Houses of Parliament

The dust has settled. The showbiz of budget day has passed and the contents of ‘that red box’ have been revealed. Here I take a look at what the spending commitments mean for science, research and innovation.

The commitments:
The Chancellor announced support for specific areas to help prepare the UK for the ‘fourth industrial revolution’ including headline-catching driverless cars and responding to our calls for greater investment in computing education. He also committed to significant further public investment for R&D generally. There were also some less headline-grabbing, but important, details in the small print.

Investment in R&D
Trailed on Monday, the Chancellor announced an additional £2.3bn for research and innovation for the year 2021-22. This builds on a 2016 commitment to invest £4.7bn in research and innovation over a four year period, starting this year and culminating in an extra £2bn in 2020-21. Monday’s announcement continues this upward trajectory for another year.

Why is this important?
The Royal Society (and many others including CaSE, UUK and CBI) have called for the government to signal the UK’s ambition to compete internationally by setting a target of 3% of GDP for UK R&D investment. The government has committed to deliver 2.4% within ten years, with a longer-term goal of 3%. Last week the Commons Science and Technology committee called on them to outline a roadmap to achieve this.

This announcement demonstrates the government’s ongoing commitment to deliver the 2.4% target by 2027. Currently, public investment represents about 0.46% of GDP. Assuming that GDP and inflation were to remain flat (to make the calculation easy) this increase would take public investment in R&D to 0.59% of GDP in 2021-22. A significant step in the right direction but not quite reaching the OECD average for public investment of 0.65%. Read our explainer for further details.


It’s worth noting that the Government anticipates that public investment in R&D will hit £12.5bn in 2021-22. This is based on assumptions about rises in line with inflation.

Of course, delivering the 2.4% target does not take just public investment. For this, the UK will need to create a vibrant environment that fosters research and innovation throughout UK public services, universities, charities and businesses and attracts global investment – next week’s Industrial Strategy will be key to delivering this.
R&D Tax credits and Patient Capital
The Budget also contains measures to encourage additional investment in R&D from the private sector. We saw an increase in the R&D tax credit rate from 11% to 12% and the publication of the Patient Capital Review alongside the Budget, which made recommendations for how we can increase the amount of patient capital invested into innovative firms. Read the Society’s submission to the review.

Artificial Intelligence
The government have also announced an additional £75m to be directed at artificial intelligence (AI). Their ambition is to secure the UK’s position as a world leader in AI technology – up to £20m of this will be used to support businesses using AI to develop pioneering services. The other £45m will be used to build capability and knowledge in this area, by increasing the number of new AI PhD students to 200 per year. Our Machine Learning Report published earlier this year called for the creation of additional PhD places to help address significant skills shortages.

In addition, the Government committed £9m to create a new ‘Centre for Data Ethics and Innovation’. The Royal Society and British Academy called for the creation of a body like this in our report recommending how we can govern and use data in the 21st century so that everyone can benefit from new big data technologies with public confidence – we look forward to working with Government to shape it.

Computing education
This month, the Society called for the government to invest tenfold in computing in schools to prepare students for digital world and in yesterday’s Budget the Chancellor confirmed £100m to provide training for 8,000 computing teachers. This will ensure that the next generation are equipped with the necessary skills for the increasingly digital world.

Immigration
Of course, having a highly-trained domestic skills base is essential, but the ability to attract and retain talent from across the world will be vital to preserving the UKs world leading status in research and innovation. The small print of the Treasury’s red book includes changes to immigration rules to speed up the process for world-leading scientists and researchers endorsed under the Tier 1 (Exceptional Talent) route to apply for settlement (plus expanding the Tier 1 route itself), as well as speeding up the process for highly-skilled students to apply to work in the UK after finishing their degrees. We will also see a reduction in red tape in hiring international researchers and members of established research teams.

What next?
So we’ve had a chance to review the numbers, but we can expect more detail about how much of this investment will be spent in the much anticipated Industrial Strategy White Paper, expected on Monday. Our President wrote to the Times yesterday highlighting the need for an industrial strategy that invests in our strengths, but also cautioning that we should think long-term and ambitiously “as we rush to put money into the applications of science we must also make sure that we continue to invest in the kind of basic and fundamental science that will lead to completely new knowledge. That new knowledge will become the foundation for transformative new industries and prosperity for generations to come.”

For further details about the UK’s R&D landscape read the National Academies joint publication, Investing in UK R&D

Read Royal Society President, Venki Ramakrishnan’s statement on the budget.