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House of Commons Science and Technology Committee

Bioengineering: Government Response to the Committee’s Seventh Report of Session 2009–10 Fifth Special Report of Session 2010–12 Ordered by the House of Commons to be printed 8 June 2011

HC 1138 Published on 14 June 2011 by authority of the House of Commons London: The Stationery Office Limited £0.00

The Science and Technology Committee The Science and Technology Committee is appointed by the House of Commons to examine the expenditure, administration and policy of the Government Office for Science and associated public bodies. Current membership Andrew Miller (Labour, Ellesmere Port and Neston) (Chair) Gavin Barwell (Conservative, Croydon Central) Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East) Stephen McPartland (Conservative, Stevenage) Stephen Metcalfe (Conservative, South Basildon and East Thurrock) David Morris (Conservative, Morecambe and Lunesdale) Stephen Mosley (Conservative, City of Chester) Pamela Nash (Labour, Airdrie and Shotts) Jonathan Reynolds (Labour/Co-operative, Stalybridge and Hyde) Graham Stringer (Labour, Blackley and Broughton) Roger Williams (Liberal Democrat, Brecon and Radnorshire) Powers The Committee is one of the departmental Select Committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No.152. These are available on the Internet via Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at A list of reports from the Committee in this Parliament is included at the back of this volume. The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in printed volume(s). Additional written evidence may be published on the internet only. Committee staff The current staff of the Committee are: Glenn McKee (Clerk); Stephen McGinness (Second Clerk); Farrah Bhatti (Committee Specialist); Xameerah Malik (Committee Specialist); Andy Boyd (Senior Committee Assistant); Julie Storey (Committee Assistant); Pam Morris (Committee Assistant); and Becky Jones (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Science and Technology Committee, Committee Office, 7 Millbank, London SW1P 3JA. The telephone number for general inquiries is: 020 7219 2793; the Committee’s email address is: [email protected]

Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10


Fifth Special Report On 25 March 2010 the Science and Technology Committee published its Seventh Report of Session 2009–10, Bioengineering [HC 220]. On 23 May 2011 the Committee received a memorandum from the Government which contained a response to the Report. The memorandum is published as an appendix to this Report.

Appendix: Government response The Government welcomes the Committee’s report and its support for the UK’s world class bioengineering base. This memorandum sets out the Government’s response to the report. This response has been prepared by the Department for Business, Innovation and Skills (BIS) with major contributions from the Department for Environment Food and Rural Affairs (Defra) and the Department of Health (DH). In a number of areas the response has required the development of the [Coalition] Government’s policy and the Committee’s patience following the publication of its report in March 2010 has been appreciated.

1 Basic Research 1. Bioengineering is an important component of the UK research base and basic research is relatively well funded. We detected, however, some tension between government priorities and funding support in the area of GM crop research. This may be a healthy manifestation of the Haldane Principle or a situation peculiar to GM crops, but we invite the Government to consider whether its overall strategy on the differential levels of funding in key strategic areas is a cause for concern (Paragraph 21). The Chief Scientific Adviser’s ‘Food Research and Innovation Strategy’, published in January 2010, set the strategic direction for the implementation of Government’s priorities from a global as well as a national perspective. The Government has since adopted this science strategy. In December 2010 the Government announced the allocation of science and research funding1 stating that “Despite enormous pressure on public spending, funding for science and research programmes has been protected in cash terms demonstrating the Government’s commitment to rebalancing the economy and promoting economic growth.” Resource funding was protected with a £4.6 billion per annum flatcash, ring-fenced settlement for 2011–15 providing long-term stability and certainty to the research base. An additional investment announced in the budget of £100 million in science investment projects will develop infrastructure at national research campuses2. These investments will protect national capability, maintain international competitiveness 1



This included funding for the Harwell Science and Innovation Campus, the Daresbury Science and Innovation Campus, the Norwich Research Park and the Babraham Campus.


Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10

and maximise the economic and social benefits of research over many years. The Government recognises that under the Haldane principle the precise balance of resources allocated to the research and development of various types of improved crops, including GM crops, is a matter for the Research Councils. The Government does not therefore consider there to be a “tension” between its strategic priorities and the funding of GM crop research, but consider that there is a necessary and healthy determination made by the Research Councils for their own allocation of funding between the different types of food research, of which, GM is only a small but important part. Programmes such as the cross-Government ‘Global Food Security’ programme led on behalf of the Research Councils by the Biotechnology and Biological Sciences Research Council (BBSRC) which BBSRC have confirmed to be a priority for them in their 2011– 2015 Delivery Plan, published in December 20103 bring together, in a co-ordinated way, the research and development efforts of other Research Councils and agencies and departments including the Food Standards Agency (FSA), Medical Research Council (MRC), Natural Environment Research Council (NERC), Technology Strategy Board (TSB), Department for International Development (DFID), Department for Food, Environment and Rural affairs(Defra) and Department of Health (DH). This currently represents some £400m of combined annual expenditure on food research. Within this the budget for GM crops is relatively small, but funding for GM crop research needs to be considered in the context of the Government’s overall strategy and policy agenda for food and farming. The BBSRC is the main funder in the food research area, focusing mostly on fundamental plant and crop science. Defra and DFID are also significant funders, supporting work in line with their specific policy aims as is the TSB through its Sustainable Agriculture and Food Initiative, which covers industry-led collaborative research. At present, the amount of public funding specifically for GM crop-related research is limited. However, the issue should not be the level of support for GM relative to other technologies, but pursuing the most effective solution for each identified need, whatever approach that might entail. The Government considers GM to be only one of the potential tools available to help society to further increase future food supplies. Considerable progress has also been made in recent years in the development of gene sequencing technology, or ‘genomics’ much of it resulting from research initially funded by BBSRC at Cambridge University and this is enabling gene marker technology to identify those plants with the desired characteristics in conventional breeding programmes. The development and use of GM crops needs, therefore, to be considered in the broader context of the challenge on global food security. It may take more than improved crop breeding assisted by new genomics technologies including rapid gene sequencing to meet this challenge. There is a need to look at all the means at our disposal to achieve the desired outcome. GM research could offer a range of benefits over the longer term, with new crop traits (e.g. drought-tolerance, disease-resistance) to improve agricultural productivity and sustainability and potentially beneficial implications for dietary requirements.



Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10


2. The UK is a world leader in basic research in bioengineering. But there is no room for complacency, particularly when faced with the dual threats of funding cuts and increasing international competition. Excellence in research is an investment for the UK’s future, and it requires a long-term, sustained commitment to funding from the Government. Funding cuts to bioengineering, and indeed most areas of science and engineering, would risk throwing away the investment the Government has already made over the past 10 years. It would be foolhardy to take away that support now and lose out on the future benefits of past investment. We are concerned that the UK would not maintain an internationally competitive position in bioengineering if funding for basic research was cut, even in the short-term (Paragraph 29). The Government welcomes the Committee’s recognition that the UK is a world leader in research in bioengineering. The Government is keen to promote Bioengineering as an important and beneficial technology for key sectors including healthcare and agriculture. Bioengineering fits well with the Government’s strategic long–term approach for science and technology based economic growth. The Government’s strategic objective will be to develop further the strengths of the UK science base and to translate the results into long term beneficial economic impact. Government recognises that its role is to create the right climate to nurture the UK research community and its world class science base and to facilitate the translation of research findings to best economic and societal effect such that the UK becomes a leader in the future Knowledge Based Bioeconomy.

Funding Translation 3. We conclude that the private sector cannot on its own fund the translation of basic bioengineering research to commercial operation, particularly in the case of GM crops, where the private sector is virtually non-existent in the UK. Venture capitalists alone are not capable of providing the sustained long-term investment in bioengineering to achieve the economic and societal benefits the UK needs. The position of the pharmaceutical industry is less certain. We consider that the pharmaceutical sector’s need to develop new business models is an opportunity to embrace new bioengineering technologies based on, for example, patient personalised cell-based therapies (Paragraph 47). As far as drug development is concerned, the National Institute for Health Research (NIHR) has established the research infrastructure and programmes necessary to evaluate and support the development of the technologies and interventions that may arise from new business models adopted by the industry sector. The TSB recognises the challenges faced by companies in funding early stage technology development and the subsequent adoption of that technology into the market-place (whether that be in the health or the agricultural arenas). Interventions developed by the TSB look to address not only the technological challenges but also the difficulties faced by businesses in being able to realise a return on their investments. Invariably this means that businesses must change the ‘way in which they do business either through strategic partnerships or moving towards service-based models rather than being product focussed.


Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10

The TSB is funding a number of commercially led projects in value systems and business modelling in the Regen Med programme to help businesses better understand and effectively address some of these issues. Furthermore, it has also recently launched strategic research programmes in the areas of Sustainable Agriculture and Food in partnership with Defra and the Research Councils, and Stratified Medicine in partnership with the DoH and the Research Councils. The former, around £90m, will seek to stimulate the development of new technologies that will increase food productivity, while decreasing the environmental impact of the food and farming industries. The Stratified Medicine Innovation Platform, worth over £50m, seeks to enable the UK to become a world leader in developing and adopting stratified medicine, which offers the prospect of developing a greater number of medicines targeted at smaller, specific groups of patients, and will fund business led projects to establish R&D linkages between Pharma and diagnostic companies, as well as pulling together the academic and clinician bases. The Government believes technology-based innovation will be one of the key drivers of the private sector led economic growth. A Blueprint for Technology (November 2010) sets out how the Government will make Britain the most attractive place in the world to start and invest in innovative technology companies. The Blueprint aims to send a clear message to innovative technology companies of all sizes, both established and emerging, that we are committed to making the UK Government the most technology friendly in the world. The Government is currently working with businesses and other experts to set out its broader vision for innovation in a crossGovernment innovation strategy. Measures outlined in the Blueprint include: •

creating an new Entrepreneurs Visa for entrepreneurs backed by UK investors, to make the UK the most attractive place in the world to set up and grow a business;

an independent review of the intellectual property framework, including considering whether there are benefits in a US style ‘fair use’ copyright provision;

launching a new ‘peer to patent’ system to make it quicker and cheaper to register a new patent.

4. We recommend that in October 2010 the Government provide our successor committee with an assessment of the effectiveness of the Office for the Strategic Coordination of Health Research in facilitating rapid translation of research findings into health and economic benefits (Paragraph 51). 5. We recommend that the Government provide our successor committee with an update in October 2010 assessing the effectiveness of the Technology Strategy Board’s Sustainable Agriculture and Food Innovation Platform in improving the translation of GM crop technology (Paragraph 56). Response to recommendations 4 and 5;

Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10


TSB’s Sustainable Agriculture and Food Innovation Platform (SAFIP), co-funded by Defra and BBSRC, will stimulate the development of new technologies that will increase food productivity, while decreasing the environmental impact of the food and farming industries. SAFIP will see investment around £90million over the next five years in innovative technological research and development in areas such as crop productivity, sustainable livestock production, waste reduction and management, and greenhouse gas reduction. Under the first competitive call for collaborative research and development, a commitment from TSB of £13.5 million has been augmented by industry support to a total of £26 million funding for 32 approved projects to address crop protection. The next call will focus on delivering a sustainable future supply of protein for the UK. There will be two core themes: increasing self-sufficiency in vegetable protein and increasing efficiency of livestock systems. The Government will provide a further update on these matters should the Committee so request. 6. We welcome the Government’s venture capital fund, the UK Innovation Investment Fund, and commend its success to date in raising funds in a tough fiscal climate. We request that the Government provide our successor committee by October 2010 with a breakdown showing how funds will be allocated, particularly how much will be available to the life sciences sector (Paragraph 58). The UK Innovation Investment Fund is investing £150m into two fund of funds, the European Investment Fund’s UK Future Technologies Fund and Hermes GPE’s Environmental Innovation Fund. This has already leveraged private sector investment of £175m, creating a £325m pool of capital for investment. As funds of funds, we envisage a 12-15 year lifespan, with the majority of the money being invested in the next five years. This means it would be too early to say how the funds will be invested. It is worth noting that the specialist technology fund managers will make all investment decisions, but that at least £25 million will be allocated to life sciences investments. The European Investment Fund's UK Future Technologies Fund (£200M) will invest in a number of specialist technology funds such as life sciences, digital technology and advanced manufacturing. It has made three investments to date – one into the DFJ Esprit III Fund; one into Acton Capital Partners’ Heureka Growth Fund; and one into Advent’s life sciences fund. The Hermes Environmental Innovation Fund is focussed on increasing the efficient use of resources and the development of clean technologies and is a major boost in the transition to a low carbon economy and it made its first investment into WHEB Ventures’ second clean technology fund. Underlying funds have made investments into companies and continue to carry out due diligence. 7. We recommend that the Government consider increasing funding for applied research into GM crops. As it aligns with Defra’s policy objectives on global food security, we suggest that this increased funding could be provided, at least in part, through Defra’s R&D budget (Paragraph 61). Core Defra’s Evidence budget (which includes research, monitoring and surveillance) for 2010/11 is approximately £210m, of which about £123m is for research. To meet savings


Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10

requirements over the spending review, a total of £43m evidence savings (which will include savings on both research and other evidence activities) for 2014/15 has been committed. The Chief Scientific Adviser has ensured that reductions in evidence investment are strategically distributed across Defra’s entire portfolio in line with evidence priorities, as set out in the Structural Reform Agenda, Business Plan and Evidence Investment Strategy. This means greater savings will be found from areas with lower evidence need and less savings from areas of higher evidence need. Research needs for GM must be considered within this wider strategic picture. Defra’s funding for research to support the delivery of policy priorities including food security is needs led. GM is one of the tools that could make a contribution to tackling the challenges of global food security alongside other applications of scientific knowledge. It could offer a range of benefits over the longer term, with new crop traits (e.g. droughttolerance, disease-resistance) that help to make agriculture more efficient and sustainable. It will take more than improved crop breeding to meet the challenge of ensuring global food security, but we need to look at all the means at our disposal to achieve the desired outcome. Research priorities in Defra are based on the merits of individual approaches to solve specific problems. Defra funds £3.5 million per annum in genetic improvement networks covering arable crops and livestock, which is able to utilise a wide range of advanced breeding techniques.

Conclusions on Funding 8. In early stage translation, we argue that the Government has a greater duty than the private sector to bridge the gap, particularly in areas that align with policy priorities. More funding should be provided by the public sector for the early stages of translation. In stem cells, for example, this would be until the stage where it is possible for products to demonstrate evidence of safety and efficacy (Paragraph 63). 9. The Government is right to intervene to bridge the so called “valley of death” between basic research and commercial production. But if it is serious about doing so, funding for translation should be much greater. As a starting point for debate, we propose that if the Government were serious about translation in the same way that it is serious about basic research, the funding for translation would be increased to at least the same order of magnitude (Paragraph 64). Response to recommendations 8 and 9. The Government recognises that where the market has yet to develop and the risk/reward ratio and spill over benefits work against the financial viability of investment by companies alone, particularly SMEs, there is a role for Government in promoting the translation of research. A number of mechanisms are in place to encourage this, not least Government investment funds, the R&D tax credit, various grant funding programmes and other initiatives managed by the TSB, including its Regenerative Medicine programme, and a remit for Research Councils to address the economic impact of their research.

Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10


R&D Tax Credits allow all companies undertaking qualifying research and development expenditure to claim relief from corporation tax. Since 2000 almost £4.9 billion of support has been provided to UK companies through R&D Tax Credits and over 80 per cent of claims are made by SMEs. A CBI survey (2009) reported that R&D tax credits play an effective role in encouraging business R&D investment and found that savings on R&D costs delivered by the scheme now averaged 10.5 per cent for SMEs, 8.5 per cent for medium-sized companies and 6 per cent for large companies. In December 2010 HMRC published their report evaluation of the impact of R&D tax credits for the ten years since the introduction of the scheme in 2000. The findings were positive and analysis of UK claims indicates that up to £3 of R&D expenditure might be stimulated by £1 of tax revenue forgone. The Government agrees with the importance of supporting “early translation”, as was emphasised by the Cooksey review. Additional resources were granted to the MRC and National Institute of Health Research (NIHR) specifically to address this aspect of research, with coordinated programmes developed under the auspices of OSCHR. The MRC remains committed to enhancing translational research, a key component of their strategic plan, Research Changes Lives, and have put in place specific funding schemes with dedicated budgets to accelerate the development of novel innovations (including therapies, diagnostics and technologies) from discovery to evaluation. These include a new MRC Translational Stem Cell Research Committee to promote preclinical research, experimental medicine and early phase clinical trials. A key ongoing initiative, in partnership with the private sector, is Stem Cells for Safer Medicine. This uses milestone-driven approaches to develop embryonic stem cell technology for improved toxicological testing of potential new medicines. In addition, the Department of Business, Innovation and Skills, and the Department of Health will examine the UK’s position in regenerative medicine to ensure the UK is well-positioned to take advantage of future developments. The work will identify barriers to commercialisation; assess the current state of the science; and assess the value of new products to the NHS and patients. This work will underpin a ‘roadmap’ to be developed by the Public Funders in this area (Research Councils and Technology Strategy Board (TSB)) supporting the development of regenerative medicine in the UK. Early stage translation is also an area which the TSB is addressing through its Emerging Technology strategy. The strategy recognises that emerging technologies must progress from scientific concepts into technological and application demonstrators, each of which is progressively more robust and viable as a commercial proposition. The TSB is working with the Research Councils in order to understand and facilitate the transition phases in translational work. This progression requires not only the provision of long term funding strategies, but also access to key knowledge, facilities and infrastructure. An example includes co-funding of a number of Innovation and Knowledge Centres (with TSB, BBSRC and EPSRC funding) to enable access to the relevant knowledge and facilities needed by businesses to progress concepts to business propositions (e.g. the Leeds Innovation and Knowledge Centre focused on healthcare including regenerative devices and therapies).


Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10

The Role of the NHS 10. We agree with Lord Drayson that the NHS gives a competitive advantage to the UK. It is therefore essential that this advantage is fully exploited to assist the translation of bioengineering therapies such as those based on autologous stem cells (Paragraph 70). The Government recognises the importance of the NHS as a marketplace for new bioengineering therapies. A prerequisite for successful translation of bioengineering therapies into mainstream clinical practice is strict but facilitative regulation and an ethically and scientifically robust clinical trials framework. In the NHS White Paper—Equity and excellence: Liberating the NHS published in July 2010—the Government stated that it would cut the bureaucracy involved in medical research. The Academy of Medical Sciences was commissioned to conduct an independent review of the regulation and governance of medical research, and the Academy published its findings on 11 January 2011 in ‘A new pathway for the regulation and governance of health research’. In the Plan for Growth published alongside the 2011 Budget, the Government announced it will create a health research regulatory agency. As a first step, a new Special Health Authority, with the National Research Ethics Service as its core, will be established. Where simplification can be achieved without primary legislation, we shall do so. Where primary legislation is required to consolidate the functions and further develop the role of the health research regulatory agency, it will be introduced in a later Bill. The commitment to cutting bureaucracy involved in medical research goes beyond regulation reform. We will also make future NIHR funding to providers of NHS services conditional on meeting benchmarks, including a 70 day benchmark to recruit first patients for trials. The Government will keep under review developments in stem cell science starting with its regenerative medicine stock-take in 2011, which will assess the translation and potential of autologous, as well as allogeneic stem cells. 11. The Government is working on improving NHS adoption of novel technologies through various initiatives. However we are concerned that improving NHS culture and attitudes towards novel technologies is being neglected. We recommend that the Government produce a strategy for the NHS which will ensure: (1) that institutional inertia and adherence to conventional models of healthcare does not inhibit the introduction of new technologies and (2) that the NHS develops greater strengths in clinician-researchers collaborations to facilitate the translation of technologies from the laboratory to the clinic (Paragraph 71). The Government believes that to introduce an additional government innovation strategy would be wasteful and add an unnecessary layer of regulatory burden. Improving NHS culture and attitudes towards innovation and novel technologies are already the predominant focus of existing innovation policy and strategy—as articulated in the High Quality Care for All report. These commitments are now underlined by a new legal duty to promote innovation and supported by statutory guidance. The Department’s innovation strategy further includes: regional innovation funds (£20m in 2009/10), improved access to

Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10


information through NHS Evidence and the creation of a series of ‘challenge’ prizes – all of these initiatives are aimed at ensuring faster uptake and diffusion of innovation throughout the NHS. High Quality Care for All also introduced Health Innovation and Education Clusters which are designed to address workforce development capacity constraints in the uptake of innovations. Seventeen of these Clusters have now been commissioned and they have been operational since April 2010. In addition, five Academic Health Science Centres have been accredited with the aim of promoting greater collaboration between clinical and academic disciplines. To strengthen clinician-researcher collaborations, the National Institute of Health Research (NIHR) already fosters and supports collaborative research within the Higher Education sector and the NHS. Through its faculty schemes, the NIHR promotes academic training paths for healthcare professionals to attract, develop and retain the best research professionals. Similarly, national research programmes, such as the Health Technology Assessment and Invention for Innovation programmes, encourage NHS, university and industry interactions. In addition, the NIHR has established Biomedical Research Centres and Units that are University/NHS research partnerships to facilitate translational clinical research. Through the Regen Med programme (co-developed with the MRC, BBSRC and EPSRC) the TSB is funding a number of consortia involving businesses, NHS and academic organisations to enable the partnerships required to develop bioengineered therapies in a number of cell based therapies. This includes a project in the ‘Value systems and Business modelling’ competition being led by Biolatris and including BUPA, Cell Medica, Consulting in Advanced Biologics, NHS Blood and Transplant, NHS Technology Adoption Centre, Pfizer, Tigenix and Loughborough University to examine the business challenges in delivering not just autologous, but allogeneic cell based therapies. Further evidence of our support for innovation was given when, in March 2011, the Secretary of State for Health announced the country’s largest ever funding for translational research, providing up to £775 million over five years to provide the best environment to support cutting edge translational research. This will be made available to NHS and University partnerships through the NIHR.

Translation of Emerging Technologies 12. Given that there is widespread consensus that developing a national DNA synthesis capability would put the UK at the forefront of synthetic biology translation and what some consider to be the next industrial revolution, we recommend that the Government should invest in a national initiative to develop this capability. We consider that the Technology Strategy Board should manage this programme (Paragraph 74). Synthetic biology is very much at the research stage. Whilst it is encouraging to see that some highly innovative companies are already thinking in terms of the commercialisation of leading edge synthetic biology research the Research Councils will initially identify the most promising areas for synthetic biology, at which point the need for a DNA synthesis capability would become more evident. The TSB would want to consider the merits of such


Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10

a programme and DH would have an interest in trials of therapies that might be developed from this technology.

Conclusions on Translation 13. Translation of research is widely recognised as a persistent weakness in the UK, a view we share. While the UK has an excellent research base, the all-too common message is that we are missing opportunities to capitalise in the investments in the research base (Paragraph 75). The Technology Strategy Board will be the Government's prime channel through which it will incentivise business led technology innovation, simplifying the way in which companies seek and receive support, with support focused on opportunities which offer the greatest scope for boosting UK growth and productivity on the basis of business and academic strength. As stated in the recent allocation of science and research funding there will be ongoing collaboration between the Research Councils and the Technology Strategy Board in a number of strategic priority areas within broad themes including healthcare and resource efficiency. This partnership will help ensure that investments in research are more closely informed by business, and that businesses will more readily adopt innovations that stem from excellent research. We will also through the Technology Strategy Board invest over £200m to establish an elite network of Technology and Innovation Centres to commercialise new and emerging technologies. The Technology Strategy Board has published a prospectus for the new centres which sets out more detailed proposals for their management and operation, together with a list of six broad candidate areas, including healthcare, for the first phase of three to four centres, to be funded from 2011/12. It is seeking comments on these proposals and will announce in March how it will take this phase forward. The Engineering and Physical Sciences Research Council (EPSRC) plays a key role in supporting basic manufacturing research through to the stage where applications can be developed by companies or agencies such as the Technology Strategy Board. This year, the EPSRC have invested £45 million to establish nine new EPSRC Centres for Innovative Manufacturing in areas such as biological pharmaceuticals, novel composite technologies, and intelligent automation. These Centres will feed new ideas and discoveries through to business and Technology and Innovation Centres, helping to open up new industries and markets in growth areas. For example, the EPSRC Centre for Emergent Macromolecular Therapies, led by three academic institutions and working with 24 UK companies, will work on research with the potential to dramatically reduce the time and cost of developing new treatments, as well as improving the therapeutic properties. These developments offer the potential for a step change in the competitiveness and performance of the UK-based biopharmaceutical sector. 14. The barriers to translation of bioengineering extend beyond funding. However increasing funding for translation would be one way for the Government to signal its commitment to improving translation in the UK, irrespective of any strategic prioritisation debate (Paragraph 76).

Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10


Research Councils invested £150 m in 2008/09 in science underpinning bioengineering. They are encouraged to place a strong emphasis on realising the impacts of research they fund, and on seeking opportunities for translation. Research Councils also have technology transfer organisations to promote actively the exploitation of results. This is consistent with their respective strategic plans, which include the importance of economic impact and the translation of research. The level of funding allocated to these translation activities is a matter for the Research Councils to consider as part of their distribution of research budgets. The Research Councils work closely with the Technology Strategy Board (TSB) which has been established to play a cross-Government leadership role in delivering a national technology strategy. It operates across all important sectors of the UK economy, and focuses its support for those opportunities which offer the greatest scope for boosting UK growth and productivity on the basis of business and academic strength. Through its collaboration with the Research Councils it helps accelerate the translation of research excellence into new and improved products and services. For its part, the Government has in place a number of measures designed to promote translation and these will be considered in the light of the new prioritisation of Government expenditure:•

Creating a regulatory framework that can win the public’s confidence and ensure the safe and ethical application of technology.

Improving the co-ordination and communication of requirements (such as though the formation of OSCHR and initiatives like the UK Stem Cell Toolkit).

Providing risk funding where there are market failures as demonstrated by the Government’s funding to the MRC for translational research (£132M), the UK Innovation Investment Fund (£150M of which at least £25M will go to the life sciences) and some £400M committed to a range of venture capital funds. The Chancellor announced in the Emergency Budget that we will consult with business in autumn 2010 to review the taxation of intellectual property, the support R&D Tax Credits provide for innovation and the proposals of the Dyson Review. The Coalition Agreement makes it clear that we are committed to considering Sir James Dyson’s recommendation that R&D tax credits should be refocused on hi-tech companies, small firms and start ups. HM Treasury is currently leading a consultation with business about development of the R&D tax credit scheme.

However it needs to be remembered that the UK has one of the most developed Venture Capital sectors in the world and venture capital funding is very important for the life sciences sector and allows businesses to develop and take their innovative products to the market. The value of investment by Private Equity and Venture Capital funds in the life science sector has steadily increased. From 1998 to 2008, private equity (PE) and venture capital (VC) investments increased from £210 million to £1,294 million. As a proportion of all private equity and venture capital funding, life sciences accounted for 15 per cent in 2008 compared to six per cent in 1998 and with the majority of this growth being VC.


Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10

Within the PE funds the value of investment by venture capital funds in the life science sector (such as for early stage and start ups) has fluctuated widely over the last decade, as investor sentiment has been influenced by events such as the collapse of the dotcom bubble and the recession. However, the long term trend in VC investment has been one of steady increase, including into the life sciences sector. 15. The pharmaceutical sector, despite the difficulties we found, can provide valuable expertise and funding to enable translation, including in the area of stem cells. However both the pharmaceutical sector and the NHS primarily operate under a “one size fits all” approach to medicines, which will make it difficult to translate and integrate autologous stem cell therapies into clinical practise. New business and operational models will be required (Paragraph 77). The development of new business models is an area that the TSB are already addressing by examining the ‘Value systems and Business models’ that may be necessary to make new therapeutic paradigms and cell based therapies commercially viable. The TSB funded three collaborative R&D projects involving 19 separate organisations (academic, business and NHS) to look into addressing the challenge with the generic outputs being made available to the UK Regenerative Medicine community. The MRC, working in partnership with the Department of Health and others, have created the Stem Cell Toolkit to help researchers in both industry, academia and the NHS undertake the highest quality research in this area. A prospective single research regulation model could also help rationalise the variety of approvals processes.

Public Awareness and Engagement 16. In our view it is not just the responsibility of companies or the media to make an evidence-based case for GM crops to the public, but the responsibility of the Government too. We consider that the Government, and particularly Defra, is emphasising the importance of safety without informing the public that it considers GM crops to be generally safe (Paragraph 88). 17. We welcome the Minister’s positive attitude towards raising public awareness about the potential benefits of GM crops, but we believe that stronger leadership is necessary. The Government, and particularly Defra, should actively lead the public debate on this issue by stating its belief in the overall safety and potential benefits of GM crops on the Defra website and in relevant publications and speeches. It should also facilitate ways for GM crop researchers to engage with the public about the benefits of their research (Paragraph 89). One of the Government’s main roles in relation to GM is to protect human health and the environment. The Government will only agree to the planting of GM crops, the release of other types of GM organism, or the marketing of GM food or feed products, if a robust risk assessment indicates that it is safe for people and the environment. Like other technologies, GM is not inherently ‘good’ or ‘bad’, safe or unsafe. Each application of the technology, each proposed GM product, should be considered on its individual merits. GM product applications should therefore, be assessed for safety on a case-by-case basis, taking full account of the scientific evidence.

Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10


The EU and UKs systems for regulating the use of GMOs are the most robust in the world and both Defra and the FSA are confident that they ensure that any approved GM products are as safe as their conventional counterparts. The Government recognises that GM technology could deliver benefits providing it is used safely and responsibly, in particular as one of a range of tools to address the longer term challenges of global food security, climate change, and the need for more sustainable agricultural production. Informed debate in this area is important, and this should be in the broader context of the major challenges we face relating to climate change, food security and sustainability. Consumers need to be able to exercise choice through clear GM labelling rules and the provision of accessible and reliable information. Government is currently considering the best way to understand the public’s views and information needs on GM. Alongside this, Government has a role in communicating the nature of its regulatory system and decisions, and also in enabling innovation. But a range of other interested parties also have roles to play in such debates including farmers, food producers and retailers, civic society and scientists. 18. We are pleased to discover that public engagement has been considered an early priority by those working in synthetic biology research and policy. This commitment indicates that lessons are being learned from past experiences (Paragraph 92). Government recognises the importance of considering public engagement upstream in the research process, especially in potentially controversial issues such as synthetic biology. In relation to this, the Biotechnology and Biological Sciences Research Council (BBSRC) and the Engineering and Physical Sciences Research Council (EPSRC) published their dialogue report on synthetic biology on 14 June 2010. The EPSRC and BBSRC have subsequently written an open letter to all dialogue participants outlining how they will address the issues raised in the dialogue report. The BIS funded Sciencewise Expert Resource Centre aims to help policy makers commission and use public dialogue to inform policy decisions specifically in emerging areas of science and technology.

Influence of Europe on Regulation 19. The impact of Europe, particularly EU Directives, on UK science and engineering is a subject worthy of further scrutiny; one that we hope our successor Science and Technology Committee may take up as a stand-alone inquiry (Paragraph 94). The Government recognises that legislation adopted at the European level plays a significant role in establishing the conditions in which science and engineering are conducted. It is essential that legislation is firmly based on independent, expert scientific advice and that prior to publishing legislative proposals the European Commission consults widely with stakeholders and considers the potential impacts on research and innovation. In this regard the Government welcomes the plans which the President of the European Commission has announced to appoint a Chief Scientific Advisor.


Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10

Regulation of GM Crop Releases 20. We condemn the destruction of properly approved GM crop field trials and recognise that in the face of organised disruption the Government has to provide increased funding for GM crop field trial security. We recommend that Government continue to fund security for GM crop field trials (Paragraph 102). 21. We recommend that the Government consider amending the Genetically Modified Organisms (Deliberate Release) Regulations 2002 to remove the requirement that researchers publicly disclose the six-figure grid reference location of planned field trials, in order to assist GM crop field trials and reduce the burden of security costs. This may involve a reinterpretation of either the level of detail on location or the extent to which the information should be made public (Paragraph 103). Authorised GM crop trials should be allowed to proceed without the threat of vandalism. Such vandalism is unacceptable, and it is misguided to hamper research that will improve scientific understanding and may lead to potentially beneficial new crops. From 2009 to 2010 the BBSRC has funded security costs for academic GM crop trials that form part of wider projects that it is sponsoring, and that option will continue for BBSRCfunded research. In addition, by working with interested parties the Government is ready to facilitate the hosting of any trials at suitable sites that could provide greater security than might otherwise be the case. The Government will also continue to liaise with the police to ensure that, whilst peaceful protest can proceed, property is protected and those who engage in criminal activity are prosecuted. EU law specifically requires the location of GM trials to be made publicly available. Moreover, the Government believes that being open and transparent with the public is an important consideration on this issue. It does not currently consider that revealing less information about the location of trials would be productive in terms of public trust or combating vandalism. It is encouraging that the research trials in the last two years have not been targeted by vandals. Nevertheless, the security of GM trials will continue to be monitored and further action considered if necessary. 22. The EU regulatory regime on the release of GM crops for commercial purposes is adequate, but operates dysfunctionally in practice, with blockages in the EU approval process occurring for political reasons (Paragraph 107). 23. We are disappointed that the Government told us it was pressing for change to the EU regime but was unable to provide us with the evidence that it is doing so. We recommend that the Government provide us with concrete details of how it is pressing for the EU regime to be improved and what the outcomes of its actions have been to date (Paragraph 108). 24. We recommend that the Government keep our successor committee updated on proposals from the Dutch Government which may contain the introduction of socioeconomic criteria as part of the EU GM crop approval process, and explain the UK Government’s position on these proposals as they develop (Paragraph 110).

Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10


25. While public engagement is important in developing regulations, we believe that the introduction of socio-economic criteria into the GM crop approval process is unwarranted and inappropriate in what should be an evidence-based process. We recommend that the Government oppose the introduction of socio-economic criteria into the GM crop approval process at the EU level (Paragraph 111). Response to recommendations 22, 23,24 and 25. Whilst we have confidence that the EU regime does ensure safety, it is not currently being operated in a proportionate manner and has threatened both animal feed imports on which farmers rely, and the development of new GM crops of potential beneficial use in UK agriculture. However, decisions under new Commissioner Dalli on import and cultivation have signalled an intention to make the system more efficient, and proposals to allow national discretion on the commercial cultivation of GM crops are intended to improve the regulatory regime. In particular, Member States have recently voted with a qualified majority to support a Commission proposal to allow for the low level presence in animal feed imports of certain GM materials that are awaiting EU approval. This measure will apply to test results that are no greater than the validated limits of the relevant detection method, so that sporadic lowlevel findings do not result in whole shipments being removed from the market. Such a measure will help improve the security of all animal feed imports to the EU and UK. To help overcome the near deadlock in reaching EU decisions on the commercial cultivation of GM crops, the Commission has tabled a package which could give Member States more latitude to ban GM cultivation in their own territory. Under the current regime, applications to market GM products, including seeds for cultivation, are assessed and decided upon at EU level, based on whether or not the scientific evidence indicates a risk to human health or the environment. The Commission’s proposal is to introduce a new ‘opt-out’ provision allowing Member States to restrict or prohibit the cultivation of EU-approved GM crops for reasons other than safety provided such measures conform with the EU Treaties. The proposal is meant to improve the regulatory situation, the hope being that with greater freedom to impose national bans for non-safety reasons, relevant Member States will not cause delays to the EU-approval process by making unjustified safety arguments. Discussions on the principle and detail of the proposal continue at EU level, including on whether it will actually deliver the desired result through providing adequate grounds for Member States to ban GMOs given the need for them to be compatible with WTO and other legal obligations. The UK Government will continue to argue for the proportionate implementation of the EU regime.

Regulatory System for Stem Cell Research and Translation 26. Effective regulation in complex areas of bioengineering such as stem cell research and translation relies on efficient inter-agency coordination. We welcome the MHRA’s and HTA’s commitment to produce a memorandum of understanding. We recommend that other agencies—such as the HFEA—should engage in the process to


Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10

eliminate regulatory overlaps and should be included in a memorandum of understanding with the HTA and MHRA (Paragraph 118) The Government agrees with this recommendation. We recognise the need to increase efficiency and to minimise duplication and the burden on the regulated sector. As regulators, MHRA, HTA and HFEA recognise the importance of these issues and already work closely together on areas of mutual interest. The HFEA (reproductive cells) and HTA (all other human tissue and cells) are the respective regulators for the EU Tissues and Cells Directive; having two competent authorities for the Directive necessitates close working between the two bodies. The MHRA is the UK competent authority for medicines, medical devices, blood and blood components. As the requirements of medicines legislation, including the European Regulation on Advanced Therapy Medicinal Products, follow on from the requirements of the Tissue and Cells Directive all three regulators see a need to continue to enhance their joint working. In the NHS White Paper—Equity and excellence: Liberating the NHS published in July 2010—the Government stated that it would cut the bureaucracy involved in medical research. The Academy of Medical Sciences was commissioned to conduct an independent review of the regulation and governance of medical research, and published its findings on 11 January 2011 in ‘A new pathway for the regulation and governance of health research’. The Government is considering this report and its recommendations. In the Government’s review of its Arms Length Bodies (ALBs) it announced its intention to transfer the functions of the Human Fertilisation & Embryology Authority (HFEA) and the Human Tissue Authority (HTA) to the Care Quality Commission and other bodies, including a new research regulator. Following our consideration of the AMS Report on research governance we will review the legislation affecting medical research, and the bureaucracy that flows from it, and bring forward plans for radical simplification, including the possible creation of the recommended Health Research Agency as the new regulatory body for medical research. 27. We welcome the development of the Stem Cell Tool Kit and recommend that the quarterly reports on its impact, including a summary of researchers’ feedback, are published (Paragraph 120). The Government is pleased that the Committee is supportive of its approach in helping researchers understand and navigate the UK regulatory framework and thereby facilitating UK-based stem cell research. The Stem Cell Tool Kit, developed jointly by the Department of Health and the MRC, was launched in December 2009. Its impact will be reviewed at regular intervals and we will regularly work with stakeholders to ensure it remains useful to the community, especially during the transition phase of our commitment to streamline medical research regulation. 28. The UK is part of a global market and international competitiveness in bioengineering will be enhanced by access to European and American markets. We are keen to see more formalisation, or planning for formalisation, between international regulatory agencies. We recommend that the MHRA should lead on behalf of the UK in working with the EMEA and FDA to develop regulatory harmonisation, particularly for stem cell-based therapies (Paragraph 124).

Government response to the Science and Technology Committee’s Seventh Report of Session 2009–10


The EU legislative framework that applies to advanced therapy medicinal products has resulted in harmonisation throughout the EU and this has been an important step in opening up European markets. There is currently regular dialogue between both the MHRA and the EMA (formerly EMEA) with the FDA. The EMA's Committee for Advanced Therapies (CAT) has a dialogue with the FDA on a bi-monthly basis. In addition, the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) brings together the regulatory authorities of Europe, Japan and the United States to discuss scientific and technical aspects of product authorisation. The European Commission has committed to review the operation of the Regulation on Advanced Therapy Medicinal Products by 30 December 2012. The review will include an assessment of the impact of technical progress on the application of the legislation. Given this is a developing innovative area, it may be premature to focus on developing further international regulatory harmonisation before this review has taken place.

Conclusions 29. Rising competition from abroad means that the UK simply cannot become complacent about its international standing in bioengineering (Paragraph 127). 30. We consider that the UK is clearly a world leader in bioengineering, and in the spirit of making the most of the UK’s strengths, bioengineering would be a strong contender for strategic prioritisation. This would, however, require the Government to address the UK’s key weakness in exploiting basic research, an area where, although much progress has been made, more action is required (Paragraph 128). The Government agrees with the Committee that the UK should not be complacent about its acknowledged world class standing in bioengineering. The Government welcomes the Committee’s acknowledgement that the UK is a world leader in bioengineering and would wish to reassure the Committee that the exploitation of such basic research is high on the agenda for its continuing dialogue with the Research Councils.