MPs urge UK government to play venture capitalist with taxpayer-funded tech

British MPs have criticized the UK government's approach to funding tech companies through taxpayer money, urging a more venture capitalist-like strategy. The Public Accounts Committee (PAC) argues that UK Research and Innovation (UKRI) is being overly cautious in protecting taxpayers' interests and suggests that the government should take equity stakes in the companies it supports.

While UK universities generate more spinouts and patents per pound of research funding than US universities, the UK struggles to capitalize on its inventions. British startups often fail to attract necessary investment without relocating overseas, and universities have a mixed record when it comes to exploiting intellectual property.

UKRI has been hesitant to impose stricter conditions on the funded research, fearing it might deter companies from expanding. The committee calls for a review of UKRI's funding terms, including the possibility of equity investments. PAC Chair Sir Geoffrey Clifton-Brown acknowledges that advocating for the government to act more like a venture capitalist may seem unusual for a committee focused on fiscal responsibility.

However, he emphasizes that the goal is to maximize value for taxpayers' money, not to hoard it. Although the UK government has taken some steps to support tech firms, such as providing AI startups access to supercomputers and modifying procurement rules, efforts to attract more pension fund investment have been slower than anticipated.

MP's also highlight the uneven distribution of research funding, with London, the South East, and the East of England receiving a disproportionate share. The PAC criticizes UKRI for poor project management, citing an abandoned airborne laboratory upgrade and a significant backlog in university-owned research infrastructure maintenance.