Source · Select Committees · Science, Innovation and Technology Committee
Recommendation 22
22
Not Addressed
Taking risk and being rewarded for doing so are essential components of a dynamic, innovative...
Conclusion
Taking risk and being rewarded for doing so are essential components of a dynamic, innovative economy and capital is essential to driving national, regional and local growth. Whilst the Government is limited in what it can do to influence the flow of capital across the economy, London, Oxford and Cambridge dominate venture capital flows and angel investor networks, leaving high-potential early-stage businesses in other parts of the UK underfunded. The Government’s additional Proof of Concept funding, 46 to help bridge the first part of the ‘valley of death’ between research and commercialisation, falls far short of what is needed to drive real change, at just £40 million over five years. (Conclusion, Paragraph 77)
Government response summary AI-generated
The government agrees on the importance of innovation diffusion and adoption, detailing programs like Made Smarter, BridgeAI, and Robotics Adoption Hubs, but the response does not directly address the committee's concerns about imbalanced venture capital flows and the inadequacy of Proof of Concept funding in certain regions.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Not Addressed
HM Government · verbatim extract
Not Addressed
The government agrees with the overall intent of this recommendation. We recognise the importance of improving access to finance for science and deep tech companies, and the need to strengthen specialist investor capability across the UK, particularly in strategic sectors such as quantum and have recently announced a specialist procurement programme ProQure that will be part of stimulating the private sector investment base. The British Business Bank will play a key role here through its expanded capacity which will allow it to make £2.5 billion of investments per year from 2026/27. This will allow for a greater focus on building the ecosystem of specialist investors in IS8 sectors including in strategic deep tech sectors. Expansion of the Bank’s Enterprise Capital Funds and Investor Pathways will also support new and emerging specialist fund managers. We agree with the Committee the need to expand specialist knowledge which is why we will continue to build on initiatives such as the Cluster Innovation Hubs, the successful Science and Technology Venture Capital Fellowship Scheme and related programmes that build investor skills across the UK, alongside plans for a Local Growth Network to develop regional investment ecosystems. We are making progress and delivering against the Mansion House Accord, which will be reported once commitments begin to convert into committed capital flows. The second annual progress update on the Mansion House Compact (16 October 2025) shows that, by February 2025, signatories doubled their unlisted equity investment in DC default funds from £0.8 billion to £1.6 billion. Through the Science & Technology Venture Capital Fellowship, we are supporting the next generation of fund managers to develop the capability to invest in Science & Technology. We agree with the Committee’s reflection that investor awareness of deep tech opportunities is crucial, this is why the scheme includes regional events to showcase innovation ecosystems across the UK and build investor awareness of opportunities within deep tech and life sciences. By the end of 2026, a total of 40 mid-career investors will have completed the Programme, providing specialist training and network-building support to enable them to progress into S&T fund management roles. A formal launch of the Alumni Network took place in March, providing a trusted community for continued professional development, knowledge-sharing and sustained engagement between investors and DSIT on Science and Technology policy. We are currently focusing our efforts on these areas rather than specific investor envoys for deep tech sector.
Read the full response on Parliament ↗