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New Thinking.

Is Aria, the UK’s new R&D agency, the answer to low growth?

The "brainchild" of Dominic Cummings, the Advanced Research and Invention Agency will be exempt from the usual departmental and Treasury interference.

By Jonny Ball

In 2014, a special guest made a speech to researchers at the centre-left think tank, the Institute for Public Policy Research. It “doesn’t matter”, the guest speaker said, “whoever wins the election.” Neither Ed Miliband nor David Cameron “can build a serious team”, he told the crowd of policy wonks. “They don’t know how to get things done… and they don’t understand why Whitehall doesn’t work.”

This was Dominic Cummings, the man who would later go on to lead the successful Vote Leave campaign, before joining Downing Street as Boris Johnson’s chief of staff. The so-called Hollow Men speech is available in full on YouTube, borrowing its name from a TS Eliot poem and referencing the apparent ineptitude of the British political classes.

Mat Lawrence, now director of the left-wing Common Wealth think tank, was in the audience. “Everyone in the room was like ‘woah’,” he told Spotlight. Extolling the virtues of “high-performance management”, decentralisation, and the delivery benefits of working with small, focused teams of versatile, able people, Cummings forcefully made the case that “our mission should be to be the number one higher education and science country in the world after America”, Lawrence recalled, and that “government should throw loads of money at that”.

Five years and one referendum later, the establishment of the Advanced Research and Invention Agency, or Aria, was central to Cummings’s rationale for joining No 10.

“His vision was always about using the state and Brexit to accelerate the UK’s role as a tech leader,” said Lawrence.

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The UK government’s reputation for delivery leaves much to be desired. State capacity, even before our decade of fiscal retrenchment, is weak. The centre lacks agility. It’s overcentralised and unwieldy, as Cummings diagnosed. Inefficiency and lack of dexterity are almost built-in to our labyrinthine civil service, with our short-termist Treasury sitting atop complex constitutional and legal structures. This set-up leaves us far behind our competitors in providing the successful, modern public services and world-class infrastructure necessary for boosting productivity.

And recent British government history is littered with defunct, expensive, wasteful projects. Take the NHS Programme for IT (NPfIT), launched in 2002 to digitise patient records across the health service into one centrally stored system. This was meant to radically increase efficiency, as well as kickstarting a huge growth industry in life-science research that would make new discoveries and medical innovations using the vast volumes of metadata available. Ten years and £10bn later, the project was abandoned.

Or take the announcement of a new high-speed rail route, HS2, in 2010. This project would boost urban economies across the north, helping them benefit from economies of agglomeration, stimulating a construction boom, as well as increasing essential freight and passenger capacity on Britain’s rail network. Thirteen years and tens of billions of pounds later, the future of that railway looks in doubt. The estimated £100bn price tag leaves the UK with the most expensive per-kilometre railway line in the world.

These are just two national examples of expensive, slow major public projects. To this list we could have added the long-running furore over Heathrow’s third runway (Paris’s Charles de Gaulle and New York’s JFK airports both have four). We could cite the botched roll-out of Universal Credit, the failure to tackle NHS waiting lists, and the lack of capital upgrades in schools and hospitals.

What’s more, on top of weak state capacity, the UK’s growth model has been faltering for more than a decade. Living standards and real wages have remained stagnant since the 2008 financial crash. The economy is overreliant on diminishing tax receipts from the financial services sector. Rather than being a centre of technological breakthroughs or advanced, high-value manufacturing, much of Britain’s growth of the past decade has been based on unproductive asset-price inflation and a state-backed property boom in the south-east, itself built on cheap credit and quantitative easing.

[See also: The growth symposium: “Arbitrary fiscal rules aren’t working”]

Modelled on the US’s Defense Advanced Research Projects Agency (Darpa), an organisation credited with contributing to major technological breakthroughs, including GPS and the internet, Aria would be funded to the tune of £800m and tasked with investing in “high-risk, high-reward” research and development projects.

Crucially, the government agency would be held at arm’s length, away from the slow bureaucracy and checks and balances of Whitehall. Rather than being subject to normal departmental processes, decisions would be taken by a small, independent team of experts from scientific backgrounds.

When Aria was announced in 2021, Kwasi Kwarteng, then the business secretary, said it would succeed “by stripping back unnecessary red tape” and “putting power in the hands of our innovators”. Speed and flexibility were the watchwords: “It will experiment with funding models including programme grants, seed grants and prize incentives, and will have the capability to start and stop projects according to their success, redirecting funding where necessary,” a government press release stated. “It will have a much higher tolerance for failure than is normal, recognising that in research the freedom to fail is often also the freedom to succeed.”

But not everyone was fully convinced by the hubris. “The jury’s still out,” Meg Hillier told Spotlight. Hillier is a Labour MP and the long-time chair of the Public Accounts Committee (PAC). The PAC is the so-called queen of the select committees, according to the life peer Peter Hennessy, which, he said, “by its very existence exerts a cleansing effect on all government departments”. But as a seasoned scrutineer of government failure and badly spent public funds, Hillier recognises all too well the problems Aria will try to solve.

“In Whitehall, we have to go through proper processes,” she said. “It’s very slow… you’ve got to sometimes try to be a bit more Shoreditch, a bit less Whitehall.”

Aria has now been officially launched. Earlier this month, it announced its programme directors. Scanning through the biographies and head shots on the official website, it is indeed very Shoreditch: waxed moustaches; tech-bro hoodies; loose, open-collared casual shirts; black-rimmed glasses. Aria’s people have very different backgrounds to those who normally sit at the top of government, many of whom have arrived straight through the Oxbridge-PPE pipeline. There is a co-inventor of a “top-40 cryptocurrency” called Filecoin. There are experts in medical therapeutics and brain monitoring. There is a top researcher in green hydrogen technology, and the CEO, Ilan Gur, founded an organisation helping scientists bring their research to market (Aria turned down a request for an interview).

More recognisable faces are also involved. The former chief scientific officer, Patrick Vallance, of Covid press conference fame, sits on the board. Kate Bingham, head of the Vaccine Taskforce is also listed as a non-executive director. (Cummings views the taskforce as a major post-Brexit success story, partly because the small team was exempt from the strictures and purview of Matt Hancock’s Department of Health and Social Care, and thus unencumbered by its supposedly snails-pace processes and culture of risk-aversion).

With the organisation still in its infancy, the hope is that it will become central to the development of worldchanging inventions that spur growth across many industries. Some of its investments will, almost by definition, fail.

“This is about taking bets and backing world class but risky initiatives that potentially the market will not solve, or will solve badly,” Lawrence said. “It’s riskier research that traditionally capital markets don’t like if they’re seeking immediate returns.” A selfdescribed eco-socialist, it may come as a surprise that a left-wing think-tanker like Lawrence finds common cause with Cummings on this kind of initiative. The latter’s reputation for enabling Johnson’s premiership and the part he played in Brexit would make him persona non grata among some on the progressive left. But his madcap reputation is simplistic, said Lawrence, and Cummings is no traditional Tory.

“Aria is about putting the thumb on the scale of public intervention behind big, bold ideas,” he told me, “like a state-owned venture capital fund.” He linked it to the renowned economist Mariana Mazzucato’s ideas on mission-driven government and the “entrepreneurial state”.

The left might also find common cause with the aversion to the Treasury’s fiscal rules and ingrained orthodoxy, which acts as a barrier to public investment, has restrained capital spending even as the public realm physically deteriorates, and often enforces de facto austerity on governments of all stripes.

“I insisted on Aria… being excluded from normal Whitehall procurement rules, ‘value for money’ rules and so on,” Cummings writes on his blog, “they are absolutely hostile to high-speed-highperformance execution.” The shorttermism and false economies that have been derided by critics as hallmarks of “Treasury brain”, “destroy many sensible investments”, he says, “that costs so much money and destroys value.”

As the chair of the Public Accounts Committee, Hillier may balk at this philosophy. Aria “presents a challenge from a value-for-money perspective”, she told Spotlight. “While the agency was set up with maximum autonomy for the experts in charge of it, it does remain accountable to parliament for its stewardship of taxpayers’ money.”

On its website, Aria’s programme directors are touted as “questioning the status quo” to turn the “impossible [in]to inevitable” with a list of “visions” framed as questions: “Can we create edible vaccines made by plants?”; “Can we develop the capability to control the weather and climate on a regional and global basis, to mitigate or obviate hurricanes, droughts, floods and heatwaves?” It’s heady, moonshot stuff. “You’ve got to give it a bit of time,” said Hillier. If Aria is an answer to the UK’s economic malaise, let’s hope its failures pay off.

[See also: Economic Growth: Which way to prosperity?]

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