Official Report: Minutes of Evidence

The Chairperson (Dr Archibald): I will hand over to our witnesses to give us a briefing on the legislative consent memorandum (LCM) on the Advanced Research and Invention Agency Bill. We can then have a wee bit more of a discussion about the specifics.

Mr Keith Forster (Department for the Economy): Thanks, Chair. We are happy to provide you with an update on the Advanced Research and Invention Agency Bill, which is also known as the ARIA Bill. It is currently making its way through the House of Lords. You will be aware that the Northern Ireland Assembly's consent is required for the majority of the provisions in the Bill. The subject matter, which is research and innovation, is a devolved area of law. The Bill will create the Advanced Research and Invention Agency (ARIA), a new body that will target blue-sky research in areas that have the potential to create transformative technologies. It is to be based on a high-risk, high-reward approach.

In that respect, the agency mirrors very much the US Defense Advanced Research Projects Agency (DARPA) model. It therefore may be useful to provide some context about what that agency does, because ARIA will mirror what it does. Since the 1950s, DARPA has focused solely on transformative and technological research programmes. It played a key role in the creation of the internet, GPS, weather satellites and, more recently, voice-recognition technologies that are used in the like of Apple's Siri. Other countries have also adopted a similar model, which is inspired by the disruptive innovation approach, including Japan's Moonshot Research and Development Program and Germany's Federal Agency for Disruptive Innovation (SPRIN-D).

R&D, particularly transformational R&D, is an inherently dynamic, uncertain and unpredictable endeavour. Research programmes can perform better when they possess the means to capitalise quickly on new discoveries. The inherent uncertainty does not naturally suit the system of government budgeting, controls and project-clearance processes. Although such processes are prudent for some transformational R&D projects, they may constitute a bureaucratic burden that outweighs the value of assurance that they provide. The intention therefore is to provide ARIA with operational freedom, cutting bureaucracy where it is appropriate to do so.

The UK Government have committed £800 million to fund ARIA until 2024-25. That allocation will not impact on the research funding that is available to Northern Ireland.

The Department for the Economy was involved in a series of lengthy negotiations with our counterparts in the Department for Business, Energy and Industrial Strategy (BEIS), as well as with representatives from the other devolved Administrations. Those negotiations centred on two things: the level of representation afforded to the devolved Administrations in the governance of ARIA; and the reservation requirements of the Bill. As a result, from a Northern Ireland perspective, we are now satisfied that appropriate levels of representation have been achieved, primarily through twice-yearly meetings of the Government Chief Scientific Adviser (GCSA), who is currently Patrick Vallance, and his counterpart Chief Scientific Advisers (CSAs) in Scotland and Wales, and the appropriate representative on behalf of the Northern Ireland Executive in a new CSA form.

The removal of the requirement to reserve ARIA in each of the devolved regions was completed when an amendment was passed in the House of Lords on 22 November. All three devolved Governments and BEIS have now agreed in principle to sign an agreement on ARIA's independence. That will uphold the guiding principles of the ARIA design, which are strategic and operational autonomy and minimal bureaucracy.

The prolonged nature of the discussions between BEIS and the devolved Governments whilst the ARIA Bill continued its journey through the Houses of Parliament has left us in a position in which there is less time than usual to complete the steps that would be undertaken when an legislative consent motion (LCM) is being laid. In that regard, I thank you for making available the time to hear us today.

The ARIA Bill has completed its Committee Stage in the House of Lords and will move to Report Stage on 14 December. On that basis, the First Minister and the deputy First Minister agreed an urgent procedure request on 25 November for an LCM to be laid before the Assembly. As officials, we will continue to engage with BEIS as the Bill proceeds through the House of Lords and as the agency is established and becomes operational.

Chair, there is nothing left for me to say other than to thank you and the Committee for your time this morning. I am happy to take any questions that you have.

The Chairperson (Dr Archibald): Thank you very much for that, Keith. We recognise as being important the setting up an agency with the aim of supporting research, that employs, as you outlined, blue-sky thinking and that is high-risk with the funding allocated to it. We would want that to be in place. The examples that you have outlined are transformative. That is what the Bill is about.

Can you set out in a wee bit more detail the difference between the memorandum of understanding (MOU) on ARIA and what happens with the research councils that already exist?

Mr Forster: My understanding is that the purpose of the MOU is to maintain some level of distance between the operation of ARIA and what would be a more traditional sense of control exercised by a sponsoring Department or agency. For the research councils, there are much tighter governance arrangements in place for oversight and for the traditional processes that ensure that their activities represent value for money and meet high standards of audit.

This is where we were coming from: Northern Ireland and, to a lesser extent, Scotland and Wales have a specific make-up of research organisations and businesses. It was important for us to ensure that there was representation of some description for them within the governance of ARIA so that the activities of the agency would meet the needs of the business base and the research institutions in Northern Ireland. The MOU for ARIA seeks to ensure that, and we hope that that is reflected in it and that its activities will underpin going forward.

The Chairperson (Dr Archibald): There is that balance to be struck between wanting to have a level of input from the Executive on their priorities and everything else and having the degree of autonomy and independence that an agency that funds research should have. That is useful for us.

The responses that we received from the Scottish Government and the Welsh Senedd show that there is still a lack of clarity about the Welsh position. Do you have any further information? Are the Welsh now content with the MOU?

Mr Forster: The Welsh are now content with the MOU and are recommending that the Scottish Government and the Senedd respectively provide legislative consent. I think that they have scheduled it for debate next week.

It would probably be remiss not to say that the sticking point was the original intention to reserve in the Scotland, Wales and Northern Ireland Acts the functions of ARIA. That was a point of contention, but the reservation will no longer take place. The MOU was the negotiated outcome, and Scotland, Wales and Northern Ireland are now content that it will pave the way for legislative consent to be given.

The Chairperson (Dr Archibald): Keith, can you explain for members what the reservation would have meant?

Mr Forster: I will do my best. It comes down to a sort of legal position. Innovation, research and development is a fully devolved area. There was a perception that an amendment to the Scotland and Wales Acts could be perceived as an encroachment, for want of a better word, into devolved territory. That was a point of contention throughout the negotiations.

Sarah, would you like to add anything about the practical outworkings?

Ms Sarah Jones (Department for the Economy): The idea behind the reservation was that, if ARIA's functions were reserved in the devolved Acts, that would mirror the UK Research and Innovation (UKRI) reservation. The MOU was negotiated as a means of ensuring that ARIA maintains the independence that such an agency would require.

The Chairperson (Dr Archibald): That is useful.

Mr Forster: We have taken legal advice throughout the process, Chair. We are satisfied that this is probably the preferable outcome. As Sarah said, that is not to say that there is no precedent for reservations of certain powers being made through amendments to those Acts. Suffice it to say, however, we are not in that space.

The Chairperson (Dr Archibald): I have a final question, and then Stewart is looking to come in. Under clause 5, "National security directions", the Bill states:

How does that sit alongside the agency's having independence and autonomy?

Mr Forster: My understanding is that, for national interest, the Secretary of State would like to retain some control and direction of the organisation in that one area. Is that correct, Sarah? Do you have anything to add to that?

Ms Jones: Yes. That is my understanding as well.

The Chairperson (Dr Archibald): Are there any safeguards or particular governance procedures around that?

Mr Forster: Truthfully, Chair, I would need to come back to you on that.

The Chairperson (Dr Archibald): That is grand. Thank you.

Mr Dickson: Lord Callanan's letter to the Subcommittee on the Protocol on Ireland/Northern Ireland refers to issues around article 10 of the protocol. It states:

What effect does that have on the legislative consent motion? We do not know the outcome of those so-called intensive negotiations, but, for the sake of argument, if there were no change, what would happen?

Mr Forster: Sarah, do you want to cover that?

Ms Jones: We sought legal advice on that, so our understanding is that, if article 10 remains, there will be no impact and that any funding provided through ARIA will have to comply with state aid rules, and with the Subsidy Control Bill, if that comes into effect. We do not know what might happen if changes are made to certain aspects of the protocol. We would have to reassess at that time.

Mr Dickson: We are in no danger of approving the MOU without knowing the outcome of those discussions.

Mr Forster: Personally, I do not think that there would be. If there need to be adjustments or amendments made to the MOU to reflect a change in circumstances, we can do that. We are not bound to the document as currently set out ad infinitum, so if adjustments need to be made, we can certainly revisit the MOU with our counterparts in BEIS.

Mr Dickson: Depending on the outcome of any discussions, the MOU can be altered to reflect that.

Mr Forster: We would have to alter it to reflect that. I am happy to come back to the Committee on that point as well. I can speak to BEIS about it just to get clarification, if that would be helpful.

Mr Dickson: Yes. That would be helpful. Thank you.

The Chairperson (Dr Archibald): If there is no change, state aid rules will therefore have to be applied. I guess that that is the starting point for us with the LCM.

I do not have anybody else looking to ask a question, so thanks for that. It has been really helpful in informing our position for the legislative consent motion debate next — is it next Monday?

The Committee Clerk: It is next Tuesday. Chair. We have received one response, from Queen's, which is highly supportive. We close our consultation on Monday 6 December. That means that the Committee will not be in a position to deliver its LCM report, which would normally be the case. We would lay the report, and it would form part of the debate. We will, however, be able to have you speak on what we have heard so far. We will take a view from the Committee as well.

The Chairperson (Dr Archibald): Thanks for joining us this morning. Perhaps you can send on any additional information that you have, as that would be useful.

Mr Forster: Right. Thank you very much, Chair.

Ms Jones: Thank you.