Parliament ‘end-of-term’ R&D policy round-up

Investment

Spending Review

The Spending Review (SR) announcements on 11^th June 2025 represented the latest milestone in an extensive programme of work from CaSE to inform, influence and analyse public R&D investment allocations set by the Chancellor for the years to come.

CaSE conducted a comprehensive analysis of the SR, including assessing what R&D budgets set up to 2029-30 represent in real (inflation-adjusted) terms and what the Government’s spending plans mean for the R&D sector:

• The SR brought confirmation that the UK R&D budget is being protected in tough fiscal circumstances and recognised the importance of R&D to the Government’s prioritises, including economic growth. While not the ambitious settlement that CaSE had called for, that could see the UK lead the G7 in R&D, protecting the R&D budget in real terms sends a positive message to both UK and globally mobile private companies and investors that they can continue to invest confidently in R&D in the UK.
  
  
• However, CaSE analysis of the SR shows that 2026/27 is expected to be a tough year for R&D. With the Department for Science, Innovation and Technology (DSIT) facing a real terms cut to its R&D budget next year, CaSE will be keeping a strong focus on the departmental allocation discussions that follow and what these might mean for UKRI in particular.
  
  
• An aspect that was missing from the SR was measures to address the financial challenges facing universities. While it was welcome to hear the Chancellor recognise the strength of the UK’s universities, stating that “our universities are world leading, we are proud of them”, they require a sustainable financial footing to be able to deliver on the Government’s ambitions for growth.

CaSE will be working closely with sector stakeholders to inform the Government’s plans on departmental allocations and higher education reform later this year.

Departmental R&D budgets

Expanding on our analysis of the 2025 Spending Review, CaSE has also taken a deeper look at how the latest departmental R&D allocations for 2025-26 to 2029-30 compare with existing trends in how public investment is divided up across government. We also draw together publicly available data sources to shine a light on the nuanced picture of Ministry of Defence (MoD) R&D budgets. We found that:

• As a percentage of total civil R&D investment, Department for Science, Innovation and Technology (DSIT) and Department of Health and Social Care (DHSC) have been a shrinking proportion – however this will reverse slightly for DSIT over the spending review period while DHSC will continue to decline.
  
  
• Defence R&D has increased substantially and this is likely to continue, however its difficult to know for sure because HMT sets defence R&D as a ‘floor’ not a ‘ceiling’.

CaSE welcomes the UK Government’s publishing of historic data on R&D outturn as a breakdown across all departments, and encourage them to publish a full breakdown of the R&D budget allocations and final expenditure amounts across all departments for 2025-2029 SR period. Doing so will allow long term trends to be monitored and accurate scrutiny of the levels and balance of public R&D investment across government.

Industrial Strategy

In June CaSE welcomed the publication of the Government’s Industrial Strategy and the long-term strategic direction that it provides the R&D sector. We were pleased to see strong commitments to R&D throughout, putting it at the forefront of driving economic growth.

Ahead of its publication, CaSE submitted recommendations to the Government for the Industrial Strategy. We were pleased to see many of our recommendations reflected across a series of commitments, including:

• Ten-year budgets: We were pleased to see the Industrial Strategy announce the first recipients of ten-year budgets. It’s important that the Government continues this positive trajectory to signal to globally mobile private companies and investors that UK R&D is a strong, reliable destination for investment by expanding long-term funding to more organisations across the sector.
  
  
• Attracting international talent: The strategy includes several eye-catching commitments to attract the best talent from overseas to the UK. In particular, a new Global Talent Taskforce, reporting to the Prime Minister’s Office and the Treasury, will aim to attract top talent to the UK and identify ways to make the UK a more attractive destination. While these are positive changes, they leave a range of large barriers to attracting international talent to the UK unaddressed, including upfront visa costs that are substantially higher than other comparable research-intensive countries and visa policy that makes it hard for international researchers to build a life in the UK.
  
  
• Local Innovation Partnerships: We were pleased to see support for place-based innovation through Local Innovation Partnerships but are disappointed that other regions of the UK will only have access to funding through a competitive process. CaSE has previously recommended against this approach as it can come at the expense of inter-regional collaboration and alignment to national priorities.

As the Government moves to implementing its Industrial Strategy, CaSE will actively monitor how the implementation of these policies affects the sector, and we will continue to work with our members, government and the wider R&D community to advocate for the changes needed to ensure UK R&D drives growth across the country and improves lives and livelihoods.