Catapults (Science and Technology Committee Report)

By way of background, the catapults were proposed in a 2010 review for the Government by Dr Hermann Hauser. In the foreword to that review, Dr Hauser wrote that the UK

“falls short on translating scientific leads into leading positions in new industries. This is in part down to a critical gap between research findings and their subsequent development into commercial propositions that can attract venture capital investment or be licensed … Other countries benefit greatly from a translational infrastructure that bridges this gap”.

Dr Hauser’s review proposed

“that the UK develops an equivalent capability … focused on sustained and substantive support for an elite group of Technology and Innovation Centres … that aim to exploit the most promising new technologies, where there is genuine UK potential to gain competitive advantage.”

In response to Dr Hauser’s recommendation, the then Government directed the Technology Strategy Board, now Innovate UK, to establish the Catapult Network.

From 2011 to 2013, during the tenure of the noble Lord, Lord Willetts, as Minister for Universities and Science, who I am very pleased is taking part in this debate, the first seven catapults were established: High Value Manufacturing; Cell and Gene Therapy; Digital; Offshore Renewable Energy; Satellite Applications; Transport Systems; and Future Cities. In 2015 and 2016, three more catapults were added: Energy Systems; Medicines Discovery; and Compound Semiconductors. In 2019, the Connected Places Catapult replaced the Transport Systems and Future Cities Catapults. The catapult network has proved to be an important national asset. A recent report by the Royal Academy of Engineering and the National Engineering Policy Centre, Late-stage R&D: Business Perspectives, highlights the role that the catapults have in supporting late-stage R&D, a vital part of the innovation process that accounts for the majority of R&D that businesses do.

Many businesses choose global locations for high-value, late-stage R&D activities, from multinationals to mobile, innovative SMEs with growth ambitions. But existing UK support for late-stage R&D is not meeting business needs and is considered poor compared to competitor countries. Catapults provide the physical and digital infrastructure needed to test, certify and develop new products, processes, services and technologies, safely and effectively. They assist late-stage R&D by allowing access to specialist equipment, knowledge and data that would otherwise be unaffordable or inaccessible to companies.

There have been various reviews of the catapults over the past five years. Shortly after our committee’s report was published, the Government published their review in April 2021, Catapult Network Review 2021: How the UK’s Catapults can Strengthen Research and Development Capacity. In the same month, the Government also published their response to our report. I will highlight a few of our key recommendations and draw attention to the Government’s responses.

The first was funding. We recommended that specific rules governing innovation funding should be reformed to allow greater flexibility for catapults and their partners. These rules currently act as barriers to collaboration between catapults and universities, and often place too much risk on industry in transformative R&D projects. The funding available for innovation in the UK does not appear to be commensurate with the Government’s ambitions as set out in the R&D road map. The 30% cap on collaborative R&D funding for public sector bodies inhibits collaboration between catapults and universities. Leveraged funding requirements can place too much risk on industry in transformative R&D projects. Also, lack of access to research council funding puts catapults at a disadvantage compared to universities. We therefore recommended that specific rules governing innovation funding in respect of catapults should be reformed. In their response, the Government recognised the current restrictions on funding for innovation and acknowledged that the 30% cap on collaborative R&D funding for public sector bodies could be reducing the ability of catapults to collaborate with universities as well as with each other. The Government’s response indicated that UKRI, and specifically Innovate UK, had been asked to review its funding rules to allow catapults greater flexibility. Could the Minister provide an update on what changes to the funding rules have been made or soon will be made? Will the catapults be allowed greater flexibility?

Our second recommendation was mobility between academia and industry. We highlighted the importance of strengthening links between academia and industry, and the role of catapults in providing a key role in facilitating this. The Dowling Review of Business-Research Collaborations, undertaken for BIS in 2015, highlighted that the

“lack of porosity between industry and academia remains a significant challenge”.

Noting that the strong links between researchers in academia and in industry are a strength of the highly successful Fraunhofer institutes in Germany, we recommended that UKRI foster closer links between industry and universities and assist researchers to work at the interface between the two, including through supporting roles for academics at the catapults. In their response, the Government undertook to work with Innovate UK, catapults and universities to actively promote new connections between catapults and universities. Could the Minister provide an update on this promotion of such connections? What new steps are being taken to facilitate mobility of researchers between universities and catapults?

Third was regional development. Our committee concluded that the Catapult Network can play an important role in the Government’s levelling-up agenda, about which we have heard a great deal. Catapults are one of several bodies that can contribute to regional development, and better co-ordination is needed at local levels. However, catapults face a barrier to involvement in UKRI’s Strength in Places Fund, a flagship part of the levelling-up agenda. In their response to the BEIS review into the catapults, the Catapult Network explained:

“As the funding is geographically ring-fenced, it prevents Catapults from investing in regions where they do not presently work”.

This has the effect of restricting the national reach of the catapults, preventing them from participating where they could potentially add value. Our committee therefore recommended that BEIS and UKRI develop a more strategic approach across policies for innovation and regional development, such as broadening access to the Strength in Places Fund. In their response, the Government acknowledged that their Places strategy is particularly relevant to how catapults can play a greater role in supporting local innovation and growth. Could the Minister provide an update on the Government’s position on a more strategic approach as to how catapults can contribute to their levelling-up agenda? How can they all be involved in the Strength in Places Fund run by UKRI without facing geographical barriers?

Finally, there is the crucial question of the future role and long-term continuity for the catapults. Our committee was unconvinced by the Government’s approach to encouraging industry investment in R&D and how national assets such as the catapults might be enhanced. We recommended that the Government make the best possible use of the Catapult Network, preferably with an uplift in public investment, promoting it as the UK’s national innovation asset, and using it as the default mechanism for exploiting promising technologies and sectors.

In their response, the Government referred to their innovation strategy, which was subsequently published in July 2021. In this innovation strategy, the catapults are mentioned but it is not clear whether or how the best possible use of the Catapult Network will be made, particularly in terms of the envisaged prioritisation process based on the “seven technology families” identified in the innovation strategy, a concept inspired by the Government’s “eight great technologies” introduced in 2013. We understand that the new national Council for Science and Technology, chaired by the Prime Minister, will steer this crucial prioritisation process. Could the Minister comment on this? Will this process involve the catapults and how will the Government make the best possible use of the Catapult Network in the coming years?

In summary, it is clear that the Government rightly have strong ambitions for research and development, as set out in their R&D road map. Achieving the important 2.4% target will require substantially greater private sector investment. The key questions are: how is this to be achieved, which technology sectors will be prioritised, and what role should the catapults play, given that they are unique national assets? I look forward to hearing the contributions to today’s debate and to the Minister’s responses. I beg to move.

Our report called for developing greater involvement of business, academia and private investment in UK innovation and for simplifying the interface between UK research, innovation and business. Our report saw a major role for Innovate UK, and in particular the catapults, while the government report on innovation sees Innovate UK having greater powers and becoming the UK innovation agency—although it is not clear how—and is silent when it comes to the role of catapults, as the noble Lord, Lord Mair, briefly referred to.

Our report saw catapults as having a wider role, maybe even increasing their number in the area of government technology priorities. We saw an opportunity for the role of catapults to be expanded, perhaps even becoming the UK innovation agencies and bridging the interface between research, industry and business, rather like the Fraunhofer institutes in Germany. This is a model that would allow for academia to be part of the business community and for people in the institute and business to be part of academia, even to the point of innovation, and for agencies such as catapults to run their own research programmes in academic departments. So I ask the Minister: in the Government’s innovation strategy, what role do they see catapults having to implement the policy? With a change in their remit, catapults could also have an important role to play in the Government’s levelling-up agenda and ambitions, as the noble Lord, Lord Mair, already mentioned.

Our report emphasised the need to have a balanced view on competition as a driver of research and innovation. The representatives who gave evidence from the CBI commented that competition at all times is not a good idea for innovation. Our report asked that policies should make a co-operative model of innovation more possible. The Government’s innovation strategy gives the impression that a competition model is the one that they favour to encourage business to invest. It cannot be good, for example, for universities and catapults to compete for funds for innovation.

The inquiry’s report recommended longer-term funding for catapults and fewer reviews. The government response to both recommendations was, to put it generously, to pass the buck to UKRI and Innovate UK, and the subsequent government innovation strategy confirms that view. I am tempted to make the assumption that the Government are not clear what role catapults will have in the future, or maybe even that they see a different model to deliver their innovation strategy. I hope that the Minister will have some comments to make on that.

Finally, I make a plea. I feel that the innovation strategy is such an important part of the Government’s long-term R&D agenda and its implications for economic growth that the House should have an opportunity for a fuller debate on that strategy. I hope the Minister could be tempted to use his offices to persuade the business managers to facilitate this.

I would like to make a few quick reflections on the roles of catapults and how they can fulfil them. In many ways, they are to be seen as an intermediate body between universities and business. Of course, we all want to see universities and businesses dealing direct; that is excellent and needs to be promoted. However, at the same time, the analysis was that there are some kinds of TRLs—technology readiness levels—in the middle that are not the focus of attention for university research and are not yet suitable for full-blown commercial investment. That is where catapults have a really important role to play.

I still see them as torn between these two gravitational forces: on the one hand is the university academic agenda, and on the other are the requirements and needs of business. If I may draw on my new role as chair of the UK Space Agency, I hope they occupy a kind of Lagrangian point, happily balanced between these two different gravitational forces. If I were to hazard a guess, my assessment at the moment is that, if anything, the gravitational pull from business is proving rather stronger and the engagement from universities rather weaker. There are risks in that.

Catapults must find the best way of showing that they are delivering private spend by joining up with quite close-to-market projects that business is willing to finance and moving to that end of the technology readiness scale, while also thinking of more upstream activities and closer links to universities. I very much welcome the proposals in this report about getting catapults to work more closely with universities. They are not supposed to be simply recipients of contract funding for applied research which business wishes to see happen anyway; they are more at that midpoint, and we should always bear that in mind.

They went out of fashion for a few years—I never quite understood why—but they are certainly back and I think they are receiving strong support from the Government now, which I am sure is influenced partly by this excellent report. One thing that was striking during the period when they were out of favour was that an opportunity was missed to use catapults as a template whenever a new applied research institute was being created. One of the reasons for the catapult model was that too much time and effort was being expended on getting elaborate teams of lawyers to write tailor-made articles of association and deciding whether a new entity would be in the public or private sector and whether it would be a charitable body or a limited company with a public purpose. Instead, I saw the catapult model as an easily accessible template that made that whole process simpler. For example, I think the Faraday Institution, which is an excellent body, would have been up and running a year earlier if it had been simply a batteries catapult. I hope the Minister will agree that catapults are a useful template for getting on with something when we have clearly reached the stage where some mix of public and private funding is required to move a technology forward. It should be the standard template that is always available and used in those circumstances.

I very much welcome the stress the noble Lord, Lord Mair, placed on catapults as a kind of strategic opportunity. Again, in the past year we have seen the Government recognising them in that light. I had at the back of my mind the hope that, eventually, in a neat and tidy world—the world is not like that—all of the eight great technologies that we identified would have some kind of catapult support to help bring them forward. That applies now to the seven technology families identified in the Government’s innovation strategy. It is not a neat and tidy alignment, but it would be welcome if the Minister could say that, as the Government look to how they can implement their commitment in the strategy to those seven technology families, they will check to see whether, within each family, there are particular technologies or groups of technologies for which a catapult could really help deliver the Government’s ambitions.

Finally, I want to add an angle that I do not think has been touched on so far. As we look to how this country can deliver the ambitions for 2.4% of GDP being spent on R&D—let us hope it will go beyond that—there is one constraint which I fear will be the biggest single one, because I think there is now political will and a commitment to do it. The biggest single constraint is the skilled people needed to do it: the scientists and researchers, but also the technicians and technologists who will either ensure that kit works or, even better, help create new kit in that endless, exciting interaction between science and technology that brings both human progress and economic advance. Here, there is an opportunity for catapults to do far more than they do at the moment in technical training and to overtrain, training more people than may be needed for the specific operation of the catapult. If they are seen as a resource which can train more technicians to go out into industry or indeed other research institutes and universities, with proper expertise and vocational or university qualifications, that would be an extra useful role that is very relevant to the Government’s vocational and technical training agenda.

I very much welcome this excellent report, which provides a set of practical policy proposals that can be acted on, and I look forward to the Minister’s response.

A gap opened up in tertiary education when the colleges of advanced technology were freed from local authority control in 1962. Their role had been to pursue industrial research and development. This role went into abeyance when they became universities and began to teach degree courses in imitation of the older universities. The polytechnics and colleges of technology had been serving the interests of business and commerce by teaching commercial and industrial skills. The Further and Higher Education Act 1992 removed them from the control of local authorities and they too were allowed to bid to become universities. There has since been an implosion in the remnants of the further education sector, which has been severely starved of funds. The sector has been unable to invest in order to adapt to the changing demands of industry and the number of students who receive a technical education has fallen drastically.

In the meanwhile, the university sector has grown markedly. The cap on student numbers has been lifted and universities have been allowed to compete among themselves for students. The intellectual demands of a university degree course have been alleviated to cater to a wider ability range, and the research performance of universities shows signs of suffering. Their role in technical education has declined.

There have been increasing demands on universities to fill the gap where industrial research and development have been lacking. A further element has been added to the burden of the audits under which academics are labouring. They are required to demonstrate their research performance under the research excellence framework. Their teaching is monitored under the teaching excellence framework and the National Student Survey. Now, their performance in fostering industrial research and development is being encouraged and monitored under the knowledge exchange framework. They are being asked to fill the gap. These regimes make contradictory demands and ask too much of academics.

It was a consciousness of the gap that exists between academic research and industrial development that led to the establishment of the catapults. They are an increasing number of ad hoc organisations with designated purposes in various areas of industrial technology. The question that has to be asked is whether this is an appropriate and an effective means of satisfying the needs for industrial research and development. The answer that occurs to me is that, given the distorted nature of our educational system, and given the incoherent way in which Britain has organised its applied research, the catapults may be a regrettable necessity.

We can look at other countries to witness better systems. Comparisons, as we have heard, are often made with Germany, where applied industrial research, which is accorded a high status, takes place in the Fraunhofer institutes. These are research establishments spread throughout Germany that focus on different fields of applied science. With some 29,000 employees and with an annual research budget of €2.8 billion, they form the biggest organisation for applied research and development in Europe.

The size of this organisation is roughly equal to that of the Max Planck Society, which supports fundamental research in the natural sciences, the life sciences and social sciences. That organisation was given its present name in 1948. Previously, it had been the Kaiser Wilhelm Society. Its research is comparable to that of the UK universities. The superior research performance of British universities compared to their German counterparts may be an illusion, since the research that takes place in the Max Planck institutes and the Fraunhofer institutes is not directly attributed to specific universities. This is despite the fact that many of the researchers have been seconded from universities.

The report of the Science and Technology Committee makes a comparison between the catapults and the Fraunhofer institutes. However, the two networks differ in size by an order of magnitude. A comparison of the funding of industrial research and development in Germany and Britain is difficult to achieve, because of the dispersed and incoherent nature of the activities in Britain. But there can be little doubt that the funding by central government is much greater in Germany than in Britain.

It is only through greatly increased funding and by a fundamental reorganisation that industrial and applied research in Britain could hope to rival that of our European neighbours. I see no reason, for example, why the various public sector research establishments of Britain, which have served us well in the past, should not fall under the same umbrella as the catapults, to allow for a much greater coherence. At present, the catapults appear to be an ad hoc and a small-scale response to an enduring systemic failure in the United Kingdom.

“provide a crucial role in bridging a gap between academia and industry to provide academia with an insight into future needs of the sector.”

They

“play the role of catalyst in helping innovation to drive skills and vice versa, especially when supporting higher technical skills. … A systems thinking approach is necessary when planning a strategy for the R&D sector because policies across sectors are interlinked. … Catapults need sustained funding that transcends Governments to allow for stability.”

The reality is that the United Kingdom spends 1.7% of GDP on R&D and innovation whereas countries such as Germany and the United States of America spend 3.1% to 3.2%. Just imagine if we spent just 1% extra a year—an extra £20 billion a year—and how much of a difference that would make in powering our productivity and our growth. Would the Minister agree with that? That is leaving aside the shortfall of all these years where we have underinvested.

The Government say they have a strong ambition for R&D as set out in the R&D road map, saying that we should spend 2.4% of GDP on R&D by 2027, but I believe they are not being ambitious enough. They are committed to £22 billion by 2024-25 but I think the Government should target the German and American levels of 3.1% or 3.2% overall. Would the Government agree?

The catapult network is a key part of this. They are key in attracting increased private sector R&D investment and are also linked to the levelling-up agenda. On Innovate UK, the Government play a major role in this as well, and then there are the links with industry. One of my priorities as president of the CBI has been to promote industries and universities and government working more closely together, therefore catapults are music to my ears.

One of the report’s big recommendations is that funding needs to be reformed for catapults—I will come to that in more detail—and the Government need to develop

“a detailed strategic plan for delivering its R&D ambitions”.

The report, Catapults: Bridging the Gap Between Research and Industry, was produced in 2020, a year and a half ago, and it considered the role that technology and innovation catapults have played in encouraging investment and collaborations in UK innovation. It speaks about the funding of the nine catapults, which is an important point. One-third comes from a government grant via Innovate UK, one-third from industry partners, and one-third from collaborative funding—the CRD funding. This is where the report says there needs to be much more flexibility in the funding. Would the Government agreed that that should be introduced to improve the catapults?

To summarise the excellent recommendations of this report, the Government, UKRI and Innovate UK should create a clear plan for how public sector resources and private investment could match the road map ambition. The Government should scale up the catapult network. Do the Government agree with this? Without that, there will not be sufficient private sector investment. UKRI should help catapults and universities work together more easily and UKRI should allow catapults to bid for research council funding where there are clear advantages for R&D and innovation, and Innovate UK should offer greater flexibility in allowing public sector bodies to have a larger share of the CRD funding, particularly where more than one such organisation is involved. Would the Government agree with that last point in particular?

Professor Juergen Maier, who used to be on my president’s committee at the CBI and who is a former CEO of Siemens UK and chairman of the Digital Catapult, told the committee that the UK does not currently have the scale that large multinational companies need for conducting innovation projects, whereas some other countries have more capacity to support innovation.

On international factors, Felicity Burch told the committee that 48% of the R&D performed by businesses in the UK was by non-UK owned businesses. Professor Maier explained that multinational companies look for two things in a country when investing in R&D: quality and scale. He said that on quality the UK does very well but on scale we do “pretty badly”.

Other speakers have referred to Germany’s Fraunhofer Society. In terms of scope, scale and depth of links between academia and industry, Matthew Durdy said that the Catapult Network

“is probably less than a third of the scale of the Fraunhofer [Institutes].”

The Government are doing good things. I am a member of the Chancellor’s advisory board on the Help to Grow management programme, which has 30,000 mini-MBAs for SMEs. It is a fantastic programme, just the sort of thing we need to improve skills and encourage growth. Yesterday, I was privileged to chair the first CBI annual dinner for three years, with almost 600 people present. Our chief guest was the Chancellor of the Exchequer, Rishi Sunak. I shall quote from his speech, which was very relevant to our debate. He said:

“Over the long term, higher productivity is the only way to raise living standards … Our incredible universities produce the third highest number of publications worldwide and we have the second most Nobel Laureates of any nation.”

Cambridge University has the highest number of Nobel laureates of any university in the world.

The Chancellor went on to say:

“Our economy has decarbonised quicker than anyone else over the last twenty years ... We also need to overcome our longstanding weaknesses in investment, skills, and innovation. Even in the decade before the global financial crisis, capital investment had weakened. Research from the Resolution Foundation and the LSE shows that lower capital per hour worked explains around half our productivity gap with France and Germany … since the financial crisis, the rate of increase in innovation has slowed considerably. A weakness that explains almost our entire productivity gap with the United States.”

Then he said this:

“The problem I don’t believe is any longer the government. Public sector net investment is reaching its highest sustained level since the 1970s. Yet capital investment by UK businesses, as a % of GDP, is a lot lower than the OECD average … UK employers spend just half the European average training their employees.”

At the CBI, we estimate that over the next decade, businesses will have to spend £130 billion investing in training and nine out of 10 people today will have to retrain in one way or another in the next 10 years.

The Chancellor went on to say that

“over this Parliament, we in government are delivering our pledge to increase public investment in research and development by 50% to £22 billion. But businesses’ investment in R&D, as a % of GDP, is less than half the OECD average. In other words, further government action can only take us so far. We need you. The wealth creators. The entrepreneurs. The leaders. We need you to invest more, train more, and innovate more … our firm plan is to reduce and reform your taxes to encourage you to do all those things. That is the path to higher productivity, higher living standards, and a more prosperous and secure future.”

It is government’s role to create the environment for business to flourish and to invest in R&D and innovation. The Government did a fantastic thing in introducing the 130% superdeduction to encourage investment, but it is being taken away from us in April next year. We are saying that the Government should have a permanent, 100% reduction on taxes for investing by businesses. Do the Government agree that we should have something to replace the superdeduction: a 100% deduction to incentivise investment? That is what will create the growth that will create the employment that will pay the taxes that will pay down our debt.

The Government do not create the right environment for investing in R&D and innovation by having the highest tax burden in 70 years. We have already had a fragile recovery from the pandemic, exacerbated by the sad war in the Ukraine, and high taxes stifle growth and the recovery. I was on the universities and business task force that reported in 2020. One revelation that came out from that was that a huge proportion of the private sector investment that this report and the Chancellor are talking about comes from abroad. We need to continue to be a magnet for inward investment, but how can we be if we have the highest rate of taxes in 70 years? Historically, we have been the second or third largest recipient of inward investment in the world.

As chancellor of the University of Birmingham, I am so proud of one example of what the report talks about and the catapults are trying to achieve. In 2012, a PhD research project into producing a hydrogen-powered train led to a model hydrogen-powered train in the engineering department of our world-leading railway institute, headed by Professor Clive Roberts. That led to COP 26 in November last year, when we had the world’s first retrofitted hydrogen-powered train up and running. The Prime Minister and Prince Charles were on the train; I chaired a meeting of university leaders on the train. That happened only because of research by a world-leading university, working in collaboration with Porterbrook, the rolling stock company, companies such as Siemens and the Government with Innovate UK. That is what led to that world-leading innovation. That is the potential of catapults.

To conclude, catapults have a crucial role in eabling this country’s phenomenal ability to be creative and innovative in a world-beating manner: to get universities, government and business working together to create best-of-the-best, world-leading innovation.

We have heard that a number of catapults were first established in 2010-11 and thereafter in 2015, and two are relevant specifically to UK life sciences: the Cell and Gene Therapy Catapult and the Medicines Discovery Catapult. The Cell and Gene Therapy Catapult, as an example of the success of catapults, is quite striking. It was established with great foresight and imagination at a time where there was recognition of an emerging technology—cell and gene therapies—to be applied not only to treat but potentially to cure diseases. We have seen a rapid advance in the technological base for cell and gene therapies, contributing at pace and increasing scale to the management of many diseases.

However, it is interesting that the area around Stevenage, the home of the Cell and Gene Therapy Catapult, is also the world’s third largest cluster of cell and gene therapy companies. In establishing the catapult, the innovation landscape has not only established the opportunity to house essential technology and equipment but provided the opportunity for nascent and established businesses to test their innovation, establish their credentials and ensure their broader application generally in healthcare. It has also encouraged the development of many novel businesses in the location and their taking advantage of those opportunities to ensure the development of jobs and economic activity.

Your Lordships’ Science and Technology Committee report identified a critical anxiety regarding funding rules attending the opportunity for catapults to avail themselves of Research Council funding and to be in a secure position to take full advantage of public funding made available by Innovate UK. These are two critical issues that my noble friend Lord Mair touched on in his presentation of the Committee’s report. I should declare that I was a member of your Lordships’ Science and Technology Committee. In making recommendations 3 and 4, we highlighted the repeated concern and the chilling effect of a restriction regarding access to Research Council funding, and that the 30% cap on Innovate UK funding to public sector organisations, which could include the two catapults or universities working together, was a substantial disadvantage. Her Majesty’s Government recognised and accepted the recommendation.

In November 2021, Innovate UK published its plan of action moving forward, recognising the success of catapults but, as far as I can ascertain, failing to address the question of restrictions to Research Council funding and the quantum of Innovate UK funding for public sector organisations. Are Her Majesty’s Government content that this issue has been addressed and if not, how do they propose to address this pivotal recommendation in the Science and Technology Committee’s report?

It is clear that public sector investment in research and development is frequently attended by a tremendous upside in terms of private sector contribution. We see this in the analysis of the biomedical catalyst fund: some £250 million of funding resulted in £1.3 billion of private sector contribution to research funding, acquisitions and other elements of commercial activity.

If the true opportunity to leverage public sector R&D in the life sciences sector is to be achieved, providing that funding consistently through mechanisms such as the catapults is of tremendous importance and significance, as is Her Majesty’s Government’s commitment to ensuring that if our country is unable to participate in Horizon 2020 funding as an associate member, that funding deficit will be matched. Can the Minister update us on the Government’s position regarding Horizon 2020 funding or its future matching, as that too plays a vital role in the UK innovation landscape?

The Digital Catapult has taken public funding and applied a significant multiplier to it to make a difference right across the country—over 400 businesses each year since its establishment. On levelling up, look at the work in Northern Ireland that the Digital Catapult is doing with nano manufacturing businesses: a clear example of how the catapult can play a critical role in that part of the ecosystem, add pace at that stage and be a key part of the Belfast innovation district. Again, that shows that this is not just about individual entities, individual parts of the state trying to operate as verticals or in isolation. It has to be an ecosystem, a district, a cluster and a collaboration between all those elements, right across the United Kingdom.

We have the opportunity. Crucially, it comes down to enabling that talent and technology to come together—that inclusion and innovation. To answer the question that still exists in this area, as much as in so many areas of our lives, the talent is everywhere. The ideas are everywhere. Crucially, the opportunity still is not. Catapults have a crucial role to play and we should all continue to be supportive of their work.

Finally, I ask the Minister for his view on what more we need to do to ensure that we get to the 2.4% and beyond. As I have the microphone, I hope I will be indulged in asking him where the Government are on the leadership of ARIA and how he sees the role it can play in the overall innovation space. It will be the so-called new technologies that build economic growth and, through that, the social, psychological, community, city and national growth that we need to move forward for the benefit of us all.

As you might imagine, our witnesses from the catapults suggested ways in which they could get their hands on more cash to fund their projects. The noble Lord, Lord Bilimoria, asked for more flexibility about funding. Some of our recommendations agreed that this could be done in a number of ways. We asked UKRI to allow catapults to bid for research council funding, where there are clear advantages for research and innovation. I am pleased that the Government’s subsequent review of the catapults agreed this should be done. We also asked that Innovate UK should raise the cap on the share of collaborative research funding for which catapults can bid, particularly where more than one such organisation is involved. I echo the request for that from the noble Lord, Lord Mair, and the noble Lord, Lord Kakkar, said that failure to do so has had a chilling effect.

Again, the Government agreed to ask UKRI and Innovate UK to make these changes, so I ask the Minister whether there are any figures on how much additional funding has become available to the catapults since that change was agreed in the Government’s review. This would be money well spent. Catapults can deliver enormous leverage for the funding they receive, though some are better at it than others. For example, the Digital Catapult core grant is £12 million. It calculates the yield as £436 million over four years, from the funds raised by the businesses it supports. The noble Lord, Lord Holmes, also mentioned this and the noble Lord, Lord Kakkar, mentioned the great success of the Cell and Gene Therapy Catapult.

There is of course some variation in the success enjoyed by the catapults. Some are better at working with universities than others, and we recommended that more could be done, perhaps through adjusting the universities’ KPIs, to encourage them to collaborate with catapults to increase translational work. Some are better than others at helping small businesses grow, and I would like to see more opportunities for the less successful ones to learn from the leaders in the catapult field.

When we wrote the report, we believed that there needed to be more clarity in the Government’s plan for their innovation ambitions, a matter we are pursuing further in our current report on the R&D landscape. In their response, the Government restated their confidence that their target of reaching a spend of 2.4% of GDP on R&D would be achieved by 2027, though unfortunately, as mentioned by the noble Lord, Lord Mair, the latest data available says we have reached only 1.7% to date.

The Government have accepted that more private funding is essential to their ambition, but we recently heard from a senior industry witness that they are not engaging with industry sufficiently well to achieve that. There is a lack of confidence in the clarity and consistency of the Government’s science strategy to encourage such investment. I realise the response was published a year ago—we have been waiting that long for a debate on this—but I wonder whether, in his reply, the Minister will tell us whether that situation is improving and through what actions.

I heard that the Government’s innovation strategy, published several months after our report, contained a mention of the role of catapults, so I had a look at the “implementation” section. I found multiple strategies, missions, forums, reviews, assessments, headline pledges and even a new organisation—ARIA, the Advanced Research and Innovation Agency, which, as the noble Lord, Lord Holmes, pointed out, cannot seem to find a chief executive.

Eventually, I found a mention of catapults on page 110. First, I found the review of catapults, which, as I have mentioned, was carried out last April just after our report. I found an acknowledgement of the role of catapults in the levelling-up headline ambition, as they are in 40 different locations across the country and are charged with creating jobs and improving skills by helping industries to grow. I found that the review published last April recommended:

“Innovate UK will ensure that Catapults deliver on their full potential for business. This will include growing their capabilities to support skills development in the sectors they support, contributing to levelling up, driving research commercialisation, and enabling global innovation collaborations.”

Our committee also had a recommendation about this. The catapults work in the regions, but the strength in places funding stream from UKRI is tightly ring-fenced. This means that they sometimes cannot work in places where they might have added value. We asked the Government to look at this and I hope the Minister will tell us that they have. I therefore wonder whether that recommendation and various others about scaling up funding are being carried out, and I look forward to what the Minister has to say about that.

I have one or two more points. The noble Lord, Lord Mair, asked about our suggestion that UKRI should support researchers to work at the interface between universities and industry, in the exact place where the catapults work. Support for such professionals would allow them to make a valuable contribution to any catapult. Has there been any progress on this idea?

The noble Lords, Lord Willetts and Lord Holmes, mentioned skills, and they might like to know that our next report will be on what can be done to increase the science and skills people pipeline. I look forward to further debates on that when it comes out but, for now, I look forward to the Minister’s response.