Source · Select Committees · Public Accounts Committee
Recommendation 5
5
Accepted
Develop government's approach to risk in research and innovation funding, defining risk for stakeholders.
Conclusion
It is unclear how UKRI manages risk across its portfolio and what the different parts of its portfolio are meant to achieve. UKRI has repeatedly referenced the importance of its portfolio approach to funding research and innovation. However, the committee is not convinced that the components of UKRI’s portfolio and the objectives they seek to achieve are sufficiently defined and deployed in a tactical way. DSIT highlights the importance of defining the places where government needs to take more risk. UKRI says it has a very long and strong track record of taking high risks in the research it invests in. However, we are concerned that UKRI cannot demonstrate how it manages risk across its portfolio, and does not actively monitor its high risk, high reward investments. However, we are not discouraging investments in this area. If you always castigate failure, innovation is at risk of being stifled. recommendation DSIT and UKRI should work together to further develop the government’s approach to risk when funding research and innovation. This should include defining what is meant by risk in this context for their organisation and what it means for its staff and stakeholders. 5
Government Response Summary
The government agreed and committed to incorporating recommendations into UKRI's biennial risk appetite statement review by February 2026, developing guidance for risk appetite types, providing training, establishing a community of practice, and reviewing peer reviewer instructions.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. department has both the opportunity and obligation to try approaches that may bring greater rewards, particularly where those approaches can act as trailblazers for other programmes. UKRI has a long track record in supporting high-risk research as part of its overall portfolio. UKRI developed a risk appetite statement in 2021, which is reviewed biennially in line with UKRI’s Risk Management Policy. The risk appetite statement is a fundamental element of the Risk Management Framework and reviews are undertaken with teams across UKRI to ensure that risk appetite types and levels are effective. UKRI will incorporate the NAO’s recommendations into its 2025 review of its risk appetite statement, to be completed by February 2026. This will be closely monitored by DSIT. UKRI will develop guidance for each risk appetite type to provide information on the risk appetite level and its implementation. UKRI will provide further support through training and its Risk and Assurance partnering team. UKRI has also established a community of practice for staff delivering funding competitions, which will ensure the risk appetite for different stages in the funding process is actively communicated. UKRI will also review instructions for peer reviewers and grants panels to ensure they effectively consider UKRI’s risk appetite. UKRI will, through the updated risk appetite statement, ensure that a new approach to learning from risk taking is evaluated as part of the management of our portfolio.