CaSE responds to Budget 2016

CaSE warns that announcements on maths education, big data and part-time science degrees are offset by concerns that science will suffer in academies.

Commenting on today’s budget, CaSE Director, Dr Sarah Main, said:

“The Chancellor has announced a number of science investments across the country, as well as welcome support for flexible and part-time study of science and engineering. It is great to see scientific evidence being used in the development of policy, such as the new levy on sugary soft drinks. However, the move to make all schools academies is worrying and seems to be based on variable evidence at best. Evidence seems to have been thin on the ground in deciding science capital investments over the last five years, according to the NAO.

CaSE calls on the Government to ensure that all science capital investments are now strategically planned and fully funded, so that public money stands the best chance of improving lives through science. Further, the Government must ensure that the proposed anti-lobbying clause in Government grants does not apply to the use of the findings of scientific research in the development of Government policies.”

The Chancellor set out OBR concerns about low productivity growth globally and in the UK. It is shown that science and engineering are one of the few government investments that actually drive productivity upwards, delivering a rise in private sector productivity by 20p per year in perpetuity for every £1 government spends on R&D.

 Commenting on science capital investment, CaSE Director, Dr Sarah Main said:

“The ‘shiny new project’ syndrome of the last five years had its place as an emergency measure to claw back some of the 40% cut to science capital made in 2010. Science got more money, but investments were often determined by political opportunism, not scientific merit. Worse, the snowballing running costs are taken from money intended to fund research ideas, so there is less money to go round for research, to the tune of £2bn – 8% of the resource budget. It is therefore vital that the science capital facilities announced today, such as the £50 million for the Quadram Institute in East Anglia, are strategically planned and financed by BIS, including the running costs to keep them open.”

The Chancellor says that he wants to “lead the world with long-term solutions to long-term problems”. It is time for that principle to be applied by government to its science and engineering investments. The National Audit Office has been crystal clear that government’s strategy for science capital investments has been woefully inadequate. You can read CaSE’s response to the report here.

Anyas Morse, the head of the NAO, said the Department for Business, Innovation and Skills (BIS) “has not used good quality information to decide which science capital projects to invest in to optimise scientific and economic benefits” and that this had undermined the department’s “ability to prioritise and deliver value for money”.

Commenting on education, CaSE Director Sarah Main said:

“What seems to be an ideological policy on Academies could undermine the good work that has been done encouraging more young people to study science subjects. We could see a situation in five years time where there are fewer qualified teachers with science expertise teaching science subjects, and fewer schools offering the option to teach biology, chemistry and physics to the age of 16. Worse still, the Chancellor’s initiative to extend study of maths to 18 could be completely ignored as the Academies are not required to follow the National Curriculum.”

 The Chancellor proudly announced his was a budget “for the next generation”. His ambition to convert all primary and secondary schools to Academies raises serious concerns for science education. The evidence of the benefits of academies is variable at best, and there is certainly no overwhelming case that they are beneficial. Other studies can be found here and here.

• Academies don’t have to follow the National Curriculum so there is no requirement on them to teach biology, chemistry and physics up to the age of 16.
• Academies are not required to have qualified science teachers, of which there is a considerable shortage. This could undermine the quality of science teaching by encouraging more teaching of sciences by people who have no qualification in those subjects.
• National initiatives such as teaching maths to 18 (proposed in Sir Adrian Smith’s review announced by the Chancellor today) could be undermined by the absence of any requirement to teach the National Curriculum.

You can read a full Budget 2016 summary below

“As set out in Spending Review 2015, the defence and overseas aid commitments, the real-terms protections for the NHS in England, schools funding in England, the police and science will be maintained.”

Within services, output has been strong across different high-value added sectors. Scientific research and development has grown by 24.4% and architecture and engineering activities have grown by 42.5% since 2010.

Research and Innovation

• The government will allocate at least £50 million for innovation in energy storage, demand-side response and other smart technologies over the next 5 years
• National Mesothelioma Centre £5 million – to establish a centre of research in the fight against mesothelioma, which is directly affecting Service Veterans (paid for from banking fines)
• Ovarian Cancer Action £300,000 – to fund research into a pioneering ovarian cancer prevention strategy (paid for by tampon tax)

Regional Devolution

Northern Powerhouse

• The government will invest £15 million in the National Institute for Smart Data Innovation in Newcastle, subject to approved business case. This new facility will bring together industry, the public sector and universities to create the skills, ideas and resources needed to exploit the opportunities offered by Smart Data.
• The government is launching the first stage of a competition to identify a small modular nuclear reactor (SMR) to be built in the UK, and will publish an SMR delivery roadmap later this year. It will also allocate at least £30m of funding for R&D in advanced nuclear manufacturing. This will create opportunities for the North’s centres of excellence in nuclear research, such as the Nuclear Advanced Manufacturing Research Centre and the Sir Henry Royce Institute.
• Greater Manchester and East Cheshire, Sheffield City Region and Lancashire LEP will each benefit from a science and innovation audit. These will help each of these regions to map their research and innovation strengths and to identify areas of potential global competitive advantage.

Midlands

• The Midlands will benefit from a science and innovation audit, to identify the region’s strengths in research and innovation.
• To support local businesses and build on the area’s strengths in space science and research, a new Enterprise Zone will be created across Loughborough and Leicester, subject to business case approval.
• The government will invest £14 million in STEAMhouse, subject to business case. This is a creative innovation centre in Digbeth, Birmingham, bringing together arts and culture with science, technology, engineering and maths to drive innovation.
• The government is providing a grant of up to £16 million to Dyson to support research and development for battery technology at their site in Malmesbury.
• Aerospace R&D funding – The government is awarding over £16 million, matched by industry, to companies and research organisations in the Midlands to support aerospace R&D. This includes £7 million to help Rolls-Royce develop new high-temperature alloys in Derby.

East Anglia

• The Government will contribute £50 million to the Quadram Institute. The Institute will develop solutions to a range of global challenges in human health, food and disease.

South West

• South West England will benefit from a science and innovation audit to map the area’s research strengths and identify areas of potential global competitive advantage.
• The government will distribute £14.5 million in grants to extend ultrafast broadband coverage in the South West – £4.5 million more than the £10 million allocated at the Spending Review. As part of its assessment of how the UK can become a world leader in 5G, the National Infrastructure Commission will use the South West as a case study.

Wales

• South East Wales will benefit from a science and innovation audit to map the area’s research strengths and identify areas of potential global competitive advantage.
• Compound Semiconductor Catapult – The government will invest £50 million up to 2020-21 to establish a new Compound Semiconductor Applications Catapult in Wales.

Scotland

• Edinburgh and the Lothians will also benefit from a science and innovation audit, to map the area’s research strengths in data-driven innovation and identify areas of potential global competitive advantage.

Future audits in other areas will be announced later this year.

Infrastructure and Digital

• Deliver a 5G strategy in 2017, based on an assessment by the National Infrastructure Commission of how the UK can become a world leader in 5G. This review will include a case study of the south-west of England
• Establish a panel of leading experts, chaired by Kathryn Parsons, to shape the £20 million Institute for Coding competition
• Proposals for unlocking growth, housing and jobs in the Cambridge-Milton Keynes-Oxford corridor – the commission will report on the strategic infrastructure priorities needed to generate further growth and maximise the potential of this corridor.
• To enable the Office for National Statistics to develop world-leading analytical and digital capabilities in economic measurement, the government will invest over £10m in a new hub for data science and a centre for excellence in economic measurement in line with Professor Sir Charles Bean’s recommendations. The new hub for data science will maximise the public value of existing and new data sets – so called ‘big data’ from public and private sources – using cutting-edge techniques to allow the Office for National Statistics to produce more innovative, accurate and timely statistics.
• Electromagnetic spectrum is a valuable and scarce resource. Budget 2016 announces a new government commitment that 750MHz of valuable public sector spectrum in bands under 10GHz will be made available by 2022, of which 500MHz will be made available by 2020. This builds on government’s previous 2010 commitment, and will deliver wider economic benefits by generating capital receipts and by supporting innovation in digital communications services and the development of new technologies.

Tax Changes

• Corporation tax: R&D tax credits – The government will end Vaccine Research Relief when its State aid approval runs out on 31 March 2017. (Finance Bill 2016)
• Corporation tax: R&D tax credits – The government will amend legislation for the SME R&D tax credit scheme to ensure that it continues to work as intended after the previous large company scheme ends on 31 March 2016. (Finance Bill 2016)
• Patent Box – Compliance with new international rules – The government will modify the operation of the Patent Box to comply with a new set of international rules created 106 Budget 2016 by the OECD, making the lower tax rate dependant on, and proportional to, the extent of research and development expenditure incurred by the company claiming the relief. This will come into effect on 1 July 2016. (Finance Bill 2016)
• VAT refunds for shared services – As announced at Autumn Statement 2014, the government will legislate to enable named non-departmental and similar bodies to claim a refund of the VAT they incur as part of a shared service arrangement used to support their non business activities, to encourage public bodies to share back-office services, where this results in efficiencies of scale.

Education and Skills

5-19 education

• Driving forward the radical devolution of power to school leaders, expecting all schools to become academies by 2020, or to have an academy order in place to convert by 2022.
• To ask Professor Sir Adrian Smith to review the case for how to improve the study of maths from 16 to 18, to ensure the future workforce is skilled and competitive, including looking at the case and feasibility for more or all students continuing to study maths to 18, in the longer-term. The review will report during 2016

FE/HE Education

This Budget announces that, for the first time, direct government support will be available to adults wishing to study at any qualification level, from basic skills right the way up to PhD. During this parliament, loans will be introduced for level 3 to level 6 training in further education, part-time second degrees in STEM, and postgraduate taught master’s courses.

• From 2018-19, loans of up to £25,000 will be available to any English student without a Research Council living allowance who can win a place for doctoral study at a UK university. They will be added to any outstanding master’s loan and repaid on the same terms, but with the intention of setting a repayment rate of 9% for doctoral loans and a combined 9% repayment rate if people take out a doctoral and master’s loan. The government will launch a technical consultation on the detail.
• Those who take out only a master’s loan will still repay at 6%, as announced at Autumn Statement 2015. The government will also extend the eligibility of master’s loans to include three-year part-time courses with no full-time equivalent.
• Lifetime learning – The government will review gaps in support for lifetime learning, including for flexible and part-time study, and bring together information about the wages of graduates of different courses and financial support for further and higher education to ensure people can make informed decisions.
• The government will continue to free up student number controls for alternative providers predominantly offering degree level courses for the 2017-18 academic year. The best providers can also grow their student places further through the performance pool.

Apprenticeships

• As announced at Autumn Statement and Spending Review 2015, the government will introduce the apprenticeship levy in April 2017. It will be set at a rate of 0.5% of an employer’s paybill and will be paid through PAYE. Each employer will receive an allowance of £15,000 to offset against their levy payment. This means the levy will only be paid on any paybill in excess of £3 million. (Finance Bill 2016) The government will apply a 10% top-up to monthly funds entering apprenticeship levy payers’ digital accounts in England from April 2017.

Museums

• The government’s creative sector tax reliefs have been highly successful at supporting growth, investment and innovation in industries that employ 1.8 million people. To encourage museums and galleries to develop creative new exhibitions and display their collections across the country, the government will introduce a new tax relief from 1 April 2017. This will be available for the costs of developing temporary or touring exhibitions and will follow a consultation on its design over summer 2016.
• The government will also broaden the eligibility criteria for the VAT refund scheme for museums and galleries, with new guidance to allow a wider range of free museums to access the support.