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CaSE responds to the 2016 Autumn Statement

23 Nov 2016

CaSE reacts to the exciting possibilities from substantial new investment in research, announced by Phillip Hammond today.

Following the Prime Minister’s speech on Monday 21st November, the Chancellor has today announced significant new investment in R&D, worth £2bn per year from 2020. In addition, the Chancellor announced three reviews of financial incentives for investment in R&D: the Small Business Research Initiative, R&D tax credits and ‘patient capital’ for long-term investment into innovative firms.

To coincide with the Autumn Statement, CaSE has also launched its R&D investment factsheet, giving the latest R&D facts and figures at a glance.

Commenting on the Autumn Statement, CaSE Director, Dr Sarah Main, said:

“This is truly exciting. The potential of what can be achieved with this investment is enormous. New research, new inventions, new businesses offering high quality jobs, and real progress in tackling major challenges and improving quality of life right across the UK.

It is a real boost to see UK strength in science being championed by the Prime Minister and backed with what is the most significant investment in R&D I can remember. The funding principles that underpin our scientific strength are being upheld, with researchers leading the management of funds under their new body, UK Research and Innovation (UKRI). To stay cutting edge, it will be vital that balance is maintained between discovery-led and challenge-led programmes, but I am encouraged that these decisions will rest with UKRI.”

It is vital that this money is well-used and we can show Government that its investment paid off. I think the reviews of tax incentives are welcome as they have the potential to help get more out of the current system by making these tools work better. If the Small Business Research Initiative were operating optimally, it could transform the ability of innovative start-ups to grow into stable businesses.”

In numbers:

  • Government science budget stands at £5.9bn today, rising to £6.3bn in 2020. The additional £2bn represents a third increase on the science budget and an increase in the total spend on R&D across all Government departments of 23% (from £8.7bn to £10.7bn).
  • CaSE has called for Government to commit to a long-term target for public and private R&D spending to reach 3% of GDP by 2025. Assuming this additional public investment draws in private investment in the predicted ratio of 2:1, GERD would rise from its current level of 1.67% of GDP to reach 2.0% in 2020.

CaSE Director Dr Sarah Main said,

“There is some way to go to reach the ambitious target of R&D spending reaching 3% of GDP, but this is a huge step in the right direction.”

Note: A fuller list of announcements in the Autumn Statement relating to research, infrastructure and skills can be found below:

Research and Development

A new National Productivity Investment Fund will add £23 billion in high-value investment from 2017-18 to 2021-22. The government will target this spending at areas that are critical for productivity: research and development (R&D); housing; and economic infrastructure. The NPIF will take total spending in these areas to £170 billion over the period from 2017-18 to 2021-22, reaching 1.7% of GDP in 2021-22.

The National Productivity Investment Fund (NPIF) will provide an additional £4.7 billion by 2020-21 in R&D funding; an extra £2billion a year by the end of this Parliament. Through the NPIF the government will fund:

  • Industrial Strategy Challenge Fund – a new cross-disciplinary fund to support collaborations between business and the UK’s science base, which will set identifiable challenges for UK researchers to tackle. The fund will be managed by Innovate UK and research councils. Modelled on the USA’s Defense Advanced Research Projects Agency programme the challenge fund will cover a broad range of technologies, to be decided by an evidence-based process
  • Innovation, applied science and research – additional funding will be allocated to increase research capacity and business innovation, to further support the UK’s world leading research base and to unlock its full potential. Once established, UKRI will award funding on the basis of national excellence and will include a substantial increase in grant funding through Innovate UK

R&D tax environment – To ensure the UK tax system is strongly pro-innovation, the government will review the tax environment for R&D to look at ways to build on the introduction of the ‘above the line’ R&D tax credit to make the UK an even more competitive place to do R&D.

Tech transfer and R&D facilities – In October the government committed an additional £100 million until 2020-21 to extend and enhance the Biomedical Catalyst. These funds will be allocated to Innovate UK. Funding of £100 million will also be provided until 2020-21 to incentivise university collaboration in tech transfer and in working with business, with the devolved administrations receiving funding through the Barnett formula in the usual way.

Science and Innovation Audits – The government has selected 8 areas for the second wave of Science and Innovation Audits: Bioeconomy of the North of England; East of England; Innovation South; Glasgow Economic Leadership; Leeds City Region; Liverpool City Region; Offshore Energy Consortium; and Oxfordshire Transformative Technologies. The government is also announcing a further opportunity to apply to participate in a third wave of audits.


The government welcomes the National Infrastructure Commission (NIC)’s interim report into the Cambridge-Milton Keynes-Oxford growth corridor, accepts the recommendation for an Oxford-Cambridge expressway, and will provide £27 million in development funding.

The government will award £1.8 billion to Local Enterprise Partnerships (LEPs) across England through a third round of Growth Deals. £556 million of this will go to the North of England, £392 million to LEPs in the midlands, £151 million to the east of England, £492 million to London and the south east, and £191 million to the south west. Awards to individual LEPs will be announced in the coming months. This funding of local infrastructure will improve transport connections, unlock house building, boost skills, and enhance digital connectivity.

Education and Skills

Grammar schools capital – The government will provide £50 million of new capital funding to support the expansion of existing grammar schools in each year from 2017-18.

Expanding medical training places – The Autumn Statement includes the additional student loan outlay expected following the announcement made by the Secretary of State for Health on 4 October 2016 that the government will fund up to 1,500 additional medical training places each year, from the 2018-19 academic year onwards.