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Reflections on the 2017 Spring Budget

10 Mar 2017

Deputy Director, Naomi Weir, takes a look at how science & engineering fared in the Budget

Given the major R&D funding announcement in the 2016 Autumn Statement we were expecting few fireworks in the Chancellor’s 2017 Budget. So what did we find out?

National Productivity Investment Fund update

We received a bit more detail on how the first round of the new R&D funding (£4.7bn in total up to 2020 with £425m allocated for 2017-18) announced as part of the National Productivity Investment Fund in November will be used.

£270m in 2017-18 on disruptive technologies through Industrial Strategy Challenge Fund (ISCF):

The new ISCF is described as supporting “collaborations between business and the UK’s science base”. The initial investment will kick-start development of disruptive technologies “that have the potential to transform the UK economy”. Specifically – battery technology for electric vechicles, AI and robotics systems for hazardous environments, and accelerating access to new drugs and treatments through medicine manufacturing technologies.

ISCF has been teed up as a ‘Darpa-like’ challenge led fund and these are described as the “first wave of challenges”. This first set of announcements follows rapid and wide consultation with the sector, but that kind of activity is always going to result in people saying their area of research should be funded.For those with an encyclopedic knowledge of the Chancellor’s speeches (or the CaSE website) you’ll remember that disruptive technologies is something that the Chancellor has spoken of before and is perhaps an interest he carries over from his time as Defense Secretary.

The next wave is being consulted on as part of the Industrial Strategy green paper. (As an aside, CaSE will be responding to the wider consultation on the Industrial Strategy and is seeking member input – so please do let us know your views!) However, we hope that as this fund beds in, and as Research Councils and Innovate UK find their feet in the new world of UKRI, a transparent process is developed for making these kind of funding decisions in line with national research and innovation strategy.

The rest of the funding will go towards developing UK talent and attracting international talent:

  • £90m over 4 years for an additional 1000 PhD places
  • £160m over the same period for new fellowships for early and mid career researchers
  • £50m for fellowships to actively attract international talent
  • A further £50m for fellowships to attract international talent from emerging research nations (from existing international funds – likely meaning the DfID science budget top-up from the 2015 Spending Review aka the Global Challenge Research Fund)

The eagle-eyed will have spotted that doesn’t add up to £425m – but the announcement on talent funding is spread out over 4 years so only a portion of it will be 2017-18. We don’t yet know the profile of the spend over that period so some of the £425m may yet to be allocated but we’ll have to wait and see.

On the talent announcement itself, we don’t have much detail on how it will be allocated, but there is a recognised challenge for early and mid-career researchers where career structures aren’t known for being stable, so its great to see additional support. The announcement of additional PhD places comes alongside the introduction of new £25k loans for doctoral study from 2018-19.  I’m still not clear quite how the loans will function alongside funded PhD places, but we’re told they are intended to be a “contribution to the cost of doctoral study. The student can use the loan as they wish towards the cost of the qualification, whether on tuition, maintenance, or any other costs associated with study”. These are a reflection perhaps of the gap between stipend amounts and living costs, but also of the hyper-concentration of PhD funding from Research Councils in recent years through the DTP model, squeezing out many universities from being able to access funded PhD places. Whether the additional 1000 funded PhDs will be distributed along the same lines or more widely isn’t stated but it seems that to do so would, coupled with the availability of loans, further an uncomfortable, and arguably unnecessary, uneven playing field for institutions and individuals.

It was great to see funding announced for fellowships designed to attract international talent to the UK. As we’ve already said, the Government must ensure that its immigration policy works in harmony with its aims to attract international talent. If you’d like to delve a bit deeper into ways in which the government could better join up its policy and messaging on research and immigration our most recent work on immigration was in response to a Home Affairs Committee inquiry, or take a look at our (shorter) immigration factsheet. (Spoiler – public opinion and the economy agree on the value of skilled and student migration but are seemingly at odds with government policy and messaging.)

We also heard an update on the Government’s review of R&D tax credits that was kicked off at the Autumn Statement. The government’s review found the UK environment was internationally competitive but they will make administrative changes to increase the certainty and simplicity around claims and will take action to improve awareness of R&D tax credits among SMEs. The government also said they will continue to keep the competitiveness of the UK environment for R&D under review to ensure that the UK is profoundly pro-innovation.

The Chancellor also made a bold claim that any lingering doubt about the parity of esteem attached to technical education pursued through the Further Education route was ended for good on Wednesday by the introduction of T-levels. I hope T-levels have broad shoulders! But seriously, it is good to see Government taking seriously the need for a fully-functioning technical education system. This is covered in the Industrial Strategy green paper and there are lofty ambitions from Government. We hope these ambitions will be matched with sufficient funding and sustained policy direction.

Evidence, evidence, evidence

In April CaSE will be publishing some new work on the use of evidence in government, looking at the structures and processes in place to ensure government policy is informed by evidence and decision makers have appropriate access to scientific advice. In our response to the Budget, we said that “the Chancellor seems heartfelt in his intention to make education reforms work for everyone, but we must challenge Government to take a hard look at the substantial evidence on education models and explain their policy decisions. That is surely part of their duty to spend public money well. Science is a costly subject to teach at school in terms of equipment and space. Science tends to suffer in schools facing budget squeezes. So, I encourage the Government to fund science in existing schools well so that their education policies will complement and amplify their success in technical skills reform.”

Of course most of this hasn’t made the headlines on the budget, but with sustained effort and policy stability (not forgetting the need for some heavy duty joining up across departments) the measures announced this week could be very positive for UK science and engineering. But we need this and more – with Brexit looming we’ll need to run to stand still.