£2bn increase in research spending per year announced

In his Autumn Statement 2016 on Wednesday, the Chancellor of the Exchequer announced a commitment to £2 billion (US$2.5 billion) more spending per year in research and development funding by 2020-21, which he described as a “major increase” in research and development funding for universities and businesses with R&D projects.

The increase would help the United Kingdom remain an attractive place for businesses to invest in innovative research.

“This will back scientific research and development of technologies such as robotics, artificial intelligence and industrial biotechnology,” he said in his statement.

But critics say the increase falls way short of the recommended target of spending 3% of gross domestic product or GDP, reaching just 1.7%, an increase of 0.1%, although some private funds could also be leveraged.

The government is giving itself room to raise spending by changing its policy of seeking to achieve a balanced budget, where more tax is raised than is spent, by 2019. This will “provide the flexibility to support the economy and create space for more investment in roads, rail, research and housing”, the Autumn Statement said.

Global go-to place

The extra spending on research was heralded earlier in the week by Prime Minister Theresa May, who told the Confederation of British Industry on Monday: “We’re ambitious for Britain to become the global go-to place for scientists, innovators and tech investors.

“Today, Britain has firms and researchers leading in some of the most exciting fields of human discovery. We need to back them and turn research strengths into commercial success,” she said.

“That means not only investing more in research and development, but ensuring we invest that money wisely. Supporting technologies and sectors that have the potential to deliver long-term benefits for Britain.”

May said that in the last parliament, despite the deficit inherited from the previous Labour government, the then Conservative-Liberal Democrat Coalition protected the basic science budget, “even when that meant we had to take difficult decisions to control other spending”.

But the UK’s competitors are not standing still, they are investing heavily in research and development, she said.

The Autumn Statement would therefore commit to “substantial real terms increases in government investment in R&D – to help put post-Brexit Britain at the cutting edge of science and tech”.

She added that a new Industrial Strategy Challenge Fund will direct some of that investment to scientific research and the development of a number of priority technologies in particular, helping to address Britain’s “historic weakness on commercialisation and turning our world-leading research into long-term success”.

Negotiate risks

Responding to the Autumn Statement, Venki Ramakrishnan, president of the Royal Society, said: "The Chancellor has rightly recognised that future economic growth and prosperity will depend on improving productivity, and that in turn can be driven by research and innovation.

“This commitment to additional new investment in science and innovation over the next four years alongside the other investments in infrastructure are welcome steps as we negotiate the risks and opportunities of leaving the European Union.

Dame Julia Goodfellow, president of Universities UK and vice-chancellor of the University of Kent, said the announcement was good news.

“It is recognition of the importance of research and innovation to economic growth and to meeting the big, global challenges we face. It will also help strengthen the links between UK university research and business,” she said.

“Our international competitors have been increasing their spending in this area, so this announcement will help maintain the UK’s position as a global leader in research and innovation.”

Dr Wendy Piatt, director general of the Russell Group, representing 24 leading UK research universities, said the commitment to spending on R&D is “much needed as our universities face increasingly stiff competition from our international rivals who have benefited from greater levels of government investment”.

The further detail in the Autumn Statement of £4.7 billion of additional investment over the next parliament will support the excellent research in the UK’s world-class universities and their continued collaboration with business, she said.

Fall short

But Scientists for EU said while the promise to increase funding in infrastructure, technology and scientific research was to be applauded, the amounts “fall far short of the widely recommended 3% GDP target”.

The group said currently the UK spends 1.6% of GDP on research and development (public and private investment). The funding increase will raise that figure to 1.7% of GDP and leveraging private funds could raise it further to 1.8%-2%. But this is by 2021, so “hardly indicates that we are in a hurry to be competitive with other nations”.

The group said a strong part of UK science productivity is due to its role in the science engine of the EU and multinational European networks.

“Collectively the EU is outperforming the US in science for sheer size and growth. We need to know whether this government intends to prioritise buying back into those networks after Brexit. If so, will the necessary funds come from this ‘£2 billion’ or will they be external to it?”

The UK's Office for National Statistics says UK spending on research and development as a proportion of GDP was 1.67% in 2014, unchanged from 2013. The OECD puts the figure slightly higher at 1.7% in 2014, which is still well below its figure for the EU average of 1.95%, or for China (2.05%).

The Russell Group is calling for: an increase in public and private sector investment in research to 3% of GDP; a guarantee that big-cost subjects such as science, technology, engineering and mathematics or STEM are properly resourced to meet the skills needs of a modern economy; more innovation and concept funding; and the creation of a new fund to back university and industry consortia while using the tax system to stimulate investment and university-business collaboration.

The group has identified at least £21 billion worth of economic benefits from just a sample of research projects at its universities – a return of £100 for every £1 of initial investment.