How the 2021 Spending Review can make the UK a ‘science superpower’

CaSE Assistant Director Daniel Rathbone sets out CaSE’s key asks from the 2021 Spending Review and the rationale behind them.

We now know that the Comprehensive Spending Review (CSR) we have all been waiting for will conclude with the Chancellor setting out his plans to Parliament on 27 October. And, unlike the last couple of reviews, it will cover the next 3 years.  

The Government has said that, while difficult decisions will need to be made because of the pandemic, science, research and innovation will form a crucial part its plans to “Build Back Better” and achieve its ambitions to build a “Science Superpower”. Previously, the Government has committed to increasing the public research budget to £22bn by 2024/25, in line with the trajectory to reach an investment target of 2.4% of GDP in R&D by 2027. 

Today we have set out five actions the Government needs to take as part of the CSR to meet its ambitious goals. We also identify some of the wrong turns that could be taken and the consequences these would bring. You can see those actions in our publication – and I have set out some more detail below.  

1. Publish a full budget trajectory to make the R&D targets work harder  

The Government should set out the long-term budget for public investment in R&D in line with the ambition for R&D investment to reach £22bn by 2024/25. Members have told CaSE that leadership and long-term certainty over R&D investment from Government enables them to plan and gives industry confidence to invest in R&D. Year-by-year budgeting chokes off the confidence boost offered by the ambitious £22bn target, with businesses taking their R&D investments elsewhere in the world. 

Our international competitors are pulling further ahead. For example, Germany has committed to an annual 3% increasing in funding for research institutes until 2023 through its Pact for Research and Innovation. The United States recently met its target of investing 3% of GDP in R&D and has plans to further increase investment.  

History shows that achieving major uplifts in investment takes time and committment – if we do not plan and start moving towards it now, then the target may remain out of reach.  Hitting the target by reallocating existing spending commitments or artificially broadening what’s counted as =R&D investment only serves to miss the point, and will undermine the UK’s ambition to become a more research-intensive country. Bold, visible and comprehensive support is needed to stimulate the industry investment and become a Science Superpower. 

2. Use increasing R&D investment to strengthen the foundations 

Global businesses cite the UK’s strong academic base as a reason for investing here. Rising R&D budgets over recent years have been very welcome. However, the headline figures can hide budget pressures on parts of the R&D sector. It is vital that, as investment grows, this includes discovery research to protect and enhance the UK’s world-leading research base. This would build on the increasing allocations for core UKRI budgets announced at last year’s Spending Review. 

A narrow approach to investment leaves discovery research underpowered and unable to deliver the dynamic environment in which mission-driven R&D, such as the new ARIA programme, is able to thrive. Without a strong research base sustained over many years the UK would not have been able to develop a COVID vaccine or ramp up genetic sequencing in such a short space of time. 

3. Channel science and technology into all parts of government 

Meeting the target for increased research intensity is not just a job for BEIS and UKRI. Departmental R&D budgets are responsible for up to 30% of public expenditure on R&D1 and have a crucial role to play in increasing the UK’s research intensity. There is great potential for R&D investment to directly benefit the delivery of public services, supporting more effective and efficient policymaking, and in assessing policy outcomes against the Government’s objectives.  

The Office for Science and Technology Strategy offers a new and powerful tool to co-ordinate R&D investment across Government, supporting departments to get the most out of their research budgets.  

4. Deliver R&D opportunities for every region of the UK 

R&D will be crucial to “levelling-up” and driving local economic growth and prosperity across the UK. The Government must set out details of the innovation element of the Shared Prosperity Fund, detailing how institutions across the UK will be able to access the fund. It should support the collaboration between small businesses and universities that drives growth and jobs in all parts of the UK, and in particular those areas with the most untapped potential. A lack of clarity around the Shared Prosperity Fund disadvantages certain communities, and fails to make the most of R&D’s role in driving local prosperity.  

5. Attract the R&D workforce that the UK needs for tomorrow 

High-quality science education is crucial to the government’s plans for the UK’s future. Underinvestment, unchallenged stereotypes and uninspiring courses see many young people put off by STEM subjects from an early age, sowing the seeds for a workforce crunch just as the UK is reaching its ambitious £22bn investment target.  

With the UK’s becoming more research-intensive, it’s important that everyone should be able to participate and prosper in a more innovative economy and society. This not only means continuing to inspire an increasingly diverse group of people to become scientists and engineers, but also equipping all young people with the skills to take advantage of advances in research and innovation, whatever their background. 

It is vital, therefore, that young people can receive a far-reaching and well-rounded science education in school.