The UK’s science and technology sectors are set to get a financial boost with the Chancellor Rachel Reeves to announce £86 billion of investment in the upcoming Spending Review to support innovations from drug discovery in life sciences to new battery technologies, advanced manufacturing and artificial intelligence.
The funding includes a package put at £22.5 billion a year in 2029/2030 to boost the UK’s innovation in a range of areas from new drug treatments, and improved batteries, through to AI. The government says that the move will “ensure that the UK leads the way in pioneering the technologies of the future.”
The investment package also includes up to £500 million for the UK’s regions, benefiting, for example, the northwest and Liverpool, with its life science base, and South Wales, where there is extensive expertise in semiconductor design.
In addition, a new partnership linking the ‘high growth’ regions of Manchester and Cambridge will receive £5 million to help attract business investment and pilot new approaches for collaboration: the Cambridge x Manchester Innovation partnership will be led by Research England, on behalf of UKRI.
SCI chief executive Sharon Todd said: “We very much welcome the government’s commitment to putting science at the heart of the forthcoming industrial strategy. At £86bn, this is real money targeted at the right scientific and technological advances, such as new drug treatments and AI."
She added: “However what is critical is that a significant proportion of funds are dispensed to actively support the scale up of new technologies to full scale manufacture in the UK. Our research has shown significant ‘innovation leakage’ and the investment we make in science needs to feed back into the economy.”
The government said that every £1 invested in R&D generates up to £7 in benefits to the UK economy and leverages double in private investment in the long run, with businesses that receive their first R&D grant funding seeing jobs and turnover go up by over 20% in the following years.
Tim Bradshaw, chief executive of the Russell Group of universities said: “We know government faces difficult decisions on spending with tight fiscal constraints. We’re therefore pleased to see investment in the critical contributions that science and innovation can make. We await the full details of the settlement, but it's encouraging to see recognition of the existing R&D strengths in different part of the UK, with plans to go further to transform regional prosperity.”
Alicia Greated, executive director of CaSE said that, based on Office for Budget Responsibility forecasts for inflation, the spending plans announced today would appear to be "broadly flat" in real terms. "While not the ambitious settlement we called for, in this difficult fiscal circumstance it is positive that the R&D budget has been protected," she said.
With the spending review due this week, it is anticipated that the government will reveal the details of its Industrial Strategy in the coming weeks, which is aimed at tackling barriers to growth in the UK’s highest potential growth-driving sectors and regions. A report from the House of Commons Business and Trade Committee recently concluded that a “once in a century” chance for the UK’s economy will be lost unless the strategy is well-funded and deals with industrial energy costs that are among the highest in the world.
SCI has long been calling for a comprehensive industrial strategy that champions science-based businesses, and launched its own Manifesto for an Industrial Science and Innovation Strategy with recommendations that include establishing an Innovation & Science Growth Council with a direct reporting line to the Prime Minister, reforming pension funds to encourage investment in start-ups to commercialise their innovations in the UK and simplifying the overly complex R&D tax relief system.
With this his sort of support, SCI has said that the UK should aim to see 15 start-ups scaling to £500m, five unicorns listing in the domestic market, and ten investments of £500m+ being made in manufacturing - all by 2030.
Further reading on science and innovation
• New Industrial Strategy will boost investment say business leaders
• Life sciences and clean energy core to new Industrial Strategy
• Future of chemicals industry on the agenda in discussion with European Commission
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