Industrial Strategy Challenge Fund Contents

Summary

UK Research and Innovation and the Department for Business, Energy & Industrial Strategy set up the Industrial Strategy Challenge Fund quickly but we have concerns about its clarity of purpose including the multiple projects now being funded, the length of time it takes for a project to be approved and the lack of clear evaluation about the impact.

By January 2021 over 1,600 projects had benefited from funding of £1.2 billion to support innovation in some of the most complex issues faced by the UK. Businesses and other bodies have contributed almost £600 million themselves to projects in what is known as co-investment. It is important that the fund tracks the job creation ambitions and the number of jobs delivered over time if it is to properly demonstrate its economic impact.

Greater clarity is needed on what the Fund as a whole is trying to achieve and how it is trying to do it. Although UKRI can point to good performance in beginning to tackle the various chosen challenges and amongst their funded projects, and in involving industry in the selection of challenges to support, its objectives for the Fund overall are input focused. This makes it difficult to assess whether the investment of taxpayers’ money through the Fund has been successful in terms of, for example, economic impact including the number and quality of jobs created. The financial support provided by the Fund is currently concentrated in certain parts of the country and larger organisations have recently received an increasing proportion of funding. We are concerned that these risks undermining future performance by overlooking ideas from elsewhere and smaller businesses. The proof of whether the fund delivers is some years off and it is important that clarity about desired outcomes and proper evaluation of progress is built in at this early stage.

The fund is a key element in achieving the government’s ambitious target for the UK to spend 2.4% of GDP on R&D by 2027. This was challenging before the outbreak of COVID-19 and is more so now. The Department needs to set out clearly how it proposes to meet this target. Structural issues in the Fund’s design- such as lengthy approvals processes and co-investment requirements- similarly need an overhaul if it is to play an important role in helping re-build our economy post-pandemic. UKRI, the Department, and HM Treasury need to act with more urgency to tackle these issues and protect taxpayers’ investment.




Published: 30 April 2021 Site information    Accessibility statement