The InnoScot Health funding model is changing — what you need to know
The effective management of intellectual property (IP) generated by NHS Scotland employees has long been recognised as crucial to advancing healthcare innovation. This led to the establishment of Scottish Health Innovations Ltd (SHIL), now known as InnoScot Health, as a dedicated Technology Transfer Office (TTO) for the NHS
For over 22 years, InnoScot Health has supported NHS Boards by protecting, managing and commercialising IP, and providing a range of additional innovation services including idea evaluation, regulatory support, funding and investment and project development. These services have helped to translate innovative ideas into tangible health benefits, generate income for the NHS, and support broader efforts to improve healthcare services.
As innovation, and the broader healthcare landscape continues to change, so do the underpinning structure, systems and services. This means InnoScot Health is entering a new phase and from 1 April 2027 will become entirely self-sustaining.
A managed transition phase will ensure minimal disruption, and we remain committed to working with healthcare innovators across Scotland, building on our reputation as a trusted adviser and proven delivery partner.
What is changing?
The funding model for InnoScot Health is transitioning, meaning changes to the way NHS Boards and Regional Innovation Hubs access advice, expertise and support from the organisation.
InnoScot Health is currently part-funded via an annual grant from the Chief Scientist Office (CSO) of Scottish Government. This enables NHS Boards across Scotland to access advice and expertise free of up front charge.
Grant funding from CSO will be ending in March 2027, and InnoScot Health will transition to a self-sustaining and fully commercial model. This means services will no longer be free of charge for NHS Boards, and InnoScot Health will consider alternative funding and commercial opportunities that maximise the skills and expertise it can offer to the wider healthcare ecosystem.
What does this mean for NHS Boards?
As part of the changes, three CSO Regional Innovation Hubs – West of Scotland, South East Scotland and North, will be responsible for agreeing with NHS Boards that fall within their regional grouping, a preferred new model of working with InnoScot Health or alternative TTO providers. This will include negotiating and agreeing regional service level agreements, and associated costs. InnoScot Health will liaise directly with Special Health Boards that do not fall within the remit of the Innovation Hubs.
Whilst it is not compulsory that new agreements for access to innovation services must be with InnoScot Health or that InnoScot Health will be under any obligation to continue working with NHS Boards, the longevity of the organisation and vast expertise built over 22 years of working in partnership with NHS Scotland – alongside existing knowledge and relationships – are considered advantageous when agreeing new models of support.
Why is it changing?
This change has been informed by a review of InnoScot Health undertaken by CSO. It recognises the evolution and importance of the innovation landscape, challenges on public finances and ultimately the advantages of Regional Innovation Hubs agreeing regional service level agreements and funding arrangements that are best tailored to their local needs.
This new approach is intended to foster greater collaboration, maximise investments in the research, development and innovation infrastructure across Scotland, and deepen the collective impact of efforts to improve health and health services across Scotland.
When is it changing?
From 31 March 2027, CSO will no longer part fund InnoScot Health via an annual grant. This means NHS Boards and Regional Innovation Hubs will no longer have free access to the services provided from this date and will be responsible for self-funding innovation and commercialisation arrangements.
A transition phase to enable InnoScot Health to manage the ending of its CSO grant funding will be effective from 1 April 2025. Current projects will continue and external regulatory consultancy services provided by InnoScot Health will not be affected by these changes.
Next steps
To enable a smooth transition and continuity of equitable support across NHS Scotland, work is underway which will establish the future model for TTO services. This will involve Regional Innovation Hubs and NHS Scotland Boards working together with InnoScot Health to consider the options available to them. A decision on future TTO arrangements for each region has to be confirmed to CSO by 31 March 2025.
CSO will continue to part fund InnoScot Health until 31 March 2027 as follows:
- Until 31 March 2027: CSO will continue to provide grant funding to InnoScot Health at the current level, covering a proportion of the costs associated with providing TTO services. This funding ensures no charges for TTO services provided to NHS Boards by InnoScot Health during the 2025/26 financial year
- However, from 1 April 2026 to 31 March 2027, partial cost recovery may be introduced, allowing InnoScot Health to charge NHS Boards for services not covered by the CSO grant. This will help bridge the gap between grant funding and operational costs as InnoScot Health transitions towards financial sustainability. Details on the specific charges will be communicated closer to the time, with measures in place to minimise any impact on NHS Boards
- From 1 April 2027 onwards: InnoScot Health will transition to a fully self-sustaining and commercial financial model, with full charges for all TTO services. CSO will cease its grant funding support at this point, and InnoScot Health will operate independently, recovering costs directly through service fees
Overview of CSO-Funded Technology Transfer Office (TTO) Services
Under the terms of the current CSO grant, InnoScot Health is funded to deliver the following key activities related to the commercialisation of NHS Scotland innovations:
- Infrastructure Support for Commercialisation: Maintaining and developing infrastructure necessary for commercialising NHS innovations, which includes technology auditing, policy development, awareness-raising, and staff development across NHS Scotland.
- IP Protection and Exploitation: Supporting the protection and commercial exploitation of intellectual property (IP) generated within NHS Scotland. This includes technical and commercial advisory support, external consultancy when needed, and facilitation of partnerships with private sector companies.
- Disclosure Management: Initial evaluation and triage of disclosures originating from NHS Scotland Health Boards, in line with annual grant objectives.
- Customer Engagement and Satisfaction: Proactive engagement with NHS Scotland R&D departments and clinicians.
- Income Generation: CSO funding supports the oversight of commercialisation activities, including meeting royalty income targets from commercial licenses, as outlined in InnoScot’s budget projections.
- Awareness and Visibility: Conducting awareness-raising initiatives, such as webinars, sector events, and partnerships with Health Boards, to maximise reach and promote TTO services.
- Economic Assessment Planning: Developing economic assessments for innovations, evaluating both healthcare impact and broader economic benefits.
Future Cost-Recovery Model (from April 2026)
From April 2026, a phased cost-recovery model will begin, under which InnoScot Health may introduce charges for specific services that exceed the core functions funded by the CSO grant. This phased model will be designed to avoid duplication of costs and ensure any charges are strictly limited to services not covered by CSO funding.
- 2026-27: Partial cost-recovery charges may be applied for additional services provided to NHS Boards, while CSO funding continues to cover the core functions listed above. InnoScot Health will ensure transparency in service breakdowns to clarify which are grant-funded and which are cost-recovery services.
- Post-April 2027: Following the end of the CSO grant in March 2027, InnoScot Health will transition to a full cost-recovery model. At this stage, all TTO services will operate on a charge-for-service basis, with InnoScot providing full transparency to NHS Boards regarding service costs.
Ongoing Communication and Transparency
To maintain alignment with the CSO grant objectives, InnoScot Health will continue to provide reporting on the use of grant funds and the services provided under the grant to CSO, while also communicating any changes to service costs to NHS Boards in advance of the phased cost recovery.
Get in touch
To support the transition engagement sessions are being organised for early 2025 and the InnoScot Health team remain committed to working with NHS Boards and Hubs across Scotland. For further information please contact [email protected].
Important Note: NHS Research Scotland Central Management Team (NRS-CMT) is currently hosted by InnoScot Health via a grant from the CSO. Plans to review options for CMT are underway and will be shared with key stakeholders in due course.
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