We outline our key asks for the budget and what we will be looking out for on the day
Looking ahead to the 2020 Budget
10 Mar 2020
The first Tuesday of the new decade ushered in the announcement of the new Government’s first budget, set for mid-March. At the time, it felt like this would be the first budget in a few years to set long-term plans without distraction. Fast forward to the week of the budget, fresh Cabinet faces and the Coronavirus epidemic could derail commitments on research and innovation funding again. The Treasury has tweeted that this budget will be one to ‘invest in scientific achievements of the future’, which hopefully signals good news for science and engineering, and here are a few things we will be looking out for come Wednesday.
The first, and certainly the most visible pledges we will be looking for are commitments against the Government’s endeavour to increase the UK’s research intensity to 2.4% of GDP. Before the election, the Prime Minster pledged to double public investment in research and development by 2024/25, with the Conservative manifesto showing how they had planned to increase this investment over the next few years. While the manifesto pledges would leave us a little short of doubling public research investment, and be below our projections to reach 2.4% by 2027, significant increases to public research expenditure will be greatly welcomed. Alongside increases to investment, we will need to see the publication of a long-term plan for how the investments will be implemented. We have long called for this, along with others in the sector, to build confidence in the private sector to continue to invest in UK R&D. A long-term budget will enable the development of a detailed strategy and delivery plan that will allow for efficient use of the funding, minimizing wastage and maximizing leverage. It would enable Government to consider the appropriate balance of funding and make transparent, evidence-based decisions about how to most effectively use public R&D investment and levers.
Within any uplift in research funding, the balance and effectiveness of how the investments are administered will be crucial in ensuring the UK reaps the benefits. One of the UK’s unique strengths is the breadth of world-leading R&D that is carried out, from fundamental research to bringing new technologies into use and ensuring that public support for R&D in all of its settings will be crucial. This budget may give more detail on a new mode of funding for ‘high-risk, high-reward’ projects but it is important that fundamental research funding is increased at the same time. What is more, the dual support funding model of research has come under increased pressure over several years, meaning universities have to work harder to meet the full economic costs of the grant projects they are awarded money for.
The Conservative manifesto also outlined other measures to boost innovation that could be announced at the budget. A call that CaSE and others have made is that the Government should review the scope of R&D tax credits to enhance the UK’s offer to private companies investing in research. The party pledged to do just that, in particular looking at reliefs on cloud computing and data for the use of research, in line with CaSE’s recommendations. The Government are also likely to announce an increase in the tax relief from 12% to 13%, but it remains to be seen whether this will be made in this budget.
Read CaSE’s representation to HM Treasury for Spring Budget 2024.
On 30th January, Labour announced its plan for the life sciences sector. CaSE welcomes the proposals and encourages Labour to extend their commitments to the whole science and innovation sector.
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A General Election year presents a real opportunity for the R&D sector to make our voices heard.