Getting better value from Public Sector Research Establishments

Quentin Maxwell-Jackson
November 2011

This report compares the success of Public Sector Research Establishments (PSREs) that are privately owned or operated with those still in public hands. It finds that

  • privately owned or operated PSREs are particularly effective in employing technology transfer at the heart of their business models to drive profitable growth and increase employment.
  • the main difference in performance between government owned, government operated (GOGO) establishments and those now in the private sector is financial and organisational. One GOGO laboratory (Forensic Science Service) has made significant losses in a highly competitive market, and is due to close in 2012. By contrast, privatised laboratories like LGC and QinetiQ have grown strongly and profitably since privatisation.
  • the success of some of the privatised establishments, and to some extent those under private management, stems directly from the removal of public sector operating constraints including slow decision making, high overheads and a lack of access to capital.
  • removing these constraints would yield value for money benefits and savings. However, CentreForum believes some activities need to remain in the public sector for reasons of security and the need for impartiality.
  • there is evidence that former public sector scientists were positive and enthusiastic about furthering their careers in the private sector.
  • clarity about the advice and services government needs from public sector research establishments is key to getting the best performance from them, but this clarity has not always been present.

Download the full report and appendices.

A relief for some: how to stop lump sum tax relief favouring the wealthy

Mark Lloyd with Chris Nicholson
November 2011

The tax relief permitted on pension lump sums disproportionately benefits the wealthy at taxpayers’ expense. The result is a regressive system where those with the most generous entitlements also receive the highest rate of tax relief. At a time when the public finances are under strain wealthy individuals are able to shelter considerable amounts of pension income from the tax system.

This report proposes that those individuals taking lump sums above the higher rate tax threshold (£42,475) should have to pay tax analogous to income tax at the higher rate. This would mitigate the regressive outputs of the current pension system whilst ensuring that the average pensioner can still benefit from the flexibility that a tax-free lump sum provides at retirement.

Download the full report.

"A close inspection of this issue is long overdue. Tax relief on pensions must not be ring-fenced from efforts to make the overall tax system fairer."

- Lord Newby, Co-chair of the Liberal Democrat Treasury Parliamentary Policy Committee

An analysis of Labour’s proposed £6,000 undergraduate degree cap

Tim Leunig
September 2011

This report finds that the typical beneficiaries of Labour's plan to cap student fees at £6,000 a year will be graduates in their fifties earning £72,500.

CentreForum believes the policy is regressive because virtually no one in the bottom half of the earnings distribution, and virtually no one under the age of 35, will stand to gain from it.

Furthermore, the policy will be harmful during a period of economic recovery – banks will be taxed now so that graduates pay back less in 28 years' time.

Download the report.

Click here to view policy impact timeline.

"I would urge anyone attracted to Labour’s proposals to read this very informative analysis. It makes clear that the policy only benefits wealthier, older graduates. It exposes Labour’s claim that they want to help young people as completely false."

- Rt Hon Dr Vince Cable MP, Secretary of State for Business, Innovation and Skills

"This timely analysis highlights the flaws in Labour's proposals. They don't help students and they don't help the economy. CentreForum's detailed and rapid analysis should be welcomed by all who care about higher education."

- Rt Hon David Willetts MP, Minister of State for Universities and Science

Mastering postgraduate funding

Mastering postgraduate funding coverTim Leunig
October 2011

'Mastering postgraduate funding' proposes a new way of financing one year taught postgraduate courses based on the system for undergraduate loans. Under this proposal, the government would loan prospective students £10,000 up front and reclaim the money later through income contingent payments.

CentreForum's modelling shows that most students would pay back their entire loan after they had graduated. It also suggests that any losses would be outweighed by higher tax revenues from individuals who would not otherwise have undertaken postgraduate level work.

Download the report.

Click here to view policy impact timeline.

"Access to postgraduate degrees is important in promoting social mobility. I welcome CentreForum's report."

- Rt Hon Nick Clegg MP, Deputy Prime Minister

"This is the latest in a series of timely and thought-provoking reports on higher education from CentreForum. We will consider the recommendations carefully and look forward to hearing the response of universities and students."

- Rt Hon David Willetts MP, Minister of State for Universities and Science

"I am glad to see such a timely contribution to the vital policy issue of UK graduate funding. I hope that it will be given serious consideration."

- Professor Andrew Hamilton, Vice-Chancellor, Oxford University

"CentreForum's proposal is important both because it addresses a badly-neglected area and because it shows that practical solutions exist."

- Professor Nick Barr, Professor of Public Economics, LSE

Moving from the financial crisis to sustainable growth

Vince Cable
September 2011

The prime preoccupation of the coalition government has been to manage the fallout from the global financial crisis. This remains very much an ongoing concern, and a creative and flexible policy mix is necessary.

In this paper, the coalition business secretary Vince Cable provides a detailed account of how the government has worked, and will continue to work, to reduce the deficit, rebalance the economy and promote growth.

"There is a lot of uncertainty about the economy, globally and in the UK. The issue is how to maintain growth in the face of weakening demand. The Government has a key role in stimulating growth and the essay describes what is being done and could be done, consistent with achieving UK fiscal stability and with the overall strategy for maintaining policy credibility.

"It is not ideology but sound economic theory and I have always believed in the value of politicians engaging in the intellectual as well as political debate.

"I look forward to reading the essays that follow in this series from CentreForum. There is a wealth of ideas and experience that the Government wants to drawn on in the years ahead as we get the economy back on course.”

- Rt Hon Dr Vince Cable MP, Secretary of State for Business, Innovation and Skills

Download the publication.