The Department for Business, Innovation, Science and Trade (BIST) and UK Research and Innovation (UKRI) are spending £9.2bn of taxpayers’ money on UK innovation. But, according to a report from the Public Accounts Committee (PAC), they need to do more to get better value for taxpayers from the UK government’s investments in research and development, and to keep the UK at the global forefront of innovation.
While the PAC noted that BIST has recently changed its procurement approach to make it more likely that UK companies will supply some of the £400m worth of specialised artificial intelligence (AI) chips it plans to purchase, the authors of the report said that British companies still find it much harder than their US counterparts to obtain the capital investment they need to grow while remaining based in the UK.
The report criticised UKRI for taking too cautious an approach when dealing with intellectual property. UKRI aims to strike a balance with the design of its IP controls so as not to inhibit companies’ growth. The PAC said that the more liberal approach to IP controls taken by UKRI, compared to other parts of the public sector, does not go far enough and BIST should go further to recover taxpayers’ money. The PAC suggest UKRI could, for example, look to take more equity stakes where it is providing funding.
Geoffrey Clifton-Brown MP, chair of the Public Accounts Committee, said: “It may strike followers of this committee’s work that our call for government to take a less cautious approach to taking a direct stake in British innovation is an unusual one. But we are a body dedicated to value for taxpayers’ money, not hoarding it. The nations currently leading the global tech race did not achieve their positions by avoiding more entrepreneurial policies. This is a simple case for the government of nothing ventured, nothing gained.”
The PAC was also critical of UKRI’s approach to cancelling projects it had already funded. In the report, the PAC said that UKRI cancelled funding for its airborne laboratory five years after deciding to upgrade it, having spent £46m of the £49m budget.
“We believe it could have taken action sooner. UKRI could also have been quicker to realise the Science and Facilities Technology Council’s (STFC’s) plans were unaffordable,” the report’s authors said. “The decisions it will soon take to bring spending back under control could have serious consequences for the UK’s skills base, for sites such as the Daresbury research campus, and for the UK’s reputation as a partner in international collaborations such as CERN.”
Another area of concern raised by the PAC is UKRI’s ability to maintain and upgrade infrastructure needed to support research. It reported that restoring university-owned research infrastructure to a fully operational condition would cost £5.6bn, at a time when many universities have large financial deficits.
In the report, the PAC noted that BIST and UKRI failed to ensure the Archer2 national supercomputer’s replacement would be ready before Archer2 is turned off. The PAC said the 13-month expected delay would have been longer without the University of Edinburgh’s decision to proactively prepare its site by upgrading a grid connection.
Looking at regional differences, the PAC found that the current VAT framework for research infrastructure, along with other barriers, discourages researchers from using facilities outside their own institution.
“We also heard that UKRI has focused on large investments and paid less attention to whether the overall landscape is balanced, efficient and resilient,” it noted.
Clifton-Brown added: “Our report also identifies a continuing and unacceptable regional divide in researchers’ experiences outside of London and the South East. UKRI’s spending in the North seems to be going in the right direction, but without a dedicated focus on rebalancing the scales, there is every possibility of slipping back to the previous status quo.”
