What does the Spending Review mean for biomedical research?

Last Wednesday [27 October 2021] the Chancellor announced the Government’s spending plans for the next three years. Following an initial response our President, Professor Dame Anne Johnson PMedSci sets out the key figures, the questions they answer, and what remains unclear.   

The headline figure for research and development

The Chancellor dedicated an entire section of his speech to science and innovation, outlining a welcome increase of overall investment to £20 billion by 2024/25. We and others in the sector, have been calling for a positive settlement for science like this for some time and welcomed this news. Without doubt, it demonstrates the vital role UK research and development plays in driving health and wealth.

To give some context, total Government investment in research and development (R&D) currently sits at around £14.8bn. Government’s ambition was to raise this to £22bn by 2024/25, but this has now been delayed to 2026/27, which is after the next General Election, meaning the benefits of increased investment may be realised more slowly.

 

2021/22

2022/23

2023/24

2024/25

Government R&D spending (£bn)

14.8

16.1

19.4

20.0

The commitments made to science were significant and a guaranteed, yearly uplift to science spending is a vote of confidence and a welcome change to single-year settlements. It is also a signal, at home and abroad, that the Government is serious about being a science superpower. Even so, the picture is not simple and it is worth digging into what these increases will include.

The good news

The increase to £20bn will include some genuine uplifts for health research:

  • Yearly increases for the core budgets of UKRI and the National Academies. This was announced last year and has been reaffirmed and extended to 2024/25. We await specific details to plan how these resources can be used to advance biomedical and health research to the benefit of patients.
  • Increases for the Department of Health and Social Care (DHSC) R&D budget, rising from around £1.4bn to a guaranteed £2bn per year from 2024/25. This budget funds the National Institute for Health Research (NIHR) and Genomics England. We don’t know exactly where the increases will fall, but we know the NIHR will receive at least £40 million new investment in social care research, and £30 million to support investment in research skills and training to ‘level up’ opportunities for underrepresented groups.

 

2021/22

2022/23

2023/24

2024/25

DHSC R&D budget (£bn)

1.4

1.5

1.5

2.0

  • Core funding for Innovate UK will rise to just over £1bn by 2024/25.

 

2021/22

2022/23

2023/24

2024/25

Innovate UK (£bn)

0.7

0.7

0.8

1.1

  • Commitments to enhance R&D tax credits (to include data and cloud computing costs) and set up a Global Britain Investment Fund (including £354m for life sciences manufacturing).
Questions raised

Some announcements in the Chancellor’s speech will take a little longer to understand.

  • Funding for R&D through Official Development Assistance (ODA) will rise – after being cut last year – to £1bn by 2024/25. While welcome, it’s not yet completely clear how this compares to previous levels of ODA-funded R&D, or how that money will be spent.
  • Government plans to increase R&D investment outside the Greater South-East. Details are limited so far, but we’ll continue to engage with the development of the levelling up White Paper, due to be published later this year.
  • A new Global Talent Network to “find and bring talented people to the UK to work in key science and technology sectors” seems positive, but again we will need to await further details – including how this will relate to the UK’s comparatively expensive visa system.
  • Government will invest £800m in the Advanced Research and Invention Agency (ARIA) as planned, but over four years, instead of three.
  • Finally, there were no specific announcements to support the UK’s medical research charities, who play a uniquely valuable role in the UK’s health research eco-system and yet have been hit hard by a fundraising crisis brought on by COVID-19. It’s possible some of the new money for science will find its way to research charities and we urge all involved to ensure that happens.
The hard reality

Perhaps the largest caveat to the Government’s increase to science funding is that it will include the cost of the UK’s association to Horizon Europe. Before the UK left the EU, these costs were covered over and above the UK’s science budget, meaning that a large chunk of the increases to the science budget is allocated to the costs of association. Even taking this into account, the overall increase set out last week will still outweigh the costs of association, but it does means figures for public investment before and after Brexit are not directly comparable. The table below seeks to set this out.

 

2019/20[1]

2020/21[1]

2021/22[2]

2022/23

2023/24

2024/25

BEIS R&D budget (£bn)

8.6

10.3

11.3

11.9

13.7

14.2

EU programmes association* (£bn)

N/A**

N/A**

1.3

1.2

2.3

2.1

Approx. remaining BEIS R&D budget (£bn)

8.6

10.3

10

10.7

11.4

12.1

*(includes Horizon Europe, Euratom, ITER and more)
**Part of the UK’s total national contribution to the EU

Whilst a guarantee to cover the costs of association is reassuring, there are still hurdles to be overcome before Horizon Europe association is fully realised.

In January 2021, we celebrated the fact that the UK-EU Trade and Cooperation Agreement (TCA), will allow  UK participation in Horizon Europe. Since then, final approval of UK participation has been repeatedly delayed.

Recent reports suggest that UK participation in EU programmes, such as Horizon Europe, has become collateral in ongoing UK-EU negotiations, not least relating to Northern Ireland.

The Academy will continue to use all available routes to work with the UK Government and our European partners to secure our desired outcome of full UK association to Horizon Europe. However, in the event association is not achieved, the Chancellor has provided assurances that the money set aside for association will be spent on UK R&D, including to support new international partnerships. We will engage with Government on what those should look like and how they should be delivered if they are required.

Looking ahead

Overall, last week’s budget should be considered a positive step forward and a welcome shift from Government rhetoric into delivery of tangible investment. There is still plenty of dust to settle, particularly as decisions are made on how to spend this money and how the UK will engage in international partnership with the EU, LMICs and other nations of scientific strength. The Academy remains closely engaged on all of these topics and will continue to emphasise the importance of balance across the sector, the value of using foreign aid to fund health research and of our relationships with European and global partners.

We have also just launched a project on the long-term sustainability of health research which will look at how some of this investment can be deployed to secure a stable research ecosystem in future. If you would like to find out more about this work, please visit our webpage or complete our survey (closing 22 November 2021). 

[1] BEIS: The allocation of funding for research and innovation (July 2018)  [accessed here]
[2] Autumn budget and spending review 2021 (October 2021) [accessed here

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