The government should do more to make sure UK taxpayers benefit from tech firms that have received public funding, the Public Accounts Committee (PAC) has said.

UK Research and Innovation (UKRI) is the UK’s largest single public funder of research and innovation, with a budget of £9.2 billion for 2026–27. However, a new report notes that while it’s great at handing out grants, the organization should be taking more equity stakes in companies where it provides funding. .

According to the government, UK universities proportionally generate more spinout companies and patents than in the US – but the way this intellectual property (IP) is then monetized is patchy, according to the PAC.

UKRI is too focused on avoiding inhibiting companies’ growth, it said, warning: “The longer UKRI and the government spend thinking, reviewing and considering what they might do, rather than actively intervening on behalf of the taxpayer, the more opportunities will be missed.”

UKRI gives free access to publicly-funded supercomputers to AI startups deemed to be ‘strategically significant’, while DSIT revised its procurement rules to improve UK companies’ access to £400 million in specialist AI chips.

The British Business Bank, meanwhile, also invests alongside pension funds, giving the public a stake in supported businesses. However, while ministers hoped for faster pension fund investment, progress has been slow.

“It may strike followers of this committee’s work that our call for government to take a less cautious approach to taking a direct stake in British innovation is an unusual one,” said Geoffrey Clifton-Brown, chair of the PAC.

“But we are a body dedicated to value for taxpayers’ money, not hoarding it. The nations currently leading the global tech race did not achieve their positions by avoiding more entrepreneurial policies. This is a simple case for the government of nothing ventured, nothing gained.”

North-south divide widens

Meanwhile, the report points to a continuing north-south divide for researchers, with London, the South East, and East of England receiving half of all UKRI funding.

Although 20% of UKRI’s spending now takes place in the North – up from 12% five years ago – UKRI should build on this by setting specific targets around regional growth, the committee said.

It is also concerned that the current budget allocated by UKRI to the Science and Technology Facilities Council (STFC), which supports UK research facilities, could mean it has to cut its spending on collaborative projects with other nations.

“UKRI’s spending in the North seems to be going in the right direction, but without a dedicated focus on rebalancing the scales, there is every possibility of slipping back to the previous status quo,” said Clifton-Brown.

“Further, if the UK doesn’t protect its ownership of innovative ideas, this intellectual property is then exploited by countries around the world who are then better able to compete with us.”

Infrastructure bloat in the spotlight

The PAC has also urged UKRI to review the condition of its ‘bloated’ research infrastructure estate, and should be prioritizing decisions on what infrastructure could be decommissioned much more actively.

The report noted that UKRI cancelled funding for its airborne laboratory five years after deciding to upgrade it, after spending £46 million of the £49 million budget.

According to the committee, the organization should have been quicker in realizing the Science and Facilities Technology Council’s (STFC’s) plans were unaffordable.

“The research infrastructure funded by UKRI is becoming ever more important, as advancements and breakthroughs at the cutting edge of technology determine the new winners and losers on the global stage,” the report read.

“The critical role UKRI will play in this race cannot be overstated, and it is vitally important that it spends the money available to it wisely, in accordance with a strategic plan and taking into account its existing infrastructure investments.”

FOLLOW US ON SOCIAL MEDIA