Nesta gets cash boost

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By Alex Klaushofer

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The National Endowment for Science, Technology and the Arts has been awarded a £95m top-up, despite criticisms that there is little to show for its money so far.

Nesta was set up in 1998 with a £200m investment from the lottery to provide backing for inventions and ideas in the arts and sciences. In 2001 it approached the government for an extra £300m, arguing that low interest rates had knocked £4m off its anticipated £12m annual income from the endowment. Last month parliament approved a funding boost of £95m, made up of £50m to help increase Nesta’s annual income, plus £45m for the development of new initiatives. The decision follows the publication of an uncomplimentary report by the Select Committee on Science and Technology in October, which criticised Nesta for a lack of clarity about its pro-gramme expenditure. The report said: ‘We believe it is premature for Nesta to request a significant increase in its endowment… It is a bit rich for an organ-isation getting £8m a year to distribute in grants and bursaries to go asking for more, when it is unable to maintain a clear grasp of how much it is spending and on what.’ Andrew Murrison MP, a member of the Science and Technology Committee, told Lottery Monitor: ‘We have had a vast number of extremely glitzy reports from Nesta – it’s a glitzy, ritzy organisation. But to date we’ve seen very limited outputs.’ Murrison said that judgement on Nesta’s performance should be reserved to allow it more time to prove itself. ‘We certainly don’t need to be increasing its funding,’ he said.

Nesta’s chief executive, Jeremy Newton, said, ‘Nesta was originally intended to be funded through an endowment of £500m. We greatly welcome the recent increase in funding as a valuable milestone on the path to attaining this.’ He rejected the committee’s criticisms of Nesta’s financial management. ‘They do not seem to understand the statutory framework in which we have to set out our accounts,’ he said. ‘In the previous report the committee encouraged Nesta to take a high-risk approach and suggested that it should be evaluated “on a basis of output and value for money rather than operational cost efficiency”. That is exactly what we have been doing and what we will continue to do.’ The £95m is to be drawn from future unallocated funding from the New Opportunities Fund. Announcing the decision, the DCMS minister Richard Caborn said that Nesta, before receiving all the money, would have to demonstrate it was spending funds cost-effectively and dealing with the issues raised by the Science and Technology Committee report. The new initiatives that Nesta is planning to fund include a scheme to promote entrepreneurship within the national curriculum and a programme supporting art and design graduates to set up their own businesses.