Recommendation 2

We are concerned that UKRI is not doing enough to ensure the taxpayer fully reaps the rewards of public investment in research and innovation, it must address this as a matter of urgency. The British Business Bank is acting as a ‘cornerstone’ investor in innovative companies alongside pension funds, meaning the taxpayer shares in the benefits of successful investments. Government’s aim is to bring in more investment from 3 pension funds, but the Department accepts that the pace of change has been slower than it would have liked. According to the Department, UK universities generate more spinouts and patents per unit of research resource than their US counterparts, but the way universities make the most of their intellectual property (IP) is patchy. UKRI takes a different, more liberal approach to IP controls than some other parts of the public sector; we are not convinced this is justified. It could, for example, look to take more equity stakes where it is providing funding. UKRI told us that it is worth looking again at its standard IP terms and conditions, but that it is seeking to strike a balance with the design of its IP controls so as not to inhibit companies’ growth. This approach is far too cautious and we urge the Department to do much more to recover taxpayer’s money when a successful company exploits research which the taxpayer, via UKRI, has paid for. recommendation UKRI should write to the Committee alongside its Treasury Minute response to tell us what changes it plans to make to its grant funding terms and conditions in both intellectual property and equity stakes and the intended impact for the taxpayer of this.