Background to the report

The transport sector has a long history of introducing new and improved ways of helping move people and goods. The Department for Transport (DfT) has identified innovation as a key enabler to achieving its priority outcomes of growth; greener, safer and healthier transport; and improving transport for people.

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It plans to spend approximately £1.1 billion on activities to support innovation between 2022-23 and 2029-30, spread across various activities and transport modes.

There are currently a wide range of opportunities and challenges across the sector. Successful innovation will be needed to make the most of emerging technologies and address the challenges of decarbonisation, and in a way that achieves reliable services for people and cost-effective solutions for the taxpayer.

Scope of the report

This report examines whether DfT’s support for innovation in transport is delivering value for money. It looks at whether DfT:

  • has set out a clear approach to supporting innovation
  • is managing its activity to support innovation effectively

The scope includes innovation spending by DfT’s three highest-spending arm’s-length bodies: Network Rail, National Highways and HS2 Ltd.

Video summary

Jonny Mood, the report’s director, shares our findings.

Key findings

Our key findings are summarised below. For the context and evidence behind them, download the report

DfT’s approach to supporting innovation

  • DfT has increased its focus on innovation but could improve how it prioritises its funding to achieve the outcomes it wants.
  • DfT aims to use a range of interventions to support innovation but could make better use of regulation and its commercial influence.
  • DfT has identified and is addressing barriers to innovation in its approach.

DfT’s management of its activity to support innovation

  • DfT’s governance of its innovation activity provides limited strategic oversight.
  • DfT has not clearly set out its risk appetite for innovation to guide its investment decisions.
  • DfT commissions its main delivery partners, Innovate UK and Connected Places Catapult, to monitor progress and outcomes, but this does not cover all the innovation activity that DfT funds.
  • DfT’s three highest-spending arm’s-length bodies are more actively prioritising and managing their innovation portfolios.
  • DfT has facilitated learning within the transport sector but has identified that it needs to improve the coordination of innovation activity with its arm’s-length bodies and key stakeholders.
  • Industry representatives we spoke to identified several areas where DfT can improve how it supports innovation.

DfT forecasts spending £1.1bn on innovative programmes between 2022-23 and 2029-30, over half of which is on maritime

Note: This figure is adapted from Figure 7 in the report (page 23).

Conclusions

The successful support and adoption of new ways of doing things is key to addressing the opportunities and challenges facing the transport sector.

In recent years, DfT has improved its approach to supporting innovation, taking steps to raise its profile within the department and to widen the type of interventions it makes.

To continue this positive trajectory there are several areas where DfT can improve what it does to ensure it achieves good value for money. In particular, DfT could better define how its innovation activity can support the full range of outcomes the department wants to achieve.

In doing so, it must be clearer on how much risk it is willing to take, collect the data and information it needs to manage and assess its activity, and help progress activity from early stages through to commercial readiness.

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Press release

View press release (18 May 2026)

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