Government R&D expenditure grows as the balance shifts

The Office for National Statistics (ONS) has published the latest Government Expenditure on R&D (GovERD) statistics for 2024, which provide estimates of research and development (R&D) performed in and funded by UK government departments and the devolved administrations.

Overall Picture

In current (cash) prices, we have seen substantial increases in overall R&D expenditure by the Government since 2016. This trend has continued in the latest ONS figures for 2024, with an overall increase of 11.6% from £18.3 bn in 2023, to £20.4bn in 2024. These annual increases are a positive outcome for R&D and demonstrate that the previous Government followed through on its commitment to increase public investment in R&D.

Overall, excluding defence, R&D expenditure is now 80% higher in cash terms than it was in 2016 and 40% higher when adjusted for inflation. This is a very substantial increase. The effect of inflation means that much of the real terms increase happened in the period 2016-2020. It is not possible to include defence expenditure before 2019 as the figures are not directly comparable due to a change of methodology in 2018. Defence R&D spending has more than doubled from £1.22bn in 2019 to £3.07bn in 2024.

It is critical that the breadth of UK R&D continues to be supported by the UK Government if R&D is to drive economic growth and deliver wide-ranging benefits to society. This is why it was a positive step that the Government is maintaining the high level of R&D investment across the spending review period to 2030.

UKRI expenditure on R&D

A greater proportion of this increase has been seen in Government departments than in UK Research and Innovation (UKRI) and Higher Education Funding Bodies. We observe a continued downward trend in the proportion that UKRI make of the total R&D expenditure by the Government (excluding EU budget contributions), from 42% of expenditure in 2019 to 36% in 2024.

Meanwhile, there has been a steady increase in the proportion of departmental R&D expenditure within civil departments and the Ministry of Defence across the same period, from 26% to 30 % and 8.3% to 16%, respectively.