The government White Paper on science, engineering and technology ('Realising our Potential'), published in May 1993, set out a range of measures designed to secure maximum advantage from annual public expenditure. The Government stated its belief that many of the scientific services provided by its research establishments could be carried out in the private sector, and changes were made to various Departments along these lines. For those establishments which remained in the public sector, the Government undertook a scrutiny of public sector research establishments to identify possible candidates for early privatisation or to identify the potential for rationalisation, or to consider changes to current ownership or financing arrangements. The scrutiny was undertaken by a team drawn from a number of government departments and the private sector, under the auspices of the Government Efficiency Unit. The scrutiny focused on around 50 civil public sector research establishments in England, Scotland and Wales. The report of the scrutiny team was published in July 1994, and was followed by a four month period of consultation. The Government accepted the majority of the report's recommendations, including the proposed measures to extend competiton for government funding, implementing a programme of rationalisation. A prior options review of research establishments was announced, which aimed to test whether the functions of the research establishments were necessary at all, and whether there was scope for privatising, contracting out, merging bodies or transferring work between them.

The Prior Options Review of Public Sector Research Establishments assessed 22 establishments for privatisation, including 11 agricultural research institutes drawn from the Ministry of Agriculture, Fisheries and Food, the Scottish Office and the BBSRC. It was co-ordinated by the Government's Efficiency Unit.

The scrutiny followed the May 1993 publication of the government white paper 'Realising our potential', which focused on the applications of science to quality of life and wealth creation. The paper announced the government's intention to 'undertake a scrutiny of the public sector research establishments to review, sector by sector, the future status of establishments, looking in depth at privatisation, rationalisation and different options for ownership.' The scrutinty was undertaken chiefly during the first half of 1994 by the Efficiency Unit of the Cabinet Office, by a team consisting of five members seconded from various Departments, and one from the private sector. The Scrutiny Team aimed to identify those public sector research establishments, including the BBSRC'S Roslin Institute, where privatisation seemed desirable, to identify the potential for rationalisation or consider changes of ownership or financial management.