MPs Urge UK Government to Adopt Venture Capital Model for Tech Funding

Members of Parliament are calling on the UK government to shift its approach to funding technology, urging the state to act more like a venture capitalist to ensure public returns on innovation. In a report shared with The Register, as the outlet first reported, the Public Accounts Committee (PAC) accused UK Research and Innovation (UKRI) of being overly cautious regarding the protection of taxpayer interests.

While the Department for Science, Innovation and Technology (DSIT) notes that UK universities generate more patents and spinouts per pound of research funding than US universities, the PAC argues Britain struggles to capitalize on these inventions. The committee is urging UKRI to review its funding terms and consider taking equity stakes in the businesses it backs, rather than relying solely on grants.

UKRI has previously resisted tougher conditions, suggesting such moves could hinder company growth. However, PAC chair Sir Geoffrey Clifton-Brown stated that leading nations in the global tech race did not succeed by avoiding entrepreneurial policies, noting that for the government, it is a case of "nothing ventured, nothing gained."

Existing efforts to secure public stakes include the British Business Bank investing alongside pension funds, and DSIT updating procurement rules to assist UK firms in supplying £400 million in specialist AI chips. Despite these steps, the PAC remains critical of UKRI's management, citing a £46 million expenditure on an abandoned airborne laboratory upgrade and a projected 13-month gap in national supercomputing capacity following the shutdown of ARCHER2.