Sir Andrew Witty called for the boost in innovation funding in his review of universities and growth issued last year.

He argued that increasing the fund to £250 million a year would incentivise universities to work with small and medium-sized businesses. It is currently worth £160 million.

But in its response to the Witty review, published on 14 March, the government said it was unable to commit to raising the level of Heif in the “current tight fiscal environment”.

This was despite British Invention: Global Impact – The Government’s Response to Sir Andrew Witty’s Review of Universities and Growth acknowledging that a recent independent review had found that each £1 of Heif funding generates £6.30 in return.

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Wendy Piatt, director general of the Russell Group of research-intensive universities, urged the government to reconsider not increasing the “highly-effective stimulus”.

In his report, Sir Witty also recommended that the impact weighting of the research excellence framework should be increased to 25 per cent in the next round.

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The government said that all four funding bodies are “considering carefully” this recommendation.

Research by research institute RAND Europe is already under way to look at the costs and benefits of the REF’s impact element for universities.

The report said: “[T]his evidence together with feedback from the assessment of impact in the current REF, will inform future implementation.”

But Dr Piatt cautioned against such a move. She said: “Often it is long-term, curiosity-driven research which produces the biggest pay-offs in the end. For example, the World Wide Web was an unintended consequence of particle physics research.”

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