The Public Accounts Committee urges the UK government to adopt venture-capital practices by taking equity stakes in funded startups and in companies that build on publicly funded research, so taxpayers share in profits and value for money improves.

There is a gap in national supercomputer coverage, with ARCHER2 not yet replaced and users facing a 13-month delay before a new system becomes available.

MPs flag regional funding imbalances, noting London, the South East and the East of England receive about half of UKRI funding, while the North’s share has modestly increased but lacks targets and ongoing redistribution.

UK universities generate many spinouts and patents per research pound but struggle to retain and scale them, with promising companies often relocating abroad to secure late-stage growth capital.

The report highlights a structural flaw in UK commercialization compared with the US, where policies like Bayh-Dole and active tech transfer offices foster equity and private investment, enabling domestic leadership in foundational tech commercialization.

Notable inefficiencies include a 46 million spend on an airborne laboratory upgrade that was abandoned, and estimates of 5.6 billion needed to restore university-owned research infrastructure, alongside a 13-month ARCHER2 replacement gap.

UKRI and DSIT policies are seen as potentially discouraging growth or failing to maximize public gains, prompting calls to review funding terms and consider equity stakes.

The PAC calls for measuring actual growth impact on British firms rather than just disbursement totals and for clearer regional targets and accountability on taxpayer benefits from publicly funded innovation.

There is a transatlantic commercialization gap, with UK startups seeking funding in Silicon Valley or Asia and relocating headquarters abroad to access capital and tax advantages.

Government support includes free AI supercomputing access through UKRI, procurement reforms for AI chips worth 400 million, and the British Business Bank co-investing with pension funds, though progress on faster pension fund investment remains slow.

The PAC criticizes UKRI for overly cautious funding terms and urges recovering taxpayer money when publicly funded research leads to successful private ventures.

Robust metrics are needed to assess whether government support actually helps UK companies scale domestically, with a broader equity-based model to maximize returns on public investment.