Elizabeth Truss, secretary of state for the Department for Environment, Food and Rural Affairs has announced £14.5M worth of investment in FERA through a joint venture with Newcastle University and Capita.
In addition, FERA, an agri-food, food safety and environmental research body which was previously largely government-funded, is pumping £4.5M into its facilities. However, the deal, which starts on April 1, means that although the government would keep a 25% stake in it, the agency would be run by business process management and outsourcing solutions firm Capita.
“Capita has said it will invest £10M up front in FERA to upgrade systems,” a spokesman for FERA told FoodManufacture.co.uk. “In addition, Newcastle University is investing £4.5M and we will put £4.5M into the formation of a joint agri-food institute, which will create 40 research posts.”
He said a further 50 jobs would be created at FERA’s Sand Hutton site near York, which currently employs nearly 400 scientists.
Allegations
However, The Independent has reported that the Cabinet Office was investigating allegations that Capita short-changed small firms to which it outsourced business for a £250M civil service training contract, causing some of them to collapse.
That prompted Maria Eagle, shadow environment secretary, to write to Bronwyn Hill, permanent secretary at DEFRA, quizzing her about the venture.
In particular, Eagle asked what impact Capita’s investment would have “on the capacity of FERA to carry out its core functions in the public interest”.
She argued the joint venture should be fully scrutinised by parliament, so should not be launched as planned after parliament’s dissolution, during the period directly before the May 7 general election.
‘Robust safeguards’
“I would be grateful if you would clarify exactly what functions FERA will retain, including the scientists that it currently employs, and what robust safeguards it will put in place to ensure that government science continues to take precedence over commercial interests,” she wrote.
Jon Poole, ceo of the Institute of Food Science and Technology, acknowledged some element of commercial investment in such scientific agencies was inevitable to maintain their activities. But he added: “I do hope the capability at FERA isn’t lost over time.”
He said FERA had previously conducted some projects focused on anticipating solutions to future problems. If it was too influenced by commercial concerns, it could develop a purely short-term focus, meaning the food industry would be unprepared for such issues, he said.
“If FERA retains a substantial amount of government involvement, then fine. If it moved to a 100% commercial footing, that would have to be addressed.”
‘Public good’
Responding to these concerns, a spokeswoman for Capita told this site FERA would “continue to serve the public good in the long term”. She said: “Without quality science our customers wouldn't want to do business with us. Commercial growth will enable us to invest further in doing quality science.”
Referring to the article in The Independent, she added: “Capita has an excellent track record of working with and engaging small to medium-sized enterprises.
“Under the Civil Service Learning contract for example, 59% of training has been awarded to more than 400 small- and medium-sized companies, representing 70% (£45M) by value of supplier invoices.”
Capita was selected as the preferred bidder for the FERA joint venture, which is scheduled to last up to 10 years and gives it a 75% stake in FERA in return for £20M in cash. The partnership will offer services to DEFRA, its network, the Health and Safety Executive and third-party crown bodies, for example the Food Standards Agency.
Capita forecasts its involvement would enable the venture to achieve at least £700M revenue over its first 10 years, compared with FERA’s current £40M annual turnover.
After the announcement of the deal, FERA ceo Hilary Aldridge said: “We are a global leader in plant health, the agri-food supply chain and environmental sciences, and this enables us to grow from strength to strength.”