The National Endowment for Science, Technology and the Arts has been formally abolished as an arm’s-length body and established as a charity.
A separate charitable trust will be established to hold Nesta’s National Lottery endowment, the government announced on 19 January.
Plans to abolish Nesta as a non-departmental public body were made as part of the government’s “bonfire of the quangos” in 2010.
The Department for Business, Innovation and Skills’ confirmation of the move follows a six-week consultation, which included Nesta employees and trustees.
According to BIS, responses from businesses, charities, social enterprises and individuals showed strong support for the proposal to become a charity, and for its consequent independence.
“Responses highlighted that the change in status would improve Nesta’s abilities to support innovation in the UK – giving Nesta greater freedom to be creative and at the forefront of developing ideas to help drive economic growth,” reads the government’s response to the consultation.
A few responses, however, called for greater clarity of Nesta’s role in the devolved nations and clarity over Nesta’s ability to fund commercial interests if it became a charity.
Respondents, who included the body’s chairman, John Chisholm, and six trustees, generally agreed that Nesta would benefit from being more independent of government, said BIS.
Last month the government’s Innovation and Research Strategy charged Nesta with setting up a centre of expertise to offer inducement prizes to stimulate innovation, the first of which will be in the region of £100,000.
BIS will invest around £250,000 per year to support further prizes, with Nesta tasked with finding investments from elsewhere in government and businesses to add to the pot.
The body’s other recent work has included creating a map of Britain’s most successful companies and high-growth firms, as well as launching research calls and carrying out analysis of innovation policy.
Nesta’s chief executive is Geoff Mulgan, former chief executive of the Young Foundation, a non-profit research organisation founded in 2006, and former head of policy in the Prime Minister’s Office under Tony Blair.
BIS expects the body to make the transition to a charity in April this year.