UK R&D strategy lacks detail and funding, report says

Catapults are not-for-profit independent centres, which connect businesses with the UK’s academic community in order to translate research into commercial products. The report acknowledged that the Catapults provide valuable contributions to UK innovation and could have the potential to contribute to regional development (the 'levelling up' agenda).

However, the committee found that the government’s R&D strategy is failing to make the most of the Catapults, lacking a detailed plan and sufficient funding for reaching R&D ambitions. The government aims to reach 2.4 per cent of GDP spending on R&D by 2027.

The report called for a “detailed strategic plan for delivering [the government’s] R&D ambitions” with clear criteria for how technologies and sectors will be selected to receive further support.

Rules governing innovation funding need reform, the committee found: “These rules currently act as barriers to collaboration between Catapults and universities, and often place too much risk on industry to transform R&D projects.”

The Catapults’ innovation activities are funded with a thirds model: equal parts from a government grant via Innovate UK, industry partners, and collaborative funds bid for by consortia involving Catapults. In 2019-20, total funding for these activities was £774m; in 2019 Germany’s Fraunhofer Institutes had approximately £2bn in contract research revenue.

The collaborative R&D component was raised as a concern, as Innovate UK caps the amount of this funding that can be allocated to public sector partners in a consortium, limiting the Catapult’s ability to engage in some projects. This is aggravated when another Catapult, university, or other public research organisation wants to be involved. Other barriers include the need for industrial partners to provide a certain amount of leveraged funding, disincentivising high-risk projects, and lack of access to Research Council funding – which is available to universities – for Catapults.

“The funding available for innovation in the UK does not appear to be commensurate with the government’s ambitions […] rules governing funding for innovation create barriers to collaboration between Catapults and universities, and can deter industrial partners,” the report said.

It recommended that the government set out a clear plan for how public and private funding can be made to match the scale of the UK’s R&D target. This could include allowing Catapults to apply for Research Council funding and loosening caps for collaborative R&D funds.

The inquiry also found that Catapults have the potential to contribute to regional development, aligned with the government’s “levelling up” agenda, but coordination must improve in order to unlock this potential.

“The UK’s innovation system has all the necessary components to be successful, but it lacks the necessary scale and collaboration to fully realise economic benefits for the UK,” said Lord Patel, chair of the committee. “The Catapult Network is an important national asset, which has the potential to drive further innovation. The Catapults could have a much larger impact if their performance was not held back.

“To maximise the impact and potential of Catapults, collaboration should be strengthened with academics and industry. The government should broaden access to funds and prioritise scaling up the network Catapults. Without urgent action to attract more private investment, the government is unlikely to meet its R&D spending targets.”