On 16 March 2021, the House of Commons released a new research briefing that summarises current research on Research and Development (R&D) funding in the UK.
Broadly, the Government defines research and development funding as ‘expenditure on research, predominantly in science and technology, that results in new products, processes and understanding.’ This includes research undertaken in, and funded by, the public and private sectors.
The contents of the briefing are summarised below.
- In the UK in 2018, total expenditure on R&D was £37.1 billion, £558 per head, or the equivalent of 1.7% of GDP.
- The business sector is the largest funder of R&D performed in the UK. In 2018, it funded £20.3 billion (55%) of R&D.
- In 2018, R&D performed in the South East of England was worth £7.0 billion, 19% of the total. R&D performed in the South East, the East of England and London accounted for 53% of all UK R&D.
- In 2019, the pharmaceutical industry performed the most R&D in the UK – worth £4.8 billion. The automotive manufacturing industry performed the second most R&D, worth £3.4 billion.
Government commitments on R&D
The UK Government has made several recent commitments to UK R&D funding:
- The Government’s 2017 Industrial Strategy committed the UK to spending 2.4% of GDP on R&D by 2027 and 3% in the ‘longer-term.’
- The March 2020 budget set out plans to increase public investment in R&D to £22 billion per year by 2024-25.
- In the November 2020 Spending Review (SR20), the Treasury announced what it called “significant increases in research and development (R&D)”, with “almost £15 billion in 2021‑22 including funding for clinical research to support delivery of new drugs, treatments and vaccines.”
Advanced Research and Invention Agency (ARIA)
On 2 March 2021, the UK Government published a Bill to create the Advanced Research and Invention Agency (ARIA), an independent UK scientific research agency that will fund “cutting-edge science and technology”.
This new agency falls in line with 2020 Budget proposals to spend, “at least £800 million” on the establishment of a new “blue skies” research agency intended to fund high-risk, high reward research.
Upon the announcement of ARIA, TIGA CEO, Dr Richard Wilson OBE, said:
“It is great to see that the Government is delivering on its commitment to increase R&D expenditure. It should be a priority for the UK Government to increase public investment in science, research, and innovation. Quality R&D expenditure can result in new jobs, new businesses, and new technologies.
“ARIA is a brilliant step in this direction. Increased funding for R&D, combined with reduced bureaucracy will allow the UK to strengthen its place as a leader for science and technology.
“However, the Government should bring forward its commitment to reach 2.4 per cent of GDP invested in R&D to earlier than 2027. In the video games sector, TIGA would like to see the Government introduce a Video Games Investment Fund (VGIF) to enhance studios’ access to finance. It could provide between £75,000 and £500,000 to developers nationwide, promoting the development of new technologies, original IP and encourage studio growth.”
According to the briefing, the UK will participate in the EU’s next funding programme, Horizon Europe, as part of the Trade and Co-operation Agreement with the EU.
The UK Government has said that it will pay a “fair and appropriate share into the budget of this programme to enable the UK science and research sector to further their partnerships with our European neighbours.” An announcement on the funding is expected “in due course”.