Source · Select Committees · Public Accounts Committee
Recommendation 28
28
Accepted
UKRI and DSIT implementing strategies to improve R&I commercialisation and start-up scaling.
Conclusion
We asked what UKRI and DSIT are doing to address the systemic challenges to achieving economic growth by commercialising the results of R&I.74 DSIT told us that it is currently focusing on how public sector investors (including Innovate UK, the British Business Bank, the National Wealth Fund, and UK Export Finance) can best channel their investments to help investment-ready ventures to scale up successfully.75 UKRI told us that universities tended to spin out their commercial ventures too soon, before they had done enough work to establish the commercial viability of their ideas. To improve the chances of success, UKRI also said that it has launched a Proof-of-Concept Fund, which will provide pre-incorporation investment to help start-ups to develop to a point at which they become more attractive to external investors.76 DSIT told us it is looking at how to make government procurement easier for small technology businesses to navigate, as adoption by public services can assist such companies to scale up more rapidly.77
Government Response Summary
The government agreed with the Committee's conclusion, outlining ongoing efforts to support scaling innovation, including UKRI's new Proof-of-Concept fund, an integrated approach with various public finance institutions, and leveraging public procurement, with allocations to UKRI to be published by Spring 2026.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation. Target implementation date: Spring 2026 6.2 DSIT will publish allocations to UKRI in Autumn 2025, and UKRI’s allocations will be published by Spring 2026. 6.3 DSIT and UKRI will draw on a variety of data sources to understand where to have the greatest impact on scaling innovation domestically. This involves not only assessing where there is strength in research, but also where there are existing or nascent industry strengths, absorption capacity and identifiable market failures. 6.4 UKRI has recently launched the first round of the new discipline agnostic Proof-of-Concept funding opportunity. Understanding the full impact will only be possible after the first rounds of projects conclude and are evaluated (evaluation dates not yet confirmed). Early insights will contribute to allocation decisions. 6.5 Scaling innovation is not a linear pipeline from research to scale-up but instead requires an integrated approach across different actors (both private and public) that provides the right policy environment for innovative firms at every stage of their growth journeys. The government’s Industrial Strategy set out how we plan to achieve this. This includes better engagement and alignment between UKRI, the British Business Bank, the National Wealth Fund and other public finance institutions through the new Strategic Public Investment Forum, plus more effective use of public procurement to buy from innovative suppliers, and removing regulatory barriers to scaling. 6.6 In deciding the aforementioned allocations, DSIT will consider the impact on the financial sustainability of university research. DSIT uses analyses of Transparent Approach to Costing data, as well as insights and analyses provided by UKRI, to understand the financial challenges universities face within the R&I system.