The Industrial Strategy Challenge Fund

Public Accounts Committee Closed Inquiry
Opened: 1 Feb 2021 Closed: 28 Jun 2021 Parliament page
The Industrial Strategy Challenge Fund (ISCF) awards support for research and development projects under the four themes of the government’s Industrial Strategy: clean growth, the ageing society, the future of mobility and artificial intelligence & the data economy. It constitutes a significant part of a government commitment to spend £4.7 … Read more
1 Recommendation
20 Conclusions
1 Report
1 Oral session
3 Letters
1 Event
Activity timeline 7 events
23 Nov
2021
Correspondence
10 Sep
2021
Correspondence
2 Sep
2021
Report published
30 Apr
2021
Report published
22 Mar
2021
Correspondence
4 Mar
2021
Oral evidence
4 Mar
2021
Formal meeting (oral evidence session) · The Wilson Room, Portcullis House
Oral evidence sessions 1 session
4 Mar 2021
View on parliament.uk
Industrial Strategy Challenge Fund
Jo Shanmugalingam · Department for Business, Energy and Industrial Strategy Professor Dame Ottoline Leyser DBE FRS · UK Research and Innovation (UKRI) Sarah Munby · Department for Business, Energy and Industrial Strategy
Title HC No. Published Items Response
Fifty-Sixth Report - Industrial Strategy Challenge Fund HC 941 30 Apr 2021 21 Responded
Recommendations & Conclusions
21 results
2 Conclusion
Fifty-Sixth Report - Industrial St…
We are not convinced that UKRI’s and the Department’s approach to intellectual property generated by...
We are not convinced that UKRI’s and the Department’s approach to intellectual property generated by the Fund adequately protects taxpayers’ interests. Taxpayer funding invested through the Fund creates a ‘bridge’ between pure research investment and commercial development. There will potentially … Read more
Government Response
agree with the conclusion that DHSC and NHS Digital took too long to identify all clinically extremely vulnerable people. Given the data available at the time, and the novelty of … Read more
HM Treasury
View details
3 Conclusion
Fifty-Sixth Report - Industrial St…
The Department has not yet made clear how it will make sure the UK will...
The Department has not yet made clear how it will make sure the UK will meet the target to spend 2.4% of its GDP on R&D by 2027. The government has a target to 6 Industrial Strategy Challenge Fund increase … Read more
Government Response
agree with the conclusion that there was huge local variation. NHS Digital and DHSC have already written to the Committee with an initial analysis of the local variation in growth … Read more
HM Treasury
View details
5 Conclusion
Fifty-Sixth Report - Industrial St…
UKRI is not doing enough to make sure the Fund is attracting successful bids from...
UKRI is not doing enough to make sure the Fund is attracting successful bids from across the country. Funding awarded by the Fund is distributed unevenly across the regions of the United Kingdom. By October 2020, just over 63% of … Read more
Government Response
5.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2021 5.2 The department and UKRI recognise that all R&D funding has a key role to play in … Read more
HM Treasury
View details
6 Recommendation
Fifty-Sixth Report - Industrial St…
The elongated time taken by the Department and UKRI to provide funding to successful bidders...
The elongated time taken by the Department and UKRI to provide funding to successful bidders risks putting off businesses from applying for the programme. It took UKRI, the Department and HM Treasury 72 weeks to select and approve the challenges … Read more
HM Treasury
View details
7 Conclusion
Fifty-Sixth Report - Industrial St…
Powers currently delegated by the Department and HM Treasury to UKRI do not strike the...
Powers currently delegated by the Department and HM Treasury to UKRI do not strike the right balance between the governance necessary to support efficient decision making and unnecessary bureaucracy. The Department and HM Treasury set the governance arrangements for UKRI’s … Read more
Government Response
7.1 The government disagrees with the Committee’s recommendation. 7.2 The department and UKRI are working closely together to consider the future design of challenge funding and how it can continue … Read more
HM Treasury
View details
1 Conclusion
Fifty-Sixth Report - Industrial St…
On the basis of a Report by the Comptroller and Auditor General, we took evidence...
On the basis of a Report by the Comptroller and Auditor General, we took evidence from the Department for Business, Energy & Industrial Strategy (the Department) and UK Research and Innovation (UKRI) about the management of the Industrial Strategy Challenge … Read more
Government Response
1.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2021 1.2 The Department for Business, Energy & Industrial Strategy (the department) and UK Research and Innovation (UKRI) … Read more
HM Treasury
View details
4 Conclusion
Fifty-Sixth Report - Industrial St…
The Department has five objectives for the Fund, to: • increase UK businesses’ investment in...
The Department has five objectives for the Fund, to: • increase UK businesses’ investment in R&D, while also improving R&D capability, capacity and technology adoption; • increase multi- and inter-disciplinary research; • increase engagement between academia and industry on targeted … Read more
Government Response
agree with the conclusion that a centrally directed system was chosen because of a lack of confidence in local authorities. Councils are crucial partners in delivery of shielding support to … Read more
HM Treasury
View details
8 Conclusion
Fifty-Sixth Report - Industrial St…
We asked the Department and UKRI why it had not ensured that the taxpayer benefited...
We asked the Department and UKRI why it had not ensured that the taxpayer benefited from any intellectual property generated as a result of successful commercial development paid for by the Fund.19 The Department told us that securing intellectual property … Read more
Government Response
2.1 The government agrees with the Committee’s recommendation. Target implementation date: July 2021 2.2 The government with UKRI will review the current approach to intellectual property (IP) and consider the … Read more
HM Treasury
View details
9 Conclusion
Fifty-Sixth Report - Industrial St…
The government has a target to increase the UK’s public and private investment in R&D...
The government has a target to increase the UK’s public and private investment in R&D to 2.4% of gross domestic product by 2027. The Fund contributes to this target.24 In 2018, the most recent year for which data are available, … Read more
Government Response
3.1 The government disagrees with the Committee’s recommendation. 3.2 The government has committed to increasing UK investment in research and development (R&D) to 2.4% of gross domestic product (GDP). To … Read more
HM Treasury
View details
10 Conclusion
Fifty-Sixth Report - Industrial St…
In 2019, the Department announced that to achieve government’s target of 2.4% both public and...
In 2019, the Department announced that to achieve government’s target of 2.4% both public and private R&D investment would need to rise to around £60 billion.26We asked witnesses how, and by when, it was going to increase funding to meet … Read more
Government Response
3.1 The government disagrees with the Committee’s recommendation. 3.2 The government has committed to increasing UK investment in research and development (R&D) to 2.4% of gross domestic product (GDP). To … Read more
HM Treasury
View details
11 Conclusion
Fifty-Sixth Report - Industrial St…
UKRI considered that meeting the target as very challenging but also described it as plausible...
UKRI considered that meeting the target as very challenging but also described it as plausible if it could, for example, maintain the momentum the Fund had generated around private investment. It asserted that having an ambitious target was important “otherwise, … Read more
Government Response
3.1 The government disagrees with the Committee’s recommendation. 3.2 The government has committed to increasing UK investment in research and development (R&D) to 2.4% of gross domestic product (GDP). To … Read more
HM Treasury
View details
12 Conclusion
Fifty-Sixth Report - Industrial St…
In the third and most recent wave of funding that started in 2019–20, it took...
In the third and most recent wave of funding that started in 2019–20, it took UKRI, the Department and HM Treasury 72 weeks to select and approve challenges.32 We asked the Department and UKRI why it took them over a … Read more
Government Response
6.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2021 6.2 The government recognises the impact that an elongated approvals process can have on the participants to … Read more
HM Treasury
View details
13 Conclusion
Fifty-Sixth Report - Industrial St…
The Department told us that part of the reason for the delays in approving challenges,...
The Department told us that part of the reason for the delays in approving challenges, and ultimately projects, lay with drawn-out approval processes.34 The Department and HM Treasury are responsible for approving business cases for challenges. The Department told us … Read more
Government Response
6.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2021 6.2 The government recognises the impact that an elongated approvals process can have on the participants to … Read more
HM Treasury
View details
14 Conclusion
Fifty-Sixth Report - Industrial St…
We were concerned that lengthy approval times, combined with changes in coinvestment requirements, could deter...
We were concerned that lengthy approval times, combined with changes in coinvestment requirements, could deter participation from some small and microsized companies.39 For example, we received written evidence from Tees Valley Combined Authority which told us that it had submitted … Read more
Government Response
6.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2021 6.2 The government recognises the impact that an elongated approvals process can have on the participants to … Read more
HM Treasury
View details
15 Conclusion
Fifty-Sixth Report - Industrial St…
Delays in getting new challenges approved have had a knock-on effect on UKRI’s ability to...
Delays in getting new challenges approved have had a knock-on effect on UKRI’s ability to start spending. For example, in 2019–20, UKRI had underspent by £86 million, equivalent to 14% of its budget for the Fund the year. During 2020–21 … Read more
Government Response
6.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2021 6.2 The government recognises the impact that an elongated approvals process can have on the participants to … Read more
HM Treasury
View details
16 Conclusion
Fifty-Sixth Report - Industrial St…
Lack of staffing capacity within UKRI may also have impacted the time taken to approve...
Lack of staffing capacity within UKRI may also have impacted the time taken to approve bids. At the start of Waves 2 and 3, UKRI faced significant challenges recruiting staff to oversee and manage the challenge programmes. Of the 186 … Read more
Government Response
6.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2021 6.2 The government recognises the impact that an elongated approvals process can have on the participants to … Read more
HM Treasury
View details
17 Conclusion
Fifty-Sixth Report - Industrial St…
One of the Fund’s five objectives is to increase collaboration between new small companies and...
One of the Fund’s five objectives is to increase collaboration between new small companies and those that are established. Analysis undertaken by the National Audit Office showed that UKRI had initially succeeded in attracting a range of different sized companies … Read more
Government Response
4.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2021 4.2 UKRI is committed to increasing engagement with small and medium sized enterprises (SMEs) within the research … Read more
HM Treasury
View details
18 Conclusion
Fifty-Sixth Report - Industrial St…
There are several reasons why the proportion of smaller businesses receiving funding could have fallen...
There are several reasons why the proportion of smaller businesses receiving funding could have fallen including the increase in UKRI’s requirements for coinvestment from participants for wave 3 funding. UKRI increased the co-investment requirement from industry in wave 3, responding … Read more
Government Response
4.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2021 4.2 UKRI is committed to increasing engagement with small and medium sized enterprises (SMEs) within the research … Read more
HM Treasury
View details
19 Conclusion
Fifty-Sixth Report - Industrial St…
Other factors that may have influenced the reduced participation of smaller businesses include insufficient communication...
Other factors that may have influenced the reduced participation of smaller businesses include insufficient communication about the Fund reaching SMEs, limited capacity within SMEs to participate in collaborative bids, and the lengthy approvals processes for funding.51 We received written evidence … Read more
Government Response
4.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2021 4.2 UKRI is committed to increasing engagement with small and medium sized enterprises (SMEs) within the research … Read more
HM Treasury
View details
20 Conclusion
Fifty-Sixth Report - Industrial St…
Whilst UKRI does not have an explicit objective to consider the regional balance in its...
Whilst UKRI does not have an explicit objective to consider the regional balance in its funding awards, the 2017 Industrial Strategy did include a focus on ‘prosperous communities’ across the UK.55 The government’s 2020 Roadmap for R&D expenditure sets out … Read more
Government Response
5.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2021 5.2 The department and UKRI recognise that all R&D funding has a key role to play in … Read more
HM Treasury
View details
21 Conclusion
Fifty-Sixth Report - Industrial St…
UKRI recognised the need to think about R&D expenditure in terms of what it described...
UKRI recognised the need to think about R&D expenditure in terms of what it described as the ‘place part of the agenda’.58 Comparing the distribution of the Fund with what it described as normal R&D expenditure, UKRI asserted that it … Read more
Government Response
5.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2021 5.2 The department and UKRI recognise that all R&D funding has a key role to play in … Read more
HM Treasury
View details
Correspondence 3 letters
23 Nov 2021 Correspondence from Sarah Munby, Permanent Secretary, Department for Business, Energy & Industrial Strategy, re Fifty-Sixth Report of Session 2019-21: Industrial Strategy Challenge Fund (ISCF), 3 November 2021
Parliament page
10 Sep 2021 Correspondence from Sarah Munby, Permanent Under-Secretary of State, Department for Business, Energy and Industrial Strategy, re Fifty-Sixth Report of Session 2019-21: Industrial Strategy Challenge Fund (ISCF), dated 29 July 2021
Parliament page
22 Mar 2021 Correspondence from Sarah Munby, Permanent Secretary, Department for Business, Energy and Industrial Strategy, re Response to the Committee regarding 04 March Industrial Strategy Challenge Fund Public Account Committee hearing, dated 18 March 2021
Parliament page