UK government greenlights university spin-outs funding and new public sector guidance

According to the announcement, £30 million in funding will be provided to support world-leading research institutions and industry experts roll out innovative new business models at a time when the higher education sector continues to come under significant financial strain.

The funding will allow universities across four locations in Merseyside, East Anglia, the Midlands and Northeast England to grow more innovative new businesses, commonly referred to as “spin-outs”, within their institutions. The government said the investment would help “unlock scientific research’s vast economic potential” and allow “world-leading public sector labs [to] turn brilliant ideas into businesses that attract investment and sustain jobs”.

The latest funding comes from Research England, part of national funding agency UKRI, and will help the four regional research clusters to grow more spin-outs within research institutions. UK university spin-outs secured over £2.6 billion in funding in 2024, nearly 40% more than the previous year, according to recent government figures.

The move also comes as the government releases new guidance for PSBs on commercialising intellectual assets. The guidance, which applies to both universities and any other PSBs, outlines best practice on identifying potential benefits of commercialising knowledge assets and issues and challenges presented by different commercial models.

It also identifies commercialisation routes, including direct sales, licensing and formation of a joint venture or new spin-out, as well as market research opportunities, key steps to managing intellectual property, the due diligence process, licensing and navigating relevant approval processes and procedures.

Joanne McIntosh, an expert in technology contracts in universities at Pinsent Masons, said PSBs should review the guidance carefully ahead of considering launching any new spin-outs. “The approaches in the guide are not mandatory and are aimed at central government bodies, albeit the guidance may be of interest to wider public sector bodies also,” she said. “For those public bodies at an early stage of having in place policies and processes regarding commercialisation of their intellectual assets, the Knowledge Asset Commercialisation Guide will likely provide useful building blocks upon which policies and processes can be built.”

McIntosh said the guidance also offers PSBs the opportunity to review their existing policies and processes to see if they align with the government’s approach. “Although the guide is not mandatory, if a body adopts an approach to commercialisation which differs significantly from the guide, this may result in scrutiny and justification needed regarding the approach adopted, particularly as government will likely be keen to develop some consistency of approach around commercialisation,” she said. “For those more advanced in their processes and procedures, reviewing how your organisation's policies and procedures fair compared with the guide would be advisable, particularly to assess whether there are any key areas of disparity between the approach suggested by the government.”

The guidance applies to PSBs across the UK, but acknowledges that spin-outs from a UK government PSB are most likely to be located in England and Wales. Recent research indicates there are currently 1,635 active university spin-outs in England, 243 in Scotland, 105 in Wales and 81 in Northern Ireland. London has the highest regional concentration, hosting almost 19% of the total UK-wide spin-out population.