The Science and Tech Committee release report outlining urgency to support financing and scaling of UK science and technology

This week, the Science and Tech Committee published their report 'Bleeding to death: the science and technology growth emergency', a report into financing and scaling UK science and technology. The report cautions the government that the UK's inability to retain and expand its science and technology firms has become critically urgent, severely damaging the nation's economic health.

techUK welcome the reports recognition that the UK has many of the foundations in place for to scale the ‘next trillion-dollar technology business’. But we recognise the urgency for the government to act to fix the blockers to scale, retain the economic benefits of R&D in the UK, and to seize opportunities for this government’s imperative to deliver on economic growth. Just this week, techUK explored this very topic with our members at our Tech and Innovation Summit hearing from innovative scale-ups including Pragmatic Semiconductor and Genomics.

We further welcome many of the recommendations productive visa policies, greater risk appetite and reforms to public procurement. Many of these align with techUK’s recommendations for the government ahead of the Autumn Budget.

The scale of the challenge

It is well documented that the UK has world-class universities, strong early-stage venture capital, and a thriving ecosystem of innovators and start-ups. However, the UK continues to be caught in what the report calls a ‘doom loop’ with shallow capital pools, risk-averse institutional investors, and undervalued technology companies that creates a perfect storm pushing promising tech firms overseas.

The statistics are further alarming. Companies looking to scale up struggle to find late-stage capital from the UK; pension funds now allocate less than 5% to domestic equities, down from 50% in 1997. In the US, 72% of venture capital comes from pension funds while in the UK, this is just 10%. Alongside this, of the top ten global universities, only three of the top 100 industrial R&D spenders globally and none in the top ten.

Meanwhile, the UK’s capital markets are not working as well as they should be. Companies list overseas with the perception that higher valuations are available there, which reduces activity and capital in the UK market, perpetuating a vicious in the first eight months of 2025, only seven UK companies listed on the London Stock Exchange compared with 129 in the US.

During the inquiry, Lord Mair (Chair of the House of Lords Science and Technology Committee) highlights that several significant companies including Oxford Ionics, Deliveroo and Wise have relocated or expanded abroad.

The call to action

The report recognises that fixing the scale-up crisis requires coordination across government – something techUK has long called for. Visa costs that deter global talent, Treasury appraisals that undervalue long-term R&D benefits, and departments pulling in contradictory directions all undermine our competitiveness.

Looking ahead, the report calls for a proposed ‘National Council for Science, Technology and Growth’ with responsibility to co-ordinate efforts across departments, including which technologies the UK needs sovereign control over and intervene to ensure that this is the case.

There is also an emphasis on public procurement to better support scale. Government spending of £434 billion annually should be a powerful lever for growth, yet risk-averse, bureaucratic processes often hinder the level playing field for our most innovative SMEs and start-ups. In the US, for example, the Small Business Innovation Research programme allocates billions to SMEs while the UK's equivalent manages just £42 million.

But the UK should remain confident in its ability to scale. The recent industrial strategy included interventions to address the scale-up problem. The Mansion House reforms are intended to increase investment by UK institutional investors in UK tech companies, as well as increasing the funding for public investment bodies such as the BBB and National Wealth Fund (NWF), which the strategy tasked with different roles in providing scale-up finance

Few key recommendations include:

Within our Autumn Budget submission, techUK outlined measures to support a thriving science and technology ecosystem. This included moving faster with Mansion House, ensuring better join-up with Public Finance Institutions (British Business Bank and InnovateUK) through the Strategic Public Investment Forum and reassessing the costs for visas where this is uncompetitive and preventing tech talent from coming and staying the UK.

We also emphasised the need for universities to be better supported by uplifting the Higher Education Innovation Fund (HEIF), enabling university institutions to translate research into societal and economic benefits.

On behalf of our members, we look forward to continuing to work with the government to ensure that the next ‘trillion-dollar tech company by 2035’ calls the UK its home.

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