutionally and scientists get their rewards through prestige and (financial and other) patronage. In Mode-2, science and its beneficiaries align themselves to mutual goals or ‘shared visions’, but science retains its independence. Of course, however, such production processes inevitably influence what scientists choose to do, but in essence science retains its agency. Once science has shifted to become the producer of a commodified knowledge, there is more than a transition from one vision of science to another, there is also a real institutional and organisational change that is written in the name of financial relationships. Knowledge that is ‘bought’ is produced via different processes to that produced by independent professional scientists of their own volition and, it can be argued, has a quite different status as knowledge. In the next section we consider the tangible and observable changes that have occurred in knowledge production processes as a result of their commodification and, in the concluding section, discuss the likely impact of these commodified processes on the quality, utility and cost of science and technology services to government.

5 Of cost codes and other things Amongst the laboratories that we researched, agencification and, to a greater extent, privatisation had an observable and tangible effect on the process of knowledge production. Most of these changes have their origins in the financial and other market-based reforms that occurred under NPM. To recap, NPM’s financial reform aspects involved the removal of the significant block grants of the laboratories and the placing of these funds in the hands of policy customers in Whitehall. Laboratories then

154 Scrutinising Science

had to bid for these funds, often in competition with outside potential suppliers. Work came to be awarded on a contract basis – payment was made strictly in accordance with work done. Moreover, old practices of cross-subsidising some work from more lucrative contracts became prohibited. Thus, if a laboratory now wants to do some work it must do so under a specific contract, for which it is paid. Labour and time within the laboratory must be much more tightly controlled and staff purposively deployed to achieve the maximum efficiency in the completion of contracts. Laboratories must spend time cultivating customers, bidding for work and helping their funders to become ‘intelligent customers’. It is difficult to underestimate the effects of such changes on the work practices of scientists and therefore the micro-organisational form of their laboratories. The most obvious point is that here, clearly, scientific work has become a commodity to be bought. But the changes are also deeper than this. Science and technology service providers in commodified systems are often in open competition for work. Yet this is work where the customer may frequently be unsure of what they want or need. This has necessitated the laboratories actively cultivating their departments as customers, and on occasions even being issued with contracts to specify for the department what work is needed (work that the laboratory can then bid for). Yet costing in such circumstances can be problematic. One provider complained bitterly about the laboratory being undercut by universities in research bids, maintaining (probably quite accurately) that universities were not charging the full economic cost of their work. Another worker insisted that the department wanted market testing for cheap prices but also wanted his laboratory to be there as a fall back when such contracts went wrong – something that he pointed out was paradoxical. The laboratories were previously accustomed to a system of working whereby they would subsidise some projects from government-funded work. This type of activity is not as reprehensible as it might sound. The ability to use funds flexibly for a ‘quick-look-see’ meant that creative ideas could be quickly tried out and then only pursued properly when there was a prima facie case for doing so. Under a contracting system, such practices had to stop because the only work that could be done was that for which the laboratory had been paid. The onerous problems associated with tendering for funds to try a piece of work, only for it to become immediately apparent that the efforts were futile, acted as a major disincentive to curiosity-driven research. The necessity of being accountable under contracts was also having a major impact on the working lives of individuals. One worker, we shall

Scientific Knowledge Production Processes 155

call him Mike, explained that prior to agencification he had just one cost code for his work, which was all for the owning department. He had kept a time sheet and filled it in accordingly. After agencification he had perhaps three or four cost codes that he had charged his time to. Now, post-privatisation, he had during the four days prior to our interviewing him, recorded his work under ten different cost codes. Other employees spoke of their frustration about not being able to liaise with people in their own organisation to get technical help on specific issues unless they had a cost code for their colleague to charge the conversation to. They expressed the view that such ‘nonsense’ (as they saw it) ironically made their work extremely inefficient. Some laboratory staff expressed real concerns about the differing pressures on their time and efforts. The need to generate income meant that they might have difficulty giving their undivided attention to a department in a crisis. An example cited here was the worry over what would happen if a key scientist was abroad on a non-government consultancy project when they were needed at home. Other issues became apparent to us with this commodification of scientific advice. These included unresolved questions relating to how departments would know that they were getting value for money when the market for proffering advice was so small. We were surprised to see that many departments had to buy laboratory time to help them specify what their work should be. This tended, it seems, to go against a central tenet of customer contracting – namely that the customer knows best. Indeed, it seems almost farcical at times to think of laboratories being paid to write specifications that they themselves then bid for.

6 Some conclusions This chapter has argued that scientific knowledge production processes are derived from a combination of the hegemonic vision of science and also its organisational form. That is, what science is ‘supposed to be’, combined with the arrangements set in place for facilitating the execution of that set of functions can be said together to form a process for the production of knowledge. Until the 1960s at least, we have argued, the scientific knowledge production process of the GREs closely emulated the Mertonian ideal of what Ziman (2000) has called ‘academic’ science. In the 1960s and, increasingly, in the 1970s, some efforts were made to shift the GREs to the production of more ‘useful’ science. This attempted transformation was organic and gently exhortational in approach and largely failed.

156 Scrutinising Science

We have argued that this failure was due to a shift in the vision of science, or at least the espoused vision, but not in its organisational form. We have argued that there was much rhetoric about the usefulness of science, but actually little real evidence that anyone was working in strict Mode-2 style. It may be that the espousal of the utility of the GREs work provided some defence against attempts to curtail or control what they were doing. Such support for the vision of useful science was certainly not accompanied by any voluntary or otherwise reform in the organisation of science that would have made a new knowledge production process possible. The legitimacy given to the vision of ‘useful’ science did however pave the way for successive Conservative governments from 1979, and Labour governments since, to complete the transformation of the knowledge production processes to a commodified form. In a sense, it had already been accepted that science had to serve government and industry, responding to their needs. The Conservative organisational reforms further impacted on the vision of science – making it possible for it to be conceived of as a marketised activity.

7 Lab Reports

1 Introduction Chapters 4, 5 and 6 discussed the transformation of government science and technology service providers along three key axes: the organisation of science; the visions of what science ‘is’ and scientific knowledge production processes. These chapters demonstrated that transformations of government scientific service providers reflect more general observable trends in science towards greater commodification and away from the Mertonian ideal (Merton, 1973). In this commodified model of science, scientific knowledge is a commodity traded as any other and the means for its production are subject to commercial pressures and controls. The NPM reforms of the eighties, nineties and beyond have, we argue, acted as an imperative to these triple transformations in the public sector. This chapter explores the accountability aspects of this triple shift in public sector science. We compare here the accountability discourses practised by and applied to science and technology service providers before, during and after this transformation process. Because accountability practices are inextricably linked to the organisation, vision and processes of a system, our analysis maps onto the transformations that have occurred. Accountability issues merit special attention here because of the importance of government-funded science to its wider stakeholder communities and because of the usage of public funds. In Section 2, which follows, we hypothesise on the nature and implications of the shift in accountability forms under traditional scientific regimes and new, post-NPM, commodified ones. In Section 3, we present a detailed case study of the transition of accountability practices. In Section 4 we discuss performance and accountability. 157

158 Scrutinising Science

2 Accountability discussed Accountability broadly defined Accountability is a broad concept that varies significantly with context. At its simplest, it constitutes an obligation placed on an individual or organisation to give an account of their or its actions. As such, the core actors in any formal accountability context are the person/organisation obliged to give an account and the person/organisation demanding it. There may be other actors too: especially those wider stakeholders who may benefit from acts of accountability by the receipt of information. In this chapter we discuss only organisational accountability, not the personal forms. Accountability requirements generally exist where an organisation has been entrusted with resources, obligations or tasks to undertake on behalf of others. Accountability mechanisms cannot compel or directly oblige the accountable organisation to do as tasked. Rather, such mechanisms should provide a means for validating whether or not those held accountable have properly executed their tasks. Indirectly, the implied threat of being held accountable may, so the theory goes, ensure that organisations do properly execute their tasks. That is, accountability offers a means of indirect rather than direct control. However, to be really effective as a means of indirect control, accountability mechanisms have to be backed up with some sort of sanction – a price to be paid for non-performance or non-compliance. Finally, audit provides an important element in accountability arrangements. Audit provides the means by which those demanding accounts from organisations can verify that the account is true. Accountable relationships also suggest a power dynamic. One side (the principal) has the power to demand an account from the other (the agent). But the exercise of power is rarely complete, and no less so in situations where accountability is demanded. Information asymmetries between the actor demanding an account and the organisation held accountable might diminish the power of the principal, such as when the account given is partial and incomplete. For instance, the obligation on a company literally to give ‘accounts’ to its shareholders annually constitutes an important means by which, in theory, shareholders exert power and influence within their company. In practice, the nature of the regulations relating to how the accounts are drawn up gives significant latitude to the company directors. This, together with the nature of annual general meetings at which accounts are presented, significantly attenuates the shareholders’ power to make their company accountable.

Lab Reports 159

The sanctions that need to exist to make accountability effective as a means of indirect organisational control may also be attenuated by real-life circumstances. For instance, governments are constitutionally ultimately accountable to electors. If the government fails to do as the electors might wish, then at the next election they may be voted out. However, in situations where the voters have little desirable alternative to the government in power, the force of such a sanction may be significantly diminished – and the incumbent government may factor that into its decision making. Audit should provide the means whereby principals can verify that what the accountable organisation is saying or reporting is true. That is, it should provide the means of ensuring veracity and thereby redressing any power imbalances produced by information asymmetries. However, audit is also notoriously problematic in this context. Auditors can only verify or ‘test’ a small part of the information given and may themselves be too close to the organisation being audited or inexperienced/ unskilled in the area under examination. Moreover, the more detailed the audit the greater the cost to the principal.

Accountability in different contexts The immediate imperative for the existence of an accountable relationship may derive from a legal contract, statute, socio-cultural practices or professional norms/practices. Which imperative is present will depend upon the context that frames the accountable relationship. In terms of government science and technology service providers, we wish to argue that there are three contexts that frame accountability. These are government (and especially the civil service), science and the market. What has happened to the science and technology service providers is that they have experienced a significant shift in the dominant form of accountability, from the traditional civil service ethos and that of science to a new, market-based accountability. It is this shift that forms the focus of this chapter. In its classical Weberian bureaucratic form, governmental accountability runs in a direct genealogical line up through the hierarchy from civil servant to a government minister, who is accountable in Parliament for the actions of her/his department (du Gay, 2000). This accountability form reached its apotheosis in the UK with ‘ministerial responsibility’, where ministers could be obliged to resign on account of the (perhaps unknown) actions of a civil servant beneath them in the hierarchy. That is, ministers were accountable for the actions of their

160 Scrutinising Science

civil servants and, by implication, ultimately responsible for them. The principal in such circumstances is, in loose terms, the voter whilst the organisation of government is filled with agents (Walsh, 1995). ‘Academic’ (or Mode-1) science, in contradistinction, is predicated on a very particular form of professional accountability. In Mode-1 conditions, scientists regard themselves as members of an epistemic community. Scientific knowledge production is marked by its organisational, cultural and financial separation and independence from its ultimate consumption or exploitation (Dasgupta and David, 1994). This degree of separation, into an ‘Independent Republic of Science’, makes the construction and operation of accountability systems problematic: important stakeholders in science (the final users and those affected by it) have no power over it. Instead, they must rely on systems of trust and mutual benefit in a type of social contract between scientist and citizen. Accountability for ‘academic’ scientific work is therefore not strictly owed to any person or body outside of the scientific epistemic community. Within that community, accountability works through peer review. That is, scientists submit their scientific work to mutual scrutiny to verify its veracity, robustness, morality and conformity with the norms of scientific practice. Scientists are held accountable to their colleagues for their professional practice. Peer review might, in this way, be seen as a form of accountability (submitting work for review), audit (having it scrutinised by peers) and also embodies some sanctions (the opposite of scientific recognition). This is an admittedly somewhat utopian vision of science. But, nevertheless, it is a vision that was hegemonic for many years and is still deployed in support of the independence of science and the legitimacy of its knowledge product. The notion of accountability is, under such regimes, internal to the epistemic community and acts as an outwards signifier of the trust that could be placed in scientific knowledge products. A system where scientists are bound by tight codes of professional ethics and where they subject themselves and their work to peer review implies that the public, who are after all unlikely to be able to be good judges themselves of the quality and value of scientists’ work, should have a high degree of trust. This model of the synergistic relationship between trust and professionalism is not of course limited to scientists and can be extended to other professions working in technically complex areas, such as the law or accountancy. In academic science, scientists retain a great deal of power in that they are judge and jury in their own cause. That is, they are accountable to

Lab Reports 161

each other in a reciprocal regime. However, the espousal and adherence to widely known and accepted professional norms and standards, and the system of peer review, may serve to engender trust amongst potential users of the knowledge product. If science has become ‘useful’, this basic form of professional hierarchy, with its attendant forms of accountability, continues largely unaffected. The major distinction is that scientists also recognise a responsibility to align their work with social and economic needs. They may be encouraged and incentivised to do so by the stakeholders in their scientific knowledge product, who seek a more active form of partnership with them. In fact, we would argue that the legitimacy accorded to academic science as a result of its peer-review based internal professional accountability is of value under a regime of ‘useful’ science: scientists and their work are seen as independent, rigorous and robust. Market-based systems imply fundamentally different forms of accountability, both from Weberian bureaucracies and from professional hierarchies such as science. Central to market based accountability systems is the displacement of codified or uncodified professional practice (say of scientists) or social/political practice (as in the case of Weberian governmental forms) as the basis for the relationship between actors, by formal legal contractual obligations. A binding contract between two parties requires the acceptance of an offer to undertake something (for instance, to buy something or perform a service) in return for payment in cash or kind (that is, a quid pro quo). For instance, the offer to ‘wash your car for £1’ followed by an acceptance constitutes a (verbal) contract. The statement ‘here, let me wash your car’, whether followed by an acceptance or not, is not a contract. As such, contracts provide the legal basis on which markets (as sites where goods and services are exchanged for payment) operate. As ever, the explicit presence of payment as a quid pro quo in a contract prompts consideration of financial (and other) risks. In the situation above, there is the risk for the car washer in that they will not be paid for the work. This may prompt them to ask for payment in advance. This then creates a risk for the contractor – they may suspect that the person they are contracting will take the money but run off without doing the work. This risk might, in neo-classical liberal economics, be called a moral hazard. Moral hazards exist when there is an assumption that all actors are rational, self-interested individuals and will therefore always seek to maximise their own advantage at the expense of others.

162 Scrutinising Science

Risk of non-compliance with a contract engenders a demand for accountability to provide information on whether or not the work contracted for has been done. Depending on the perception of risk or the complexity of the task, that account may be subject to audit. For instance, in the example above, the contractor may choose to believe that their car has been satisfactorily washed, or may ‘audit’ that statement by checking themselves. The level of audit verification demanded will be dependent upon the perception of the risk involved – for instance, how trustworthy is the agent or how much is at stake if things go wrong? Some customers in contract situations may have insufficient expertise to judge the quality of the work done and therefore seek external verification. Audit in this context has financial or other costs associated with it and there is a trade off between audit cost and the risk involved in the contract. For instance, the compiling of reports or the employment of auditors all bring costs with them. Audit may not, of course, ever provide complete assurance. Formal, market-based and contractually defined accountability relationships have generated legal, regulatory or statutory provisions to ensure that accountability functions as is deemed desirable. Thus, such systems operate on the basis of the law of tort, specific statutory requirements (such as the need to produce company annual reports and accounts) as well as regulatory requirements by bodies such as stock markets. This is meant to provide mutual assurance in market systems. Whilst such regulatory measures might seem paradoxical in a free market, their existence is accepted as necessary in order to counteract the effects of any market dysfunctionality (Walsh, 1995). In other systems, such as science or traditional Weberian government, such a legal basis is not deemed as necessary because the systems operate on a high degree of trust. Thus, markets place reliance on formal and/or compulsory accountability mechanisms whilst other systems embody a certain degree of trust that accountability systems will work. There can be no genuine trust in markets and there must always be recourse to law because, neo-classical liberal economics says, individuals will always act in a rational, self-interested manner. That is, at its crudest, accountability ceases to be a matter of negotiated understandings based on (variable) trust and becomes instead a system of verification against contractual obligations. For instance, in a professional trust-based system, a patient might go to her doctor and, knowing and trusting the training and professional ethics of that individual, consign herself to their care absolutely. If the doctor is late for

Lab Reports 163

their appointment, the patient might believe that this is because the doctor is busy on some more pressing case. Accountability is only at the most general level – for the proper setting of and adherence to professional standards. Under a marketised system, a patient would be concerned to be able to verify the standards achieved by and the qualifications of the doctor. There would be a contractual obligation to offer the patient certain services and to serve him/her, as a consumer, in certain ways. A ‘charter’ of patients’ rights may underpin this. If the doctor is late for the appointment, the patient may have recourse to their rights under the contractual obligations to which the doctor is bound. The patient has become a consumer of medical services, with all of the attendant consumer ‘rights’.

Transforming accountability Because accountability relationships are highly contextualised, when systems are transformed and become market based, the associated accountability systems will also have to change. Walsh (1995) provides an excellent discussion of the way in which accountability is challenged and transformed when governmental systems shift from Weberian bureaucracies to managerialist systems predicated on NPM approaches. He argues that markets challenge bureaucracy in four key dimensions that impinge on accountability. First, that there is a separation between politicians and those who manage the services that are delivered. This significantly complicates the question of who is accountable, and to whom. Second, that marketisation challenges traditional public service ethos, thereby impacting on attitudes towards accountability. This might be crudely redrawn, for instance, as ‘we have to make a profit, we are not concerned with serving the public at any cost’. Third, managerialisation obfuscates the question of who is responsible. This is in contrast to the clean lines of accountability under Weberian bureaucracies and, indeed, scientific hierarchies. Fourth, Walsh argues that managerialisation and marketisation lead to the concentration of power amongst those at the centre that control contracts and the contracting process. Where traditional government accountability is challenged in these ways, Walsh argues, it produces a number of undesirable effects. Axiomatic to NPM is the notion that market-based accountability is more efficient than that of the Weberian bureaucracies, which it supplanted. Market accountability is argued to ‘maximise citizenship, defined as the possession of individual rights to the consumption of a specific set of services’ (Walsh, 1995, p. 214). Lister (1998) makes similar

164 Scrutinising Science

arguments about what she calls ‘economic citizenship’. Walsh posits that this economic citizenship is only of one form and that it negates the importance of collective endeavours and decision making. In short, consumer rights, it can be argued, cannot be equated with citizens’ needs and, Walsh argues, citizens have less real voice in market situations. Walsh’s key arguments here are that the separation implicit in NPM between those who are responsible for decision making (the politicians) and those responsible for ‘service delivery’ allows those responsible for decision making to abrogate responsibility. Whereas under the old regime, poor service delivery would have resulted in ministerial culpability, it now results in the apportionment of blame to the ‘manager’ responsible. Accountability in such circumstances, Walsh argues, is reduced to whether service providers have met performance indicators or not. Consequently, such performance indicators become disciplining mechanisms for managers as non-performance may result in the withdrawal of work. Thus managers ‘act up to’ the indicators, possibly ignoring other, arguably more crucial aspects of their work. This acting up has been much in evidence in the UK National Health Service, for instance, with staff choosing to clear simple cases to reduce waiting lists, whilst leaving more chronic and poorly patients to wait. Walsh does not make explicit a further major problem with such regimes: those responsible for granting the contracts are subject to only minimal, indirect and informal accountability demands with regard to their actions in selecting agents, writing contracts and monitoring performance on those contracts. Walsh further argues that NPM reduces the capacity of an organisation for organisational learning. This is because the separation between the contractor and the service provider means that the contractor (unlike in the old days) is no longer expert in the service being procured. They are merely the contract holder. Walsh did not use the term, but what he appears to be arguing is that it is difficult to become an ‘intelligent customer’. Under NPM, Walsh asserts, accountability is complicated by the separation of contracting from delivery and the length of the lines of communication. Government must exercise control at a distance, through the medium of contracts, over service delivery. This enables it to abrogate responsibility when services do not match expectations. In turn, the citizens, who can only hold government to account, find themselves frustratingly isolated from being able to demand accountability from those now ultimately deemed responsible. Unsurprisingly, governments can find it tempting to pass blame for failures to contractors, with the sacking of an agency chief or the withdrawal of a contract now displacing what would have been a ministerial resignation.

Lab Reports 165

The NPM transformation of the public sector also creates challenges in the area of audit (Power, 1997). Henkel (1991) talks of the market based state as an Evaluative State – a concept that Walsh (1995) makes good use of. She argues that the basis of accountability becomes the specification of service delivery standards that can, and are, audited. Armstrong (1989) argues that trust under managerialism increasingly comes to lie with the auditor, a theme subsequently taken up and well developed by Power (1997). Yet, as we have argued above, the notion of audit is problematic in the context of public service delivery. Audit, as a means of verifying the ‘accounts’ given in accountability relationships become problematic when applied to non-financial ‘targets’. Verifying that the financial figures in a set of company accounts are accurate is problematic enough – as evidenced by the massive Enron Corporation scandal (which led to the effective demise of the corporation’s auditors). Accountability in the corporate sector tends to focus strictly upon financial returns. Yet, financial returns are not a primary objective of government organisations or, we would argue, traditional Mode-1 science organisations. This means that accountability rests around the achievement of designated ‘performance targets’ and audit becomes verification of whether or not those targets have been met. This is likely to bring its own problems (Power, 1997) as organisations and the individuals within them seek to influence the setting of targets and ‘act up’ to the indicators of performance. Moreover, there is a further danger that the targets themselves begin to drive organisational action in unintended ways by providing perverse incentives.

3 New accountabilities in science Of course, prior to 1979, the public sector science and technology service providers in our study had a dual existence. They were both part of a Weberian bureaucracy as civil servants and also a professional hierarchy as scientists. Since 1979 most have been transformed, via NPM mechanisms, into marketised and commodified organisations. This transformation prompts consideration of how traditional forms of professional accountability in the science and technology service providers have been disrupted and reshaped by the NPM reform process. Creating new, marketised accountability regimes for a set of science and technology organisations that formerly operated under Mode-1 conditions as part of a traditional bureaucracy necessarily involves much change. The challenges and changes that bureaucracies experience in such circumstances, as highlighted by Walsh (1995), are present.

166 Scrutinising Science

In addition, there is the added complexity of science-based organisations moving from trust-based systems utilising peer review to marketised forms of accountability and audit. One major complexity is that science and technology can involve a range of high-level cognitive skills and expertise. This makes not only contracting problematic, but also accountability against those contracts. Science and technology often embodies few certainties in terms of outcomes, making it difficult to hold organisations accountable against specified targets – there may, in short, be many reasons why contracted outcomes are not achieved. A second complexity is that the degree of expertise involved in such work may make it desirable to have close co-operation between the contracting organisation and its peers and also between the organisation and the contracting department. If this co-operation is acted out, then formal accountability lines become blurred because of the absence of an arm’s length formal relationship. A third complexity arises with work that may have no discernible or immediate impact on the core visible activities of government, such as research designed to maintain the longer term national science base. Here it may be difficult or even impossible to hold organisations accountable for the value of what they have produced. Fourth, the marketisation of such organisations implies, the widening of their customer base. This means, of course, that the laboratories became accountable to a wider group of ‘customers’. However, this widening took place in circumstances where much of the organisations’ work involved giving policy advice to Whitehall policy makers, often in circumstances where the Whitehall department is entirely reliant on the laboratory in respect of its specialist expertise. Science and technology services must therefore be appropriately responsive to government needs and be seen to have impeccable impartiality. For instance, a situation where a government department was wholly reliant on highly specialised technical advice on the safety of a product from either the product provider or a government laboratory, which, under NPM pressures, had contracted with the private sector to test the product, might give rise to justifiable concern. We spoke to a number of laboratory staff who regularly found themselves in just such conflictual circumstances. Fifth, in what is always likely to be a restricted market for such services, it can be difficult to find suitable comparators when accountability judgements have to be made. Finally, auditing the performance of the providers of science and technology services is likely to be problematic. The customers for services and knowledge products, as suggested by Walsh (1995), may have

Lab Reports 167

insufficient expertise to really know what they are buying. In our terminology, they may not be ‘intelligent customers’. Non-intelligent customers are unlikely to be able to effectively gauge whether or not they are getting good contract compliance (or whether even the contract was a sensible one in the first place). Customers may employ peer reviewers to assess the scientific quality of work undertaken, but such systems are unlikely to reveal much about the NPM-accountability aspects of work undertaken – for instance, whether it was fit for actual need or whether it was good value for money. Chapters 4, 5 and 6 in this book explored fundamental changes in the organisation, vision and knowledge production processes of science under NPM reforms. Core to these changes have been the implementation of regimes of control predicated not on trust in professional practice, but on the evaluation of performance against specified contractual targets or outcomes. Accountability has been similarly and consequentially recast. The devolution of responsibility for service delivery (science and technology now being a service to be delivered) to agencies or even privatised firms operating under contracts has recast accountability in terms of formal reporting mechanisms of a financial or organisational performance indicator nature. That is, the accountability of agencies and of firms is now cast not in terms of peer review and trust based relationships, or even traditional Weberian bureaucracies, but in terms of formal annual reports and accounts. The likely effects of NPM on reporting and the reporting environment are self-evident. The introduction of customer–contractor principles and practice across government has created a network of agent–principal marketised accountability relationships. From this has flowed the need for suitable reporting mechanisms. Similarly, the creation of agencies within government has created new governance and ownership arrangements that imply more formal and explicit accountability mechanisms. The marketisation and commercialisation pressures have led to a need to align reporting structures and forms more with those of the private sector, with decreasing emphasis on traditional public sector probity (Pendlebury et al., 1992) and greater emphasis on performance review and value for money audit. Moreover, where privatisation appears on the agenda, financial reporting has a role to play in positioning organisations within any potential or actual market, and bringing the business to the attention of potential buyers. Despite extremely diverse NPM outcomes (Pollitt and Summa, 1997), the greater role given to accounting technologies, including financial reporting, is a recurrent theme. This is noticeable in the government

168 Scrutinising Science

laboratories in the UK, as elsewhere. Given these imperatives it might be expected that financial reporting undertaken would evidence some change: a shift towards treating the work as ‘business’ and greater emphasis on accountability, performance (however gauged) and selfadvertisement. Whilst these issues have been explored at a macro level (Pendlebury et al., 1992; Hyndman and Anderson, 1995), the next section of this chapter looks in detail at sequential accounts of two science and technology-based Executive Agencies which have now been privatised: the National Physical Laboratory and the Laboratory of the Government Chemist. The value in this exercise is twofold. First, it provides a micro level analysis which complements other work in the field (e.g. Pendlebury et al., 1992; Hyndman and Anderson, 1995). Moreover, in tracking individual agencies on their path to privatisation, one can consider how these organisational changes are reflected in, and reported upon, in the accounts. In a similar vein, detailed examination of the reports and accounts themselves yields valuable information for piecing together the story of what has happened to these organisations. The diverse nature of the outcomes of NPM both between countries (Pollitt and Summa, 1997) and within them means that each story can contribute rich data towards analysis. The extent to which the accounts do give valuable and useable information is something that will be assessed in this chapter.

The Laboratory of the Government Chemist LGC became an agency of the DTI in October 1989. In April 1994 Heseltine, then secretary of State for Trade and Industry, announced that he intended to establish LGC as an independent non-profit distributing company in the private sector. He also indicated that he was not averse to a trade sale if a suitable buyer who could maintain the independence of LGC could be found. In November 1995 it was announced that LGC was to be sold to a management-led consortium also comprising the Royal Society of Chemistry and venture capitalists 3i plc. The sale was completed on 31 March 1996. We consider here the accounts for the year ended 31 March 1995 and the year ended 31 March 1996. These periods coincide with the announcement of privatisation and the final year as an agency. The accounts contain a statement by the ‘Government Chemist’, who was also the chief executive of the agency. The Government Chemist is an official position with statutory responsibilities. During these

Lab Reports 169

two years the Government Chemist was Richard Worswick, who was reappointed in the post on privatisation. Worswick’s statement for the year to March 1995 was positive and upbeat: the agency had met its primary financial target of recovering full costs from customers and even achieved a slight surplus. It had also met targets on timeliness and quality of service and maintained its quality validation. Only after these comments regarding efficiency and effectiveness targets did the Government Chemist note that the laboratory ‘also made significant advances in its scientific activities’. Worswick explained that the year had been ‘challenging’: discussions about privatisation were continuing and rounds of public expenditure cuts that affected ‘traditional markets’ (i.e. the public sector) had pressured LGC into an operational review. The operational review was to lead to a major restructuring of the laboratory ‘to improve LGC’s ability to exploit business opportunities and strengthen its competitive position’. The report describes the work undertaken during 1994–95 to take privatisation forward on a basis where, paradoxically, LGC could both remain independent in order to fulfil its statutory role whilst ‘providing opportunities for greater commercial freedom’. The DTI had advertised in November 1994 for trade sale buyers and had received some expressions of interests. Nevertheless, the option of a company limited by guarantee was still being considered. In the midst of this uncertainty, Worswick was keen to stress that this was a business with future potential. ‘Strategically targeted diversification’ had yielded the winning of a major contract to supply drugs tests to the Army, for instance. Worswick maintained that such advances showed that LGC understood its markets and could promote partnerships with customers ‘where appropriate’ (emphasis added). Overall, he looked forward to privatisation, saying that the work of the agency would provide a ‘sound platform’ from which privatisation could succeed. The accounts then go on to a seven-page description of the laboratory’s business areas, in each case carefully explaining how these might be developing, indeed expanding, markets and emphasising LGC’s technical competence within them. The financial accounts show that some 45 per cent of the laboratory’s income came from the DTI, a further 40 per cent from other government departments and just 15 per cent from non-government sources. Total income had fallen by some 6 per cent during the year, but income from non-government sources had increased by some 36 per cent. Overall, there was a small surplus of £67 000 on a £15 m turnover.

170 Scrutinising Science

The net book value of the agency’s assets was £3.4 m. This did not include the land or building, which were leased from Property Holdings, a government organisation. The asset ledger had been thoroughly re-examined during the year, presumably as a prelude to privatisation, and in total the cost/valuation of assets was increased by £1.5 m by revaluations. Total assets less current liabilities were £5.1 m. Eleven staff took early retirement in the year. The gross cost of these early retirements for all years was estimated at £1.8 m. This was regarded as a DTI cost. However, and this is only made explicit in the 1996 accounts, the costs would be recharged to the laboratory through the DTI’s central overhead charging mechanism. R&D expenditure was charged to the income and expenditure account, although it was not separately disclosed there. Much of LGC’s work is routine testing rather than scientific research and development. This failure to either capitalise or separately disclose R&D makes it difficult to judge the value of the intellectual property held by LGC. The general impression therefore was of an efficiently run agency with a wide potential market which was putting its house in order prior to privatisation by addressing such issues as asset valuations, staffing levels, reviewing work practices and such like. During 1995 and 1996, prior to privatisation, LGC started publishing material advertising itself and its services. This publicity appears to have been targeted at private sector customers, with brief overviews in major European languages and important financial figures such as turnover in US dollars as well as pounds. The theme throughout was on the competencies of the staff. In addition, the publicity stated that LGC takes its name from the long-established post of Government Chemist and, today, the Government Chemist continues to fill an important role as the final arbiter in disputes relating to chemical composition. LGC is not a regulator, but it does have unique links into policy-making circles which enable it to offer a well-informed service to a growing base of customers, located both in the UK and overseas. (The Laboratory of the Government Chemist: An Introduction, 1995)1 It is evident from this that efforts would be made to capitalise on the perceived intellectual skills and positional advantages that LGC was to start its private sector life with. The new company even kept the names ‘Laboratory of the Government Chemist’, ‘LGC’ and the logo. The agency cessation accounts and reports for the year to 31 March 1996 marked the end of the 154 years that the laboratory had been part

Lab Reports 171

of government. By the time they were published, the business had already been transferred to LGC (Teddington) Ltd and its share capital subsequently sold to LGC (Holdings) Ltd. The staff, 3i Group plc and the Royal Society of Chemistry jointly owned the latter company. The business was sold as a going concern. Whilst the 1995 accounts plainly set out the agency’s stall, those for 1996 represent a definitive statement on the privatisation process. Most important here is a very detailed statement made by the Comptroller and Auditor General (C&AG). The accounts also have a further use: the sale price agreed with the consortium was contingent upon, to some extent, the financial performance of the agency during 1995–96. It is evident from the accounts that privatisation had dominated LGC’s year. The laboratory had first been assisting the DTI in providing information to potential purchasers: a press advertisement asking for expressions of interest in the sale was placed in November 1994. By the closing date for indicative proposals in January 1995, only one of the shortlist of five potential purchasers had responded. At that time two further bidders entered the frame. By March 1995 the DTI had selected two of these three to go forward with a full bid but neither produced a firm proposal. The staff-led consortium stepped into this lacuna in June 1995 by expressing an interest in the business. It had submitted firm proposals by September 1995. In November 1995 the DTI announced that it would sell the business to the consortium. The sale was completed on 31 March 1996, the end of the accounting period. Worswick explained that, following the operational review carried out in 1994–95, the laboratory had introduced major changes in laboratory layout and operational structure. This resulted in exceptional expenditure of £521 000, contributing towards the total operating deficit of £916 000. The Government Chemist noted that the agency had failed, for the first time, to achieve its primary performance target of recovering full costs from customers. It was noted in the section of the accounts headed ‘Performance Measures’ that this was due to the pressures on the laboratory during its period of restructuring. It was further noted that the laboratory had failed to achieve its target of producing 93 per cent of analysis reports within the agreed time (the attainment was 79 per cent). This failure was also attributed to the dislocation caused by restructuring. The 1996 accounts have none of the upbeat discretionary pages present in the previous year suggesting that LGC had wide and lucrative potential markets. The turnover of the agency fell during the year from £15.02 m to £14.48 m. The share of turnover contributed by the DTI

172 Scrutinising Science

rose from 45 per cent to 50 per cent. Other governmental source income decreased from 40 per cent to 36 per cent and from private sources remained nearly constant at 15 per cent, although it fell a third of a million pounds in real terms. An equipment review in the year led to a write down due to obsolescence of £262 000. The accounts for 1996 showed an improved format over 1995 in that a five-year financial summary was produced. This reveals a generally declining turnover and surplus/deficit position and declining capital employed. Pensions have proved to be a particular problem with privatisations of this type. Civil service pensions are ‘continuously funded’ – that is, the pension paid to beneficiaries come from current income rather, as is usually the case in the private sector, from pooled sums invested by the pension fund throughout the lifetime of the employment. Thus, agencies being privatised had to be sold with a newly established fund of sufficient size to yield adequate returns to meet the transferred liabilities to pay the pensions. We have been unable to discover how deep the Government had to dig into its pockets in respect of serving employees at 31 March 1996, but the annual pension contributions paid by LGC to the Treasury were running at around £800 000 a year. If the actuarial calculations were broadly correct any fund established would have to reflect not only the amounts paid but also the notional accumulated investment income on that capital. There were other pension costs too. The early retirement costs of LGC staff in the year to 1996 were £266 000. As noted above, the DTI had a mechanism for the long-term recovery of these amounts through the departmental overhead charge. However, the sale of the laboratory meant that such a recovery could not be made: some £2.237 m of accrued severance costs could not now be recouped from LGC. The C&AG’s report included in the accounts reveals much information about the sale deal itself, although the conclusions are somewhat limited. The DTI had two stated priorities in the sale. First, it sought to ensure that the laboratory was able to retain, motivate and utilise the expert staff so that they could build successful futures for themselves. Second, it wished to achieve maximum value for public money, having regard for restructuring and redundancy costs, sale proceeds, the five-year guaranteed work programmes placed by the DTI and the potential for LGC to win further government work through competitive tender. In particular the DTI were anxious that LGC should retain its statutory role and its reputation for independence, continue to support the national Measurements System for at least ten years, maintain its reputation for excellence in the UK and suitably exploit its assets

Lab Reports 173

skills and reputation. A failure to ensure this might mean that the DTI would have to recreate the LGC in another, public sector, form. The DTI therefore required the Consortium to agree that it would do all things necessary ‘or reasonably requested’ to maintain the capabilities and infrastructure of the laboratory as well as the standing of the Office of the Government Chemist. Finally, the C&AG notes that the DTI wanted to make sure that the terms of the sale were acceptable to itself and the Treasury. This leads to the vexed question of the financing of the deal. The criteria laid down are bound to make the question of valuing the business opaque and deeply problematic, especially the open-ended liability to maintain the infrastructure of the laboratory and the ‘good standing’ of the Government Chemist. The DTI first established a company called LGC (Teddington) Ltd, subscribing £11.5 m in shares. It then transferred the assets of the laboratory, the site and buildings in return for a payment from the Company of £11.5 m. The land and buildings had been valued at £7.3 m. The other fixed assets of the laboratory were valued at £3 m and the net assets at the point of sale were £4.9 m. On the same day the government entered into a share sale arrangement with LGC (Holdings) Ltd, the company established by the consortium. LGC (Holdings) Ltd purchased the shares in LGC (Teddington) Ltd for £360 000, subject to adjustment either way on calculations on the final 1996 accounts. The C&AG notes that this circuitous route was because of a perceived advantage in terms of tax certainty on the part of the consortium which imposed no disbenefit to the government. In addition, the government paid LGC (Teddington) Ltd £1.96 m to relieve itself of site repair work and renovations, and undertook to pay a further £300 000 to the company if it failed to win a particular contract. In return for this, the Company agreed to maintain the standing of the Office of the Government Chemist and Richard Worswick was reappointed as Government Chemist for five years. The Royal Society of Chemists also signed an agreement setting out procedures for monitoring the performance of the Government Chemist through an Advisory Committee of senior scientists appointed by the Society. This might be seen as a continuation of peer review accountability in some form. A framework document also signed on 31 March 1996 gave the laboratory guaranteed work from the DTI for five years of between £6.7 m and £6.85 m, subject to adjustment regarding one specific contract. LGC agreed to maintain standards acceptable to the DTI in a number of core areas. In fact LGC failed to win the specific contract so the value of work

174 Scrutinising Science

given was worth £6.85 m a year. DTI placed £6.71 m and £7.2 m worth of work to LGC in 1994–95 and 1995–96 respectively. In addition to the pension costs noted above, the DTI spent £660 000 on employing consultants and advisors to the sale, and reimbursed the laboratory management’s costs of £290 000 for the same. Finally, because the final out-turn figures for 1996 were worse than anticipated the DTI ended up paying £329 000 to LGC for the ‘sale’ of the business – a net cost to the Exchequer (after consideration of the £360 000 payment originally agreed) of £689 000 (Research Fortnight, 1996). At first sight it appears that the DTI have picked up some heavy costs with regard to this privatisation: including pensions, sale costs, land and buildings, repairs to the same and payments for the business to be taken away. In return for this, they have somewhat non-specific undertaking to maintain the core business. Ironically, given the imperative for market testing prevalent at the time, they also locked themselves into a dominant supplier for five years under the guaranteed work programme. This is despite the fact that much of LGC’s work is of a routine testing rather than highly specialised nature. There is insufficient detail in the accounts and reports to judge whether the deal was equitable. The National Audit Office audited the accounts and they ‘recognised that the values of the business’s net assets would be taken into account in a settlement of the final price’ (p. 21). The C&AG pronounced himself satisfied that the 1996 accounts were satisfactory for that purpose. This is a less than confirming statement as to the value of the whole deal. It would appear that this sale was certainly no cash bonanza for the government, and that the chief advantages would have been perceived in terms of relieving the government of future liabilities whilst letting the laboratory enjoy the freedoms of the private sector. It may also have served stated aims of downsizing the public sector. It is not apparent why the C&AG chose the annual accounts as a vehicle to make so detailed a statement on the sale. The information is certainly extremely detailed, but falls short of allowing the reader to draw conclusions as to the equity of the deal. Moreover, the C&AG stops short of reaching a conclusion on this matter, limiting himself to the assertion that the accounts form a reasonable basis on which to judge the asset value of the business, a factor in the calculation of the sale proceeds. A shift in the form and content of the accounts between these two years can be discerned. Whilst the earlier accounts are positive and stress the virtues of the laboratory, the later ones are much more justificatory

Lab Reports 175

and in the spirit of providing a historical record. The 1996 accounts were published in October 1996, by which time most people were, in all probability, looking forward to seeing how the new company fared in its first year. These two sets of accounts also serve to highlight a number of issues central to debates over privatisations of the laboratories. The disruption caused by the process is evident, as are the restructuring costs incurred by the DTI. Pensions also emerge as an issue, although there are significant gaps in our knowledge here. The costs incurred by the DTI in writing a contract that seeks to ensure the maintenance of facilities and the independence of the Office of the Government Chemist are highlighted. Finally, it emerges that the professional costs incurred were also substantial.

The National Physical Laboratory NPL became an agency of the DTI in July 1990. In April 1994 Secretary of State for Trade and Industry Heseltine announced that the work of NPL was to be privatised via contractorisation: the laboratory would become a ‘GoCo’: a Government Owned, Contractor Operated enterprise. Accordingly, five bidders were invited to tender to carry out NPL’s work under contract to the DTI. The winner was Serco Group plc, an international outsourcing specialist.2 The laboratory has been managed as NPL Management Ltd (a wholly owned subsidiary of Serco Group plc) since October 1995 and was contracted to deliver the DTI’s measurement programmes for the next five years. NPL Management Ltd pays a lease charge for use of the government owned site and the larger assets: smaller assets and the staff contracts have been acquired from the government. The contract agreed the minimum value of work to be placed with the establishment by DTI in the following five years, an arrangement deemed necessary to make NPL sufficiently attractive to potential contractors. There are complicated contractual arrangements to ensure payment by achievement milestones on various projects, the retention of moneys if performance by NPL is below that expected, and arrangements by which NPL Ltd and the DTI can share efficiency gains. The accounts we have looked at are those for the year to 31 March 1995, the last full year of agency, the cessation accounts from 1 April 1995 to 30 September 1995 and for the first period of private sector trading to 31 March 1996. In line with government rules, the agency accounts were audited by the National Audit Office, whilst those for

176 Scrutinising Science

1996 were audited by Deloitte Touche, a private sector accounting and auditing firm. The chief executive’s report at March 1995 notes that Heseltine had decided that full-scale privatisation was not suitable for NPL ‘at this time’ and that the laboratory was to remain the national standards laboratory of the UK. No reason is given but our discussions have confirmed that this was due to the fact that NPL has a pivotal role in providing ultimate metrological reference standards. It might be deemed inappropriate to place such a body in private hands. The GoCo arrangement was intended to ensure that NPL retained its independence and key role whilst benefiting from private sector flexibilities and efficiencies. The laboratory had been working since April 1994 with the DTI to find a contractor and negotiations were reported to be well advanced. In fact, the contract with Serco was signed on 13 July and the accounts were published on 17 July 1995. Somewhat like LGC, NPL had been reviewing its future role and status, prompting a new mission statement. This emphasised the centrality of NPL’s role and its contribution to British industrial competitiveness. The Chief Executive maintained that the year had produced an ‘excellent business performance’ despite the uncertainties attached to the contractorisation. The laboratory had responded to cuts in DTI funding by improved efficiency, cutting expenditure and seeking new customers. He concluded by saying The performance measures show that in 1994–1995, and indeed throughout our five years of Agency status, we have delivered our services with continuously improving quality and value for money. Overall, a performance which augurs well for our future under contract operation. The report contains 18 pages of detail on the work on which the laboratory was engaged. Again, as with LGC, these upbeat pages sought to demonstrate that NPL is well situated to take advantage of expanding markets by exploiting its considerable expertise. Such self-advertisement is best read in the context of comments by the chief executive about falling DTI revenues. Because these are the last full-year agency accounts, and because the original performance indicators were set for the five years ending 31 March 1995, the Report takes the opportunity for a retrospective review of the performance of the agency for the entire period. These are summarised at the start of the report, and also stated in more detail later on.

Lab Reports 177

The agency was set seven key performance indicators at commencement. The overall financial targets related to making the trading fund balance and meeting the Vote provision. The other five were related to quality of service (such matters as timeliness of work completed) and resource efficiency (for instance, a reduction of staffing costs). Over the five-year period, NPL met five out of these seven targets. One target not met was to increase the amount of staff time directly attributable to DTI programme work. This failure was attributed to a substantial reduction in the amount of work won from DTI, making attainment of the target problematic. Furthermore, the need to develop new markets occasioned by the falling off in DTI work, and the effort put into restructuring prior to contractorisation, had further strained the availability of staff. The second target not achieved was to reduce costs per member of staff by 2 per cent a year over the five years. This was attributed to the fact that real reductions could only be achieved by way of planned programmes over a period of time. The need to rationalise accommodation was cited as a good example here. Nor had it been possible to reduce costs in line with the sharp reduction in revenues from the DTI. Finally, planned investment, such as the rationalisation of accommodation, had been delayed pending decisions on the management of the laboratory. It was further noted that the attainment of a target to reduce administrative support costs was substantially achieved by way of a change in the accounting treatment of irrecoverable Value Added Tax (VAT), it was nevertheless asserted that there had been significant real improvements in this area. The Report also goes into some considerable details of NPL’s success in attaining the levels of service demanded by the Citizen’s Charter – reflecting the role which NPL saw itself as having in terms of providing service to the Nation as a whole. The report also comments on market testing, the chief executive’s replies to parliamentary questions and prompt payment of debts. NPL considered itself to have met requirements in all these areas. The financial accounts contain considerable detail, particularly on the history and principal activities of NPL and the story of recent events. This had involved considerable restructuring, and a number of staff were due to leave NPL on early retirement prior to contractorisation. It was noted that DTI had signalled its continuing commitment to NPL by way of a substantial work guarantee programme, with the opportunity to bid for further market-tested work and outside commercial work. R&D was separately disclosed in the accounts. It was noted that, in addition to the R&D involved in the work programmes carried out for

178 Scrutinising Science

the DTI, the laboratory also conducts its own programme of more strategic research which was likely to lead to new areas of business or a reorientation of work programmes. This expenditure was expensed to the profit and loss account and was £1.7 m in the year to 31 March 1995 (£1.6 m in 1994). NPL had a turnover of £47.7 m in 1994–95, a reduction of 6 per cent from the previous year. Seventy-seven per cent of turnover came from the DTI and a further 6 per cent from other public and European Union (EU) sources. The comparable figures for the previous year were 81 per cent and 5 per cent. Private sector income had risen from 14 per cent to nearly 17 per cent in the current year. The DTI reduced its spend with NPL by nearly 10 per cent in the year. The surplus for the year, after notional interest charges, was £1.856 m, a slight increase over the previous year. The net asset value of the business was £23.8 m. This did not include the land and buildings, which were leased from the Government’s Property Holdings, but did include fixed assets at current cost. Although there were no early retirements during the year, there had been a charge through the DTI overhead recovery scheme of £588 000 in respect of early retirements in previous years. The reports and accounts for this year show an agency which has had substantial success in meeting performance targets, but which had begun to struggle with falling revenues and the requirement to restructure itself for contractorisation. There is no real explicit statement as to why contractorisation would benefit the organisation other than that it would allow some flexibilities and efficiencies. Serco group plc took over the running of NPL on 1 October 1995. The final accounts for the Agency, therefore, ran from 1 April 1995 to 30 September 1995. By the time they were published in May 1996 the laboratory had been contractorised for nearly seven months. Science agency accounts tended to be published within four months of the yearend, yet this longer period at cessation is noticeable with other laboratories too. For instance, the TRL was privatised on 1 April 1996, but the final agency accounts had still not been published by June 1997. Whilst there may be sound reasons for these delays, it does have the disadvantage that events and concerns have moved on, and the final accounts can almost be something of an afterthought. The retiring chief executive’s report in the cessation accounts is terse and merely announces that Serco Group plc did indeed become the contractor and thanked the staff for their hard work. A statement of achievement against performance indicators then follows this. NPL had only one principal financial target during its final few months as an

Lab Reports 179

agency: to recover full costs from customers after allowance for the special costs associated with the move to contractorisation. This was not achieved because the laboratory was unable to adjust with sufficient speed to a further sharp reduction in DTI income in the period. The previous agency-specific performance indicators were in abeyance. The rest of this section comments only on adherence to the Citizens’ Charter, market testing and prompt payment. The comments here are rather bland. The foreword to the financial accounts themselves add only a limited amount of information to those for the previous year, although they do note that progress in negotiating the rolling work programme with DTI on which NPL substantially depended was impeded in the year by the contractorisation uncertainties. The accounts state that DTI retained ownership of the site, buildings and fixed assets over £3000, which were then leased to NPL Management Ltd. Staff and minor equipment had been transferred. The current assets and liabilities of the laboratory were valued at the day following the contract date and a price negotiated. As these prices have been calculated by reference to the contract, rather than to the accounting policies of NPL, there is in most cases a significant difference arising. These post-balance sheet events have been fully reflected in the accounts. The contract, of course, was not in the public domain so it is not possible to discern if the price was a fair one. Finally, the forward notes that the DTI had committed itself to a five-year programme of work with the laboratory. Matters such as R&D were similar levels to the previous year. The laboratory made a deficit of £3.111 m in the period on its income and expenditure account. However, after an exceptional gain of £2.632 m arising from the sale of minor assets was taken into account3 the deficit was reduced to £479 000. The £3.111 m deficit was stated after the following charges: an adjustment (in the NPL’s favour) of £1.35 m for revised work-in-progress provisions, compensation to the contractor for untaken holidays £323 000 and £694 000 incurred in privatisation costs but not recovered from DTI. This makes the deficit attributable to trading activities some £744 000. Turnover from the DTI fell from 77 per cent of the total to 73 per cent and was £16.1 m for the period. During this period part of the laboratory’s work involving the provision of calibration services as part of the National Measurement

180 Scrutinising Science

Accreditation Service (NAMAS), was hived off to a new independent body. The cessation accounts show NAMAS income separately. The figures reveal that, unsurprisingly, over 40 per cent of NPL’s private sector income was from NAMAS work. This means that NPL entered its period of contractorisation with considerably depleted income from the private sector, casting some doubt over the notion that the laboratory was in a strong position to exploit private sector markets utilising its new private sector efficiencies and competitive advantage. Staff numbers fell in the final period of agency from 821 in 1990 to 535 by September 1995. With the transfer of the remaining staff the government also had to establish a pension fund. Again, we have been unable to ascertain how much this fund would have been, but pension contributions from NPL to the Treasury in the year were in the region of £2 m. This gives some indication of the likely scale of the fund established. As with LGC, the DTI picked up the bill for future costs for those who had retired early whilst the laboratory was an agency. Because of the contractorisation it would no longer be possible to recover these amounts, which totalled some £2.9 m, through the departmental overhead charge. The C&AG’s detailed account of the contractorisation process notes the management and DTI had previously decided that NPL had to be prepared for privatisation by restructuring to tailor the laboratory’s size to reducing demand for services. The DTI paid £1.84 m to NPL in 1993–94 as contribution towards repositioning the laboratory and helping it to improve its commercial performance. As with LGC, the DTI was reported as wanting to retain and motivate expert staff within the laboratory so that they could forge ‘new and successful futures for themselves’. At the same time, DTI wanted to achieve maximum value for money out of contractorisation having regard to the restructuring, redundancy costs, sale proceeds and the five-year guaranteed work programme. DTI wished to ensure that: the contractors maintained NPL as an important national resource, that government continued to get access to the laboratory’s unique resources during and after the contract period, that NPL maintained its world-class standing, played a part in European measurements system, and exploited its assets, skills and reputation commercially. The DTI also wanted the final financial arrangements to be satisfactory to them and to the Treasury. The final contract gave NPL Management Ltd £145.7 m in DTI work over five years, an average of just over £30 m a year. Any profits from this and commercial work was to be shared with DTI according to an agreed formula.4

Lab Reports 181

The DTI spent £1 m in consultant and advisor costs to move NPL to the private sector and also reimbursed NPL £650 000 in administrative costs arising through contractorisation since 1994. The accounts to September 1995 treated NPL as discontinued business for formal accounting standards purposes, but noted that a going concern basis was still appropriate because of the contractorisation. The accounts for NPL Management Ltd to 31 March 1996 take this story forward. In contrast to the public sector publication of the previous year’s accounts, we had to obtain those for 1996 from Companies House. The 1996 accounts represent yet further changes in presentational style. These are very basic accounts, with limited informational content: for instance, there is now no cash-flow statement on the grounds that such a statement is presented in the consolidated accounts of Serco Group plc. These are treated as commencement accounts and therefore there are no comparator figures for the earlier period. It is therefore difficult to discern what has happened to either the valuation of assets or the work-in-progress acquired. The Review of developments is extremely brief in comparison to previous years, and notes that the laboratory made a loss of £828 000 in the first period of trading due to ‘phase-in’ costs. It was argued that there would be a return to profit in 1996–97 and that the company was ‘expected to show a degree of organic growth’. This rather muted claim stands in contrast to the confident assertions made by the DTI that contractorisation would open up great opportunities for the laboratory. There is a very interesting, but possibly irresolvable, aspect to the 1996 accounts. Trade debtors suddenly leapt from £3.6 m in March 1995 to £10.3 m in September 1995 at cessation. By March 1996 they are back down to £2.4 m. However, by this time the company’s parent, Serco Group plc, appears as a debtor to the extent of £8.2 m. Similarly, accruals and deferred income (described as payments on account) have risen from £1.5 m in September 1995 to £8.6 m in March 1996. The company has also acquired a significant overdraft and bank loans totalling £2.4 m by March 1996. The absence of a cash flow statement and the mismatch between NPL Management’s March year-end and the December year-end of Serco Group plc mean that it is not possible to discern events here. The Serco Group plc accounts for the year to 31 December 1995 reveal very little of substance about the new NPL contract except for the fact that £1 m was ‘transferred to the Group’ on being awarded the NPL contract in respect of ‘contract termination’ liabilities for staff. The source of these funds is not clear from the accounts.

182 Scrutinising Science

The NPL accounts to March 1996 lack the degree of detailed information and reporting on performance which distinguished those for the period of agency. Given the format, it is questionable whether these accounts were intended for wider consumption, the consolidated accounts being altogether more informative about the group as a whole, but providing scarcely any information about NPL individually. Whilst such a change in tone and content might be expected given the change in ownership and governance, it is worth dwelling upon the extent to which the new NPL accounts do actually meet wider stakeholder need. The contractorisation process was chosen because it was recognised that NPL should remain a national asset, albeit one enjoying the efficiencies and freedoms of operating in the private sector. That implies that there are strong public stakeholder interests in the laboratory still, which cannot be denied given the centrality of its role. However, the laboratory is no longer directly accountable, through its annual reports and accounts to the public to the extent that it was as an agency. It does have a detailed and closely controlled contract with DTI for the provisions of services. There can be no doubt that DTI has a vested interest in monitoring that contract given the sums committed to the laboratory for the five years from September 1995, the prospects of ‘profit-sharing’ on the basis of NPL efficiency gains and the importance of the laboratory to the DTI’s mission. However, such accountability processes are not explicit and open in the manner of annual reports and accounts. It might therefore be concluded that the direct and open accountability to which NPL was subjected has been significantly reduced by contractorisation, and that there is no obvious substitute. These three sets of accounts for NPL reveal, as was the case for LGC, that this was, in all probability, no cash bonanza for the DTI. Once again, the DTI appears to have picked up heavy costs for early retirements, transaction costs for the contractorisation and restructuring costs. Beyond that it has committed itself to a five-year expenditure programme which runs counter to the trend of declining expenditure in the area. Further, it might be anticipated that DTI will incur heavy transaction costs in monitoring the contract with NPL given that the organisation is now at arm’s length and therefore, sensibly subject to a lower degree of trust. This reduction in trust may also be augmented by the reduction in accounting disclosures by the contractorised laboratory. These expenses have not been costed in the accounts.

Lab Reports 183

4 Discussion and conclusions These two case studies exemplify the transition from Weberian bureaucratic/academic science to a market-based form of accountability. They also give empirical basis to a number of the points made by commentators such as Walsh (1995) and Henkel (1991). Here are two organisations that have shifted their accountability form from the scientific/bureaucratic to the market type. Rather than the old labs, responsible for their conduct by traditional civil service routes and the peer review of the scientific community, both LGC and NPL were obliged to produce agency annual reports detailing their performance against specified objectives and accounting for themselves financially. At times, issues of financial, commercial and organisational (as opposed to scientific) performance appeared to dominate what was included in the reports. These reports were, quite blatantly, used as a means of either ‘selling’ the organisation in the run up to privatisation or as a means of, ex post facto, legitimising government decisions with regard to the privatisation process. As if to underline this, disclosure in the accounts is high, up to the point at which a sale or contract was agreed and the cessation accounts provide a fairly complete record of events. In contrast, the first private sector accounts produced in the case of NPL indicate a diminution in the amount of information available. It is of note that access to organisations at the start of this study was ensured via the Cabinet Office. Once LGC was privatised the company declined to take any further part in our study. Whilst these changes may be appropriate in strict ownership–governance terms, it may do little to satisfy wider stakeholder interests. That is, the process of privatisation formally reduces the legitimate stakeholders in the organisation to whom accountability is owed. In both cases, government remained an important stakeholder in the organisations. Yet the distance between the public (as the ultimate users of the work done) and the service providers, intermediated by government as the contract holder, adversely impacts on the public’s position as a principal, as Walsh (1995) predicts. This leads to consideration of who the real principal is in such contracting relationships. The very ‘commercial confidentiality’ of much contracting, who does the contracting and its remoteness from the public, means that, de facto it is the government and not the public. This in turn means that the agent is accountable to the government but, in some sense, the government

184 Scrutinising Science

does not become accountable to the public for its work of contracting. Failure becomes the failure of the contracted organisation, not of the government. Yet this begs the question of government’s culpability in participating in poor contracts. One thing that these reports and accounts highlight is the artificial nature of the supposed arm’s length customer–contractor relationships. This is marked not only by significant assistance to help with restructuring costs, but also the guaranteed work programmes that followed privatisation. The public good nature of much of this work evidently places government in a weak position as a proxy customer. In these specific cases it has become reliant on private sector companies to provide services, and has to monitor their performance in technically advanced areas without the benefit of former advisors (i.e. the laboratories themselves). That is, the capacity for organisational learning and expertise on the part of government is extremely circumscribed. This lack of expertise, one might speculate, could lead to problems in the effective monitoring of contracts. These final accounts of public sector organisations provide skilled readers with much valuable information. What is problematic is that these are not only documents without a wide readership, but also require a great deal of skill in interpretation. Existing evidence suggests that usage of such documents is limited (see e.g. Coy et al., 1997). In summary, privatisation has meant that open reporting mechanisms dealing with relationships imbued with a high level of trust and public service ethos have been replaced by private sector corporate reporting based on unpublished contracts. Accountability to departments is now enacted in private through those unpublished contracts. Many of the functions carried out by these laboratories are in the national interest – this is the very reason why government continues to fund them. Yet the stakeholders (i.e. the businesses and people of the UK) must now rely upon the DTI to exercise appropriate control over the companies as customers; strong financial reporting and public accountability links having been lost.

8 The Future of Science?

1 Introduction During the past 20 years, some of the UK public sector’s oldest and most idiosyncratic institutions – the GREs – have experienced fundamental and purposive change. That change has occurred at three intertwined levels: organisational forms, vision and knowledge production processes. The scale, and at times ferocity, of this reform programme could scarcely have been envisaged 20 years ago. Change started when the Conservatives came into power in 1979 and has been continuing, albeit with a slightly different ideological emphasis, under successive Labour governments ever since. What marks this change from the previous development of the GREs is its intentionality. Previous development of the GREs was largely organic in nature. In sharp contrast, the reforming zeal of the Conservatives was given real imperative by the neo-classical liberal economic fundamentalism of NPM. This acted as a kind of ideological blueprint for a wave of reform that consumed most of the public sector, including science. In this final chapter, we first of all summarise, in Section 2, the nature of change that has occurred to the GREs along the three axes of organisational form, vision of science and knowledge production process. In Section 3 we discuss the nature of the change process that has occurred. In Section 4, we offer some thoughts on how this area of science and technology service provision will develop in the future.

185

186 Scrutinising Science

2 3-D change The GREs had a substantial history, a distinctive place and certain repute by 1979. They were an entrenched part of the Whitehall apparatus of government, embodying the principles of bureaucratic government. In addition, they also embraced what Ziman (2000) has called ‘academic’ science. That is, their notion of science conformed as closely as possible to Mertonian ideals, whilst they still professed to exist to be ‘useful’ to government. The net result of this is that these were quite discrete areas of government, governed by their own set of professional norms and possessed of knowledge superior to that held by those who held the purse strings. Consequently, the actual degree of control exerted over them by government was really quite minimal. Science was seen as a professional and, in some sense, creative activity that should not be constrained by financial and other managerial impositions. Science is a set of social practices. As such, what it is at any time is a product of how it is conducted, the norms and beliefs and value systems that sustain it. The GREs pre-1979 existed in a world where ‘academic’ science was the norm, perhaps mildly attenuated in some instances by an injunction to be ‘useful’ to industry or the wider society. As such, it is scarcely surprising that the GREs conformed to those norms – the labs were a product of their time and place and there really only was one way to do science. This vision of science – as ultimately Mertonian – was both sustained by and sustaining of certain organisational forms. Thus the GREs had to be independent if they were to be science organisations (Dasgupta and David, 1994). In turn, this vision and organisation led to a classic academic mode of production. By the 1960s and 1970s, scientists themselves, together with some in government, had begun to espouse a somewhat different vision of science. This was, that science could and should be ‘useful’. This new vision of science did not envisage any change in its fundamental Mertonian nature. Rather, science sought to emphasise its utility. A cynical view might be that, as science grew increasingly complex and expensive, it became all the more imperative to secure public support for the enterprise. The private sector was not an option for support here because commercialism ran directly counter to the norms of academic science, with its commitment to producing open and public good knowledge. A more charitable interpretation is that scientists genuinely wished to be of public service, renewing and committing to the social contract between themselves and the public. The reality is probably a combination of the two.

The Future of Science? 187

Ironically, it may be the espousal of ‘useful’ science that sowed the first seeds of the possibility of reform. In ‘useful’ science is the germ of an idea that science should serve industry and the public. When this was put together with NPM approaches to ensuring that all public services should be efficient, economic and effective and that they should, above all, support and sustain the UK’s economic competitivity, the scientists’ cupboard was bare of defence. This belief in the nature of what science was, we think, almost essentialist in the period prior to 1979. Those in government, scientists and others could not conceive of science in any other way. Consequently, change was largely organic because no fundamental rifts with the past, no new departures, could be conceptualised because science wasn’t like that. What was not envisaged, even as late as the 1990s, was that science was not a given but a set of socio-economic and cultural practices. These could, with the right policy tools, be changed, and by that time had been, thereby fundamentally altering what science was, at least within the domain of the GREs. NPM and the approaches to reform that it engenders was key to this process of change. Its neo-classical liberal economic approach brooked no opposition. Science might be a set of socio-economic and cultural practices, but the economics of the free-market was adopted with axiomatic zeal by the Conservative governments from 1979 to 1997. Despite its theoretical, some might say ideological underpinnings, NPM did not provide a ‘one size fits all’ policy for the reform of the public sector. Rather, the diversity of outcomes and the difficulties encountered in achieving them indicates that this was an approach or a toolbox, not a blueprint for a grand design. The fact that much reform was so dependent upon the commitment of certain key individuals – notably Michael Heseltine in government – is indicative that this was not necessarily a technocratic and rational process. The personal, even ideological, element is even more marked in the shift from agencies to privatised entities than it was in the transition to agency status for the GREs. NPM engendered change in two dimensions: in the organisational form of the GREs and in the vision of what sort of science they should be doing. Organisationally, reform meant a transition from a fairly homogeneous set of institutional forms (despite the variety of functions and departmental ‘owners’) to a heterogeneous set of arrangements. This heterogeneity reflects the disruption of pre-existing bureaucratic standardised forms and a willingness, or even determination, on the part of policy makers to engender change in whatever way possible.

188 Scrutinising Science

Neither the shift to agency status nor privatisation can be seen as tinkering with these organisations. These reforms were fundamental and struck at the essential core of public sector science. The shift to agency status embodied a reorientation of the GREs towards a customer–contractor basis, reflecting a marketisation and commercialisation of their activities. The nature of the reforms meant that trustbased relationships were disturbed and new forms of accountability created. Similarly, privatisation was not simply the transfer of ownership but implied radical changes in the nature of the organisations, from their mission and purpose, through the sort of work that they did, to their imperatives and forms of accountability. The change in the second dimension – the vision of science – was equally fundamental. In a sense, this process had begun with the shift towards government scientists attempting to assert their utility, either out of genuine professional concern or a desire to defend and extend budgets, or both. This established the principle that GREs were supposed to serve. The addition of non-contestable (in the Government’s mind) NPM approaches on top of this led to the inexorable conclusion that science in government had to be re-visioned as a market-led service activity if it was to fulfil its prime function. There was no alternative. In fact, actualisation of this vision proved somewhat more problematic for quite pragmatic reasons. Whilst agencification was quite successful in giving a new service-orientated vision to the GREs, attempts at privatisation were frustrated by the fact that, for the most part, these were not organisations inherently suitable to such transformations. This did not stop successive Conservative governments, in their reforming zeal, from making the change happen. But this was achieved at considerable cost to the Exchequer and, in reality, the privatised GREs were not turned into successful commercial organisations in any real sense. Notwithstanding this, the Conservatives’ vision of a marketised form of science and technology service provider was absolutely essential to the process of reform that did occur in that it did drive the change process, providing its rationale. Despite the difficulties in execution encountered by successive governments, the actual reform of the organisation of science and the reshaping of its vision led to a shift in the mode of scientific knowledge production in the GREs. The science and technology services provided by the GREs became commodified services to be delivered, not the practice of Mertonian science. This is evident in the working arrangements that existed in the laboratories after reform and also in the accountability arrangements, which now stress financial and organisational performance above the practice of science.

The Future of Science? 189

That this shift to a new mode of scientific knowledge production was successful, where previous exhortatory attempts at the creation of ‘useful’ science had failed, is indicative of the change both in organisational form and vision that NPM simultaneously facilitated. This transformation in modes of knowledge production has, we would argue, changed the notion of what science is. This is because science is a socio-economic and cultural practice. If both the intent of such practices and their modes of organisations are reformed then the way in which they produce knowledge will inevitably be consequentially affected. If science produces knowledge in different ways, for different users and under different social conditions then science itself has been transformed. This transformation of the science of GREs has been mirrored in many aspects of scientific practice – commodification of science is not unique to this context (Baskaran and Boden, 2004). The net result has been to disrupt the pre-existing academic science model that held fairly homogeneously across all of the GREs and instead institute a series of arrangements, organisations and modes of production that are responsive to market pressures, not traditional scientific ones.

3 Change Once you’ve decided, don’t delay. The best is the enemy of the good … a good plan violently executed now is better than a perfect plan next week. (Gen. George S. Patton Jr) It is important at this juncture to reflect on how the mode of change was transformed also by the NPM approaches of Conservative governments. Prior to 1979, science had developed organically as an activity. At times responsive to changing socio-economic and cultural factors, it had grown in its own way and was largely self-governing. By 1945 science in the UK had grown to an acknowledged crucial importance to both industry and government, largely by its own design. This in turn attracted significant public funding. Science thereby became inextricably bound to government in terms of resources and role, enthusiastically embracing the notion that it was ‘useful’. But, prior to 1979, such a relationship did not entail being beholden to government or its subject. Science, including the GREs, remained in the ‘Independent Republic’ of academic science. What changed about the ‘nature of change’ after 1979 was that an energetically reforming government decided that it could change things – everything in fact, including science itself. Government, in its

190 Scrutinising Science

new managerialism, saw itself as the master of professional processes such as science rather than the facilitator. This approach extended to other professions in the public sector as well of course, including health and education. NPM gave the necessary toolbox to allow the government to see itself as being a manager in charge of the state enterprise. In this sense, change became purposive, intentional and driven by policy. Government set agendas and stuck to them. Whilst having a cunning plan and executing it ruthlessly, might be highly commendable, there are problems to consider with reforming agendas which have an axiological nature, such as that put in place from 1979. The establishments so radically transformed under successive governments during the past 20 or more years had taken many years to establish and had a central place and role in government. It has not been the objective of this book to assess how effective they were in that role. It is clear that the GREs were looking somewhat jaded by 1979 and, by the 1980s, were suffering from the financial stringencies imposed by government. Those working within the agencies readily proffered information to us indicating that agency status had brought a new sense of mission and direction to their organisations. The same respondents also felt that privatisation was a deeply damaging event that was likely to result in the dismantling of important national assets and expertise. In that sense, there could be no return to the old GREs, even as agencies. Simultaneously, recent scandals over both BSE and the 2001 foot and mouth epidemic (Cm 5263, 2001) have indicated that government does still have a need for the services of scientists in a quite traditional way. Further, it is questionable whether the successive Conservative governments did actually achieve their professed desirable outcomes of turning the GREs into successful private sector market-led enterprises where possible, and agencies adhering strictly to the triple maxim of economy, efficiency and effectiveness when privatisation was not possible. As far as the agencies are concerned, there are no pre-agency benchmarks against which to gauge improvement, although the agencies themselves do confirm this. However, it might be unlikely that officials, liberated from tight civil service control by agency status and under strict performance surveillance would say that things were not better. With regard to privatisations, identification of achievement of desirable outcomes is even more problematic. Certainly, all of the privatisations involved significant cost to the Exchequer. Financial opacity surrounding these deals, and the fact that assessment of their viability was dependent upon government statements of policy intentions, make it difficult to assess any longer term benefits to government that were

The Future of Science? 191

evident at the time. Certainly, it was evident that these were not eminently marketable businesses – this is why government paid such a high price to remove them from the public sector. Given this, there appears to be an inconsistency between the government’s persistence with privatisation and their stated desirable outcome of sustaining and ensuring the development of the laboratories as viable enterprises capable of still rendering service to government. It may be that one desirable outcome that overrode all others was the imperative to reduce the size of the public sector. The GREs certainly made their contribution to such an outcome. It is possible here that government was so deeply uncritical of its own axiological reforming agenda that it could not countenance that some parts of the public sector, quite simply, belonged there. There is certainly evidence from the Prior Options Reviews and Scrutinies, that swept like a tidal wave over the GREs, that public sector ownership was a thing of last resort. Finally, a ubiquitously applied form of new public management drove government’s radical reforming agenda. This agenda paid scant regard to the individual circumstances of the areas of government work to which it was applied. It was, at times, as if the application of management practice and market remedies were a panacea for the parlous state that the UK public sector had declined into by 1979. We have found little evidence to suggest that any real regard was paid to what made science different from the more prosaic functions of government. Like any other service to be provided, science and technology could, it was reasoned, be provided more cheaply and efficiently by the private sector or organisations emulating the private sector. The fact that science was a relatively late target is due, our respondents thought, more to do with the relatively low levels of expenditure involved than any sense that science was inherently different.

4 Scenarios for science The heterogeneous nature of the outcomes that have resulted from the NPM policy-driven changes that have been instituted in the GREs during the past 20 years suggests that the future is impossible to predict with any certainty and that speculation is a dangerous enterprise. Yet the newly constituted science and technology service providers are still subject to policy-driven reform, such as recent moves to make QinetiQ enter into a substantial public–private partnership. Hence, it is possible to imagine a variety of futures for the provision of science and technology services to government. Future outcomes are likely

192 Scrutinising Science

to be as diverse as the products of the NPM policy-driven reforms of the past two decades. Key determinants of what the future holds are likely to include problems and issues such as public health scares or similar policy crises and the effects of reform to date on national economic competivity. In addition, given the ways in which some surviving science agencies have enmeshed themselves with similar bodies abroad, especially in Europe, it is likely that developments there will also have an impact on UK developments. Government will, inevitably, continue to have requirements for science and technology services – on its own behalf or as a proxy customer. Constraining factors on the old laboratories’ continuing abilities to meet government demands for such services are likely to include the reorientation of scientific work efforts towards meeting the needs of private sector customers (whether the organisation itself is privatised or not). These new orientations may not be congruent with government needs. In similar vein, the need to service private sector customers may mean that government ceases to be central to their customer focus. Finally, the unimpeachable independence of the old GREs may now be fatally compromised, and sourcing such services from outside the UK may not ameliorate this particular problem. We can imagine three likely sorts of developments given this situation – there are probably more. First, some future government may decide to reverse the NPM process to a greater or lesser extent. This would involve some ‘recapture’ of the old GREs. However, such moves might encounter resistance from the organisations themselves. Government might have to compensate some of the facilities that it paid so dearly to privatise just a few years before. The agencies and privatised labs might resent what could be construed as the (re)imposition of a civil service straitjacket. This reaction might be especially marked amongst the senior managers who have enjoyed considerable freedoms and enhanced personal financial rewards under the NPM-defined regime. Nor might it be too helpful to subject the labs, which have endured massive shock waves of change, to yet further reform. Second, it might be that some future government decides to create a new institutional form, the primary objective of which is to respond to government need for science and science-related services. This might take shape as a series of departmental research centres of excellence that utilise public–private partnerships to provide financing and access to expertise for the labs. These new organisations could be designed to work across the spectrum from basic research to service delivery to a range of end-users, including not only government, but

The Future of Science? 193

also industry and (with government acting as a proxy customer) the public. However, within the constraints of civil service structures, such new organisational forms might face considerable problems. Public–private partnerships can be problematic to establish because of the high price for involvement demanded by the private sector. Recruiting staff of sufficient calibre might also be problematic because of the constraints of civil service rules. All of this would take place in the context of a science base seriously depleted in the NPM interregnum. Or third, government might simply ignore the issue of science and technology service provision and take no action beyond immediate firefighting of any policy issues that arise. The meeting of any unmet demand for science and technology services might, in such circumstances, be achieved by organic adjustment in existing systems. For instance, the persistence of notions of academic science in the universities might lead these institutions to fulfil more of the functions of the old GREs. In cashconstrained times, this might also provide a useful source of revenue for the universities. However, any development such as this is likely to have implications for the broad institutional landscape of science in the UK and for the science base itself. Such change might impact the research culture of the universities if they shift to become service providers to government. There might also be an adverse impact on the training and development of scientists if universities start to produce generations of workers who had little idea about the more basic end of scientific enquiry and who tended to equate science with science-related services. GREs developed slowly and organically over a long period and directly in response to government’s perceived need for science and technology services. The considerable expertise and capacity that was once represented in the GREs has now been dissipated. The new organisational forms, visions of science and scientific knowledge production processes that were created by policy-driven change that we have explored in this book have yet to be tested. What is clear is that many of the new arrangements have been created sometimes more by accident or short-term expediency rather than by careful management-led design. This means that there may be little rationality or intentionality in the current design and operation of science and technology service providers to government, despite the supposed rational and intentional approach of NPM. The reasons for this paradox lies, we would argue, in the particular nature of the science and technology work that the GREs did and which government still needs, which frustrated the NPM enterprise. Finally, the very heterogeneity now present in the system will, inevitably, make effective management of this area of work highly problematic.

Notes 1 The Changing Nature of Scientific Organisation 1 In the case of the Royal Society the candidate had to have advanced knowledge by conducting experiments. 2 When John Owens died in 1846 he left £100 000 for setting up a college to teach such learning and sciences as were usual in universities. The fortunes of the college changed following the vision of one man – Henry Roscoe, a professor in Chemistry. He managed to persuade Thomas Ashton, the cotton manufacturer (and like Roscoe, an ex-Heidelberg student), that the college could be useful to industry. After Ashton was won for the cause, £200 000 was raised from industry by subscriptions.

2 Historical Context 1 In this regard, it is interesting to recall that in 1939, J.D. Bernal argued that: For political as well as economic reasons there is … on the part of Governments an extreme reluctance to take any active part in research on the application of science. If a Government laboratory arrives at any result which could have commercial value, it is not in a position to exploit it, rather it is definitely prevented from either selling the process to an industrial firm or operating it on its own account. The general principle is laid down that in no circumstances, outside military requirements in war time, should Government Departments compete in production with industrial enterprise. The inevitable result is that the attitude of Government institutions towards applications of research is almost entirely negative. (Bernal, 1939, p. 148)

3 New Public Management 1 Interestingly, this echo of the 1970 proposal by Tony Benn at Mintech passed unremarked by the report’s authors. 2 Civil service pensions are not funded by a trust fund of money accumulated throughout the period of employment. Instead the payment of pensions to retired civil servants is continuously funded from current income. Of course, if the staff are transferred to the private sector, then the government must allocate a sum to be placed in trust to accompany the staff, out of which their pensions will be paid after retirement. This can present quite serious cash flow problems for government.

194

Notes 195

4 The Organisation of Science 1 Mutual trading organisations are not companies as such but mutual associations where members trade goods and services only between themselves. 2 We understand that Serco’s distant origins are as a subsidiary firm set up to arrange the distribution of cans of film to cinemas. 3 The source for this information is an interview with BRE staff, as the accounts of BRE are subsumed into the accounts of the Foundation for the Built Environment and this detail is no longer available. 4 The Carlyle Group is a US private equity group whose European Chairman was in December 2002 John Major, former British Prime Minister. Carlyle is one of the largest venture capitalist firms in the world and own several US defense companies.

5 Science and Markets 1 ‘Although BRE is widely respected, and has particular strengths in many areas relating to Building Regulations, it must in future win work without any special government support or favour.’ Fairclough Report, Part 2. 2 This includes the World Meteorological Organisation whose 179 member countries freely exchange data 24 hours a day, 7 days a week.

7 Lab Reports 1 Laboratory of the Government Chemist: An Introduction (1995), Teddington: LGC, page 1, emphasis added. 2 Serco won the contract in collaboration with AEA Technology and Loughborough University as subcontractors for particular tasks. 3 The acquisition costs had been previously charged to the income and expenditure account. 4 This is not stated in the accounts, but involves the ‘distribution’ to DTI of additional staff days which they can ‘spend’ at NPL.

Bibliography Advisory Board for the Research Councils (1987), A Strategy for the Science Base, London: HMSO. Anderson, P. W. (2000), ‘Snowballing, but still very much in control’, Times Higher Education Supplement, 27 October: 30–1. Armstrong, P. (1989), ‘Management, labour process and agency’, Work, Employment and Society, 3(3): 307–32. Arrow, K. (1962), ‘Economic welfare and the allocation of resources for invention’, The Rate and Direction of Inventive Activity, Princeton: Princeton University Press. Ashby, E. (1958), Technology and the Academics: An Essay on Universities and the Scientific Research, London: Macmillan. Barber, B. (1990), Social Studies of Science, New Brunswick, NJ: Transaction Publishers. Barnes, B. (1974), Scientific Knowledge and Sociological Theory, London: Routledge & Kegan Paul. Barnes, B. (1977), Interests and the Growth of Knowledge, London: Routledge & Kegan Paul. Baskaran, A. T. and Boden, R. (2004), ‘Science: a controversial commodity?’ Science and Technology Studies, 9(1). Berkowitz, S. D. (eds) (1988), Social Structures: A Network Approach, Cambridge, Cambridge University Press. Bernal, J. D. (1939), The Social Function of Science, London: Routledge. Blackett, Lord (1967), ‘Report of address to the Parliamentary and Scientific Committee’, Nature, 213(5078): 747. Bloor, D. (1976), Knowledge and Social Imagery, London: Routledge & Kegan Paul. Boden, R., Gummett, P., Cox, D. and Barker, K. (1998), ‘Men in white coats … men in grey suits: new public management and the funding of scientific research in the UK’, Journal of Auditing, Accounting and Accountability, 11(3): 267–91. Boudon, R. (1986), Theories of Social Change, Cambridge: Polity Press. Boyne, G. A. (1996), ‘The intellectual crisis in British public administration: is Public Management the problem or the solution?’ Public Administration, 74, Winter, 679–94. Cadbury, A. (1992), Report of the Committee on the Financial Aspects of Corporate Governance, London: Gee, London. Cd 9230 (1918), Report of the Machinery of Government Committee under the chairmanship of Viscount Haldane of Cloan, Ministry of Reconstruction, London: HMSO. Centre for Environment, Fisheries and Aquaculture Science (1997–98), Annual Report and Accounts, London: HMSO. Centre for Environment, Fisheries and Aquaculture Science (2000–01), Annual Report and Accounts, London: HMSO. Charlesworth, G. (1987), A History of the Transport and Road Research Laboratory 1933–1983, Aldershot: Gower Publishing. 196

Bibliography 197 Clark, B. R. (1995), Places of Inquiry: Research and Advanced Education in Modern Universities, Berkerley: University of California Press. Clark, B. R. (ed.) (1993), The Research Foundation of Graduate Education: Germany, Britain, France, United States, Japan. Berkerley: University of California Press. Clarke, Sir Richard (1973), ‘Mintech in retrospect’, Omega, 1(1 & 2): 25–38 and 137–63. Cm 2550 (1993), Realising Our Potential: A Strategy for Science, Engineering and Technology, London: HMSO. Cm 2991 (1995), Public Sector Research Establishments, Government Response to the Multi-Departmental Scrutiny of Public Sector Research Establishments, London: HMSO. Cm 5263 (2001), Response to the Report of the BSE Inquiry, by HM Government in Consultation with the Devolved Administrations, 28 September. Cmd 185 (1987), Civil Research and Development: Government Response to the First Report of the House of Lords Select Committee on Science and Technology, 1986–87 session, London: HMSO. Cmnd 2171 (1963), Committee of Enquiry into the Organisation of Civil Science (The Trend Report), London: HMSO. Cmnd 3638 (1968), Report of the Committee on the Civil Service, 1966–68 (The Fulton Report), London: HMSO. Cmnd 4641 (1971), Government Organisation for Defence Procurement and Civil Aerospace – The Rayner Report, London: HMSO. Cmnd 4814 (1971), A Framework for Government Research and Development (The Rothschild Report), London: HMSO. Cmnd 4814 (1971), The Organisation and Management of Government R&D, in a Framework for Government Research and Development (The Rothschild Report), London: HMSO. Cmnd 5046 (1972), Framework for Government Research and Development, London: HMSO. Cmnd 7499 (1979), Review of the Framework for Government Research and Development, London: HMSO. Cmnd 7797 (1980), Report on Non-Departmental Public Bodies, London: HMSO. Cockcroft, J. (ed.) (1965), The Organisation of Research Establishments, Cambridge: Cambridge University Press. Cole, J. and Zuckerman, H. (1975), ‘The emergence of a scientific specialty: the self exemplifying case of the sociology of science’, in L. A. Coser, The Idea of Social Structure: Papers in Honor of Robert K. Merton, New York: Harcourt Brace Jovanovich. Collins, H. (1975), ‘The seven sexes: a study in the sociology of phenomenon, or the replication of experiments in physics’, in Sociology, 9: 205–24. Coy, D., Dixon, K., Buchanan, J. and Tower G. (1997), ‘Recipients of public sector annual reports: theory and an empirical study compared’, British Accounting Review, 29: 103–27. Dasgupta, P. and David, P. A. (1994), ‘Towards and new economics of science’, Research Policy, 23: 487–521. Department of Trade and Industry (1995a), Assessment Services Limited Acquires National Engineering Laboratory, press release, 31 October.

198 Bibliography Department of Trade and Industry (1995b), Laboratory of the Government Chemist to be Sold to a Management-led Consortium, press release, 10 November. Department of Trade and Industry (1996), Management Consortium Acquires Laboratory of the Government Chemist, press release, 2 April. Department of Transport (1996), Norris Announces Completion of Sale of Transport Research Laboratory, press release, 2 April. Department of Transport, Local Government and the Regions (2002), Rethinking Construction Innovation and Research; A Review of Government Policies and Practices, Sir John Fairclough. DES (1981), Science and State, London: DES. DG Research (2001), The INNOCULT Final Report: April. DSIR (1962), DSIR, Universities and Colleges 1956–60, London: HMSO. du Gay, P. (2000), In Praise of Bureaucracy, London: Sage. Dunbar, R. (1995), The Trouble with Science, London and Boston: Faber and Faber. Dunleavy, P. J. and Hood, C. (1994), ‘From old public administration to new public management’, Public Money and Management, 14(3): 9–16. Durkheim, E. (1915), The Elementary Forms of the Religious Life, London: Allen and Unwin. Efficiency Unit (1988), Improving Management in Government: The Next StepsReport to the Prime Minister, London: HMSO. Efficiency Unit (1994), Scrutiny of Public Sector Research Establishments, House of Lords Science and Technology Committee First Report, HL5-1, London: HMSO. Erno–Kjolhede, E., Husted, K., Monsted, M. and Wenneberg, S. B. (2001), ‘Managing university research in the triple helix’, in Science and Public Policy, 28(1). Etzkowitz, H. and Leydesdorff, L. (1995), ‘The Triple Helix of university– industry–government relations: a laboratory for knowledge based economic development’, EASST Review, 14(1): 11–19. European Commission (2001), Internationalisation of Research: Institutional Innovation, Culture and Agency in the Framework of Competition and Co-operation (INNOCULT), Project Final Reports. Faulkner, W. and Senker, J. (1995), ‘Policy and management issues in company links with academic and government laboratories: a cross-technology study’, Journal for High Technology Management Research, 6(1): 95–112. Fells, I. (1995), ‘Another view: science of neglect’, The Independent, 12 September. Freeman, C. (1987), Technology and Economic Performance: Lessons from Japan, London: Pinter Publishers. Froud, J., Boden, R., Ogus, A. and Stubbs, P. (1998), Controlling the Regulators, London: MacMillan. Fuller, S. (2000), The Governance of Science, Buckingham: Open University Press. Gibbons, M. (2000), ‘Mode 2 society and the emergence of context-sensitive science’, Science and Public Policy, 27(3). Gibbons, M., Nowotny, H., Limoges, C., Trow, M., Schwartzman, S. and Scott, P. (1994), The New Production of Knowledge: The Dynamics of Science and Research in Contemporary Societies, London: SAGE Publications. Giddens, A. (1998), The Third Way, London: Polity, Press. Gummett, P. (1980), Scientists in Whitehall, Manchester: Manchester University Press.

Bibliography 199 Gummett, P., Cox, D., Boden, R. and Barker, K. (2000), ‘The changing central government of science and technology’ in Rhodes, R. A. W., Transforming British Central Government Vol 2: Changing Roles and Relationships, Houndmills: Macmillan. Hagstrom, W. (1972), ‘Gift-giving as an organising principle in science’, in B. Barnes (ed.) Sociology of Science, London: Cox & Wyman Ltd. Hahn, R. (1971), The Anatomy of a Scientific Institution: The Paris Academy of Sciences, 1666–1803, Berkeley: University of California Press. Hansard (1994), Written Answers Column WA133/134, 9 December, London: HMSO. Hansard (2000), Column 889, 2 November, London: HMSO. Hansard (2002), House of Lords, Written Answers, Column WA1345, 5 December, London: HMSO. Harwood, J. (1994), ‘Essay review: institutional innovation in fin de siecle Germany’, British Journal for the History of Sciences, 27: 197–211. Hayek, F. A. (1982), Law, Legislation and Liberty, London: Routledge. HC 19 (1994), Efficiency Unit Scrutiny of Public Sector Research Establishments, House of Commons Science and Technology Committee First Report, London: HMSO. HC 375 (1972), Research and Development: Minutes of Evidence and Appendices, House of Commons, Select Committee on Science and Technology, Session 1971–72, London: HMSO. HC 643 (1996), The Prior Options Reviews of Public Sector Research Establishments, House of Commons, Science and Technology Committee, Fifth Report, London: HMSO. HC 71-I (1996), The Prior Options Reviews of Public Sector Research Establishments, House of Commons, Science and Technology Committee First Report, 1, London: HMSO. Heim, C. E. (1988), ‘Government research establishments, state capacity and distribution of industry policy in Britain’, Regional Studies, 22(5): 375–86. Henkel, M. (1991), Government, Evaluation and Change, London: Jessica Kingsley. Hird, R. (1996), ‘Privatisation of Government Laboratories’, Paper presented to British Council Conference held at Manchester Business School, March. HL5-1 (1994), Efficiency Unit Scrutiny of Public Sector Research Establishments, House of Lords Science and Technology Committee First Report, London: HMSO. Hood, C. (1990), ‘De-Sir Humphreyfying the Westminster model of bureaucracy: a new style of governance?’ Governance, 3(2): 205–14. Hood, C. (1991), ‘A public management for all seasons?’ Public Administration, 69, Spring: 3–19. Howells, J., Nedeva, M. and Georghiou, L. (1998), Industry–Academic Links in the UK, London: Higher Education Funding Council for England. Hyndman, N. S. and Anderson, R. (1995), ‘The use of performance information in external reporting: an empirical study of UK executive agencies’, Financial Accountability and Management, 11(1): 1–17. IPCS (1968), Exploiting Technology, London: Institution of Professional Civil Servants. IPMS (1996), House of Commons Select Committee on Science and Technology Inquiry into Prior Options Review, Submission by the Institution of Professionals, Managers and Specialists.

200 Bibliography Jantsch, E. (1970), ‘Inter- trans-disciplinarily university: a systems approach to education and innovation’, Policy Sciences, 1: 403–28. Johnston, R. and Jagtenberg, T. (1978), ‘Goal Direction of Scientific Research’, in Krohn, W., Layton Jr, E. T. and Weingart, P. (eds), The Dynamics of Science and Technology: Social Values, Technical Norms and Scientific Criteria in the Development of Knowledge, Holland and Boston: D. Reidel Publishing Company. Joly, P. B. and Mangematin, V. (1996), ‘Profile of public laboratories, industrial partnerships and organisation of R&D: the dynamics of industrial relationships in a large research organisation’, Research Policy, 25: 901–22. Jones, R. and Pendlebury, M. (2000), Public Sector Accounting, Harlow: Prentice-Hall. Kearney, H. (1970), Scholars and Gentlemen. Universities and Society in Pre-industrial Britain 1500–1700, London: Faber and Faber. Kohler, R. (1991), Partners in Science: Foundations and Natural Scientists, Chicago: University of Chicago Press. Laboratory of the Government Chemist (1995), Annual Report and Accounts 1994–95. Levene, P. and Stewart, W. D. P. (1993), A Review of Allocation, Management and Use of Government Expenditure on Science and Technology, HMSO: London. Leydesdorff, L. and Etzkowitz, H. (1996), ‘Emergence of a Triple Helix of university–industry–government relations’, Science and Public Policy, 23(5). Leydesdorff L. and Etzkowitz, H. (1998), ‘Triple Helix of Innovation: introduction’, Science and Public Policy, 25(6): 358–64. Lister, R. (1998), Citizenship: Feminist Perspectives, London: Palgrave. Lundvall, B. A. (1988), ‘Innovation as an interactive process – from user–producer interaction to national systems of innovation’, in Dosi et al., Technical Change and Economic Theory, London: Pinter Publishers. Lundvall, B. A. (1992), National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning, London: Pinter Publishers. Lyons, J. (1969), The Role of Public Research and Development in Exploiting Technology, London: IPCS. Marx, K. (1964), ‘1818–1883, The German Ideology’, in F. Engels and K. Marx (1976) Collected Works, Volume 5, London: Lawrence & Wishart. McSweeney, B. (1994), ‘Management by accounting’, in Hopwood, A. G. and Miller, P. (eds), Accounting in Social & Institutional Practice, Cambridge: Cambridge University Press. Mellon, E. (1993) ‘Executive Agencies: leading change from the outside-in’, Public Money and Management, 13(2): 25–31. Merton, R. K. (1968), Social Theory and Social Structure, New York: Free Press. Merton, R. K. (ed.) (1973), The Sociology of Science: Theoretical and Empirical Investigations, Chicago: University of Chicago Press. Merton, R. K. (1976), Sociological Ambivalence and other Essays, New York: Free Press. Metcalfe, J. S. and Smellie, R. (1991), Maintenance Activities and the National Measurement System – Report to the National Measurement System Policy Unit of the DTI, Manchester: PREST. Meteorological Office (2002), Annual Report and Accounts, HC 846, London: HMSO. Ministry of Defence (2002), Press Notice, 5 December. Ministry of Technology (1970), Industrial Research and Development in Government Laboratories: A New Organisation for the 1970s, London: HMSO.

Bibliography 201 Mulkay, M. (1976), ‘Norms and ideology in science’, Social Science Information, 5: 637–56. Mulkay, M. (1979), Science and the Sociology of Knowledge, London: Allen & Unwin. Musselin, C. and Vilkas, C. (1994), ‘Interference between scientists and research policy in a french research institution: the case of the CNRS’, in Schimank, U. and Stucke, A. (eds), Coping with Trouble: How Science Reacts to Political Disturbances of Research Conditions, Frankfurt and New York: Campus Verlag/ St Martin’s Press. Nature (1993), UK National Laboratories Face New Threat of Privatisation, 363, 20 May. Nedeva, M. (1995), ‘Science and technology policy in the 1990s: the case of the United Kingdom’, in Parissakis, G. and Katsaros, N. (eds), Science Policy and Research Management in the Balkan Countries, Dordrecht: Kluwer Academic Publishers. Nedeva, M. (1997), Strategies for Change, PhD Thesis, University of Manchester. Nelson, R. (1959), ‘The simple economics of basic scientific research’, Journal of Political Economy, 67: 297–306. Nelson, R. R. (ed.) (1993), National Innovation Systems: A Comparative Analysis, Oxford: Oxford University Press. New Scientist (1996), End of the Road for Safety Research? 6 January. New Scientist (1997), Business as Usual after Twelve Months of Strife, 8 February. Niskanen, W. A. (1991), Bureaucracy and Representative Government, Chicago: Aldine Atherton. OECD (1972), The Research System, Vol. 1. France, Germany, United Kingdom, Paris. OECD (1974), The Research System, Vol. 2. Belgium, Netherlands, Norway, Sweden, Switzerland, Paris. OECD (1976), The Research System Vol. 3. Canada, United States, General Conclusions, Paris. Office of the Minister for Science (1961), The Management and Control of Research and Development, London: HMSO. Ogus, A. (1994), Regulation: Legal form and Economic Theory, Oxford: Clarendon Press. Patel, S. J. (1961), ‘Rates of industrial growth in the last century 1860–1958’, Economic Development and Cultural Change, 9, 3 April. Pendlebury, M., Jones, R. and Karbihari, Y. (1992), ‘Accounting for Executive Agencies in the UK Government’, Financial Accountability and Management, 8(1), Spring: 35–48. Pollitt, C. (1995), ‘Justification by works or by faith? Evaluating the new public management’, Evaluation, 1(2): 133–54. Pollitt, C., Summa, H. (1997), ‘Trajectories of reform: public management change in four countries’, Public Money and Management, January–March, 7(18). Power, M. (1997), The Audit Society, Oxford: Oxford University Press. PREST (2000), Impact of the Research Assessment Exercise and the Future of Quality Assurance in the Light of Changes in the Research Landscape, report prepared for the Higher Education Funding Council for England (HEFCE). Proctor, R. N. (1991), Value Free Science? Purity and Power in Modern Knowledge, Massachusetts, and London, England: Harvard University Press, Cambridge. Purver, M. (1967), The Royal Society: Concept and Creation, London: Routledge and Kegan Paul.

202 Bibliography Rappert, B. (1995), ‘Shifting notions of accountability in public and private sector research in the UK’, in Science and Public Policy, 22: 383–90. Ravetz, J. R. (1973), ‘Tragedy in the history of science’, in M. Teich and R. Young (eds), Changing Perspectives in the History of Science, London: Heinemann: 204–22. Research Fortnight (1996), Industry Plan for BRE Rejected … as DTI Pays out for LGC Sale, 30 October. Research Fortnight (2002), Shake-up Needed in Construction Industry, 8(11) (no. 165), 13 March. Rhodes, R. A. W. (1991), ‘Theory and methods in British public administration: the view from political science’, Political Studies, 39: 533–54. Rhodes, R. A. W. (1995), ‘The changing face of British public administration’, Politics, 15(2): 117–18 and 124. Rhodes, R. A. W. (1997), Understanding Governance: Policy Networks, Governance, Reflexivity and Accountability, Buckingham: Open University Press. Ridley, F. F. (1996), ‘The new public management in Europe: comparative perspectives’, Public Policy and Administration, 11(1): 16–29. Rip, A. and van den Meulen, B. J. R. (1995), ‘The post modern research system’, paper presented at the Science Policy Research Unit, September. Rose, H. and Rose, S. (1969), Science and Society, London: Penguin. Sanderson, M. (1972), Universities and British Industry 1850–1970, London: Routledge and Kegan Paul. Schimank, U. and Stucke, A. (eds), Coping with Trouble: How Science Reacts to Political Disturbances of Research Conditions, Frankfurt and New York: Campus Verlag/St Martin’s Press. Schmoch, U., Breiner, S., Cuhls, K., Hinze, S. and Münt, G. (1994), Interdisciplinarity Co-operation of Research Teams in Science-Intensive Areas of Technology, Final Report to the Dissemination of Scientific and Technical Knowledge Unit (DGXIII/D2), Commission of the European Communities, Luxembourg. Scott, P. (1984), The Crisis of the University, London: Croom Helm. Shills, E. (1972), The Intellectual and the Power and other Essays, Chicago and London: The University of Chicago Press. Shinn, T. (2002), ‘The Triple Helix and new production of knowledge: prepackaged thinking on science and technology’ Social Studies of Science, 32(4): 599–614. Shore, C. and Wright, S. (2000), ‘Coercive accountability: the rise of audit culture in higher education’ in Audit Cultures by Strathern, M. (ed.), London: Routledge. Sobel, D. (1996), Longtitude, London: Fourth Estate. Stewart, G. (1999), The Partnership between Science and Industry, London: The Science Museum. Storer, N. (1966), The Social System of Science, New York. Thain, C. and Wright, M. (1995), The Treasury and Whitehall: The Planning and Control of Public Expenditure, 1976–1993, Oxford: Clarendon Press. The Guardian (1993), Heseltine in row over Whitehall sale plan to sell agencies without benefit of market testing, 29 November. The Guardian, 27 July 1995, p. 22, Section 2.

Bibliography 203 The Herald (1995), Siemens subsidiary seals NEL takeover. Assessment Services Ltd pledges no job cuts as it beats off other bidders for privatised lab., 9 August. The Sunday Times (2000a), Jobs at risk in MoD sale, 16 April. The Sunday Times (2000b), MoD primes defence agency for Pounds 1bn partial sell-off, 12 March. Tilly, C. (1988), ‘Misreading, then rereading, nineteenth-century change’, in Wellman, B. and Berkowitz, S. D. (eds), Social Structures: A Network Approach, Cambridge: Cambridge University Press: 332–59. Trute, H. H. (1993), ‘Comparative analysis of European research policy structures’, in European Research Structures – Changes and Challenges: Institutional Aspects of European Research Policy, Ringberg Castle: Max–Planck Gesellschaft. Van Duinen, R. J. (1998), ‘European research councils and the Triple Helix’, Science and Public Policy, 25(6). Vig, N. J. (1968), Science and Technology in British Politics, London: Pergamon. Walsh, K. (1995), Public Services and Market Mechanisms, London: MacMillan. Waterton, C., Wynne, B., Grove–White, R. and Mansfield, T. (2001), Scientists Reflect on Science: Scientists’ Perspectives on Contemporary Science and Environmental Policy, A Research Report, Lancaster University. Weber, M. (1968), Economy and Society: An Outline of Interpretative Sociology, New York: Bedminster Press. Webster, A. (1991), Science, Technology and Society, Houndmills and London: MacMillan Education Ltd. Wedgwood Benn, The Rt. Hon. Anthony (1967), The Government’s Policy for Technology, lecture given at Imperial College of Science and Technology, 17 October, London: Ministry of Technology. Wiener, J. (1981), English Culture and the Decline of the Industrial Spirit, Cambridge: Cambridge University Press. Wildavsky, A. (1964), The Politics of the Budgetary Process, Boston: Little Brown. Wilkie, T. (1991), British Science and Politics since 1945, Oxford: Blackwell. Williams, R. (1972), ‘Independence and accountability after Rothschild’, R&D Management, 2, 131–5. Williams, R. (1973), ‘Some political aspects of the Rothschild affair’, Science Studies, 3: 31–46. Ziman, J. (1978), Reliable Knowledge: An Explanation of the Grounds for Belief in Science, Cambridge: Cambridge University Press. Ziman, J. (2000), Real Science: What it is and What it Means, Cambridge: Cambridge University Press. Zuckerman, Lord (1971), ‘Government needs and expectations’, Times Literary Supplement, 5 November: 1385.

Index accountability 9, 24, 26–7, 41, 52, 68, 71, 86–7, 90, 97, 107, 116, 127, 141, 157–68, 172, 182–4, 188 financial 82–3 public 87–8, 108, 184 Admiralty Engineering Laboratory 3 Admiralty Experiment Works 34 Admiralty Research Laboratory 33 advice expert 124 impartial 89 independent 102 scientific 34, 92, 155 technical 56, 76, 99–100, 166 AEA Technology 71, 94 agencification 59, 93, 150, 153, 155, 188 agency status see also executive agency 58, 64, 79–80, 90, 94, 103, 105, 107–8, 117, 131, 135, 150, 187–8, 190 Agricultural Development and Advisory Service (ADAS) 67, 71–2 Armament Research Establishment 33 Assessement Services Limited 89 Atomic Energy Authority 35, 36 Atomic Energy Research Establishment 38 Atomic Weapons Establishment 66 audit society 18 barriers to change 110, 112 Biotechnology and Biological Sciences Research Council (BBSRC) 73 block grant 42, 59, 78, 82, 119, 125, 147, 153 Board of Trade 40, 67, 88, 102 British Research and Development Corporation (BRDC) 40 budget and science 25, 35 cuts 95 budgetary control 59

budgetary transparency 50 Building Research Establishment (BRE) 32, 62, 73, 77, 80, 97, 113, 129 Bullard, Sir Edward 37 Cabinet Office 59, 183 Cambridge University 29 Carlyle Group 80, 101 capitalism 29–30 Central Laboratory of the Research Councils 73 Central Science Laboratory 72–3, 80 Central Veterinary Laboratory 80 Centre for Environment, Fisheries and Aquaculture Science (CEFAS) 77, 80, 105–6, 134–5 change organic 13–14, 17–19, 28, 137 policy driven 27–9, 176, 137, 191, 193 policy-introduced 13–14, 17–19 Chemical and Biological Defence Establishment 66, 80, 99 Chief Scientist 41–2 Chisholm, Sir John 133 Civil Research Agencies 65 civil service 39, 44, 51–4, 87, 93, 108, 128, 183, 190, 192–3 and culture 42 and ethos 147, 159 and pensions 72, 172, 174–5, 194 Cockcroft, Sir John 37 commercialisation 3, 45, 102–4, 109, 117, 126, 167 Companies Act (1985) 79 company limited by guarantee 86, 91, 93, 98, 129, 131, 169 competition 21, 49–50, 62–5, 89, 95–6, 101, 122, 124, 130, 133, 151, 154 Competitiveness 18, 65, 95, 142, 176 competitive tender 58, 61–3, 92, 98, 110, 130, 151, 172

204

Index 205 Conservative Government 26, 28–9, 35, 40–1, 45, 78, 105–7, 111, 117–18, 120, 132, 137, 144–5, 147, 156, 187–9, 190 constructivism 4 contractorisation 175, 182 customer contractor 40, 42, 44, 49, 58–9, 62, 65–6, 74, 112, 114, 124–5, 148, 150–1, 153, 155, 167, 184 intelligent 59, 149, 154, 164, 167 proxy 32, 57, 94–5, 104, 106, 112, 120, 123, 129–31, 184, 188, 193 defence research 43, 55, 66, 99–100 Defence Research Agency (DRA) 62–4 Defence Research Establishment (DERA) 95, 99–102, 106–7, 114, 123, 132–3 Deloitte Touche 176 department and customer 38, 44, 61, 65, 91–2, 103, 119, 123, 150 and owner 63, 80–1, 148, 151, 155 host 44, 54 Department of the Environment (DoE) 62, 73, 97, 105 Department of Scientific and Industrial Research (DSIR) 31–3, 35–6, 44, 92 Department of Trade and Industry (DTI) 38, 40, 42, 53, 58, 61–2, 67, 70, 73, 88, 91, 94–6, 127, 168–82, 184 Department of Transport (DoT) 71, 78, 81 Directorate of Fisheries Research 73, 105 drivers 74, 102, 126, 137 Drive and Vehicle Licensing Centre 55 dynamics of science see also science dynamics 19 economy 8, 40, 43, 50–1, 53, 59, 111, 122, 125, 135, 147, 190 EDS Scicon 95

effectiveness 50–1, 53, 61, 69, 79, 86, 99, 116–17, 125, 135, 145, 147–8, 152, 196 efficiency 38, 48, 50–3, 58, 60, 63, 69, 79, 83, 85–6, 94, 96, 110–11, 116–17, 119–20, 125–6, 135, 147, 151–2, 154, 169, 175–7, 182, 190 gains 63, 83, 94, 96, 120, 151, 175, 182 savings 85, 126 Efficiency Office 72 Efficiency Scrutinies 53, 69, 71 Efficiency Unit 53–5, 59–60, 67–8 Elves, Dr Michael 69 European Commission 94, 99 European Renaissance 29 European Union 7, 113, 178 executive agencies 44, 56, 59, 79, 83–4, 103, 168 Fairclough, Sir John 59 Financial Management Initiative (FMI) 53–4 First World War 31, 33–4, 92, 97, 102, 143 Forensic Science Service 62, 80 Forestry Commission 68, 73 Forest Research Station 68 Foundation for the Built Environment 98, 129 Framework Document 55, 81, 94, 173 Frascati 21 Fraser Figure 147–9 Froud, William 34 Fulton Committee 44, 52 Geological Survey 30 Glaxo 69 GoCo 72, 85, 95–6, 132, 175–6 governance 11, 27, 75–6, 78–9, 83–5, 87, 92, 107, 167, 182–3 government department 30, 32, 40, 61, 76, 79, 90–1, 94, 97, 103, 123–4, 132, 144, 147, 150, 166, 169 funding 31, 35, 43, 129–30 laboratories 24, 39, 57, 77, 97, 138, 166 policy 58, 76, 120

206 Index Government Research Establishments (GREs) 1–3, 13, 17, 19–22, 27, 32, 41–2, 44–7, 62–5, 72, 75, 78–80, 83, 86–7, 90, 104, 106–8, 126, 135, 137, 142, 147, 155–6, 185–93 government science 63, 110, 125, 147, 152, 157, 159 Green Paper (1970) 40, 44 guaranteed work see also work guarantee 91, 96, 98, 122, 128–9, 172–4, 180, 184 Haldane 31–3, 143 Health and Safety Executive 115 Health and Safety Laboratory 72–3, 115 Her Majesty’s Stationery Office (HMSO) 55 Heseltine, Michael 53–67, 71, 74, 88, 95, 107, 118, 168, 175–6, 187 Home Office 80 Horticultural Research Institute 73 House of Commons 69–70, 100 Hydraulics Research Station 39 Imperial College 95 Industrial research 22, 31–2, 37 industrial revolution 29–30 inefficiency 58, 115, 117, 145 innovation 2, 5–8, 11–13, 21, 23, 26, 31, 34, 36, 38–9, 98, 100, 142, 144 Institute of Arable Crops Research 73 Institute of Grassland and Environmental Research 73 institutes 30–1, 63, 67, 69, 70, 72, 94, 139, 151 Institution of Professional Civil Servants (IPCS) 39 Institution of Professionals, Managers and Specialists (IPMS) 72–3, 88–9 institutional imperatives 4 John Innes Centre 73 Joseph, Sir Keith 40 Kant 2 knowledge base

69, 99, 130

knowledge production 2, 5, 7–11, 23, 27, 29, 36, 44–5, 109, 125, 129, 131, 136–60, 167, 185, 188–9, 193 KPMG 89, 95 Laboratory of the Government Chemist (LGC) 71, 90–1, 106, 108, 127–8, 134, 168–74, 176, 180, 182–3 Labour Government 36, 52, 60, 96, 101, 109, 111, 132, 154, 156, 185 Levene, Sir Peter 60, 72–3 Levene-Stewart Report 60, 118, 147, 150–1 Review 66, 68, 152 Macauley Land Use Research Institute 68 management by accounting 50 market based 109–12, 152–3, 159, 161–3, 165, 183 economy 43 failure 43, 47–8, 111–12, 115 internal 59, 61 open 57, 64–5, 152 testing 65, 96, 122, 125, 154, 174, 177, 179 marketisation 49, 58, 62, 64, 109, 111–12, 117–18, 120–2, 125–6, 129, 132–5, 163, 166–7, 188 Marshall, Dr Walter 39 Medical Research Council (MRC) 31, 69 Merton 138 Mertonian 7, 26, 44–5, 110–12, 135–8, 141–2, 145, 155, 157, 186, 188 Meteorological (Met) Office 55, 77–8, 81, 102–5, 107, 114, 134 MINIS 53 Minister of Technology 39–40 Ministry of Agriculture, Fisheries and Food (MAFF) 67–8, 71, 73, 80–1, 106–7 Ministry of Aviation 36, 41 Ministry of Defence (MoD) 35, 41–2, 58, 62–3, 66, 78, 89, 99–104, 123, 152

Index 207 Mintech 36, 38, 40–1 Mode 1/Mode 2 8, 137 Modernist thinking 29 modernism 30 monopoly 34, 65, 113, 120–3, 125–6, 130–2, 134 monopolistic 112, 120, 122–3, 125, 130 monopolies 112–13, 121–2 monopsony 65, 120 National Audit Office 174–5 National Centre for Construction 98, 129 National Engineering Laboratory (NEL) 71, 87–91, 108, 126–7 National Engineering Research Council (NERC) 68 National Gas Turbine Establishment 34 National Innovation System (NIS) 5–8 National Insurance Act (1911) 31 nationalisation 47 National Measurements System 88, 172 National Physical Laboratory (NPL) 31–2, 71, 77, 94–6, 107, 131–2, 143, 168, 175–83 National Research Systems (NRS) 2, 5–8 National Research and Development Corporation (NRDC) 35 National Weights and Measures Laboratory 73, 81 Naval Construction Research Establishment 33 Net Vote 82, 97, 129 Agency 73 New Labour 111, 132 New Public Management (NPM) 1, 17, 27, 47–75, 77–9, 87, 92, 106–7, 109, 111–12, 117–18, 120, 125–6, 132–3, 135, 137, 140, 144, 147–9, 152–3, 157, 163–8, 185, 187–93 New Right 54 Newton, Sir Issac 15, 29 Next Steps 54–5, 58, 67

OECD 5, 50 Office of Public Service and Sciences 65 Office of Science and Technology (OST) 61 organisational forms 27, 56, 79, 84, 87, 109, 137–8, 140, 185–6 ownership 27, 60, 65–8, 73, 74–5, 79, 83–7, 90–1, 93, 107, 118, 120, 122, 130–1, 133, 167, 179, 182–3, 186, 191 private 79, 91, 133 public 83, 130 Parliamentary Vote 78, 95, 97 patronage 29–30, 139, 153 state 16, 110 pensions see Civil Service Pentagon 101, 133 performance and measure 52, 59, 81–2, 116, 171, 176 performance indicators 50, 57–8, 82–3, 104, 107, 164, 167, 176–9 Plymouth Marine Laboratory 68 Police Scientific Development Branch 73 policy advice 45, 51, 57–8, 63, 76–7, 115, 146, 151, 166 policy makers 5, 8, 10–11, 21, 26, 57, 76, 146, 166, 187 policy making 5, 8, 10–11, 18, 25, 34, 49, 52, 84, 170 Power Jets Ltd pre-science 15 privatisation 27, 60, 65–7, 69–74, 79, 82–91, 93–5, 98–9, 101–2, 105–11, 117–18, 120–2, 125–8, 130–4, 155, 167–72, 174–6, 180, 183–4, 188, 190–1 Prior Options Review 60, 67, 69, 71–3, 191 Private Finance Initiative (PFI) 132 Procurement Executive 41 public administration 1, 47, 48–9, 51, 57, 112, 118

208 Index public expenditure 47, 52, 53, 55, 61, 169 public good 28, 33, 45, 56–7, 76, 89, 102, 104, 112, 121, 123, 130–1, 134, 138, 141, 184, 186 public private partnership 99, 105, 192–3 public sector reform 47, 50, 117 public service ethos 44–5, 99, 104, 108, 163, 184 quasi-commercial 49, 79, 92 quasi-market 50 Qinetiq 80, 100–2, 132–3, 191 Rayner, Sir Derek 41, 53 reform administrative 49 organisational 42, 75, 99, 109, 152, 156 public sector 47, 50, 117 and NPM 47, 49–50, 56, 72, 74–5, 107, 117, 125, 132, 135, 140, 144, 147, 152, 157, 165, 167 Republic of Science 138, 153, 160 research associations 31–2 applied 21–2, 41, 99 basic 25 commodification of 3 insititutes 31, 67, 139 organisation of 2 Research Councils 21–2, 25–6, 31, 33, 35–6, 41–2, 66–7, 69–72 Rolls Royce 95 Rothschild 41 Royal Aircraft Establishment 31, 34 Royal Aircraft Factory 34 Royal Greenwich Observatory 28 Royal Society 30 Royal Society of Chemistry 91, 128, 168, 171, 173 Royal Observatory 77 science academic 24, 45, 137–42, 151, 160–1, 183, 186, 189, 193 applied 21, 24 base 25, 26, 48, 57, 69, 77, 146, 166, 193

budget 25, 35 commodified 20, 136–7, 140, 145, 147, 153, 155, 157, 189 development of 14–19, 29 dynamics 3, 13 as institution 4, 19, 23 as knowledge 21–3 policy 5, 35–6, 142 practice of 21 professional 16 public sector 27, 69, 71, 118, 157, 165, 188 pure 23–4 study of 30 useful 24, 45, 153, 156 science and technology services 27, 42, 44, 61, 64–5, 75–8, 110–11, 115, 119–20, 123, 126, 146–7, 152–3, 166, 188, 191–3 scientific advice see advice scientific instititutions 15–16, 27, 142, 144 knowledge 2, 3 organisations 30, 142 practice 30, 137, 160, 189 Scientists’ War 34 Scottish Agricultural Research Institute 67–8, 73 Scottish Crop Research Institute 73 Scottish Fisheries Research Services 73 Scottish Office 68, 72–3, 81 Second World War 33–3, 7, 97, 143 Serco 81, 85, 96, 132, 175–6, 178, 181 shared visions 57, 61, 140, 144–50, 152–3 Siements 89–90, 127 Silsoe Research Centre 73 society 2, 5, 10–11, 13–14, 18–19, 21, 30, 34, 100, 112–14, 186 sociology of knowledge 4–5 Soddy, Sir Frederick 31 stakeholders 84, 86–7, 129–30, 158, 160–1, 183–4 state failure 110–11, 115–18 structural functionalists 4

Index 209 3i plc 91 Taylor Woodrow 95 Thatcher, Mrs Margaret 28, 51–3, 118 Thatcherite 142 The Victoria University of Manchester 16, 31, 34 Third Way 52, 111 trade unions 101, 133 three E’s economy, efficiency and effectiveness 50–1, 125, 135, 190 trade sales 86 transformation of science 17, 23 Transport Research Foundation 81, 83 Transport Research Laboratory (TRL) 71, 77–8, 81, 92–3, 107, 130–1, 178 Treasury 53–6, 82–3, 90, 93–4, 97, 103, 172–3, 180 Triple Helix 5, 11–13, 139

Turing, Alan 34 TÜV Product Service GmbH

89

value for money 54, 61, 78, 150, 155, 167, 176, 180 Veterinary Laboratories Agency 77 Vickers 34 visions of science 2, 23, 138 wealth creation 26, 69 Westminster system 51 Whitehall 37, 54–6, 58–9, 76–9, 87, 102, 119, 145–9, 166, 186 customers 59, 79, 108 department 56, 58–9, 76, 78, 119, 146–7, 166 White Paper (1993) 25–6, 69 Whittle, Air Commodore 34 work guarantee see also guaranteed work 74, 177 Worswick, Richard 169, 171, 173 W S Atkins 95