Controversial Fera privatisation goes ahead with Capita/Newcastle University taking on the agency

Capita has bought Fera, the Food and Environment Research Agency, for an initial £20m.

Defra says the joint venture will expand the agency’s "world-leading scientific capability and strengthen its role in food safety research" and "will enable Fera to play an even greater role in helping to drive growth in our £100 billion agri-food industry". Defra said the winning bid from the outsourcing multinational giant and the university will "unlock £14.5m of funding".

Capita will make an initial payment of £20m for a 75 per cent stake in the joint venture, with further investment, in cash, kind and dividends, during the following five years. The joint venture will create 50 new jobs in York and, in partnership with Newcastle University, an institute that will bring together around 40 researchers.

The 10-year deal for Fera, which generates annual turnover of around £40m, begins on 1 April.

Capita said the joint venture was expected to achieve at least £700m revenue over the next 10 years, with growth forecast from existing agreements with the public sector, predicted new public sector work and the development of new commerical services.

Fera employs nearly 400 scientists near York and specialises in translating scientific knowledge into practical applications.

Capita chief executive Andy Parker said: "The excellent science being carried out by staff at Fera has not yet been able to reach its full commercial potential because of obvious limits on investment, recruitment and marketing. Capita’s commercial know-how will complement the Fera team’s scientific expertise, helping it to grow the scientific capability it can offer existing and new customers. Working together, we will create a more efficient and improved organisation allowing scientists to focus on the science and its delivery.

"Crucially, the additional capabilities of Capita and its partners, including Newcastle University, will enable the joint venture to drive commercial and government sector growth. The science services market is one we’ve been excited about for some time and we see this joint venture as laying the foundation for an additional growth market for Capita."

Newcastle University agriculture school head Professor Rob Edwards said: "This is an exciting new role for the University and we are delighted to be working with Capita on this collaboration. The bid includes our plan for an institute, led by Newcastle University but drawing on the expertise of the existing scientific team at Fera, our academic colleagues from universities both across the UK and internationally as well as Government and industrial partners.

"This new collaboration would give us a real opportunity to drive forward innovation in areas such as food security and crop protection and help us to maximise the opportunities for our research to impact on agriculture and modern food security challenges."

The venture includes the creation of a joint academic institute with Newcastle University aimed at researching practical agri-food problems.

Environment Secretary Elizabeth Truss said: "This exciting investment allows Fera to grow its science capability, ensuring the security and quality of our food supply chain and keeping our plants and environment healthy.

"Fera’s continued ability to deliver cutting edge science will enhance its reputation and viability as an international centre of excellence that can compete abroad and attract further investment."

Defra will maintain a strategic share of 25 per cent in Fera, in case of emergencies such as ash dieback or the horsemeat scandal.

Academics and horticulture industry figures told HW last week they were worried about the sell-off of the agency and the potential it has to "abrogate" Givernment responsibility for plant and animal health issues.

Fera chief executive Hilary Aldridge said: "I look forward to working with Capita and Newcastle University which will strengthen Fera’s existing scientific quality and international reputation. Capita brings a wealth of commercial experience, along with the investment needed to safeguard the long term future of Fera and the ability to grow our business, both to government and new commercial customers."

Defra chief scientific adviser Ian Boyd said: "Strong science is vital to the work that Defra carries out, ensuring that our food sector is world-leading, and protecting our country from animal and plant diseases.

"This decision will ensure that Fera remains a modern and innovative centre of scientific excellence."

Fera will be able to access to the University’s experimental farms for agriculture, horticulture and crop protection, as well as their research expertise in food quality, agri-tech and food safety.

A link between Fera and academia will see scientific research turned into practical commercial solutions, and will support the creation of a centre of excellence for UK agri-food research, Defra said.

It is intended that Capita will take over the operation of Fera from April 1.

Geraldine O'Connell, national secretary of the union Prospect, representing 400 scientists at the organisation, said: "This has been an anxious time for members. Sadly, our experience of the privatisation of other public sector scientific organisations has not been encouraging.

"We will want to ensure that the new provider focuses on delivering good quality, long-term science and is not simply concerned with making money. Equally, we will be seeking commitments from Capita to safeguard the future of the workforce and all their terms and conditions of employment."

O’Connell said that government policymakers must continue to have access to Fera’s critical and unique scientific knowledge. "Fera plays a crucial role in supporting safe food, grown in an environmentally sustainable way. This is of fundamental importance to the UK.

"The scientists at Fera focus on finding real, practical, solutions to solve problems throughout the agri-food supply chain. They also identify and monitor the disease and chemical risks within this supply chain."

Fera provides diagnostic and forensic support to the Plant Health and Seeds Inspectorate, the Genetic Modification Inspectorate and the National Bee Unit (partly based in Fera), and advises the policy units overseeing these areas. "All three areas are critical to the biosecurity of the UK," said O’Connell, who added that also crucial is the scientific support provided on quarantine plant pests and pathogens, invasive species and analysis of potentially illegal genetically modified organisms.

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