This is a positive sign that the UK is creating an environment that champions entrepreneurs. However, there is still more that could be done to better support and incentivise new startups and small businesses, starting with business grants.

In the UK, there are hundreds of government awarded grants for businesses. The latest figures reveal that more than £156 billion was awarded to businesses between 2022 and 2023. However, getting your hands on this highly sought after funding can be challenging, and even if you are considered eligible, it can take a long time for firms to receive the funds.

With the UK recently choosing its new government, we look at the five ways the new government could improve business grants.

Faster, more streamlined grant decision-making and assessment cycles

The fastest grant process in the UK (from application to the first receipt of funds) typically takes between six to nine months. This is having a significant impact on project start dates and delaying innovation, as researchers struggle to plan effectively, allocate personnel, and manage equipment and materials.

Upfront lump sum payments in R&D grants

There are a number of ways that grants are paid out in the UK. In many cases, particularly with R&D grants, firms will be reimbursed after they have invested their own funds. On some occasions, applicants will need to match the value of your grant before they receive it.

This can be a hurdle for many businesses who are just starting. However, if the government were able to provide upfront lump sums for R&D grants, businesses will have earlier access to cash resources, enabling them to invest more quickly and effectively. This will also significantly reduce the administrative burden on businesses.

Introduce meaningful regional grant funding (>£200k per award)

Awards that are less than £50k are useful to stimulate startup activities, but they naturally do not have the same impact as larger awards. We need to see larger sums of funding being distributed more evenly across the UK. This would help the government achieve its aim of widening grant distribution beyond the golden triangle, which currently receives 80% of venture capital funding in life sciences.

Greater alignment between innovation funding incentives

This includes grants and tax credits between government departments and affiliate groups. For example, greater clarity on the interplay between different incentives and ensuring that commercial exploitation of new developments is incentivised as well as the initial research.

Consider longer term funding cycles

Longer term funding cycles would help to create greater stability and predictability. Current cycles either provide a short burst of funding opportunities or have undefined future funding timelines, impacting the ability to effectively plan development projects.      

That being said, the government would need to be careful that longer cycles do not lead to inflexibility in sector-focus and prevent them from making adjustments to reflect where funding has been most effective – and what other countries have invested in. 

Looking ahead

With the Autumn Statement set to take place on the 30 October, many businesses will be eager to learn what changes related to business taxes and innovation funding the new Chancellor will introduce. 

As a firm, we hope that the new government recognises the continued importance of having a generous and stable business grant environment, the opportunities the funding creates for businesses and its employees, and the role it plays in supercharging the UK’s economy both now and in the future.