H M TREASURY 15
                                                  17 March 1998
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     UNIVERSITY CHALLENGE  - UNLOCKING BRITAIN'S COMMERCIAL
                           POTENTIAL

A major new challenge fund was announced in the Budget today,
aimed at unlocking the wealth of knowledge and innovation in
Britain's universities by creating 50 million pounds in venture
capital.

'University Challenge' will invite universities to compete for
seed venture capital funds.  These will be used  to help turn
scientific discoveries into commercially viable projects, improve
university business awareness and  bring innovative and
competitive products to the market place.

Paymaster General Geoffrey Robinson urged universities to take
up the challenge:
"This country's science base is world-class. By unlocking the
potential of university research, Britain will reap the benefit
through jobs and growth. 
"University Challenge will help fill the funding gap which has
in the past prevented innovative research being turned into
commercial ventures. In the week where we are celebrating the
enormous contribution science has made - National Science Week -
I am determined that Britain should benefit from this untapped
potential." 

The fund, part of a package to promote enterprise and high tech
growth, is a unique partnership between Government, which is
providing 20million pounds, and major charities, including the
Wellcome and Gatsby Trusts, which will provide matching finance. 
These contributions will lever in additional funds raised by
Challenge-winning universities, in partnership where possible
with the private sector.

Sir David Cooksey, a Governor of the Wellcome Trust, said:
"I am delighted that the Wellcome Trust will be a part of this
imaginative scheme. Bringing universities, businesses and finance
providers closer together will help to reduce the finance and
culture gaps which make it difficult for universities  to ensure
that the commercial benefits of their discoveries are realised."

To be successful in the Challenge, universities will need to
demonstrate that they have research ideas with commercial
potential and academics keen to develop this potential in
partnership with the private sector.  Seed funds will be used to
establish the commercial viability of research, develop business
propositions and provide initial funding for start up companies.


NOTES FOR EDITORS

1.   The University Challenge competition will be held during
     1998/99.  Universities across the UK will be invited to
     compete for seed venture capital funds - with bids being
     considered by an expert panel.  

2.   Successful entrants will be those universities that can
     demonstrate that they have a range of viable projects to
     take up seed funding,  a proper organisation in place to
     manage the fund,  and entrepreneurial staff who will  be
     given the time and support to commercialise their
     research.  Winning universities will also need to
     contribute towards their seed fund, from their own
     resources or by raising money from local business and
     charities.

3.   Each seed fund will be required to have  a dedicated
     manager from the private sector, overseen by a
     supervisory board drawn primarily from the business
     community.  Seed funds will be used to finance the
     demonstration of utility of research discoveries and to
     provide initial funding for start up companies. 

4.   The Wellcome Trust is the UK's leading source of
     charitable funds for biosciences  research.    

5.   The Gatsby Foundation is one of the Sainsbury Family
     Charitable Trusts, and supports research and development
     across the full range of scientific disciplines . 

6.   Science Week - or SET98 -  is this year's celebration of
     science, engineering and technology.  It is co-ordinated
     by the British Association with funding from the Office
     of Science and Technology.  Science Week aims to raise
     awareness and appreciation of scientific processes and
     the value of science, engineering and technology to
     society and the economy through events ranging from fairs
     to lectures.  In 1997 there were more than 5,000
     attracting more than  1 million participants.

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