£39.8 billion R&D budget for 2022-2025 will support the best ideas to become the best commercial innovations, and secure the UK’s position as a science superpower, says Business Secretary, Kwasi Kwarteng.
The government has announced that the largest ever research and development budget has been allocated across the Department for Business, Energy and Industrial Strategy’s partner organisations.
A total of £39.8 billion is being provided to help deliver the government’s Innovation Strategy for 2022-2025. These investments support the government’s commitment to ensure total R&D spending reaches 2.4% of GDP by 2027 and to strengthen the UK’s world-leading R&D system, cementing its position as a science superpower and innovation nation. They will contribute to the new cross-government approach on R&D, helping to deliver strategic advantage in science and technology, work alongside industry to leverage private investment, and deliver prosperity, security and resilience.
In turn, the investment will support priorities that are key to the UK’s prosperity, from tackling climate change to levelling up opportunities across the country, enabling investment in new technologies from clean tech to AI, where the UK has a strong competitive advantage globally and industrial strength at home.
Business Secretary Kwasi Kwarteng said, “For too long, R&D spending in the UK has trailed behind our neighbours – and in this country, science and business have existed in separate spheres. I am adamant that this must change. Now is the moment to unleash British science, technology and innovation to rise to the challenges of the 21st century.”
A significant proportion of the R&D budget has been allocated to UK Research & Innovation (UKRI), which will receive over £25 billion across the next 3 years, reaching over £8.8 billion in 2024-2025, its highest ever level and over £1 billion more than in 2021-2022. This will include an increase in funding for core Innovate UK programmes by 66% to £1.1 billion in 2024-2025, helping connect companies to the capital, skills and connections they need to innovate and grow.
It also includes full funding for EU programmes, for which £6.8 billion has been allocated to support the UK’s association with Horizon Europe, Euratom Research & Training, and Fusion for Energy. If the UK is unable to associate to Horizon Europe, the funding allocated to Horizon association will go to UK government R&D programmes, including those to support new international partnerships.
These allocations follow the government’s recent commitments made in the Levelling Up White Paper to increase public investment in R&D outside the greater South East by at least a third over the Spending Review period, and for these regions to receive at least 55% of BEIS domestic R&D budget by 2024-2025.
The government’s R&D investment plans, combined with the R&D Tax Credits programme, aims to give businesses the confidence to invest following the pandemic, with research finding that every £1 of public expenditure in R&D eventually leverages an average of £2 of additional private investment.
Further details of the partner organisation allocations of the R&D budget can be accessed here.