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CaSE responds to the Summer Budget 2015

08 Jul 2015

CaSE has today responded to the Chancellor’s Summer Budget

The budget includes a number of new announcements, including measures on maintenance grants, apprenticeship levies and catapult centres, however further questions remain over the timetable of the Spending Review and the science budget in the Autumn.

Commenting on today’s budget, CaSE Acting Director Naomi Weir said:

“One phrase from the Chancellor’s Summer Budget sticks in my mind. He said in relation to investing in defence that “commitments don’t come cheap but the alternatives are far more costly”. Taking a long-term view, the same could be said for investment in science and innovation. A lack of investment now will mean we are less well equipped to tackle persistent and emerging national and global challenges including those facing the NHS, defence, the environment and the economy.

As expected we await the major announcements on the shape and scale of investment for science and engineering as part of the Government’s Spending Review taking place in the Autumn. We want to see investment in science increase in real terms as part of a long-term cross-government strategy. Even recognising this Government’s financial boundaries set out by the Chancellor today, increased investment is a reasonable ask because backing science isn’t backing a niche special interest area, but supporting a national asset that brings enormous public benefit across the economy and society.”

As well as setting out a full list of announcements from today’s budget below, CaSE has also written on what we’ve learnt from the budget and what we still don’t know.

Full details set out in the Summer Budget 2015:

Capital Investment

Supporting the UK’s research base to deliver continued excellence, as well as driving the commercialisation of findings, is a priority for this government. The government will deliver on the science capital commitment, investing £6.9 billion up to 2021 in infrastructure to investigate the great challenges of today, whether domestic, international or in space. (As set out in Allocations of science and research funding 2015-16, BIS, May 2014).

Science and Regional Growth

The government will invite universities, cities, LEPs and businesses to map strengths and identify potential areas of strategic focus for different regions through a series of science and innovation audits. The government invites universities to develop proposals for supporting local collaboration, building on successful university collaborative partnership models such as the N8, M6 and GW4, to be supported through funding streams such as the next £400 million round of the Research Partnership Investment Fund, and will set out further details at the Spending Review.

The government will invest £23 million in Next Stage Digital Economy Centres. This investment at 6 sites (UCL, Swansea, Newcastle, Nottingham, York and Bath), has leveraged £22 million of additional funding.

The government is making good progress to deliver Health North, which will go live in autumn 2015. It is creating ‘Connected Health Cities’ across the North, assembling experts and technology to provide better care for patients promoting innovation through analysis of data on the effectiveness of different drugs, treatments and health pathways.

London and Growth

As one of the 6 Next Generation Digital Economy Centres (see above), the government will invest £4 million in a UK Regions Digital Research Facility at UCL, which has leveraged £5.6 million in additional funding.

The government welcomes Professor Dame Ann Dowling’s review into how the UK’s research base can further collaborate with industry. The government will respond in full by the Spending Review, including on how to deliver the central recommendation of making it easier for business to find support from universities and the government’s broad range of financial support. The government can confirm significant industrial support for specific science investments, including £128 million in the UK Collaboration for Research in Infrastructure and Cities (UKCRIC), with its hub to be established in London.

R&D Tax Credits

The government will correct an anomaly in the R&D tax credits legislation so that universities and charities are unable to claim the R&D Expenditure Credit (RDEC), in line with the original intention of the policy. This will apply to expenditure from 1 August 2015. (As part of the Summer Finance Bill 2015)

Regius Professorships

The government will introduce new Regius Professorships in order to recognise scientific excellence in universities across the UK. The competition will be launched later this year, with a view to making awards to celebrate the Queen’s 90th birthday.

Catapult Centres

The government has also created an extensive network of Catapult centres bringing together businesses, scientists and engineers to drive the commercialisation of technology. Innovate UK, working with Research Councils, has now identified further areas where a Catapult might be the right way to ensure the UK is at the forefront of commercialising technologies which offer global opportunities, and will come forward with proposals shortly.

Creative Industries

Innovation is key to the UK’s high growth creative industries, where the UK leads the world in areas from cutting-edge visual effects technology to architectural experimental techniques now used globally. Creative industries are worth £76.9 billion of GVA and employ 1.8 million people. The government has introduced new tax reliefs to support the production of high-end television, animation, video games, theatre and children’s television, and expanded the successful film tax relief. As announced at March Budget 2015, the government will introduce a new tax relief for orchestras at a rate of 25% on qualifying expenditure from 1 April 2016.

Education and Skills

Apprenticeships Levy

The government has committed to increase the number of apprenticeships in England to 3 million starts this Parliament. The government will introduce a levy on large UK employers to fund the new post-16 apprenticeships. In England, employers will be able to access this funding for apprenticeship training. Details including rates and implementation will be set out in the Spending Review.

National Colleges

To provide specialist higher-level training in sectors that are critical to economic growth, the government has committed to the establishment of a network of National Colleges.

Student Maintenance Loans

Maintenance loan support will rise for students from low and middle income backgrounds up to £8,200 a year studying away from home, outside London. From the 2016-17 academic year, maintenance grants will be replaced with maintenance loans for new students from England, paid back only when their earnings exceed £21,000 a year.

Tuition Fees

The government will consult on freezing the loan repayment threshold for the next 5 years and review the discount rate applied to student loans and other transactions to bring it more into line with the government’s long-term cost of borrowing.

The government will allow institutions offering high teaching quality to increase their tuition fees in line with inflation from 2017-18, and consult on the mechanisms to do this.