Science, Innovation and Technology Committee
Oral evidence: Work of UK Research and Innovation (UKRI), HC 1673
Tuesday 3 February 2026
Ordered by the House of Commons to be published on 3 February 2026.
Members present: Dame Chi Onwurah (Chair); George Freeman; Samantha Niblett; Dr Lauren Sullivan; Daniel Zeichner.
Questions 1 - 103
Witness
I: Professor Sir Ian Chapman, CEO, UK Research and Innovation (UKRI).
Witness: Professor Sir Ian Chapman.
Q1 Chair: Welcome to this one-off session of the Science, Innovation and Technology Committee with the newish chief executive officer of UK Research and Innovation, Professor Sir Ian Chapman. Before we begin our questioning, I thank the many members of the research community who contacted me and other members of the Committee over recent days expressing their deep concern at potential cuts to some areas of research spending. I and the rest of the Committee share your concerns. This is one of many pressing issues facing UKRI that we will discuss with Professor Sir Ian Chapman. As such, we will explore that this morning.
First, let me welcome you, Sir Ian. We are grateful for the opportunity to scrutinise UKRI under your leadership. You received your PhD in 2008, I believe, and less than 20 years later you are responsible for the majority—over 60%—of the UK’s public spend on research and development. Could you introduce yourself to the Committee—briefly, because we have so much to get through? Please say a little about your background, what you bring to the role and outline—again briefly, in a minute or so—your ambitions for UKRI.
Professor Sir Ian Chapman: Thank you for having me. It is a real pleasure to be here. My background is that I studied maths and physics at university and then did a PhD in plasma physics while working at the UK Atomic Energy Authority, which I joined as a graduate and moved through. I think I may be the only person in the organisation to have ever worked at every grade. I went from graduate entry to chief exec, doing a whole range of different things. I joined as a theoretician: a mathematician doing theoretical physics. I then moved into computational physics. I then moved into experimental physics, then did some operations and running big experiments, and then moved into commercialisation and thinking about how we might spin out technology. I became one of the directors of the organisation and ultimately the chief executive. It was a really fabulous journey because I could stay in one organisation but get exposed to all those different things, which is a joyful thing to be able to do.
I was chief executive there for nine years. The organisation is different from UKRI but similar in some ways. It is another non-departmental public body. It has all the same governance constraints that operate at UKRI, but it is single purpose. It was doing one thing: to develop fusion energy and make fusion a commercial power source. Having made the transition to UKRI, we do almost everything. We are incredibly broad. However, I think the different skills I have picked up during my career have immediate applications to UKRI. Indeed, the most attractive thing about joining UKRI was bringing together the push to advance knowledge—curiosity-driven research—with improving lives and driving growth. I think those three tenets—the commercialisation and impact of research, and making a tangible difference to people’s lives, underpinned by advancing our knowledge of the world—are what makes UKRI special: the fact that we do all those things across all the disciplines.
You asked me for a word on my vision for UKRI. I will be brief. The Government—and, to be honest, the previous Government and the ones before that—recognise that underpinning a lot of our social problems in the country is the fact that our economy has been flatlining for a long time. Economic growth is at the heart of the Government’s strategy—personally I think rightly. But if you are seeking above-average growth compared to our G7 or G20 peers, you typically need some sort of differentiating asset. If you are a company competing with other companies, and you want to grow faster than them and grab more market share, you need something that differentiates you, some asset that makes you different.
That is true of countries, too. Typically for countries, it might be that they have critical minerals, oil and gas deposits, or lots of land. Usually, it is some sort of natural resource that differentiates them. We have none of those things. We do not have cheap energy or any of those things. What is it that differentiates the UK when we seek above-average growth? Really, the only thing I could point to is our research and innovation base, which per capita pound for pound is best in class. I really believe that, if we are to seek above-average growth, that is our asset that we need to sweat. It is latent at the moment and under-exploited, but it is fundamental to the success of this country. That is why I took the job because I think it is the future of the country.
George Freeman: Hear, hear.
Q2 Chair: Thank you, Sir Ian. You can hear that there was appreciation of that approach and the centrality of science and innovation to the Government’s key ambition of growth. As part of that, our public funding for science is changing under Lord Vallance. We have the new bucket system as well as cross-council activity emphasised. What in practice does that mean for UKRI and its delivery of programmes? What feedback have you had from research councils on these changes?
Professor Sir Ian Chapman: Fundamentally, UKRI has always done these three things. It has always invested in curiosity-driven research which advances our knowledge. It has always invested in applied research which is fundamentally about improving people’s lives. It has always—we heard a great example from Rose earlier—supported companies in this country to start, scale and grow. We have always done those three things.
I am a complete fan of the bucket system. My view is that it provides clarity about how you link from mission to spend. I am a big believer in the statement, “Don’t tell me your strategy. Show me how you spend your money.” I want UKRI to be transparent about how money goes from mission to delivery. Previously, when money came into councils and was designated by discipline rather than output, it was quite hard to tell how you would achieve those outputs. For some subjects, literally every single council was putting money into a programme on artificial intelligence or life sciences, or other things like that. That includes economics and social science, or arts and humanities. They were still investing in those areas. That meant that it was pretty hard to see the coherent programme for AI, or for life sciences, or for national security and defence, etc.
By aggregating all of that spend into one place, with one programme board and a rainbow team from around the councils, we have greater coherence, clarity and transparency about how the money gets to output. I think, perhaps most importantly, I can also delegate responsibility and accountability to a person, whereas previously it was a sort of federation of the willing and they were all earnestly doing things, but sometimes slightly misaligned or, in the worst cases, duplicative or orthogonal. Now we have one person responsible for it, so there is a clearer line from mission to accountability. That is why we are making these changes.
Q3 Chair: Thank you. As a Committee, we are very supportive of increased clarity and transparency. I want to dig into that a little. As one part of that, particularly because George has been Science Minister and I have been shadow Science Minister, we would both say that following the money has been very difficult when it comes to science spend. This is certainly a step forward.
On just one point of clarity: is bucket 3, the support for companies, from Innovate UK or is it Innovate UK plus or minus something?
Professor Sir Ian Chapman: Innovate UK plus multiple things.
Q4 Chair: Things which are in other parts of UKRI?
Professor Sir Ian Chapman: Yes. For instance, Higher Education Innovation Funding, HEIF, which is routed through Research England, is in bucket 3. Various knowledge exchange, translation and commercialisation schemes that we run are in bucket 3. Other things make it up.
Q5 Chair: The whole of Innovate UK is in bucket 3.
Professor Sir Ian Chapman: Yes.
Q6 Chair: Going deeper into that, one of my concerns is understanding what this transformation in funding—it has been described as a transformation and you set out your ambitions for it—means in comparison to funding in previous years. We asked the Department to give us inter-year comparisons. You have told us how much we are spending on, say, bucket 3 now. How much were we spending on bucket 3 previously? We have been told that that comparison is not possible. Can you explain why?
Professor Sir Ian Chapman: I can have a go. It is not possible because—
Q7 Chair: Sorry, it is impossible?
Professor Sir Ian Chapman: It is possible, of course, but it would take a lot of effort and backwards bookkeeping, and having to attribute things that were never coded. There was no metadata for it. We would have to put a lot of effort into that. Personally, I think we should be transparent going forward and say how we are aligned to our mission. It is very difficult to do because of the way that previously money was allocated by discipline rather than by output. Having to try to work out how you would ascribe money that was attributed through councils to these buckets would be difficult.
My analogy for this is a terrible one but I will go with it: it is sort of like asking how long it would take to get from A to B on the train if you completely re-did the rail network. You would have to follow different routes. The accountability, delegations and routeing of the money is fundamentally different. We have totally changed our ledger approach. Doing that like-for-like comparison is not really possible. I would encourage you to hold us to account on transparency on the way going forward.
Q8 Chair: I have a real issue with that. Our job is to scrutinise spend. You are significantly changing spend and how it is organised. We will hear how that impacts certain disciplines. As a Committee, we have no way of holding you to account for the change in spending because we cannot see the impact of the bucket approach. We have nothing to compare it with.
Professor Sir Ian Chapman: That is true and not true. At a macroscopic level, the split between the buckets is, we believe, basically the same. If we looked backwards—as I say, this is high level; we have not gone into the granularity—our best estimations of attribution are that spend previously would have been about 50% on curiosity-driven, 25% on applied research and 25% on helping companies to scale. That is more or less the same split we propose now. The attribution between buckets does not really change.
Q9 Chair: Sorry, but there are actually four buckets.
Professor Sir Ian Chapman: Correct.
Q10 Chair: You have done it 50%, 25% and 25%, but there is a fourth bucket.
Professor Sir Ian Chapman: The bottom bucket, the underpinning stuff, just pro ratas to the other three. In effect—
Q11 Chair: That is something. It is more information than we have had previously. In terms of your estimation of 50%, 25% and 25%, do you have evidence that you can share with us of that?
Professor Sir Ian Chapman: We could show you high-level mapping, yes.
Q12 Chair: The reason why I am so concerned about this is exactly as you set out. I agree with you, and I think the Committee agrees with you, that science is one of our key competitive differentiators. You are changing and reorganising the funding for that, both in principle and in practice, but you will not allow this Committee to scrutinise how that is being done.
Professor Sir Ian Chapman: No, that is not true. I would definitely allow you to scrutinise it.
Q13 Chair: We have nothing to compare with.
Professor Sir Ian Chapman: Okay. My question is whether looking backwards is useful in this regard. People would have contended, myself included, that—as you said earlier—the previous system was not very transparent for how you could get from mission to outputs. Given that it was not very transparent, it is very hard to unpick this. What I am trying to do here is be very transparent about the way we go forward in future. I am very open to scrutiny over the way we allocate money.
Q14 Chair: Yes, but that means you are starting from a point where you say, “This is ground zero and everything will get better from where we are now.” We cannot really measure that because we do not know what the impact of curiosity-driven research was previously, because we do not know how that definition translates into the past.
Professor Sir Ian Chapman: Yes.
Q15 Chair: So it is like we are giving you a pass for where you are now.
Professor Sir Ian Chapman: I am very happy to show you this high-level mapping but a lot of things done in research contribute to all three buckets. That is indisputable. If I said, “All of the money that we spend on quality-research,” that is for sure contributing to all three buckets. It represents £10 billion or £11 billion of our spend. It goes in multiple different directions. If I were to have to do a complete audit, going backwards, of exactly how that money has been used, it would be a considerable expense and a very complicated exercise.
Q16 Chair: You could not just give a research grant to someone to get some AI to go through all your data.
Professor Sir Ian Chapman: I could not. At the moment, if I had to back-analyse how universities spent their quality-related money over the last few years, I could not do that easily. I would have to ask them all to do a detailed mapping exercise. It would be an expensive and complicated process.
Q17 Chair: You have the data on each grant that has been given from UKRI.
Professor Sir Ian Chapman: Sure.
Q18 Chair: And you know who it went to.
Professor Sir Ian Chapman: That bit is the easy part. That bit I could do.
Q19 Chair: But you cannot attribute it as to whether that was—
Professor Sir Ian Chapman: That is exactly how we made our starting position for allocations between the buckets. It was that sort of mapping of our side.
Q20 Chair: You know what money is going to whom. You are saying you cannot attribute whether it was curiosity-driven, or growth/industrial strategy-driven.
Professor Sir Ian Chapman: Correct. I could tell you a subject, recipient or—
Q21 Chair: I must say that I would have thought a good, large language model—or a small one—would be able to address that. I ask you to come back to us with your high-level estimates and a more detailed explanation of why a more detailed comparison, so we know where you are starting from, is impossible. The reason why this is highly relevant is that my next question is: why are we having these cuts?
Professor Sir Ian Chapman: We are not having any cuts. I do not understand this. There is a lot of misinterpretation of numbers in the press. Let me explain very clearly what is happening with the STFC budget. The STFC budget today is this much. The costs of running it are this much.
Q22 Chair: Let me see your hands again.
Professor Sir Ian Chapman: So the budget is here, and the costs are here.
Q23 Chair: Right.
Professor Sir Ian Chapman: In the future, the budget is here. It is flat. It is not going up; it is flat, not cut. The budget is the same. Our forecast for expenditure is that the cost base is going up, for three main reasons. First, there is inflation. We use a lot of electricity in our big experiments in STFC. That has driven up costs and will continue to do so. Secondly, there are foreign exchange rates. Also, through STFC, we pay most of our international subscriptions for major international federated experiments—
Q24 Chair: Like the Hadron Collider.
Professor Sir Ian Chapman: Like LHC, yes. That is also going up. There is cost pressure there. Thirdly, we have started—I think this is on us—more projects than we can afford. Our ambition was even higher. We wanted to be able to increase the budget. We started lots of other projects. We do not have the operational cost expenditure cover to run all those projects and, because the cost base is escalating more than the budget, we have to make cost reductions. It is not a cut in budget; it is a cost reduction against forecast costs. Does that make sense? Am I clear?
Q25 Chair: It does make sense but I know that the conclusion that physicists will draw when they see the cost reductions is that this affects their programmes. For example, the association with the Hadron Collider investment is going down. They may ask the question, though this is prior to you, “Why wasn’t this predicted?” I think we understood that costs were going up. One great thing about infrastructure investment is that it is long term and should be more predictable.
Professor Sir Ian Chapman: I agree with that. I would say that some decisions have been taken where we hoped for a settlement which allowed us to provide the operational cover for all these additional projects. That settlement is not what we got. We now have to make some choices about how we rectify that situation.
Chair: Right, okay. I know you said that you want UKRI to be more choiceful. We will see how that plays out. I know that the whole Committee is interested in this area. George will take us on and then I will come to Daniel.
George Freeman: Good morning, Ian. Many people cheered your appointment, none louder than me. It is lovely to see you in post, having worked with you at UKAEA, seen you deliver world-class science and turn it into an industrial programme and an ambition. We need more of that, as you said. It is also lovely to see the three buckets, although perhaps I may suggest we switch to calling them something more appropriate, such as “priorities” or “programmes”. As a trade envoy, selling “buckets” is really hard. We need to be selling big strategic priorities.
Chair: I agree with you entirely, but I think the Government need to make that switch.
Q26 George Freeman: I want to put on record that I welcome the focus on three key strategic priorities: first, maintaining our excellence in blue sky; secondly, converting that into innovation-led growth for everyone; and, thirdly, recognising that we are in a global fist fight and new geopolitics for sovereign advantage, which requires some sovereign strategic missions.
I want to ask about three things: first, UKRI reforms and how we turn it into the Formula 1 engine that I know you want it to be and it has not been; secondly, outcomes; and, thirdly, accountability. On UKRI reform, I do not think any of its biggest supporters would argue that it has yet become that intelligent controlling mind, that Formula 1 engine that allocates cleverly and smartly. I inherited a big bureaucracy with very bad IT struggling to get a grip. I think we repeated a lot of bureaucracy, which was why we set up the Grant review to look at UKRI, the Adam Tickell review to look at research bureaucracy, and we got Paul Nurse to look at how we might reshape the ecosystem.
On UKRI reform, how would you judge progress on those three things? What is your ambition for UKRI as an organisation during your period? I call it a Formula 1 engine; that is my terminology, but I would love to hear your vision for how you would like to leave the organisation.
Professor Sir Ian Chapman: In response to those three, first I must pay great testament to my predecessor Ottoline. All of us are caretakers of an organisation that has existed for 100 years in some parts and will continue to exist. We are just caretakers. Ottoline genuinely took care of the organisation. She cared deeply about research and innovation, and did a lot of pretty difficult things. The start of an organisation is never a good phase. No chief exec wants to do the implementation of an ERP system; it is just something that somebody has to do. She had to transform the team completely and begin to build a culture to make all of the parts work together so that it is genuinely more than the sum of the parts. Ottoline did a great job in starting all of that. I think her biggest legacy is that I have inherited a brilliant team. All of them want to be team players and work together. That is a great testament to her and her leadership.
As to where we are, I would describe us as an organisation which is eight years old and in some ways feels eight months old. In a way, we are getting the foundations in place now. We do have an ERP system. It is not wholly functioning yet, but it is in. We have a new funding service platform. Again, it is not wholly functioning and there is work to do, but it is in, and we have eight of the nine councils working on that platform. A lot of the foundations are in place that give me room to make it work as an engine.
There is one particularly problematic thing in the organisation. I have already mentioned going from outputs to show how the money flows. Because that was not clear, it means that when we have to make decisions we end up calling a committee where everybody has a view but nobody is really sure who is accountable and who is delegated. We admire the problem and then leave the room. We have not made a decision, so there is a lot of entropy in the system because we are not clear about delegations and accountability. That is one of the most fundamental things. It is a big organisation. Clarity of accountability and delegation is essential. I liken UKRI to a FTSE 100 because it is. It has nearly 10,000 people and a budget of £10 billion a year. That is the middle of the FTSE 100. It does not yet have the slick corporate operation of a FTSE 100 and we need to get to that point. So I am putting a lot of effort into delegations, accountability and machinery in the background.
Q27 George Freeman: I echo your tribute to Ottoline and how much she cared. I think she inherited a very difficult situation. One of the reasons I cheered at the priorities is that I was trying to push them. I do not blame her for it, but she was in the middle of such an internal problem with the organisation that it was too much and we were not able to land them, hence my question. I think it leads into this question about outcomes and accountability. Unless you are confident that you have everything you need to turn UKRI into an organisation that can allocate to the three priorities, track performance, support that which is excellent and, yes, cut funding for that which is not working—unless you have those internal control mechanisms—it is just PR, is it not? I am keen to give you the chance to say on the record that, if you want a Formula 1 engine to do that, you need more of X, Y and Z, or less interference from the Treasury, or whatever it is. What do you need to deliver it?
Professor Sir Ian Chapman: I am totally cognisant of the fact that I am running a very large non-departmental public body and we have the privilege—and I believe it is a privilege—to spend £10 billion of taxpayers’ money to get a return for the economy, improve people’s lives and drive growth. That is what the electorate wants from us. We need to be clear-eyed on our mission and focus on delivering those outcomes. I do not think it would be appropriate for there not to be oversight and control from Parliament, Treasury and the Government when you are in that position. So far, I have experienced nothing but complete commitment and support from our Department, the Treasury and No. 10, so I have nothing to complain about.
Q28 George Freeman: Excellent. That brings me to my second question, about outcomes, which picks up where the Chair started. If I have understood the priorities—research excellence, discovery science, growth, R&D and strategic sovereign missions—we have had excellent sessions with the Minister and Secretary of State. How do you want to be judged, and what do you think the real outcome metrics are?
On research excellence, it seems quite easy: it is bang for buck; are we winning more Nobel prizes for excellence? I think that is quite easy to measure. An interesting question is: what is our ratio of excellence to mediocrity? Is it better than others? We will have to be better than others.
On growth, it is very interesting. There are lots of metrics. The Secretary of State said, admirably in my view, it is very simple: how much private investment are we pulling in, in return for this very substantial public R&D? I agree; I think the Committee agreed. She took away an action, hopefully working with you, to come back to us on how to measure it.
On strategic sovereign, we accept that some of that is a bit secret squirrel. Some of it is defence related and perhaps concerns other Committees.
Can I pick up growth? There are big growth sectors—life sciences, clean tech, agri-tech and AI—that grow way beyond the rest of the economy. The industrial strategy is quite high level, but we are hoping you have more of an internal sense of where that growth is. There are places, clusters. Are you on the journey to being able to map and report to us on that growth money? The Permanent Secretary told us it was per year £14 billion blue sky, £7 billion growth and £18 billion on sovereign. Whatever the number is, how are you doing against the Secretary of State’s test of whether we are pulling in more money?
Professor Sir Ian Chapman: For all those things we have clear metrics. We have a balance score card that we publish every quarter. I am very happy to share that with the Committee, if that is useful. I agree, frankly, with the thesis that the types of things on which we should be held to account are: inward investment—how much money we pull into the country; what leverage there is from partners; and how many jobs we create. Those are hard numbers.
There is also a slightly more anecdotal but also real point. Let us take as an example the cluster at Norwich Research Park. If you are starting up a company in food science and you could be somewhere else in Europe, you think that moving to Norwich is the best place for your company to succeed and grow because of the aggregation of competence that exists in that region. We should see that inward movement of companies that provide more jobs. You can measure the pounds and inward investment. That type of narrative is also valuable.
Fundamentally, the thing I would like to be held against more than anything is that I am spending firefighters’ money; I am spending nurses’ money; I am spending the public’s money. We are here in service of the public, and I would like the public to feel more and more that research and innovation improve their lives, the economy and their economic opportunity.
Q29 George Freeman: I agree. Can I replace “feel” with “see”? They need to see the numbers and see it in their localities. Norwich is a very interesting example. When I insisted on taking the Department and UKRI on a 29-cluster tour around the country, each time, you may remember, I asked for a map of where the UKRI investment in that cluster was, for Innovate UK where they were supporting companies, and for DSIT where it was supporting projects. It was like pulling teeth. UKRI could produce Excel printouts of particular professors, but there was no sense of geography or place. UKRI could tell me which companies they had given money to but did not have any information on what other companies were there and whether or not it was a cluster, and DSIT’s were pretty arbitrary and quite political. Where are you on the journey?
To support you, we would like to be able to have annual reports that show on three priorities funding is going up, it is clearly allocated and it is working. Norwich is a good example. It has had a lot of science. I have done my bit to pull it in. It has not been very good at turning that into companies, unlike, say, Glasgow, which has been a poster child for turning some good R&D into Europe’s No. 1 satellite city. These clusters are very different. How will you be able to measure where the money allocation is working?
Professor Sir Ian Chapman: This goes to the root of one of the behavioural changes that I want to bring to UKRI. I would contend that previously the way we have made investments has been somewhat transactional and slightly tactical. I would like to elevate that to having more strategic long-term relationships with places, mayoral combined authorities and also our delivery partners—universities and companies—where they know there is continuity and a commitment on our side that that is the place where we do a thing, and we are really going to support them so that they can match investment into that, not thinking, “We have a grant for three years, but I don’t know whether it will continue in three years’ time.”
Q30 George Freeman: Hence the question. I totally agree on the first question about UKRI. Do you agree with me that where we want to get to as quickly as we can—I appreciate it may not be by four o’clock today—is a place where all of us are able to tell the public and the world what we are investing by sector? It used to be £3 billion a year in life sciences. That is roughly £700 million through the MRC, which you might call blue sky; £1.5 billion through NIHR, which you might call applied; and some other which is growth related. I used to be able to answer that question. In other sectors, we could not. Do you agree with me that it would be helpful to know what those three numbers are by key growth sectors and by the first 10 or 15 key clusters? As a trade envoy, I would love to be able to tell people those numbers, because it would help to pull in inward investment.
Professor Sir Ian Chapman: Our allocations explain and do exactly that for the industrial strategy sectors. We can say how much is applied research; how much is innovation. It also shows basic curiosity-driven research in the subject, so you can do that now from our budget on the numbers. It has yet to get to, “And these are the places that we are going to cluster around that,” but we are working on that intently.
We want to give continuity to places and say, “You are our partner of choice here.” A big part of that is the local innovation partnership fund, which is meant to be catalytic. It is a very live issue. We are working at the moment with 10 different regions and another competed strand is going on in parallel for the second wave. With those 10, we are driving in a co-creation way to say we will be the best place in Europe or the world to do this thing, not that we are going to invest in 10 different things and do them all at small amounts. I do not want to provide crumbs to everybody; I want to say, “Here is a thing we will do really well,” and that will then become a cluster and focus for the place.
Q31 George Freeman: I have two specific questions on that. On the sectors—I do not ask you to give me the whole lot—can you pick out a standout one? Which is top of the league table for turning, however small the money is, public R&D into private? I do not want to name and shame, but pick a sector where we are putting in quite a lot of money but—we do not have to blame anyone—we have to get in more private investment.
Professor Sir Ian Chapman: I would not want to do that off the cuff. I should have data to back that up and I do not have it at my fingertips. I am very happy to come back to you on that.
Q32 George Freeman: That is an interesting answer, because I think all of us should have that pie chart as quickly as we can.
Professor Sir Ian Chapman: I do agree, but at the moment we are in a world where we have spread, so it is a bit hard to point to those examples. Let us take life sciences. We have spread life sciences money all over the country. That might be the right answer, but it is worth thinking carefully about whether that is the right answer. Is that the best way to get economic return? We are supporting discovery science everywhere, but should we be clustering more of the applications? Should we be clustering more of the innovation, start-up and scale of money around places, which we are not really doing at the moment? That is very live in UKRI; we are working hard on it, but there is no answer yet.
Q33 George Freeman: When do you feel you may be able to come back to us with not the final answer but a decent presentable draft of the allocations by sector and place?
Professor Sir Ian Chapman: Certainly this year. Sector by sector, done. I would be pushed to walk you through it, but that information exists. By place, we should be in a position to do that by the end of the year.
Q34 George Freeman: Chair, can we make an appointment? It would be really good to hear that. Can I turn to accountability, which is the last bit? As you say, it is a huge amount of money. You are in a chain of accountability. Within UKRI, research councils are accountable to you, and then you to Treasury and DSIT and the rest of Government. How does that work? When I was Minister, Ottoline and the chair would come in to the Department. The chair would refuse to meet me because I was the junior Minister; he would meet the Secretary of State. Ottoline would meet me. It was not ideal. They were quite resistant to this conversation. Surely now, with these priorities, we need a serious quarterly report. Do you present to Cabinet? What is the mechanism for Government to make sure they are giving you every support you need to drive this?
Professor Sir Ian Chapman: Within the Department, I meet our science Minister on a fortnightly basis.
Q35 George Freeman: Lord Vallance.
Professor Sir Ian Chapman: Yes. We are very closely in touch with Lord Vallance. I regularly meet the Secretary of State and speak to the Permanent Secretary and, almost on a daily basis, our director general, and we have regular contact with the Treasury. I have met the FST and CST multiple times in the process of setting up our allocations. I really feel a strong support.
Q36 George Freeman: Is the National Science and Technology Council—the NSTC—which we set up to give this Cabinet-level leadership, still meeting? Do you have a chance to present to Cabinet how you are doing on the three priorities?
Professor Sir Ian Chapman: I could not answer the question of how frequently that meets, and I have not presented to Cabinet.
Q37 George Freeman: Lastly, can I just ask about the chair? Is there a plan to appoint a new chair? It is a key job to give you support. Would it be full time? Are there any plans or a timetable?
Professor Sir Ian Chapman: It is very live. The term of the current chair, Andrew, finishes at the end of June. The advert is closed. I understand that at the moment the Department is in the short-listing process, with interviews planned towards the end of this month, I believe. Obviously, it is not my appointment to make; it is my boss, so it is the Department’s appointment, but that is my understanding of the timescale.
Q38 George Freeman: Is there anything in our inquiry that you would like us to help push and support to help you drive this very exciting agenda as quickly as needed given the global competition?
Professor Sir Ian Chapman: I think the thesis of your questions is exactly on the money: how we make choices. I reiterate that when we make choices I am not talking about whether we do life sciences or things that affect national security, or do we do the creative industry? Surely, we are going to do all of them. Yet within the creative industry, what do we really do? I do not want us to try to do everything and spread our money everywhere. We have to own the fact that we are a medium-sized economy, not in a big trading bloc. That is what we are. We have an amazing latent asset in our research and innovation base, but we will exploit that asset only if we focus on a few things, do them really well and be the best place in the world to do them, not if we try to do everything. We are not the US; we are not China; we are not the European Union. We have to focus and be clear-eyed about things which will give us the biggest return. Within the creative sector, be choiceful; within life sciences be choiceful. I would very much welcome coming back to you in the future and you holding me to account on whether we are making choices. Are we being deliberate in what we are doing and what should we be stopping?
George Freeman: I am not the Chancellor of the Exchequer. I think you have made a powerful case for innovation-led growth and we would love to hold you to account on how we are doing, because the economy needs it.
Chair: Thank you, George. I absolutely echo that. We will be looking to hold you to account on innovation and growth, hopefully in a constructive way. I am also very pleased that you have explained what you mean by “choiceful”, because that is a term that has been used, and the element of prioritisation. I think we will come back to that in our further questioning. I know that Daniel wants to come in on some choices that have been made.
Q39 Daniel Zeichner: I am the Member of Parliament for Cambridge. As you can imagine, I have had representations from physicists, astronomers and people with concerns. As a former Minister who reallocated grant funding, I quite understand the difficulty that sometimes creates. It seems to me that you are not exactly taking people with you at the moment in terms of response. There are two areas I want to pick up quickly. First, on the issue of people feeling they are losing, how will you deal with that? Your argument is that the money overall is there but it will be allocated in different ways. When people do not feel that is the case, how will you deal with that? I can tell you from experience that you lose the argument quite early on if you are not careful.
Professor Sir Ian Chapman: Can I take the opportunity to own the fact that we have not done our communications in the right way over the past month or so? I thought that before Christmas we managed the allocations process very well. We were clear about these three buckets; this is how our mission is changing; this is how we are allocating money. I thought we did really good engagement through that process. You saw that, despite this being probably the single biggest change in how research and innovation money is distributed, certainly in a decade but maybe longer, nobody was really upset about that. We had brought stakeholders alongside. In the past five weeks, we have not done a good enough job of engagement. I own the fact that that happened because of information security not being good enough inside my organisation.
We made some decisions about being deliberate in our choice. The right thing to do and what we planned to do was then to talk about those decisions with stakeholders and those affected, blow by blow, and bring people on the journey of why we have made those choices before we communicated that to the outside world. We were not able to do that because of information leaks outside the organisation. We ended up having to rush out comms when we had not done that engagement, for which I am very sorry. I realise that this causes upset and uncertainty; it causes people to worry about their jobs. It is quite fundamental. We have not done that well enough. I just have to own that; it is my organisation’s fault. We had not managed that process well enough. You have my commitment that that was not the intent. I promise we will do it better next time.
Q40 Daniel Zeichner: Again, I have huge sympathy because I recognise the situation, but it is important you invest in it, and you may want to go back to our earlier discussion about investing some money in explaining how it used to be spent, because that will probably give people reassurance that it is not as stark as it seems.
Professor Sir Ian Chapman: I totally agree. When we are making a big choice and saying this is something we are now going to de-prioritise, I totally agree that we must be able to say as an open book, “This is how it used to be; this is how it will be in the future.” When we make those choices, I am prepared to put the effort into doing that sort of audit trail. It is an overhead. I do not think it brings fruit to do that audit trail for everything, but when we make choices I am totally prepared to do that.
Q41 Daniel Zeichner: That is helpful. On STFC, as you demonstrated earlier it is about the fixed costs. You will be familiar with the points that have been made. There are consequences to that in terms of individual jobs and commitment to international projects. What assessment have you made of the impact this will have?
Professor Sir Ian Chapman: I must admit that we are in the process of that. We are exploring and what we have so far determined is that we have cost pressure. We know what the cost pressure is based on our forecasts of how the costs will escalate over the next four years. We have a cost pressure that we have to address. The right thing to do in that circumstance is not to hope it will go away. We cannot just carry on with the programme of work that we have and hope that the cost pressure does not materialise. We can forecast it now and we should start to do things about it. We have not made decisions about exactly what we are going to do about it. We are beginning to ask the community, grant-holders, what the implications for the science that is achievable would be if we did reduce grants in the future.
Q42 Daniel Zeichner: You can see the problem that is emerging, because people are now speculating that that will mean pulling out of major international collaborations with the reputational damage that follows.
Professor Sir Ian Chapman: I totally understand. Hard choices have to be made; there is no way round that. We are talking to the STFC, which is an independent body, and our infrastructure advisory councils. We have a number of independent advisory boards through this process. Of course, we will take input from the community more broadly. I have already acknowledged that communications so far have not been great, but none the less it is a cost pressure that we have to deal with.
Our starting position on this, by the way, is that we should own most of the pressure. Of the £160 million that we view as a pressure, £100 million falls on UKRI, so we have to live with that ourselves. We have to find a way of being more efficient, of running our facilities more efficiently and using fewer people to run them, driving efficiency into our own processes and systems. It would be absolutely reprehensible for us just to put that pressure on to the community. We need to own the bulk of it and take the log out of our own eye, look at our own systems and be as efficient as we can be. We are determined to do that. Michele Dougherty, the executive chair of STFC, and I are driving us to take greatest ownership of the problem, but we do not yet have a complete plan for how we will deal with that pressure. I acknowledge that there is pressure and we are trying to take it head on and not hide, obfuscate or bury it.
Q43 Daniel Zeichner: You have not come to any conclusion yet on something like the LHC collaboration.
Professor Sir Ian Chapman: We fully expect to continue to be a partner in LHC and CERN. We are the second biggest contributor to CERN and fully expect that to continue. We will continue to put grants into the community to enable science, which is done through our subscription. That is absolutely our expectation. But, none the less, on new things and new projects which are not yet committed, we cannot just layer up cost pressure on top of cost pressure.
Q44 Chair: Can I seek a couple of clarifications? We have talked a lot about the STFC cost pressures, but I have heard real concerns about the decision of the MRC and BBSRC to limit grant applications. Indeed, on Friday I visited Newcastle University’s child cancer research lab. This was raised as a potential barrier to certain levels of research. Can you address that quickly?
Professor Sir Ian Chapman: In both those cases—this is true of a number of councils—we are going through a transition period. We are stopping the old and starting the new. For BBSRC to begin with, we are going to move to always open, applicant-led proposals. At the moment it is done in waves. We are going to pause gently while we reorient the system to be always open. It will pause for a matter of a few weeks and from the spring it will move to an always open mode as are EPSRC and AHRC. Some other councils already work like that. It is only a temporary pause while we change the system.
On MRC, we initiated a pause. I expect that pause to run to early summer and then we will be open again. On ESRC, we are changing the way that applicant-led mode proposals will be done. Again, we will communicate more on this in due course, but we are shifting to five different schemes rather than the three we have at the moment, the main thesis of which is that we are trying to encourage real novelty and so things which are properly blue sky at the moment. I would contend that our three schemes are all a little vanilla, whereas we are trying to say that we want the very blue sky novel ideas. We are opening up schemes specifically for that. Again, it is just a slight pivot. There will be a pause and we will open a new one. It is not that we are not continuing applicant-led funding. In the allocations explainer, you can see that the applicant-led funding budgets for all the councils are holding; none of them is declining.
Q45 Chair: Before we come to Samantha, on specialisation, I have had concerns expressed to me that there is a general move from humanities funding to STEM funding. Given the priorities of the industrial strategy and innovation, there is much more emphasis on and welcome for STEM funding applications rather than humanities funding applications. Looking at the budgets for the research councils, I can see them increasing over the spending review period, but can you talk briefly to the value of humanities funding and UKRI’s choiceful approach to humanities and STEM?
Professor Sir Ian Chapman: If you look into the detail of the numbers, our support for the arts and humanities discipline will increase reasonably significantly—by about 20% over the course of the spending review period. That is a combination of the money that is routed through, applicant-led, the Arts and Humanities Research Council as well as the creative industry sector, and we will probably expand that to be the creative and cultural industry sector, which is growing significantly over the period. I believe it starts at about £50 million and ends at £95 million, if I get my numbers right. You see significant growth in that sector. We are adamant that we should be growing that sector. It makes a big difference to our national GDP. It employs hundreds of thousands of people. It is a growth sector where the UK has a prominent position and a big market opportunity to seize a greater share, so we absolutely should back that sector, and you see that in the budget. The budget is increasing for that sector.
Q46 Samantha Niblett: That is quite a nice segue into my question. Hello and welcome. I am doing some work with a woman called Lou Jackson, who is trying to get the comedy sector the attention it deserves. In fact, funnily enough, last night, she was up till 3 am doing an application to Innovate UK—her third time and hopefully third time lucky. Part of the challenge is, when you look at Creative Catalyst, the drop-downs are: advertising and marketing; animation; architecture; arts and culture; crafts; design; fashion; film, TV and video; games; publishing; music and radio; and visual art and photography. Comedy does not show. I know that might sound like a joke—to use a pun. When you look at the value that can come from social prescribing with comedy and at the contribution of comedy to our GDP, it is not insignificant. If it does not appear as a drop-down, if there is not an option for comedy, it means that they cannot apply for grants. A prime example of that is that during covid it was really hard for some smaller venues to get support to be able to deliver.
One of the asks is—and we have spoken to Ministers about this—might that be something that UKRI could consider as a separate drop-down? We have spoken to Arts Council England about it. It feels like there is an uphill battle, but, if one organisation could go, “Yes, we recognise it,” the rest may follow.
Professor Sir Ian Chapman: Can I take that away? I do not know the answer to that. It could be that the team would say, “Well, actually, comedy could appear in multiple different layers, and you could just go through the routes that exist.” If you do not mind, can I take it away and come back to you?
Samantha Niblett: Yes.
Professor Sir Ian Chapman: Thank you.
Q47 Dr Sullivan: Last week, we had regius professor Mike Ferguson come and do an innovator pitch. He is at the University of Dundee, where I studied with him, just to declare an interest. He proposed the issue of proof-of-concept funding. A lot of investment from UKRI, £20 million to £30 million, is put into different research propositions and experiments. It then gets to a point where it is ready to go to industry. Industry goes, “Ah, can you just do these last few experiments?” That costs £250,000 or something, and there is a standoff, nothing happens and then it dies. Is there an interest in this proof-of-concept funding? You have mentioned it before, but are you looking to expand that?
Professor Sir Ian Chapman: Yes, the short answer is that we are expanding that. At the moment, I do not think that we help signpost companies to the right place to dock into our systems. We have, I think, 14 different schemes that industry could participate in, which is hard to navigate your way around, so we are simplifying that. We are going down to four. The bones of those four are, first, joint research, where we and industry will put money in to do some research and probably co-own the IP.
The second thing is what we call impact acceleration. Does it look like it has commercial application? You do some very early feasibility studies. If that is going well, we go to what you are describing as proof of concept. Those are usually quite small sums of money. These are bigger sums of money, where you are then looking at a ticket price of a few £100,000 or maybe even £1 million.
We are setting up a proof-of-concept scheme that is live at the moment. That will be £40 million to start with, but it is a thing that I really hope grows. I hope that we begin to see real success from the first wave, and my aspiration is that we will then be able to put more money into it in the future.
The fourth scheme is, as Rose mentioned earlier, helping entrepreneurs and founders develop their skills and on their personal growth journey. We are very keen to support the development of high-quality entrepreneurs in the country as well. Those are the four schemes rather than 14, and we will come up with nomenclature that is consistent across the councils. We will be able to communicate more about that in the future.
Q48 Dr Sullivan: Grand. Is that additional money? Is that ringfenced money? Is that part of the growth bucket?
Professor Sir Ian Chapman: Part of the decisions that we took at allocations was to find money to put into that scheme. That is now attributed. If we are able to grow it from £40 million upwards, that will be a redistribution at a later date, but I want to get going first and see that it works and that we are getting benefit from it.
Q49 Dr Sullivan: Right, okay. In terms of the life sciences space, I was formerly a life scientist. We are losing a lot of companies to the US and that unlocking of capital. What steps are you looking into—maybe pension companies—to free up that capital?
Professor Sir Ian Chapman: It is a great question. This is something that I am really passionate about. I described our asset base as latent. The reason why I describe it as latent is this. If you imagine how we operated in the past, we would put money in at the top. Money would go into councils and then into programmes, often into sub-programmes. We would invest in research groups, institutes, centres, universities or companies. Some of that investment would then lead to IP that looks like it has commercial utility, either to license to a big company or to start a spin-out. We have been very hands-off from that point. We create this portfolio of high-quality IP that looks like it has commercial utility and we sort of say to founders, “Good luck. Off you go. Go find some money.” I am really keen that we do a much better job of curating that portfolio and saying, “This is the IP that we’ve generated through our investment every year. Of that IP, this is the part that’s really internationally differentiated, properly world class, and, of that, this is the part that’s high-growth potential.” That is so investable. It is a really investable proposition.
There is a role for UKRI to do in that portfolio curation and then promotion of the stuff that is really high-growth potential, because that is what investors want to invest in. Rather than pushing everybody out and saying, “Off you go on your own. Good luck,” we could do a lot better job at curating and signposting where the real high-growth potential is. That levers money into the system. It then levers proper investment into the system, because that is where the pension funds want to invest. They just do not have the bandwidth to go and talk to every little company. That is not how a pension fund operates. They want to invest in a vehicle that says, “Okay, here’s my pipeline of high-growth potential companies that are differentiated.” That is then an investable vehicle. It is not our role to set up an investable vehicle. The British Business Bank, UKGI and others will have a role in that. Our job is to do the signposting and the portfolio management.
Q50 George Freeman: As a UK trade envoy in Southeast Asia, I talk to those with big pots of money that want to invest in UK science, research and technology, and they typically are keen to invest in places like science parks, infrastructure—big money—and in venture pots. Traditionally, those two asset classes have been very different. We have taken the view that government does infrastructure and the private sector does the venture. Is there any work going on to see how we might attract more global money into our infrastructure base here, such as science parks, to relieve the pressure on your budget?
Professor Sir Ian Chapman: That happens, but not really because of us. Harwell and Culham are really good examples. I know we now have joint ventures with Daresbury. We have joint ventures set up with a partner that provides financing. We provide the land. We do that in a concerted way, where we look at how we use our assets as attractors to companies, and then leverage the private money to start building out the campus. It is compartmentalised. We are looking for an investor into the campus, fabric and buildings, and then separate investors who might put money into the companies that use that asset. That might not be wrong. Equally, there are investors who want to bridge and sit in both classes. There is a big role for us to play in helping to do that. I would contend that UKRI has not really played in this space anywhere near as much as it ought to have done in the past.
Q51 Dr Sullivan: Where is the front door? I have a lovely spin-out company from the University of Sussex. I have an amazing quantum thing which is a million times better than the nearest competitor. They are struggling to find a front door. They do not want to sell to the US. They want to keep it here, but there is just nobody to engage with. What you say sounds interesting. When will the front door be available?
Professor Sir Ian Chapman: For each of the industrial strategy sectors where we have now allocated money, not through councils but separately as a budget line, there will be a programme board formed of everybody who has skin in the game. Government Departments that either have a policy that matters to this or put money into it will be sitting around that table, that programme board. That programme board has a chair, who is one of my executive chairs, responsible for that industrial strategy sector plan. In quantum, it would be Charlotte Deane, who is the executive chair of the Engineering and Physical Sciences Research Council. Charlotte would be the front door. She would then have a team made up of all the councils. STFC people will work on quantum. Innovate UK people will work on quantum. There is EPSRC and Research England. They all work together, all to one person. It is Charlotte in that case. That would be the best front door to use.
It is great that you pick on quantum. In quantum, we have a really clear strategy. We say, “We’re not going to try to do everything. These are the things that the UK is really good at. Those are the things we’re going to invest in.” That is a programme that has been going on for 10 years, and it has led to internationally differentiated companies that are properly good in that space and are a very investable proposition. It is one of the examples where that work has happened really well and it has been already a proper programme with STFC, EPSRC and Innovate UK working together in a coherent way. It is my poster child. I would quite like all the industrial strategy sectors to be like that.
Q52 Dr Sullivan: Okay, brilliant, thank you. I am interested in what you said about exploiting the asset. I think we are talking about our talented researchers and scientists. There is an ambition to have world-class people in careers, making the UK the top destination for talented people and teams. We want innovation and talent—wonderful. The issue I have is how we make sure that we are growing our own talent within the UK so that we have the sovereign capability of our own talent to participate and take advantage of these amazing opportunities. Do you know how many of our PhD fellowships are taken up by British students?
Professor Sir Ian Chapman: I could not tell you the number off the top of my head, but I know it is declining.
Q53 Dr Sullivan: Yes. I wanted to flag with you some of the concerns that have been raised with me. The competition is so grand, which is great. You need to have a master’s in order to do a PhD programme. That obviously puts in a huge number of barriers. For somebody like me and many others, there is no way we would have been able to afford to do a master’s in order to do a PhD. Is this putting our British students at a disadvantage? How can we address this?
Professor Sir Ian Chapman: I am acutely aware of this. It is something that we are working with. I would describe it as an evolving policy situation. We are talking to our Department. We are talking to the Department for Education with some ideas that we have that might help bring more British nationals into the PhD cohort, particularly for sectors like national security and defence, quantum and AI, where we want to grow our domestic cadre of PhD students. That is not negating all the benefit that you get from international PhD students. You want the best people. I have used this phrase to George before: if you are world class, you have people from the world. That is the definition. There are no Premier League football teams that are just made up of English people. You have to attract the best talent, but at the same time you should not do that to the degradation of your national cadre of people. We recognise the issue. It is something that we are working hard on, but I do not yet have a policy that addresses it. People recognise that it needs addressing.
I should address your first question, which is: do we have a clear way for protecting the growth of that talent? One thing that we were really keen on within our allocations process was to really protect the talent funding line. That goes up from £800 million to more than £900 million, which is a significant amount of money. We fund 5,000 PhDs every year, and that is totally protected. We are all completely committed to that.
Q54 Dr Sullivan: Looking at the strategic sovereign capability and our amazing USP that Britain has this amazing infrastructure and people, and thinking about the world-class talent that we have coming here, they are brilliant. I have had the privilege of working alongside some incredible people. They then leave, and it is a case of how we make sure that we retain these strategic sovereign capabilities when other countries may well want to poach them, and we have seen that. It is having an eye on our British students, ensuring that the talent that we have here from any background is recognised and taken forward.
Professor Sir Ian Chapman: This is a slightly churlish answer, but you attract talent, both UK nationals and foreign students, when you do the most exciting things. When you run projects and programmes that are the best in the world, the genesis of the person does not matter. They all want to be involved in that programme. The incumbency is to do the best and most exciting programmes, and then people will come, whether they are UK nationals who will stay and not take more money from the US, or international students who come here for the work and the excitement of the programme. That is the biggest attractor.
Q55 Dr Sullivan: That is very interesting. The problem, though, is it fails to recognise that there are different barriers for different people. Some incredible women have had to give up their careers because of maternity and making the choice between having a family or having a career, waiting for tenure and those sorts of things. How are we ensuring that we are not losing lots of really amazing people because of the inflexibility of grants?
Professor Sir Ian Chapman: I would contend that our grants enable all those things. We obviously do not employ PhD students. They are employed by universities, institutes and centres, largely. Our grants do not place any constraints on that, and indeed we try to encourage as best we can processes that allow people to take career breaks and come back, people who are coming back from a career break into a PhD, and people from diverse backgrounds. We are totally supportive of all that. If you have ideas that we could implement that would help do that in a better way, we are all ears. We recognise the issue and try very hard through the different schemes that we have and the grant conditions that we place to enable that as best as possible.
Dr Sullivan: It is very hard to get back in.
Professor Sir Ian Chapman: I understand.
Q56 Dr Sullivan: The Daphne Jackson Trust is brilliant in that space. The fact that we have two or three-year grants and you cannot pause science when you have a child, whether you are male or female, and that you have to eat into research time was the reason I chose to leave research, because I did not think it was fair to the research. How can we pause science so that you can come back afterwards with that time still intact, because you are eating into it?
Professor Sir Ian Chapman: Again, are you happy for me to take that away and come back to you? I recognise the issue.
Dr Sullivan: Yes.
Q57 George Freeman: Can I follow that up? The question of our globally competitive fellowships is key. When I was a Minister, I went to see the Max Planck Institute in Germany and met a British woman. She was 29, had done a post-doc at Oxford, was absolutely world class, and she had gone there. I said, “Why?” She said, “Well, they’ve offered me a fully funded 10-year fellowship, a choice of any of the 80 institutes, a technician who comes with me for 10 years and a research grant.” I said, “Tell me, was there anything about Germany? Did you have any links to Germany before you came here?” She said, “No, I wanted to do that in the UK, but we don’t have a fellowship offer as strong.” It always seemed to me: how do we be a superpower on a shoestring? Get the best people when they are young. I really echo this. I wonder, Ian, if one of the metrics could be how competitive our fellowships are for bright, young research scientists.
Dr Sullivan: It gives us stability, does it not?
Professor Sir Ian Chapman: The Future Leaders Fellowships scheme is not 10 but seven years. It gives you continuity for seven years, and you can do career breaks and things within that seven-year period. It gives you extra support for additional things around you. It is not just your salary, but it is things around you. It is hugely competitive and we get brilliant people on to that scheme.
Q58 George Freeman: How many of those do we have?
Professor Sir Ian Chapman: I could not tell you the answer to that, George.
Q59 George Freeman: Is it roughly 50 or 500?
Professor Sir Ian Chapman: No, more than that. Let me find out. It is into the hundreds now.
Q60 Chair: What is the gender breakdown on those?
Professor Sir Ian Chapman: I do not know that either. Again, I am happy to take it away.
Q61 Chair: It is noticeable that in your responses to Lauren there is not the level of passion and proactive action on this key issue of diversity of our research talent, I will be honest with you, that I have heard from other witnesses who have come here to give evidence. You say you recognise the issue. How concerned are you about doing something about it?
Professor Sir Ian Chapman: It is absolutely a big part of my job. We cannot do anything without people.
Q62 Chair: But the diversity of the people.
Professor Sir Ian Chapman: Without that, you do not achieve anything. I am completely committed to that. I was very proud in the organisation where I was previously to have got my executive to be 50:50 male and female, and we had 70 different nationalities within the organisation. We were hugely multicultural, and much to our credit for doing so. I find already that that exists in spades at UKRI. Again, it is a 50:50 gender balance on my executive. I find people from all over the world, and much to our credit. Ottoline did a fabulous job at that.
Q63 Dr Sullivan: On the point about returners to research, many people will set up a spin-out and then try to come back into research. It is quite hard when you are applying to the Medical Research Council or other different councils to then go and explain why you want to then come back. Is feels like there is a dogma of once you leave science research that’s it. How can we start changing that?
Professor Sir Ian Chapman: It is tricky, and of course we are not wholly in charge of that. We are not the employer for most of these people. All we can do is encourage. It is incumbent on all of us, the people around the table, all the employers and universities, and all the companies, to recognise that having multifaceted, diverse career pathways is a very positive thing. We should not treat career pathways as linear. People should be able to go many different routes. That is a really good thing. All I can do is encourage and embrace that of the people I employ. I do not run all the other businesses in the world.
Q64 Chair: Lauren spoke about not being able to pause science, but you spoke earlier about pausing applications for the MRC and the BBSRC. What impact do you think that will have on early-career researchers? Will you be doing an assessment on the impact on early-career researchers?
Professor Sir Ian Chapman: It is a necessary pause. By the way, this would have happened irrespective of my arrival.
Q65 Chair: Yes, absolutely. I am concerned about the impact on early-career researchers. Perhaps we could understand if that pause is having an impact on them. Before I go to Daniel next, I would like a clarification. We talked about humanities and I asked about them. UKRI makes a distinction between social sciences, including economics, politics, psychology, etc, and humanities. Did your support for humanities include social sciences as well?
Professor Sir Ian Chapman: Yes. I did not actually talk about social sciences, but economics and social sciences are supported through ESRC. The budget for curiosity-driven research there is the same as in all the others. It is completely supported and not cut.
Q66 Chair: Great. That is curiosity-driven research in each of the three buckets.
Professor Sir Ian Chapman: Yes.
Q67 Chair: Social sciences and humanities are represented in each of the three buckets.
Professor Sir Ian Chapman: Social sciences and humanities are embedded in almost all the sector plans. In AI, there is a very strong role for social sciences there as well, of course.
Chair: Fantastic, thank you very much. Daniel.
Q68 Daniel Zeichner: If we can go back to almost where we started with this new approach that you are taking to allocating resources, how are you going to report on that? We discussed whether we should go back. You are encouraging us to look forward. What can we look forward to seeing? How much level of detail to allow us to scrutinise it?
Professor Sir Ian Chapman: Things that I am aspiring to do, which are not in place yet, are to report quarterly on where the money has gone and the outputs that are achieved every quarter, and to be able to talk quarterly about the quarter ahead—not the immediate one but the one beyond that—of the pipeline of opportunities. For example, in June I would be able to say, “From September to December, these are the pipeline of opportunities that are coming,” so that we are clear with our partners about the opportunities that they can prepare and be ready for. Those are the types of things on which I would like to be held to account. We have a clear pipeline, and we are reporting on a quarterly basis on outputs and outcomes.
Q69 Daniel Zeichner: Will it be published in some format that this Committee can see?
Professor Sir Ian Chapman: It is on our website every quarter.
Q70 Daniel Zeichner: Quarterly is quite frequent. It would be an almost permanent dialogue going on with partners.
Professor Sir Ian Chapman: Yes. That is the intent. When you are the other side, you need information to be able to plan. You need to know what the pipeline is. You need to know how things are progressing and money is moving. You need to be able to see that. It is a healthy commitment.
Q71 Daniel Zeichner: That is reporting what you are spending. In terms of what you are planning and budgeting for over that period, how do you anticipate changing that year by year? You are setting out a new approach. Over what period of time is that expected to be in place?
Professor Sir Ian Chapman: We have attributed budget for the next four years through to March 2030. As I said to the Treasury, an exercise that was done in about 12 weeks at the back end of 2025 will be precisely wrong for March 2030. I do not know how it will be wrong, but it will be precisely wrong. We need an amount of fungibility there, an ability to vire and move to respond to opportunities, and to respond to what we learn and what happens in the outputs and outcomes that we achieve.
Those budget lines are not set in stone. There is an ability to move money between buckets and sectors to respond, but I want to be up front and transparent when we do that. Every quarter, as well as saying, “This is what’s come,” I would also like to be able to say, “This is the pipeline. This is how things are evolving. These are the opportunities that are coming. If we do make some changes, these are where the changes are being made and why they’re being made.”
Q72 Daniel Zeichner: That is helpful, thank you. Finally, you are setting out for the next three or four years. The one thing we know about the world is that it changes very quickly these days. I think it has been talked about that you may identify new emerging priorities. Who is it that identifies those? Is it you or is it DSIT?
Professor Sir Ian Chapman: It is everybody involved in this. The Government will definitely have a role in identifying emerging priorities and indeed setting the policy, regulatory framework and everything else that they are responsible for. Equally, we should be doing that, but so also should our community. If we get good ideas coming from universities or companies, we should be live and able to respond to opportunities. By baking in too much of our money and not being able to respond, we do ourselves a detriment, and we are not able to then move when opportunities arise.
Q73 Daniel Zeichner: That sounds slightly vague to me. Will you be directed by Government? You may push back and say, “No, we don’t recognise this as something that should alter our priorities.”
Professor Sir Ian Chapman: Of course. We are an arm’s length body; we are here to advise the Government. It is also true that Government should be able to give us objectives and set objectives that inform our strategy. But they ultimately set the objectives for the organisation, and it is within their liberty to change those objectives. That is the relationship that we have with them.
Q74 Samantha Niblett: I want to talk about Innovate UK, an organisation that I have had a fair bit to do with over the past couple of years. There was a bit of a furore in August before last when half the number of awards that were supposed to have been given to women were. There was quite a lot of pushback and I think a period of reflection and recognition. I am really hoping that under Tom Adeyoola’s leadership a lot of the mistakes that were made will not happen again. How are you supporting him in his aims to clarify Innovate UK’s purpose and make it more outcomes-focused?
Professor Sir Ian Chapman: Tom does not really need my support. He is an extremely capable person. He and I are completely aligned on how Innovate UK should be working in order to curate the growth journeys for our highest-potential companies. In the past, we have been guilty of investing in too many at too little. Then everybody gets choked and everybody gets starved rather than being able to identify the really high-growth potential companies and help them on their journey with a more curated support system. I recognise that that means that we will invest in fewer companies by being more deliberate, but it is the right thing for Innovate UK to do.
If you look at the ratio, roughly speaking—these are very rough numbers—the R&D tax credit system is about £10 billion and invests in about 50,000 companies. It is a very broad base. I am in favour of a very broad-base support system like that, albeit it could probably be improved. Innovate UK’s ratio was more or less the same, which is telling me that it is investing in a very broad, indiscriminate way. I would like us to be able to be more focused in how we choose the companies that are high-growth potential and then support them in a more concerted way. That is certainly Tom’s view as well.
Q75 Samantha Niblett: Is that aligned to the five missions and focusing on the economic growth opportunity?
Professor Sir Ian Chapman: The intent is that we will put most of that around the industrial strategy, but give ourselves some freedom so that, even when companies exist outside industrial strategy sectors but they are high-growth potential, we still have ability to invest in them.
Q76 Samantha Niblett: Excellent. I previously sat on the Women and Equalities Select Committee. We did an inquiry into female founders, and there were some recommendations. Recently, I saw the response from Government, which was a little bit wishy-washy. In the response from Innovate UK to the recommendations that were made, although it was not, “We’ll take your recommendations and implement them,” there seemed to be quite a lot of demonstrable examples of, “These are the things we are doing to help bring opportunity to more people.” I for one am excited about Tom’s leadership at Innovate UK. Do you know when Innovate UK will publish its new strategic delivery plan?
Professor Sir Ian Chapman: We were commissioned by the Secretary of State to write a new strategy for UKRI at top level. We intend that to come out in the spring. I will probably use all of the spring there, so it will be into June after the local elections. Alongside that high-level strategy for the organisation, the intent is to publish a delivery plan for everybody, all the councils, at the same time.
Q77 Samantha Niblett: Excellent. One thing Tom had mentioned to this Committee before my time—it is certainly on record—is that Innovate UK’s grant application process skews towards being good at filling out the grant process rather than the type of business you are. Do you agree?
Professor Sir Ian Chapman: I do.
Q78 Samantha Niblett: Fair enough. Is this an issue in other parts of UKRI? If not, why not?
Professor Sir Ian Chapman: I do not think it is such a prevalent issue in other parts of UKRI. Because Innovate UK supports so many companies, a bit of a machinery has developed around grant applications, and a number of consultancy businesses would help you to write grant applications for Innovate UK. That is not really true or prevalent across the other research councils where the numbers of applications are much lower than they are for Innovate UK.
Q79 Samantha Niblett: I have a final question, but I cannot decide whether you have answered it already, or whether it is even applicable now. What is UKRI doing to improve the grant application process? It sounds to me like you have just said Innovate UK is basically streamlining who can apply for things so that it is not quite so scattergun. I am sorry if I am interpreting this wrongly, but it almost feels like there is a bit of a racket going on around organisations that you can basically pay to help you get through the grant process.
Professor Sir Ian Chapman: That is true. I do not think anybody would deny that. There are organisations that help write grant applications for Innovate UK. It is twofold. Can I answer your question in two parts? On Innovate UK, the main change is the number, volume and nature of the quantum of money that we are going to use to support companies—fewer companies, bigger tickets.
For the research councils, I am really keen to drive down the time it takes from idea to investment, which at the moment can be the fat end of a year—but sort of 200 days—and that is just too long. We are working concertedly on how we take time out of that process. How do we adopt metascience and use novel techniques? Where can we use technology to support us more than we do at the moment? How can we take time out of that process? We are going to commit this year to a target to reduce funding cycles by 30 days. I will probably push the organisation to do another 30 days next year and try to drive it down so that we are quicker from idea to award.
Q80 Samantha Niblett: Excellent. I have one quick last question. You talk about reducing the number of industries or organisations that can apply to Innovate UK so that you become a bit more targeted. Have you decided that already, or is that part of the strategic delivery plan?
Professor Sir Ian Chapman: That will be part of the planning. The strategy is very much agreed: we will aim to be more deliberate so that we give fewer companies more curated support in their growth journey.
Samantha Niblett: Thank you.
Q81 Chair: Thanks very much. We have about 10 or 15 minutes left, and we are keen to talk about Horizon Europe. There are a number of issues to raise on that. Following on from Samantha’s points, I have a couple of questions for clarification. Did you say that you are looking to have more curated support for companies or to target companies with larger amounts that might therefore be more accessible by larger companies? Can you clarify what it is?
Professor Sir Ian Chapman: I am absolutely keen that we give more curated support to companies, for sure. The ability to do larger awards comes from doing fewer companies. At the moment, companies cap out. Lauren, you talked about it earlier. We struggle to bridge. A company might say, “Well, actually, to go to the next phase, I need a bigger ticket. I need a bigger lump of money,” and we end up creating a sort of valley that they cannot get across because we cannot give a big enough investment. By doing fewer, we are then able to go bigger. That is not suggesting that we are all of a sudden going to just invest in multinationals.
Q82 Chair: Exactly. You got my question. The short answer is no. Small companies, as we heard from this morning, will still be accessible. That is great.
We were all very pleased to hear about measuring the returns on public investment in innovative companies. I think we were promised some kind of a dashboard in terms of how many companies are being invested in. Do you have an update on when that dashboard may be available for us?
Professor Sir Ian Chapman: As I said on Daniel’s question earlier—
Q83 Chair: Is that a dashboard?
Professor Sir Ian Chapman: We will produce a quarterly output report, which will include investment into companies, number of companies started and investment raised. Those sorts of metrics are part of our quarterly report.
Chair: Okay. So that is a quarterly dashboard.
Q84 George Freeman: I think I heard you say earlier that by Q4 you will be able to do not just where we are spending but where we are seeing extra growth and private investment. To the Secretary of State’s key metric, follow the money. That is the bit that we have not been able to get our hands on.
Professor Sir Ian Chapman: That is our aspiration.
Q85 Chair: That is great. Fantastic. We have heard about the level of return on investments in innovative companies. We have also been very impressed by the level of tech investment. On the extent to which UKRI’s portfolio is likely to be impacted by an AI bubble bursting, I am not going to ask you to predict it, but what work are you doing to address that possibility, which would have an impact directly, and then the possibility of contagion for capital access generally?
Professor Sir Ian Chapman: The risk for us is more what you just described in the second half of your question. It is a contagion risk of capital becoming more nervous of investment. Our investments in AI are fourfold, maybe five if you include skills. We will make investment into novel, transformative things, narrow models, edge models, and things that are earlier in their genesis but could take over market share in the future from the large language models that we have at the moment. We will invest in particular industrial strategy sectors. The Alan Turing Institute is very much focused on national security and defence. We will look at how we apply AI to sectors like that. We will also help companies on adoption, sort of like a catapult model, trying to help companies to utilise tools to improve their own efficiency and effectiveness. In parallel, we will invest in the infrastructure and skills that underpin all that. That is the nature of our AI investments.
To your concern about inflation of valuations of companies, we are not hugely exposed to that in the UK because we do not have many of those companies that are getting very high valuations. Most of our money goes into next-generation technology. I see the risk more being that there may be a contagion. Investment capital might be more nervous about investing into some of those companies that are born from our investment because they are exposed to some of the big valuations at the moment, which may go downwards. We just do not know. Does that answer your question?
Q86 Chair: I think you are saying you are aware of it but you do not know what the impact would be.
Professor Sir Ian Chapman: I do not think we are hugely exposed. It is more the contagion risk that I would worry about.
Q87 Chair: Great. Let us come on to Horizon Europe. There are two points on Horizon Europe: its changing funding models and our association with it. I will deal with them one by one. In terms of its changing funding models, it is related. From Horizon FP9, which is where we are now, to the next one, Horizon FP10, we are looking at a doubling of Horizon funding overall. Where we have buckets—we are agreed that maybe they should be called priorities—Horizon has “pillars”. In FP10, its pillars map on to our buckets more or less. It has 25% on excellent science, 43% on competitiveness in society, and 22% on innovation. Are we aligned to its spending evolution, in your view?
Professor Sir Ian Chapman: Yes, we are. Given the fractions I described earlier, there are two factors involved in why I would say that. The alignment of the content of the three buckets versus the three pillars is very comparable. While the fractions may appear different, of course, UKRI is not all of Government R&D spend. The vast majority of what is spent by other Government Departments goes into bucket 2. Eventually, when you look at the whole of the R&D stack, bucket 2 is the biggest bucket. While half of our budget goes into curiosity-driven research, we are the only place that funds curiosity-driven research, so we have to be the guardian and protector of that.
The other thing that is important to remember is the leverage. You get almost no leverage on curiosity-driven research. Then you get some significant leverage on applied research. Then, once you are at the point that companies are starting and scaling, you get significant leverage. There is lots of private capital to come to match our pounds and lots of additionality there, which means that the total system is obviously a lot bigger.
Q88 Chair: Those are very good points. It was raised with me that, for Horizon companies, businesses could apply for any of their pillars, whereas UKRI companies could only apply for Innovate UK grants.
Professor Sir Ian Chapman: Yes.
Q89 Chair: Is that the case?
Professor Sir Ian Chapman: That is the case.
Q90 Chair: Why is that?
Professor Sir Ian Chapman: It is the way that we run our eligibility. You know we fund a dual-funding support system in the UK. If a company were to bid for curiosity-driven research, they could register to become eligible for that, and if they went through the eligibility checks they could then bid against it. We only fund at 80% of full economic costs, so they would have to provide match funding into the system. Nothing stops that. There is no preclusion, but they would have to apply through eligibility.
Q91 Chair: Okay, so they could, but they do not. Between FP9 and FP10, there is an increase of 50% in innovation for Horizon spending. As in our previous discussion, we cannot say that for UKRI spend because we do not know where we are coming from.
Professor Sir Ian Chapman: For innovation?
Q92 Chair: Between framework 9 and framework 10 for Horizon, spend on the third pillar, Innovative Europe, has gone up from 14% to 22%. Proportionately, it increased about 50%. Can we say whether that has happened for UKRI funding?
Professor Sir Ian Chapman: We could do that. When I come back to you on the details of the high-level mapping, the spend on innovation is quite easy to map, because it is largely the Innovate UK budget, the HEIF budget and some of our proof-of-concept money. That is quite easy to match. It is rising, but not to that extent.
Chair: Okay. When you come back to us on the inter-year comparability, if you could do what you can do and then say to us how much work would be involved in doing more, that would be helpful.
George Freeman: Can I pick up that point on Horizon?
Chair: We are going on to Horizon association. Is that what you want to ask about?
Q93 George Freeman: I want to ask about the Horizon pillars. When I looked at the three, the fellowships clearly seem to me essential—we are world class and have a lot of Horizon fellows. On pillar 2, the industrial, Rolls-Royce had a couple of contracts, but there was not a lot because we do not have a strong industrial base. Pillar 3, the innovation, where I was expecting to see a lot of UK companies, is quite academic. It is set up in a way that for a small SME with five or six staff who are not very good at filling in academic grant forms it is quite difficult, which is why I tried to set up a concierge to help them. Is there anything we can do to help UK SMEs get more access to that pillar 3 innovation money?
Professor Sir Ian Chapman: Indeed, we do. I would contend that there is more that we could do to help with that. We have a very small team in UKRI who help with signposting opportunities and helping people to form collaborations and connections that allow them to bid into pillar 2 and pillar 3. You are entirely right that we are doing really well in pillar 1. We are the second largest recipient behind Germany. We are not in that position in pillar 2 and pillar 3. We are doing more to signpost, but there is quite a rebuild time on that, because, as you will appreciate, when you are bidding for a fellowship you can pretty much go like that. When first you have to form collaborations and consortia and reinsert our companies into that process, there is a lag.
Q94 Chair: That is the key question with regard to our reassociation with framework 10. We have been very good at getting the return on investment for pillar 1. For pillar 2, we have been middling. For pillar 3, we have been pretty bad. To George’s question about what we can do more, how does that influence the decisions about reassociation with framework 10? What conversations are you having?
Professor Sir Ian Chapman: Those conversations have not really started yet.
Chair: All right.
Professor Sir Ian Chapman: Of course, DSIT and the Treasury would own those negotiations, not UKRI. We will support. It is very much our role, having made a commitment to be in this current framework programme, that we should try to make the best of that as best we can. As George asked, we definitely are supporting companies and universities in bidding into the current framework programme. As we think about the next framework programme, that is all very much in discussion with other member states at the moment as to what the content, scale of the budget and split will be. Those things are proposals. They are not yet legislated and the regulations are not passed. When we then get to the discussion about countries that may wish to associate to that programme, that will be a negotiation. Previously, it was all or nothing. There is precedent for it not being all or nothing, that you could be in some pillars and not others. That may be a thing that the country may wish to explore. All of this is to come, and it is the Government that do that, not UKRI.
Q95 Chair: You must have a view as to whether it would be good for UK science to reassociate with framework 10.
Professor Sir Ian Chapman: There is no contention that collaboration is a good thing for science. I do not yet know what the value-for-money case will look like because we do not know how much it will cost, we do not know what access we will have, and we do not know any of the regulations. We do not know the detail yet to be able to say that that is value for money. There is no doubt that collaboration is a good thing for science.
George Freeman: Presumably, Chair, there is an issue around the new geopolitics of Europe, the defence surge. There is a lot of dual use, such as NSSIF. There are question marks over whether UK SMEs are going to be allowed in those European supply chains. If we are, I would have thought it is a no-brainer that we want to engage. If we are not, you could see an argument that perhaps we need to do it ourselves.
Q96 Chair: Yes. George, you remind me: that is a really good point about dual use and UK sovereignty, which is a point that this Committee has made a number of times, in particular with regard to our science diplomacy inquiry. Do you understand what the Government mean by sovereign AI, for example? Are you in discussions about how sovereign capabilities should be reflected in UKRI’s work?
Professor Sir Ian Chapman: Yes, we understand it.
Q97 Chair: Excellent. Can you explain it to us?
Professor Sir Ian Chapman: There are multiple facets. There is infrastructure and hardware being UK domiciled rather than in the cloud or federated. There are models and tools to which we know that we have guaranteed access, either because they are generated internally or they are through an ally. There are skills and people. People who are available to work on things of application to national security need to have the right clearances. There is that layer to it. All three of those things play into sovereignty.
Q98 Chair: Thank you for the best explanation of sovereignty that I have heard so far. Are you in discussions with Government about how that impacts UKRI’s work?
Professor Sir Ian Chapman: On an almost daily basis. As we are forming the AI programme at the moment, for sure, DSIT is on that programme board. Other Government Departments as well have a big stake in that, as you would imagine.
Q99 Chair: Great. I said that was my last question, but I realise we have not spoken very much about regions. George talked about clusters and you responded to that. In terms of regional priorities, you know that we are in the process of finishing our inquiry into innovation, growth and the regions. How do you consider regional growth in allocating your funding? You said that regional growth is something to consider, but that is at a very high level. You have not really said very much about how you consider that.
Professor Sir Ian Chapman: It is embedded in everything that we do and in all the decisions that we make. Let me give you two tangible examples. When we were deciding about our investments in infrastructure for the next few years, the recent wave of infrastructure investments we made, one of the important facets that we tasked our infrastructure advisory committee to look at was the regional distribution of the proposals that came in, and that was very much a lens that we applied to making decisions. When we are able to announce the awardees for the Infrastructure Fund, which is not yet, I am afraid, you will see that there is a regional distribution, as there should be. Again, I perceive the Local Innovation Partnerships Fund as an important step for UKRI, not because it is a huge sum of money—
Q100 Chair: It is less than 1% of your budget.
Professor Sir Ian Chapman: Correct. It is £500 million over the spending review period. It should be catalytic. If we can, working with regions, say that that is the area that we want to be best in class in this region, it is a quid pro quo. The regions should expect that UKRI will say, “Okay, well, we have all these other schemes on infrastructure, talent and clustering that we can bring to bear in helping that region to grow in that area.” Conversely, if regions take the money and try to spread it really thin, I have no anchor to hook on to say, “Well, I can double or treble your money.”
Q101 George Freeman: It leads us back to the data point from earlier, does it not? If you have the metrics to be able to say, “Wow, look what Glasgow has done with quite a small amount of money. It has attracted huge growth,” you would presumably look and say, “What does that cluster need to grow more?” With others you might say, “Well, they’ve had a lot of money and delivered very little.” I think that is what you were saying you are building so that you can allocate on that basis.
Professor Sir Ian Chapman: Exactly. That has to be co-creation. We are not trying to dictate to a region, “This is what you should do,” nor are we saying, “Do whatever you like.” It has to be a co-creative thing.
Chair: It also has to reflect what is already in the region and the infrastructure investment that might drive that. Samantha has one last quick question before we do a summary and wash-up.
Q102 Samantha Niblett: Thanks very much for letting me squeeze this one in. There has been a little bit of pushback and irritation because DSIT recently announced a new relationship with Anthropic. The pushback is that, if we are building AI sovereignty in this country, why are we not making sure that we are demonstrating, particularly if we want scale-ups, that we invest in our own? That sends a really clear message that we back our own, back British or whatever. Does DSIT ever talk to you to say, “We want this. We’ve got this ambition. Is there anyone within the field in which you are investing and giving grants to that have this capability, where, instead of us having to go out to the wider market and to the States, we could look at what we’ve got here?” Is there a process in place for that?
Professor Sir Ian Chapman: There will be. We have a very regular dialogue with DSIT, as of course you might expect. On our side, we have been fragmented. Literally every council has some programme in AI. Talking to UKRI about AI is quite difficult because everybody has a vested interest. By bringing the budget together in one place with one responsible owner and one programme board on which DSIT will sit, we should be much more concerted and transparent about where our investments can then feed into wider Government policy.
Samantha Niblett: That is really comforting to hear. At the minute, I think it depends on who has the deepest pockets and lobbies the hardest. To think that we could invest in our own is fab.
Q103 Chair: Also, as we are in the process of a huge digital transformation of public sector and Government, the procurement of innovative AI is such a key driver for investment. Having an understanding of sovereignty and sovereign capability in that procurement is, I hope, something that DSIT can inform, perhaps through GDS. That is not UKRI, but I hope you are in talks with GDS about that. Great.
Sir Ian, we have kept you longer than we planned, but that reflects both the interest around the Committee and the wide understanding and vision that you have for UKRI. Thank you for spending your time with us this morning. The clerks will summarise what we agreed today in terms of what you will come back to us on. I want to reflect back to you that we have had a lot of discussion about outcomes and metrics, and that you have committed to come back to us with more detail on the metrics and the road map to get there, particularly around the three buckets or priorities, as I think we are going to call them now, George, and how that reflects clusters and sectors. We are expecting a quarterly report/dashboard sometime around June or July. We look forward to those deliverables to the Committee to build on the excellent contribution that you have made this morning.
Professor Sir Ian Chapman: You are welcome.
Chair: Thank you very much.