New £1.25 billion package protects firms driving UK innovation
20 April 2020
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UK businesses driving innovation and development will be helped through coronavirus with a £1.25 billion government support package.
The Chancellor, Rishi Sunak, said the targeted and tailored help would ensure firms in some of the most dynamic sectors of the UK economy – ranging from tech to life sciences – are protected through the crisis so they can continue to develop innovative new products and help power UK growth.
The comprehensive package includes a new £500 million loan scheme for high-growth firms, called the Future Fund, and £750 million of targeted support for small and medium sized businesses focusing on research and development.
Chancellor of the Exchequer Rishi Sunak said: “Britain is a global leader when it comes to innovation. Our start-ups and businesses driving research and development are one of our great economic strengths and will help power our growth out of the coronavirus crisis.
“This new, world-leading fund will mean they can access the capital they need at this difficult time, ensuring dynamic, fast-growing firms across all sectors will be able to continue to create new ideas and spread prosperity.”
Alok Sharma, Business Secretary, said: “The UK is a world leader in innovation and at this hugely challenging time, we know that young, fast-growing firms require tailored support to see them through.
“This wide-ranging package delivers important help that will protect some of the most dynamic sectors of our economy.”
Secretary of State for Digital, Culture, Media and Sport, Oliver Dowden, said: “We are the tech and creative capital of Europe, and it’s crucial to maintain our place. This funding will protect high growth businesses and enable the unicorns of tomorrow to thrive so that tech is in pole position to drive our post COVID recovery.
“The £500 million Future Fund has been designed to ensure high-growth companies across the UK receive the investment they need to continue during the crisis.”
Earl Yardley, Director at Industrial Vision Systems, comments: “This is the urgent action our industry required to stabilise and potentially intensify investment in automation and high technology manufacturing. Before this crisis arrived, UK factories were making products that are more competitive now than at any time in the modern era. This R&D investment support ensures we are heading in the right path when it comes to supporting Britain’s position as a world leader in areas such as artificial intelligence, industrial automation and robotics. It also places industries such as ours in the most robust position possible for when we all come back up for air when relative normality arrives, and we can all return to the factory floors.
“Despite COVID-19, we can’t lose sight that the UK currently has a golden opportunity to become a strong market-oriented island of first-class R&D, high-tech industry and free trade. While cautious, we must all remain optimistic. We can still build the UK into a modern, high-tech society which, in turn, directly and positively impacts traditional manufacturing industries which should be the backbone of a stable UK economy. We should intensify our traditional free enterprise strengths, encouraging investment. Automation and robotics are critical to this success. This package will go some way to supporting those objectives.”
Delivered in partnership with the British Business Bank and launching in May, the fund will provide UK-based companies with between £125,000 and £5 million from the government, with private investors at least matching the government commitment. These loans will automatically convert into equity on the company’s next qualifying funding round, or at the end of the loan if they are not repaid. To be eligible, a business must be an unlisted UK registered company that has previously raised at least £250,000 in equity investment from third party investors in the last five years.
The government is committing an initial £250 million in funding towards the scheme, which will initially be open until the end of September. The scale of the fund will be kept under review.
The £750 million of targeted support for the most R&D intensive small and medium size firms will be available through Innovate UK’s grants and loan scheme.
Innovate UK will accelerate up to £200 million of grant and loan payments for its 2,500 existing Innovate UK customers on an opt-in basis. An extra £550 million will also be made available to increase support for existing customers and £175,000 of support will be offered to around 1,200 firms not currently in receipt of Innovate UK funding. The first payments will be made by mid-May.
This package builds on the government’s existing support for innovative, high-growth firms including the £2.5 billion British Patient Capital fund, the upcoming £200 million Life Sciences Investment Programme, internationally competitive R&D tax reliefs and our major commitments to increase public R&D spending to £22 billion by 2024-25.