First Special report: Response to Science and Scotland inquiry
On 15 June 2023, our predecessor Committee opened an inquiry into Science and Scotland. The Committee concluded its evidence-taking but was unable to formally report its findings due to the dissolution of Parliament following the announcement of a General Election on 24 May 2024. As such, the then-Chair of the Scottish Affairs Committee—Pete Wishart MP—wrote to the outgoing Secretary of State for Scotland and the Minister of State for the Department for Science, Innovation and Technology on 24 May 2024 with a summation of the Committee’s findings. The current Government responded to these findings on 12 March 2025. A copy of this response is appended to this report. While our predecessor Committee’s correspondence was not itself a committee report, we are publishing the Government’s response to the correspondence in the form of a special report in the interests of accessibility and transparency.
Appendix: Government response
Letter from the Ian Murry MP, Secretary of State for Scotland, Scotland Office and Lord Vallance, Minister of State for Science, Research and Innovation, Department for Science, Innovation and Technology, dated 12 March 2025
We would like to thank the Scottish Affairs Committee for its inquiry into both Science and Scotland and Space sector in Scotland concluded last year and for your letter setting out some key recommendations as a result of this work. Your letters cover a broad range of issues, responsibility for which falls between the Scotland Office and the Department for Science, Innovation and Technology and we are responding on behalf of the UK Government.
The UK Government is committed to working collaboratively with the Scottish Government to harness growth and create high-skilled jobs in the science and space sectors. The UK Government is working extensively to support and promote science, innovation and the space industry in Scotland. Scotland plays a leading role in both sectors, with significant strengths to be proud of. To point to just a few examples, Scotland proudly hosts SaxaVord spaceport, a rich and diverse life sciences sector, as well as some of the UK’s highest performing, historic universities and four Catapult sites.
Scotland is also home to pioneering innovation centres focusing on semiconductor research and development with The University of Glasgow being at the forefront of research and commercialisation through the James Watt Nanofabrication Centre, one of the UK’s leading facilities in nanofabrication, enhancing semiconductor design and production capabilities in partnership with industry. The University also hosts the UK hub for quantum-enabled position, navigation and timing, building on its strengths in photonic technologies.
In partnership with Scotland’s Chief Scientist Office, the Office for Life Sciences awarded further funding to seven technologies to prevent drug overdose deaths. The UK Government is committed to supporting life sciences business in Scotland through the Life Sciences Innovative Manufacturing Fund, which is open for applications UK-wide. NHS Scotland’s Safe Havens, facilitated by Research Data Scotland, provides a federated network of secure data environments. These Safe Havens are bound by a Charter of agreed principles and standards that enable the secure use of health data for research and development whilst protecting patient privacy. Continuing to ensure the success of these institutions will be critical for delivering the UK Government’s Plan for Change and achieve our mission of delivering economic growth across all parts of the UK.
Since last year’s general election, the Prime Minister has been leading a profound reset of relations with the Devolved Governments, with a renewed focus on collaboration and delivery for citizens across the four nations. As part of this, both DSIT and the Scotland Office are committed to harnessing Scotland’s scientific, technological and innovative potential for the benefit of people across the UK. That is why we have taken early action, such as extending the Innovation Accelerator Pilot in the Glasgow City Region.
Please find attached to this letter responses to Science and Scotland Annex A and Scotland’s space sector Annex B, in turn, to the 24th May letter from your predecessor, the Honourable Member for Perth and Kinross-shire, Pete Wishart MP, to our own ministerial predecessors. We look forward to working with you and the new Committee members, supporting Scotland collaboratively to drive growth and opportunity across Scotland’s science and space sectors.
Yours sincerely,
Rt Hon Ian Murray MP, Secretary of State for Scotland
Lord Vallance, Minister of State, Department for Science, Innovation and Technology
Government response
UKRI research funding in Scotland
Our evidence suggests that disparities in both the overall level of core funding, and the relatively fewer different funding pots in Scotland compared with England, is hampering Scottish researchers’ ability to compete for UK-wide UKRI project-specific funding schemes. When additional funding is announced for English universities through Research England, in general the Scottish Government receives a proportionate increase in funding through the Barnett formula, which it is not obliged to pass on to the Scottish Funding Council.
UKRI should acknowledge that due to the structure and size of Scottish funding programmes, researchers in Scotland face more challenges accessing UK-wide funding schemes, when compared with competitor institutions in England. UKRI should be clear how they will take greater account of this, and should also work with the Scottish Funding Council to better ensure the accessibility of its funding programmes for Scottish researchers.
Issues related to the level of core funding for higher education and number of funding pots in Scotland are the responsibility of the Scottish Government. Scottish research organisations and businesses have benefitted well from UKRI funding, with Scotland placing 4th highest among the 12 UK ITL1 regions (FY2021–22, excluding Research England funding) in terms of UKRI funding levels.
UKRI ensure that their activities are supported by strong working relationships and frequent, strategic engagement with partners and stakeholders, including the Scottish Funding Council (SFC) and Scottish Enterprise. For example, Research England and SFC have reciprocal observer status on the respective Council and Board. UKRI also engages with senior SFC officials through the Science and Innovation Strategy Forum (convened by UKRI), and the UK Funders Forum.
Funding for IROs (Independent Research Organisations)
It is clear to us that meeting match funding requirements through the 80:20 model is a particularly acute barrier for IROs. While we accept the UK Government’s arguments regarding the role of the 80:20 model in allowing more projects to be funded overall, more support is needed to improve IROs’ access to funding. We welcome the fact that UKRI is proactively considering how to redress the barriers which Scottish IROs face through the 80:20 model, specifically the difficulties they face meeting match funding requirements.
UKRI should provide updates on this work, and set out what changes it plans to make to the current funding model.
The government is determined to work with the research sector to transition to sustainable research funding models, including by increasing research grant cost recovery.
It is government policy that grant funding for research by UKRI and NIHR should be funded at 80% of the full economic cost. Academic free enquiry is the cornerstone of our research system. The purpose of UKRI funding, therefore, is to scale activity in the system rather than direct research organisations (ROs) on what to research. For this reason, ROs fund a portion of the research they do and UKRI Research Council funding is allocated on the basis of excellence by peer review panels.
IROs, like universities, are independent bodies and will need to take their own steps to ensure they are working as efficiently as possible and, where necessary, make choices about how best to manage their finances.
Government understanding of Scotland’s science sector
Sector understanding
It is difficult to understand the impact the Cluster Map is having on the UK Government’s understanding of Scottish researchers, and any benefit the Map may have for scientific researchers in Scotland, as the project was only recently launched. Regardless of existing tools used to understand the research landscape, there are significant concerns that UKRI’s policy design does not have sufficient regard to the particular nature of Scotland’s scientific research ecosystem – including its SME-dominated business base. While the success rate of Scottish researchers’ funding applications is generally high, the UK Government needs to do more to understand and address the barriers that may be preventing more from succeeding or applying in the first place. The UK Government should publish periodic updates of the Cluster Map, and be clear about how it will be used in practice to benefit Scottish researchers.
The innovation clusters map is the most comprehensive picture to date of firm-level innovation activity in the UK, including Scotland.
It is aimed at policymakers, investors and others such as researchers, helping them to better understand, engage with and invest in the UK’s ecosystem. The map is the first of its kind and experimental. We are updating the map in response to feedback on the current version, to improve functionality and sector representation. Feedback should be sent to innovationclusters@dsit.gov.uk.
UKRI is committed to working with researchers and innovators across the UK to understand and support the R&I ecosystem, and to foster world-class research and innovation. UKRI continue to develop and grow their engagement with regional partners, including across Scotland, to achieve this. For example, in November 2023, Innovate UK signed a Memorandum of Understanding with Scottish Enterprise to help foster tailored support for Scottish businesses and easier access through the innovation support ecosystem. Coinciding with this, Innovate UK partnered with Scottish Enterprise and Glasgow City Region to launch the Glasgow City Region Innovation Action Plan, aimed at further nurturing the City Region’s thriving innovation economy. Alongside this UKRI is continuing to work with the Glasgow City Region to deliver an innovation accelerator pilot which is focussed on supporting innovation and innovation in the region.
It is clear from our evidence that Scotland’s scientific researchers would benefit from a greater physical UKRI presence in Scotland, as demonstrated by the success of the EPSRC’s regional contact system. Such a presence and the engagement it would bring with the research sector could help address concerns from the sector that their voices are not being heard. UKRI should expand the EPSRC model of regional contacts to the other research councils, increasing their physical presence in Scotland to better support Scotland’s scientific community.
As part of UKRI’s strategic objective World-Class Places, UKRI are committed to strengthen research and innovation across the UK by connecting people, ideas and sectors, to build partnerships and businesses, attract investment, drive growth and create jobs. Core to this is extensive engagement, and UKRI works with hundreds of research organisations, including 142 universities and more than 60 institutes and national laboratories; thousands of businesses; and dozens of civic authorities across the UK.
All of UKRI’s councils1 engage with the R&I community in Scotland. Although there are no plans to expand the model that EPSRC and Innovate UK use for regional engagement, it is important to note that other councils do have a physical presence in Scotland, for example the STFC Higgs Centre for Innovation and the MRC Centre for Research Policy.
Nevertheless, UKRI is committed to deepening their strategic engagement with regional partners across the UK, including in Scotland, in line with our strategic objectives. Through this we aim to:
- Achieve greater connectivity in the regional research and innovation system, including the co-creation of funding applications.
- Improve the synergy between UKRI and devolved research and innovation budgets for greater regional impact.
- Ensure that UKRI funding opportunities are shared, where they align with regional research and innovation strengths or priorities.
As part of UKRI’s evolving programme of work to drive even stronger engagement and impact from research and innovation, UKRI is working to develop our relationships with important stakeholders including research organisations, businesses, and local civic leadership across the UK, including building our connections in Scotland.
Geographical spread of funding and cluster coordination
Place priority
We welcome the strategic priority of place launched under UKRI’s 2022–27 Strategy, and the commitment to raise R&D investment outside the southeast of England. However, to date, the trajectory of UKRI policy has not been in favour of Scottish researchers. UKRI must consider ways of ensuring science researchers in Scotland are able to benefit from its commitment to raise investment and compete for a proportionate amount of the funding available.
As described earlier, as part of UKRI’s strategic objective, World-Class Places, UKRI are committed to deliver economic, social, and cultural benefits from research and innovation to all UK citizens, including by developing research and innovation strengths across the UK.
It is important to note that Scotland performs consistently better at the UK level than most ITL1 regions when Research England funding is excluded. For example, in FY 2021–22, Scotland received £467 million in funding (4th highest performing region), translating to an average investment of £85 per person (4th highest performing region).
We also welcome that the Strength in Places Fund has proved beneficial for researchers in Scotland. However, it constitutes only a fraction of the funding offered by UKRI and is in any case now closed to new applications. We are also concerned that, despite the Fund being championed by UKRI as part of its efforts to support all nations of the UK, UKRI was not able to tell us what factors meant Scotland specifically was so successful in it. This does little to allay concerns about UKRI’s understanding of Scotland’s research ecosystem, or its ability to consciously design policies such that Scotland’s researchers can be most effectively supported. UKRI should undertake a review of the Strength in Places Fund to identify the characteristics which meant Scottish researchers were so successful in it. UKRI should consider replicating those elements in future funding schemes in which Scottish researchers are underrepresented, to ensure Scotland receives its fair share of UK-wide funding, and UKRI’s world-class places priority is properly satisfied.
As part of UKRI’s aim to develop R&I strengths across the UK, UKRI maintains a broad portfolio of place-focused activities, other than the Strength in Places Fund, that build on Scottish strengths and synergies. For example:
- The National Quantum Technologies Programme, which has a hub based in Scotland, aligns with priorities within Scotland’s Innovation Strategy. The UK Hub for Quantum Enabled Position, Navigation and Timing (QEPNT), building on the vibrant innovation ecosystem in Glasgow, including its strengths in photonics and quantum.
- Glasgow City Region is one of three UK areas piloting the Innovation Accelerator programme, through which it is seeking to accelerate growth in key sectors including advanced manufacturing, space and precision medicine.
- One of the four UKRI-funded Local Policy Innovation Partnerships (LPIPs) is based in Stirling, and focuses on making the most of resources in the Forth water basin. The LPIPs programme funds partnerships between universities, local authorities, and businesses to harness the power of research and innovation and co-develop solutions for regional challenges.
These build on the activities supported through the Strength in Places Fund, including the three projects led from Scotland with a total UKRI grant value of £82 million. The Strength in Places Fund is undergoing a full evaluation, with the final impact evaluation expected in 2026.
The government is learning lessons from programmes such as the Strength in Places Fund to inform proposals for the Spending Review and the design of our future regional R&D and innovation programmes. Ensuring that our future approach effectively supports all the Devolved Nations is a key goal of this work.
Innovation clusters
We support plans for R&D clusters in Scotland and recognise the advances in research and innovation they can enable. We can see both Governments are seeking to promote such structures and to provide clear opportunities for funding organisations such as UKRI to support them through schemes like the Strength in Places Fund. For such plans to succeed and achieve maximum impact, co-ordination between the UK and Scottish Governments is needed.
The UK and Scottish Government’s cluster plans must be co-ordinated in order to maximise impact and ensure appropriate focus. The UK and Scottish Governments must work together on plans for R&D clusters, to ensure that the Science and Technology Framework aligns with the National Innovation Strategy to best support innovation in Scotland.
The government is engaging with the devolved administrations to learn from the impact of current programmes and to help inform the development of future policies. We believe co-design of any new programme to support clusters will be key to success.
We are learning lessons from delivering the Innovation Accelerators programme in partnership with local leaders, research performing organisations and industry. The Scottish Government and organisations such as Scottish Enterprise have been engaged to support the Glasgow pilot of this innovative programme.
Supporting spin-outs
Retaining spin-outs in Scotland
As science spin-outs seek to grow, difficulties in scaling-up often force them to move out of Scotland and to the southeast of England or abroad. Increasing the availability of facilities to help them grow, notably innovation hubs and flexible lab spaces, is key to keeping these companies, and the economic benefits they bring, in Scotland.
Investing in research spaces to help boost innovation and skills should be a joint aim of the Scottish and UK Governments. The UK Government should work with the Scottish Government to ensure a joint approach to developing relevant infrastructure in Scotland, notably increasing the availability in innovation hubs and flexible lab space, in order to retain spin-outs and ensure the economic benefits of such home-grown research remain in Scotland.
HMG is committed to working with the Scottish Government to harness Scotland’s scientific, technological and innovative potential for the benefit of people across the UK.
We recognise the challenges faced by science firms looking to scale in Scotland and the importance of retaining these companies to develop innovation clusters regionally and so create growth. HMG will explore opportunities for government intervention, including the provision of innovation hubs and flexible lab spaces, to support the growth of science spin-outs in Scotland. Many of the challenges in developing more lab space are related to planning policy, and most government support for incubator space arises around universities. While planning and universities are devolved matters, we are keen to collaborate with the Scottish Government to address these issues.
We are committed to improving access to capital across the UK, with a focus on supporting the retention and growth of companies nationwide, ensuring the benefits of home-grown research are maximised. We are transforming the UK Infrastructure Bank into the National Wealth Fund with a total capitalisation of £27.8 billion. UKRI programmes are driving innovation in regional tech clusters, while reforms to the British Business Bank (BBB) and ‘British Growth Partnerships’ aim to better leverage the UK’s institutional capital. The Investment Fund for Scotland will provide £150 million in new funding to support sustainable economic growth. It offers commercial finance options, including loans and debt finance from £25,000 to £2 million, and equity investment up to £5 million. Covering all of Scotland, the fund aims to increase early-stage finance for smaller businesses, breaking down barriers to access and fostering innovation and local opportunities.
Support for spinning-out
It is clear to us that advice given to innovators who are seeking to spin-out from universities needs to be independent of the main technology transfer office within their university. Researchers often have little commercial experience and their primary source of advice for these negotiations is often the technology transfer office of the university itself, which poses obvious challenges and constitutes a barrier to effective and fair negotiations.
To best support spin-outs, the UK Government should promote policies which ensure that independent sources of support and advice are available outside the university from which researchers are spinning out, or from an appropriately independent source within the university. The UK Government should include actions to deliver access to independent advice and support in its planned response to the independent review of university spin-outs, ensuring that they are integrated into the general network of support for innovation in the science sector.
HMG recognises the importance of providing independent advice to innovators seeking to spin out from universities. A range of external support is available, including resources such as the RAEng Entrepreneurs Handbook and private organisations that assist scientist founders. HMG also funds the Royal Society’s Entrepreneurs-in-Residence programme, which places external experts within universities to offer tailored guidance.
Innovate UK plays a key role in supporting academic entrepreneurs through initiatives like the ICURe programme, which provides dedicated advice and support to academics seeking to commercialise their ideas and potentially create a spin-out. This advice and support is delivered separately to the university.
Through joint working between Research England and the Scottish Funding Council, Scottish universities have signed up to the terms of the spin-out review and adopted best practice policies. To support this, the government continues to fund TenU, a collaboration of university technology transfer offices that shares effective practices in research commercialisation. To simplify the spin-out process, TenU has developed two sets of deal terms guidance, ensuring that founders get a good deal.
We are committed to ensuring that independent advice remains accessible and to integrating these resources into the broader innovation support network, creating a more effective and equitable environment for the growth of spin-outs.
Footnotes
1 This includes Research England (see above point about links with SFC).