Recommendation 7

Powers currently delegated by the Department and HM Treasury to UKRI do not strike the right balance between the governance necessary to support efficient decision making and unnecessary bureaucracy. The Department and HM Treasury set the governance arrangements for UKRI’s oversight of the Fund, including the requirements for approving new challenges. UKRI, the Department and HM Treasury each approve business cases for challenges in turn—as a result business cases can take over a year to approve. One consequence of this delay is that funding is slow to be allocated. In addition to delaying getting funding to those delivering approved projects, this could create extra financial pressures in the later years of the programme as funded activity builds up. The Departments’ approach to the appointment of senior civil service positions has led to delays in appointing Challenge Directors, which have taken an average of over 37 weeks. Challenge Directors are fundamental in setting the direction for, and then overseeing delivery against, the objectives for each challenge. UKRI would like to be able to appoint these senior staff earlier, but to do so depends on its delegated powers from the Department. Recommendation: The Department and HM Treasury should, by July 2021, review the conditions they place on UKRI to manage the Fund with a view to supporting more efficient decision making. The Department and HM Treasury should write to the Committee to explain the changes they have introduced together with their intended impact. 8 Industrial Strategy Challenge Fund 1 Measuring the impact of the Funds