The government is “flying blind” when it comes to economic growth in the UK’s regions, due to a lack of decent data.
according to the Science, Innovation and Technology Committee of the House of Commons, whose report, Flying blind: Innovation, growth and the regions, is published today.
Chi Onwurah, committee chair, said: “The UK is flying blind when it comes to innovation policy. At a time where economic growth is urgently needed and a new approach to R&D funding is being rolled out, the government and UKRI [UK Research and Innovation] must be guided by data to make evidence-based policy that reflects regional strengths.
“Without the right data, how can we know whether innovation policies are working, whether public money is being directed to the right places, and how much private investment it is generating? Clear and transparent metrics are essential to track investment, outputs and outcomes.”
The committee has pinpointed what it called “unacceptable” shortfalls in data about innovation, making it “impossible” to effectively assess policies. It is urging the government to take a more rigorous, data-driven approach to “ensure public funds encourage the development of regional innovation clusters and stimulate private investment”.
In its summary, the committee stated: “We believe there is still untapped potential for innovation-driven activity across the regions, with an increase in the number of innovation-led clusters”.
The report notes that the government’s 2025 industrial strategy was “unashamedly place-based”, and recognised that “stronger regional growth is critical for the competitiveness of [key growth-driving sectors] and the resilience of the national economy”.
Lack of data
But while the idea of having “clusters” of research, development and innovation is lauded by the committee, it found a debilitating lack of data about those clusters, defined as “geographic concentrations of firms, research institutions, skills, and related industries that benefit from proximity and collaboration”. Among the clusters cited are life sciences in Cambridge and Liverpool, financial services in Edinburgh and Leeds, and clean energy industries in Derby and Aberdeen.
The committee recommends that the government publish annual data covering the performance and impact of innovation clusters.
A theme that emerges strongly from the report is the patchiness of technology-related business growth outside of the South East of England. The UKRI is the UK’s biggest public funder of R&D, with an allocation of £8.8bn in 2025-26. But its CEO, Ian Chapman, told the committee that its “investment per person is consistently higher within the Greater South East than outside”, according to the report.
The committee said a data insufficiency problem runs across the whole of the UK, at regional and national level. Its report notes: “We heard of major shortfalls in gathering and sharing data relating to innovation policy, meaning that at present, there is no clear way to track the pipeline from R&D research through to capital investment, company growth and wider economic benefit.
“Future disclosures of [government] departmental R&D spending should include breakdowns by region and cluster,” it continues. “The government and UKRI should also develop a framework for tracking impact and publish annual regionally disaggregated reports that set out how public R&D funding supports innovation across the country. These should include company-level data on funding, innovation diffusion and take-up, and geographic distribution.”
The report also describes barriers to accessing public R&D funding for people outside “traditional hotspots”. “To support regional innovators more effectively, the government should establish a portal matching innovators to funding and Innovate UK should set clear targets and metrics for increasing engagement across the UK,” it says.
In and out of the Golden Triangle
The committee’s inquiry and report had a particular focus on the so-called “golden triangle” of London, Oxford and Cambridge, and whether there is a “balance to strike between ensuring that it remains internationally competitive and raising the level of innovation elsewhere”.
There was evidently pushback on this. Patrick Vallance, the science minister and Oxford-Cambridge innovation champion, told the inquiry that “funding for cutting-edge, curiosity-driven research had to be allocated solely on the basis of excellence, that excellence would always be clustered in certain areas, and that funding should ‘absolutely not’ be ‘spread … evenly like jam across the place”.
By contrast, the University of Southampton testified, in a written statement: “The prosperity generated by high-potential growth sectors is often not shared equally and improved living standards often do not reach every community within a region. In some areas, economic inequalities are exacerbated.”
The report notes that the triangle has disadvantages that other areas do not. “Traditional innovation hubs like London, Oxford and Cambridge are limited in physical space, housing costs and facilities, which other locations can offer in abundance and often at lower cost,” it says. “Utilising their potential has the additional benefit of supporting greater regional economic growth.”
The committee recommends the government “should publish a strategy setting out how it plans to exploit the full potential of the Oxford-to-Cambridge Growth Corridor – including locations outside these cities”.
It adds: “The government should publish an assessment of whether funding to Golden Triangle institutions should be made contingent on projects having a quantifiable economic impact elsewhere,” and recommends it appoints a minister to “champion innovation in each region of the UK – not just the Golden Triangle”.
The inquiry found data gaps “regarding the commercialisation of innovations, in areas such as university spinouts”.
Irene Tracey, vice-chancellor of the University of Oxford, told the inquiry: “It is very hard to get the data to know how many companies we are spinning out, what the deal terms are, how it is going, how many have collapsed, how many are doing very well or how many have left the UK and grown in the US.”
To fill the gaps in spinout data, the committee recommends the government should speed up delivery of a “University Spinout Dashboard, ensuring it includes standardised data on metrics such as institutional support and regional outcomes”.
However, as Sam Freedman, senior fellow at the Institute for Government, says in his book, Failed state: Why nothing works and how we fix it, the Treasury has a long history of blocking regional autonomy.
“Michael Gove as secretary of state for local government [in the previous government] … was ultimately stymied by a lack of Treasury support [for his so-called Levelling up whitepaper],” he says.
Though, Freedman also notes that “the rise of select committees … has shown a desire among MPs to play a greater scrutiny role, and indicated that governments will occasionally acknowledge that”.