Budget allocations for UK Research and Innovation

UKRI will be setting out further detail about how it will implement the new funding structure as part of its delivery plans in 2026. We hope that this will provide more clarity on the outstanding issues we set out below and we will continue work with UKRI and DSIT to advocate for as much detail to be provided to the sector as is possible.  

Curiosity research

The explainer states that UKRI will invest:

• £3.3 billion into applicant-led research allocated to research councils ‘to support curiosity-driven discovery’
• £8.9 billion into quality-related (QR) research funding to universities in England with UKRI investment in core QR and Higher Education Innovation Funding (HEIF) growing in line with expected inflation over the spending review period.
• £2.3 billion into other investments “essential for thriving curiosity-driven research, including institutes and infrastructures directly supporting transformative discoveries, open access and metascience”. For now, it is unclear which institutes and infrastructure sit in bucket 1 as opposed to the cross-cutting fund and how these decisions have been made.

Overall, curiosity-driven R&D investment has received a roughly flat settlement in cash terms. However, UKRI states that it is making changes between 2026-27 to 2027-28 to ‘increase the coherence of its portfolio’. This means that it is difficult to determine in detail how investment in curiosity driven research is changing. For example, the ‘quality-related research funding’ budget line in the UKRI data (reproduced in the table below) reduces in 2027-28, before increasing again in subsequent years (although not back to the same level). However, the explainer states that overall levels of funding available to universities will continue to increase in aggregate. It is unclear whether the changes are the result of moving funding lines between buckets but still focussed on the same areas over the first few years, or a genuine reduction in the amount of money invested in curiosity driven research. This is one area where comparison to previous years would be especially helpful.

Strategic government and societal priorities

UKRI states it will deliver £8.3 billion of R&D investment to support strategic government and societal priorities, including:

• £6.8 billion of programmatic support for Industrial Strategy sectors and wider government priorities delivered by cross-UKRI programmes
• £500 million for the R&D Missions Accelerator Programme
• £750 million for the large-scale national supercomputing service at Edinburgh

Levels of investment across the Industrial Strategy sectors vary considerably over the Spending Review period, with some increasing and others decreasing. Most notably, the proportion of the ‘bucket 2’ annual budget going towards the ‘Digital and Technologies: AI’ sector is set to more than double, from 15% of the annual budget in 2026-27 to 32% in 2029-30, while the largest decrease in proportional investment from this bucket will be seen by the ‘Life Sciences’ sector, from 31% to 19%. It is currently not clear how the amounts allocated across all sectors have been decided and what the rationale is for them.

The amount invested in ‘wider priorities’ falls from £651m in 2026-27 to £510m in 2029-30, or from about 33% to 23% of the total ‘bucket 2’ investment. This is presumably as existing commitments end and investment is shifted towards industrial strategy sectors (rising from 49% to 58% of the total in ‘bucket 2’). It’s important that this area of investment is still sufficient to support new and emerging areas as well as research that is beneficial to society that does not fall within the industrial strategy sectors. The areas of strength and comparative advantage for the UK will not necessarily stay constant over the spending review period and into the future; it is important that UKRI retains the ability to support new and emerging areas.

Enabling and strengthening UK R&D

UKRI states it will invest £8.4 billion for underpinning capabilities needed across the three R&D buckets, which includes investments in talent, infrastructure, institutes and facilities. 

As part of this there will be planned changes to UKRI’s infrastructure portfolio to “support infrastructure in a more effective and transparent manner”. This includes prioritising investment in digital research infrastructure, complementing DSIT’s £1 billion commitment in its UK Compute Roadmap to expand the UK’s compute capacity. Additionally, investment in the Research Capital Investment Fund will be reformed from financial year 2027-28 with its use focused on sustaining current facilities. The explainer states that funding will be made available for new equipment through competitive capital calls by combining resources to “form a more coherent and transparent infrastructure funding approach”.

Overall, with the new compute priorities, it looks like the budget for infrastructure is going to be tight. Therefore, it is good to see that UKRI will ensure that current facilities are sustained. It is important that we make the most of the UK’s existing research infrastructure.