Sci-tech cheerleader NESTA spared from quango bonfire

Keep calm and carry on multidisciplinary stakeholder engagement

The government has secured the future of the science and tech quango NESTA, which was previously uncertain. Like the Design Council, NESTA will be reconstituted as a charity, the Department for Business said today.

NESTA was created in 1998 to spend lottery money on science and technology innovation, and became an emblem of New Labour thinking - where interdisciplinary approaches and open collaboration became fashionable. For example, a small business that employed a Strategy Boutique consultant would get £4,000 in funding for every £1,000 it raised: which explains the proliferation of Strategy Boutiques during the dog days of the NuLab administration.

"NESTA redefined innovation in far too elastic a way," thinks one critic, James Woudhuysen, editor of Big Potatoes: the London Manifesto for Innovation.

"Aping New Labour's worship of everything creative, it found innovation in aesthetics, financial services and among users of the public sector. 'Innovation', it told anybody working in a lab in a white coat in 2008, 'is about more than product breakthroughs resulting from scientific and technological research'."

The trendy quango's new organisational structure [more here] will create a limited company in the voluntary sector to manage the cash pile. NESTA currently sits on an endowment of £321m.

Let's hope that remains in safe hands.

One of those trustees will presumably be Sir John Chisholm, NESTA's chairman since 2009.

Chisholm was head of the UK's equivalent to DARPA, the Defence Research Agency, later DERA, when it was being privatised. Chisholm and his fellow executives were permitted to write their own equity deal with the main investor in the floatation, the Carlyle Group. As a result, and thanks to an astonishing lack of supervision, Chisholm and the other executives wrote themselves share packages worth some £20m.

The arrangement was strongly criticised by both the National Audit Office, and Parliament's Public Accounts Committee, which described it as "profiteering". Chisholm and the others reaped £200 for every £1 they invested.

British entrepreneurs and innovators can only dream about such returns.

Meanwhile, the Telegraph reports that the Bonfire of the Quangos is not turning out to be a conflagration. Cunning quangocrats are outwitting ministers, with only 53 of the 199 state appendages being abolished and only one of the 120 quangos due to be merged actually merging.

That isn't surprising. Merged quangos don't downsize - they get new offices, new logos, and new opportunities for blue-sky reappraisals where core values, strategic priorities and stakeholder engagement can all be holistically re-scoped! ®

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