Recommendation 20

Whilst UKRI does not have an explicit objective to consider the regional balance in its funding awards, the 2017 Industrial Strategy did include a focus on ‘prosperous communities’ across the UK.55 The government’s 2020 Roadmap for R&D expenditure sets out its intention that spending on R&D and innovation should contribute to its ‘levelling up’ agenda.56 Analysis by the National Audit Office showed that the distribution of funding across the regions was uneven. Between 2017 and 2020, almost two thirds of the money committed to projects as part of the Fund had been distributed to companies registered in three regions of the UK—London, South East and West Midlands. In comparison, areas such as the North East or Yorkshire & Humber received 2.9% and 1.8% of the Fund respectively over the same period. The NAO concluded that this distribution was not necessarily explained by factors such as population size or the distribution of business undertaking R&D activity. UKRI noted that this analysis was based on data on the location of the organisation in receipt of the funding and not necessarily where the R&D activity took place. However, it did not provide us with any analysis setting out the regional distribution of the Fund based on where it thought R&D activity was actually taking place.57