Volume 2

Setting priorities for publicly funded research : 3rd report of session 2009-10. / Science and Technology Committee.

  • Great Britain. Parliament. House of Lords. Science and Technology Committee.
Date:
2010
Catalogue details

Licence: Open Government Licence

Credit: Setting priorities for publicly funded research : 3rd report of session 2009-10. / Science and Technology Committee. Source: Wellcome Collection.

    31/520 (page 23)
    R&D Tax Credits 21. R&D tax credits are one of the Government’s most important policies designed to promote innovation in the UK, playing an effective and increasing role in supporting business investment in scientific and technological R&D. The forecast future costs of claims are: FY 08-09 £820 million; FY09-10 £890 million. Since 2000, almost £3.9 billion of support has been provided to UK companies, through payable credits to SMEs not in profit or as tax relief to both SMEs and large companies. 22. In FY07-08, the last year for which published figures are available, there were 7,670 claims totalling £790 million, based on almost £8.7 billion of business investment. Around 75 per cent of claims are made through the small and medium sized companies scheme, and the other 25 per cent through the large companies scheme. Claims were primarily from companies in Business Services (38 per cent of claims, totalling £340 million) and Manufacturing (33 per cent of claims, totalling £300 million). From 1 August 2008, 175 per cent relief is provided under the SME scheme, available to companies of up to 499 employees. Companies claiming through the SME scheme also have the option of exchanging the enhanced deduction for a payable cash credit from HMRC worth 24.5 per cent of the original qualifying expenditure if they are loss making. From | April 2008, 130 per cent relief is provided under the Large Company Scheme. The UK scheme is normally considered to compare well with the schemes of other countries. The government has undertaken a number of measures to enhance and improve the schemes and their accessibility for all companies undertaking qualifying R&D, and is committed to evaluating the effectiveness of the schemes, focusing first on the SME scheme, by the end of 2010. The Technology Strategy Board 23. The Technology Strategy Board (TSB) is an executive non-departmental public body funded by the BIS innovation budget. For the three-year CSR 07 period, £711 million was allocated to the TSB, which was increased in the 2009 budget by a further £50 million. Its budget for 2010-11 is £288.8 million. This money is part of the innovation ring-fence and is separate from the Science and Research Budget. 24. The TSB plays a cross-Government leadership role in delivering a national technology strategy, and therefore works extensively with other organisations, such as Regional Development Agencies, the Research Councils, other Government Departments and the Devolved Administrations, to create critical mass and coherence so that UK business has greater clarity and is better able to access the most relevant support available. This will result in the TSB and its partners investing well over £1 billion between 2008-09 and 2010-11 with the aim of catalysing business innovation in those areas which offer the greatest scope for boosting UK growth and productivity. UK Innovation Investment Fund (UKIIF) 25. The UKIIF was established to drive economic growth and create highly skilled jobs by investing in growing small businesses, start-ups and spin-outs, in strategically important UK sectors including digital and life sciences, low carbon and clean technology and advanced manufacturing. It will operate on a Fund of Funds structure which means it will not invest directly in companies, but rather invest in a small number of specialised, private sector technology funds that have the expertise and track record to invest directly in technology businesses. By increasing the supply of venture capital to these funds the UKIIF will drive investment in high-growth businesses, start-ups and spin-outs which are finding it difficult to raise finance in the current economic climate. From early 2010, £325 million of new venture capital is available to invest at first closing, and the Government’s longer term ambition is that the UKIIF will be worth up to £1 billion over its 12-15 year lifespan. In his Pre Budget Report, the Chancellor announced the Government’s intention to appoint, subject to contract, Hermes Private Equity and the European Investment Fund as the Fund of Funds Managers. SBRI 26. The government also aims to use government procurement to drive innovation, through the Small Business Research Initiative (SBRI). Following the recommendation of the Sainsbury Report and successful piloting, this initiative was thoroughly reformed and relaunched in April 2009. The new SBRI provides business opportunities for innovative companies whilst solving the needs of government departments and other public bodies. Through SBRI, public bodies run open competitions for ideas and new technologies to meet specified needs, leading to the award of fully funded development contracts between the companies and the government body—it is not a government grant programme, but promotes innovation through the commercial procurement of technology development. The scheme is administered by the Technology Strategy