Analysis of DSIT R&D budget allocations

Overall allocations

DSIT reiterated the budget aims to support its three R&D priorities, which were first set out in the post-16 education and skills white paper:

• Protecting curiosity-driven, foundational science
• Supporting strategic government and societal priorities
• Targeting innovative, UK-based company scale-up and growth

DSIT’s overall R&D budget will total £58.5 billion over four years from 2026 to 2030. Today’s publication commits £55.4 billion across DSIT’s various organisations and programmes over the course of the Spending Review period, distributed annually as shown in the graph below. The remaining £3.1 billion has not been allocated, with details to be set out by DSIT “in due course”.

Within DSIT’s allocated funds, the budget for the Advanced Research & Invention Agency (ARIA) will see substantial increases. The organisation’s annual allocation from DSIT is set to more than double, in cash terms, by the end of the four years, from £184 million in 2025/26 to £400 million in 2029/2030.

UKRI’s budget

Over the four years 2026 to 2030, total funding for UKRI will be £38.6 billion. The annual budget in 2029/2030 will reach nearly £10 billion. Based on current inflation forecasts, the UKRI budget will be broadly flat in real terms across the later years of the review period.

It is important to note that UKRI’s allocations for the years 2026/2027 to 2029/2030 include budget for programmes managed on behalf of DSIT, while the UKRI allocation figure for 2025/2026 does not include these programmes. Therefore, we do not know how much of the increase in UKRI’s budget from 2026/2027 onwards covers these managed programmes. As a result, meaningful comparisons between UKRI’s budget for the year 2025/2026 and 2026 onwards cannot currently be made. Hopefully this will be possible when the breakdown for UKRI is published.

The announcement highlights that DSIT is planning to manage its R&D funding in a “more agile way.” It remains to be seen how this develops – it could mean that future underspend gets reallocated and doesn’t automatically go back to the Treasury, as we have seen in previous years.

The allocations also include funding for association to Horizon Europe and FP10, its successor programme. While this is a positive sign of the Government’s intentions, the budget and scope of successor programmes remain uncertain, and UK association will be subject to future negotiations between the UK and EU.