CaSE reviews the UKRI budget allocations

Our new Policy Officer, Camilla d’Angelo, takes a look at the UKRI allocations published last week.

In March 2022, the Department for Business, Energy and Industrial Strategy (BEIS) set out its R&D allocations for the next three years, confirming a budget of £39.8 billion in 2022-2025. Of this, over £25 billion has been allocated to UK Research and Innovation (UKRI) across the next three years. This is a significant investment in UKRI, whose allocation settlement will increase from £7.8 billion in 2021-2022 to £8.9 billion in 2024-2025, its highest ever level. This represents a 14% increase in UKRI’s overall budget.

CaSE welcomes the BEIS announcement, which reflects the government’s commitment to its target of R&D spend reaching 2.4% of GDP by 2027. The fact that this is happening at a time of significant pressure on public finances highlights the importance of research and innovation to the future of the UK. The UKRI allocations will be crucial in supporting the financial resilience of the UK’s research base and delivering on the government’s ambitions to establish the UK as a science superpower and innovation nation.

However, despite the substantial budget increase, there are concerns from the research community that this will be outpaced by high inflation. This means that any budget increase will be lower in real spending terms, at least in the immediate term. This will likely reduce the scope to deliver on the UK’s R&D ambitions.

UKRI allocations for the next three years

BEIS figures show that all UKRI bodies and research councils will see an increase in their budgets over the next three years. Innovate UK and Research England will see the biggest increases, with increases of 54% and 32% between 2021/22 and 2024/25, respectively. Research England will remain the largest overall constituent of UKRI – its core budget will increase to roughly £2.3 billion per year by 2024/25. The seven research councils will receive more modest rises, between 6% and 18% over the three years. The Economic and Social Research Council and the Arts and Humanities Research Council will remain the smallest constituents of UKRI, with their budgets increasing to £122 million and £70 million, respectively.

Evident in these figures are the government’s commitment to investing in fundamental research, innovation and business R&D, which is to be welcomed. However, it should be emphasised that a wide range of disciplines, including the arts, humanities and social sciences, are critical to building a stronger research base and promoting innovation. Therefore, CaSE believes that continued funding support across all areas of research is needed to deliver on the government’s science and innovation ambitions.

The wider context – a welcome multi-year budget

Crucially, this represents the first time that a multi-year budget has been approved for all parts of UKRI since it was created. The three-year settlement is intended to give UKRI more flexibility and autonomy to shape and support the R&D landscape going forwards and to build longer-term plans around the increased investment.

In particular, the allocations will help to deliver UKRI’s first long-term Strategy 2022-2027, which was published earlier this year. The new five-year strategy, the first since UKRI was set up four years ago, sets out UKRI’s long-term, high-level priorities to deliver their vision for an outstanding research and innovation system. This new long-term vision is important for strengthening UKRI as an organisation and to establish the UK’s ambition to become a science superpower and innovation nation.

Although most (95%) of UKRI’s 2022/23 budget is already committed, UKRI indicated it will have more financial headroom in the latter parts of the three-year period, with uncommitted funding rising to just over £4 billion in 2024/25. This will hopefully allow UKRI to begin implementing its new strategy.

Uncertainty around Horizon Europe

One concern is that the allocations have been set in the absence of a decision on the UK’s association to the EU’s Horizon Europe programme. This leads to uncertainty in particular around UKRI’s plans around talent and global collaborations spending. CaSE and partners across the sector continue to push to secure association to Horizon Europe, which would provide researchers with access to research programmes and vital collaborations. On the positive side, the BEIS allocations include full funding for EU research programmes, with £6.8 billion allocated to support the UK’s association with Horizon Europe and other European Union programmes. In the event the UK is unable to associate to Horizon Europe, the funding has been promised for UK alternatives.