Scottish R&D quango forced to go cap in hand to Europe for cash

SCOTLAND's flagship publicly backed research and development body will be forced to look for additional cash from Europe as it prepares for cuts in its budget as a consequence of the Scottish Government slashing funding at Scottish Enterprise.

ITI Scotland, a ten-year programme that funds and develops commercially oriented technologies and services, faces a cut in its annual budget for 2009 as Scottish Enterprise (SE) reviews its spending after its own budget was cut earlier this year.

Shonaig Macpherson, chairman of ITI Scotland, said that, although the ITI programme was ahead of schedule in bringing new technologies to market, it faced cuts in its 2009 allocation.

Last year ITI Scotland received £38.1 million from SE but has said it will have to be "realistic" about funding in 2009.

ITI Scotland is an umbrella company for three ITIs that focus on energy, technology and media, and life sciences.

Although the ITI programme was launched in 2003 with an estimated £450m ten-year budget, the organisation relies on SE for its annual budget allocation. The ITI is often described as "arm's length" to the government and SE, but it is understood in future the two organisations will be working more closely together.

Macpherson also cast doubt on whether the scheme would realise its £450m budget as this "was not written in stone". She said the group was actively looking at tapping extra funds through the EU's European Regional Development Fund and other funding streams. Last year, ITI Scotland also made £112,000 on the back of exploiting the outcomes of its research programmes. Macpherson expects this income will rise in the coming years.

Macpherson told The Scotsman: "I think we have to be realistic about what is going on in the world around us and whether or not that funding will be there for us. We will be looking for additional funding."

Alex Neil, the SNP MSP, said a decision by SE to cut the organisation's budget would be "cutting off their nose to spite their face".

He added: "If we really are going to build an economy that can compete in tomorrow's world then the work of the ITI is vital in the key areas of energy, tech media and life sciences. I am a big fan of the ITIs."

Critics of the organisation, however, believe that the ITIs have performed poorly and have called for a review of the company's budget and the return on the tax payer's investment. Professor Grahame Bulfield, the former head of science and engineering at Edinburgh University, and former head of research at Roslin, was involved with the formation of the ITIs and believes they are underperforming.

"If they are going to be funded at the same level they are now, someone needs a very close evaluation of the value they are producing for Scotland both in terms of things getting to the market place and things being created.

"We should be doing better in terms of producing a life sciences industry, an IT industry and a modern engineering industry than we are doing. It is not that we don't have the science and the scientists, it is we are not able to put that into practice. It is a big challenge for Scotland."

Macpherson said ITI was currently preparing a full economic impact review for release next year.

In its annual report, released at the end of October, ITI said it had launched 25 R&D programmes. Eleven of these had been completed, producing commercial applications licensed to Scottish companies including anti-hack software and drug screening technology.

Since 2004, the organisation has spent £134m and filed 133 patents.