Government backs UK R&D with record £20.4 billion investment at Autumn Budget

At yesterday's Budget (Wednesday 30 October) the Chancellor has announced the highest ever level of government investment of £20.4 billion in research and development for next year, reinforcing the government's commitment to back the UK's R&D ecosystem to drive economic growth and achieve its five national missions.

The Budget will fully fund the UK's association with Horizon Europe, providing scientists and innovators access to the world's largest collaborative funding scheme, with over £80 billion available for cutting-edge projects under the EU scheme. DSIT's own R&D budget has increased to £13.9 billion, and core research funding has also been increased to a record £6.1 billion, bolstering the UK's leading research base.  

A significant part of this Budget is dedicated to the UK's life sciences sector, a cornerstone for positioning the UK as a leader in science and innovation, through a £520 million commitment to the Life Sciences Innovative Manufacturing Fund.

Additionally, the Chancellor announced funding for several other programmes to be led by DSIT. Together, these investments underscore the importance of science and technology in driving economic growth essential to raising living standards and funding public services, positioning the UK at the forefront of global innovation and progress.

Science and Technology Secretary Peter Kyle said:

The Autumn Budget is clear recognition of this government's view that driving economic growth and improving people's lives cannot be done without investing in science and technology.

That's why we are taking R&D investment to record levels and matching our words with action by empowering researchers and businesses to solve real-world problems, grow emerging new industries and create high-quality jobs.

DSIT's Autumn Budget announcements include:

Life Sciences Innovative Manufacturing Fund

The Chancellor unveiled the Life Sciences Innovative Manufacturing Fund (LSIMF), starting with £70 million in grants, as part of a long-term commitment of up to £520 million to secure major life sciences manufacturing investments across the UK.

This fund strengthens the country's ability to develop and produce life-saving treatments, ensuring quicker access to vital medicines and bolstering NHS stability.

The LSIMF is expected to unlock up to £1.8 billion in private investment, supporting thousands of high-skilled jobs and driving economic growth nationwide, while preparing the UK for future health emergencies and enhancing NHS resilience.

R&D Missions Programme

The new R&D Missions Programme (RDMP), which we are initially investing £25 million for, will address specific challenges our National Missions face, such as advancing healthcare and transitioning to cleaner energy. Partnering with private and third-sector organisations, this initiative aims to turn scientific advancements into real-world benefits, improving public services and quality of life across the UK.

Spin-Out Review Proof of Concept Fund

To support the UK's Growth Mission, the government is investing £40 million over five years in a Proof of Concept Fund, to turn pioneering university research into successful companies. This initiative aids researchers in bringing their innovative ideas to the market, creating high-potential start-ups that drive job creation and economic growth.

Successful spinouts like Pragmatic Semiconductor, which raised £182 million to help open its first manufacturing facility and create 500 high-skilled jobs, or Oxford Nanopore with over 1,000 employees, highlight the potential impact of research-led innovation.

Innovation Accelerators and Made Smarter Innovation programmes

The government has extended for a further year, two key programmes that promote innovation across UK regions and manufacturing. The Innovation Accelerator programme will continue for another year, focusing on high-potential clusters in the Glasgow City Region, Greater Manchester, and the West Midlands.

Successes include Chemify, a Glasgow-based spin-out developing new methods for chemical manufacturing, which has since attracted £28 million in private funding, and the Biochar Cleantech Accelerator in the West Midlands, which is creating new products to support green growth. These projects demonstrate the benefits of R&D across the country and its support for regional economic growth.

Meanwhile, the Made Smarter Innovation programme will continue to be funded with up to £37 million, and empowers manufacturers to adopt digital technologies, enhancing productivity and sustainability by connecting digital solution providers with industry. 

Project Gigabit

The government will invest at least £500 million over the next year in Project Gigabit and the Shared Rural Network, accelerating the rollout of digital infrastructure to underserved regions in the UK. The funding aims to deliver full gigabit coverage by 2030, ensuring fast, reliable internet access for communities and businesses, enabling equal access to digital opportunities nationwide.

Shared Services Strategy

DSIT will invest up to £80 million to enhance corporate functions across nine government departments. It aims to transform shared services and streamline systems, making them more efficient, modern, and cost-effective, delivering better value for taxpayers.

Review of barriers to the adoption transformative technologies

The government has commissioned a review led by the government Chief Scientific Adviser, Professor Dame Angela McLean, and National Technology Adviser, Dr Dave Smith, to identify barriers to adopting transformative technologies. This review will focus on the high-growth sectors in the government's Industrial Strategy, aiming to enhance and productivity and drive growth to boost the UK economy.

In response to today's Budget, Sir Adrian Smith, President of the Royal Society, said:  

It is very good news for the science sector and for the UK that the Chancellor has recognised research and innovation as a ‘crucial national asset' for delivering long-term economic growth. 

Protecting the science budget, despite the challenges facing public finances, and investing £20.4 billion in 2025/2026, will create conditions that generate new knowledge, boost productivity and unlock opportunities for every corner of the UK. 

There is clear recognition that delivery of net zero and support for innovation in growth sectors, like AI, will be key to capturing these economic opportunities. 

The Chancellor rightly recognises that investing in education and skills today lays the foundation for the UK's future prosperity and international competitiveness. Recruitment of specialist science teachers and reform of mathematical education as part of the upcoming curriculum review will be key to delivering this pledge.

Professor Andrew Morris PMedSci, President of the Academy of Medical Sciences, said:

With this Budget, we are pleased that the government has recognised the pivotal role of research and innovation in powering economic growth and prosperity. The Academy will continue to support this by working with our partners to deliver the best possible outcomes for research and for the health of people everywhere. 

It is encouraging that the Chancellor is providing much-needed stability for our research community by protecting core R&D budgets and we particularly welcome the real-terms increase in National Institute for Health Research investments, which are an important step towards delivering health research and innovations for patients across the UK.  

The government's commitment to fully cover the cost of the Horizon Europe programme is essential for advancing medical science and addressing global health challenges across borders and we encourage the UK research community to actively pursue these funding opportunities.

By recognising innovation as one of the seven pillars of its Growth Mission, alongside the commitment to establish 10-year budgets in the Spring Statement and a roadmap to rebuild the NHS, the government is signalling an important shift to longer-term thinking. Stable, sustained funding is crucial for fostering productive partnerships between academia, industry and the NHS, and enabling the kind of transformative research that improves the lives of people across the UK.

Dr Tim Bradshaw, Chief Executive of the Russell Group said:

In a challenging fiscal landscape, we are pleased to see the government has protected the R&D budget, including core research funding, and recognised the value of research and innovation as a key pillar of the growth mission. This will allow universities to continue to deliver on growth and productivity, contributing to job creation, regional investment and advances that improve public services.

We particularly welcome the introduction of a multi-year R&D missions programme which highlights the role of R&D in achieving the government's top priorities, including the Industrial Strategy. We are also very encouraged to hear that full funding has been made available for our association to Horizon Europe. In both of these areas we will be working with our partners across industry and academia to maximise the benefits for the UK.

Continuing to grow R&D investment for the UK, including in fundamental research, will be crucial to creating new industries, leveraging private investment and delivering high-value jobs across the country.