Getting better value from public sector research ... - CentreForum

Getting better value from Public Sector Research Establishments
390. Recent turnover has been adversely impacted by
reductions in public sector spending. TRL has a pension
scheme deficit reported as £20m in 2010.
Privatised – Profit Distributing
Three out of the four organisations in this group (LGC, QinetiQ,
TUV NEL) appear to have done well since privatisation.
Significant effort was required to transform them from their
government culture and operating methods to embrace
private sector disciplines. This process took a number of
years.
LGC has grown from its public sector roots by acquisition and
organically, increasing turnover 800% since privatisation.
The much larger QinetiQ has pursued a similar strategy
of expansion, and now has a significantly larger presence
outside the UK than in it. TUV NEL is a very small part of a large
German company which acquired it soon after privatisation.
None of them receives core government funding any more,
although a high proportion of TUV NEL revenues come from
government under a single National Measurement Office
contract, QinetiQ has a Long Term Partnering Agreement with
MOD, and LGC receives about £6m a year to provide the UK
Government Chemist and designated National Measurement
Institute functions.
AEA Technology now represents only about 10% of the
business at the time of privatisation, following large scale
divestments of the core nuclear research capabilities. It
recently made a significant operating loss (which the accounts
restate as profit after taking account of certain restructuring
and acquisition costs), and its share price has collapsed.
Government requirement and quality
LGC, QinetiQ and TUV NEL appear to be successful in
competing for government contracts, and in some cases
have negotiated long term contracts (e.g. QinetiQ’s Long
Term Partnering Agreement with MOD). AEA Technology’s
UK customer base has been shrinking:
38