Summary

• The Public Accounts Committee wants UKRI to reconsider the terms attached to publicly funded intellectual property and examine taking equity stakes in more businesses it supports.
• UKRI has a £9.2 billion budget for 2026–27, while the committee identifies £5.6 billion in costs needed to restore university-owned research infrastructure to full operational condition.
• MPs raise concerns about regional inequality, a cancelled airborne laboratory upgrade and a planned 13-month gap before the national ARCHER2 supercomputer is replaced.

MPs have urged the government to take a more ambitious approach to recovering the value of publicly funded research, arguing that Britain risks financing promising technologies without receiving an adequate share of the returns when successful businesses commercialise them.

The House of Commons Public Accounts Committee published its findings on 21 October, examining how UK Research and Innovation (UKRI) manages research infrastructure, supports companies emerging from publicly funded science and decides whether expensive facilities remain worth maintaining.

With UKRI holding a £9.2 billion budget for 2026–27, the committee believes the organisation should reconsider its intellectual property conditions and examine taking equity stakes in more companies receiving public support. It also questions whether decisions about existing research facilities have been sufficiently timely and strategic.

UK Research and Innovation supports academic research, business innovation and specialist scientific infrastructure through its constituent research councils, Research England and Innovate UK. Its responsibilities span early research that may not deliver an immediate commercial return and programmes intended to help businesses develop products and services.

Grant funding creates questions about ownership

Publicly funded research can generate valuable intellectual property, including patents, software, industrial processes and scientific discoveries that companies subsequently develop into commercial products.

Universities frequently support that transition by licensing technology or establishing spinout businesses. However, the terms governing ownership and investment can vary between institutions and funding programmes, affecting how much value the original research organisations or public funders receive when businesses succeed.

The committee reports government evidence suggesting British universities generate more patents and spinout companies per unit of research resources than their American counterparts, while their ability to obtain commercial value from those assets is inconsistent.

UKRI currently applies relatively flexible intellectual property conditions compared with some other public funding bodies. The organisation argues that demanding extensive ownership rights could discourage private investors or constrain companies seeking to expand.

MPs remain unconvinced that those concerns justify the existing arrangements, particularly where taxpayers have financed research that subsequently supports a highly valuable commercial business.

The committee wants UKRI to explain how it intends to revise the terms attached to grants, including its approach to intellectual property and potential equity participation. It has requested a response outlining the intended benefits to taxpayers.

Taking an equity stake could allow the public to share financially in successful investments, but it would also expose public funds to commercial risk. Many research-based businesses require substantial further investment, while others never generate returns sufficient to recover their development costs.

Any wider equity programme would therefore need arrangements for valuing stakes, managing dilution when new investors participate and deciding when holdings should be sold.

The committee’s recommendations do not establish a new mandatory ownership regime. UKRI and the relevant government department must determine how such arrangements could operate without undermining the ability of companies to attract capital.

Commercial support extends beyond research grants

British technology businesses can face considerable costs when moving from laboratory research into commercial production, particularly in fields requiring specialist equipment and lengthy qualification processes.

Semiconductor development, quantum computing and advanced AI infrastructure may all depend on facilities that smaller companies cannot justify constructing independently.

The committee acknowledges government efforts to make publicly funded infrastructure more accessible. Qualifying AI startups undertaking strategically significant research can receive free time on national supercomputing resources, allowing them to perform demanding calculations without immediately purchasing equivalent equipment.

The government has also changed the procurement approach for its AI Research Resource programme to create opportunities for British developers of specialised chips. The programme is expected to purchase approximately £400 million of such equipment.

These initiatives can support emerging companies, although the committee wants clearer evidence about how different forms of assistance contribute to commercial growth.

It has recommended annual quantitative reporting covering business support mechanisms beyond ordinary grants, allowing government to evaluate whether recipients secure investment, develop products and expand their activities.

UKRI is also seeking stronger links between grant recipients and sources of growth capital, including the British Business Bank and the National Wealth Fund.

The committee recognises that accessing investment remains harder for many British growth businesses than for comparable American companies, even though the government argues that the gap has narrowed relative to the size of the respective economies.

Closer connections between research funding and commercial finance could help businesses progress beyond their initial technical development, but the value of such arrangements depends on the quality of investment opportunities and the terms available to participating companies.

Regional funding remains concentrated

Although UKRI has increased the proportion of spending directed towards northern England, substantial geographic differences remain.

The committee reports that London, the South East and East of England collectively received half of UKRI investment in 2023–24. The proportion allocated to the north of England has increased from approximately 12% to 20% over five years.

UKRI considers regional economic effects when assessing investments, but it has not established specific targets for the geographic distribution of its funding.

MPs want clearer objectives, while recognising that investment decisions must also reflect scientific quality and the benefits of concentrating particular facilities where established expertise exists.

Researchers and smaller businesses can struggle to identify available public research infrastructure, with access sometimes complicated by institutional arrangements, capacity restrictions and operating charges.

The committee also identifies aspects of the VAT framework that may discourage organisations from making equipment available to researchers outside their own institution.

Improving access would require practical changes to booking systems, financial arrangements and technical support, rather than simply increasing the total amount committed to regional projects.

Techopia previously examined government funding for regional innovation clusters. The new committee report raises a separate question about whether existing research infrastructure and investment reach organisations across the country effectively.

Ageing facilities create substantial liabilities

UKRI spent £1.2 billion during 2024–25 on building, upgrading and maintaining research infrastructure, including laboratories, specialist equipment and large scientific facilities.

The committee found that the condition of existing facilities places growing pressure on public budgets. Restoring university-owned research infrastructure to full operational condition would cost an estimated £5.6 billion, at a time when many universities are experiencing financial difficulties.

Problems also affect infrastructure maintained directly through UKRI’s research organisations. Approximately 45% of the Science and Technology Facilities Council’s estate is described as being in an unacceptable condition.

Maintaining facilities that are ageing, underused or no longer required can divert funding from research activity and investment in newer equipment.

MPs want UKRI to make clearer decisions about modernisation and decommissioning, including reporting the costs associated with maintaining redundant facilities.

The consequences of delayed decisions are illustrated by an airborne atmospheric research laboratory whose proposed upgrade was abandoned after £46 million of a £49 million budget had been spent.

UKRI decided against providing the additional operating expenditure required, arguing that demand for the aircraft had declined and alternative research technologies were becoming available.

The committee accepts that research investment involves uncertainty but questions why the programme continued for so long before its financial sustainability was reconsidered.

Supercomputing continuity faces a gap

Research computing provides another example of the consequences of infrastructure planning decisions.

The committee reports an expected 13-month gap between the retirement of the ARCHER2 national supercomputer and the availability of its replacement.

The government and UKRI intend to maintain computing access through a network of existing and new systems, including access to European infrastructure, rather than leaving researchers without any national computing resources.

Nevertheless, the delay creates uncertainty for organisations that depend on particular workloads, software configurations and predictable access to advanced computing.

The University of Edinburgh’s decision to prepare its site by upgrading its electricity connection reduced the expected delay. That illustrates the importance of coordinating computing procurement with the physical infrastructure required to operate the resulting equipment.

UKRI also faces difficult decisions concerning the future activities of the Science and Technology Facilities Council, whose planned programme exceeds its available budget.

Potential reductions could affect research sites, technical expertise and Britain’s participation in international scientific collaborations, including projects connected with CERN.

The committee wants clearer criteria for deciding when projects should continue, change direction or stop, together with a more coherent approach to long-term infrastructure budgets.

Its report does not establish that public investment in research has failed to produce commercial or scientific benefits. It identifies gaps in the information used to assess those benefits and in the way expensive facilities are managed throughout their operating lives.

The government’s response will determine whether intellectual property conditions, public equity participation and infrastructure investment decisions change. For British technology companies, the resulting policy could alter both the support available for commercialisation and the financial interests retained by the public institutions that helped fund the original research.