Source · Select Committees · Public Accounts Committee
Recommendation 23
23
Accepted
UKRI strategically balances high-risk, high-reward R&I investments across its diverse funding portfolio.
Conclusion
UKRI’s total portfolio of funding comprises a wide range of investments, including R&I grants, strategic institutional funding to English Higher education providers and institutions, and UKRI says it balances risk across its portfolio by the type of funding mechanism.57 UKRI considers R&I grant funding to be of higher risk than some other types of funding. It seeks to operate with ‘open/bold’ risk when deciding what to fund for R&I grants, meaning it intends to take high risks where there is the potential for high rewards.58 Sir David Grant and Professor Boyle highlighted the need to think about risk in a complex way and told us that perceptions of risk depend on the individual or on the situation; for example whether it is a risk around the research topic to be funded, or the timeliness of the funding being given.59 UKRI repeatedly referenced the importance of portfolio management in R&I funding and told us that it has “a very long and strong track record of taking really high risks in the research that [it] invests in”.60 DSIT told us it considers the world of R&I to have a mature understanding and approach to risk taking but also noted the need to define the areas in government where more risk taking is needed and “go hard at them.”61
Government Response Summary
The government accepts the implied recommendation, stating it will incorporate NAO recommendations into UKRI's 2025 risk appetite statement review by February 2026. UKRI will also develop risk appetite guidance, provide training, establish a community of practice, review peer reviewer instructions, and evaluate learning from risk-taking.
Government Response
Accepted
HM Government
Accepted
5.1 The government agrees with the Committee’s recommendation. Target implementation date: February 2026 5.2 DSIT developed a risk appetite statement in November 2024, which stated the 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. 5.3 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. 5.4 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. 5.5 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. 5.6 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.