Central government research funding

Introduction

In March 2020, the chancellor announced a record increase in public investment for research and development (R&D) funding. This commitment will see taxpayer funding for R&D reach £22 billion per year by 2024-25, with an aim of public and private R&D spending equivalent to 2.4 per cent of GDP by 2027 (over £60 billion). Recent ONS figures showed that public funding for R&D reached £10.5 billion in 2019.

The March 2020 budget also made a commitment to allocate £800 million to establish a new UK research funding agency – the Advanced Research and Invention Agency (ARIA) – to support high risk, high reward science and technology. This new agency will be in addition to the nine existing research funding bodies.

The public sector is able to leverage scale and pursues priorities beyond a return on investment, which is often more central to private research funding. As such, justifications for an increase to the billions already spent can more easily be found, but government R&D funding should not be exempt from proper accountability. This is especially important with public sector borrowing at a record high.

This paper highlights how research funding is currently administered, including total spending, and how efficacy is measured in 2017-18, 2018-19 and 2019-20.

Key findings

• Government departments spent a total of £11,038,077,014 on research and development expenditure in 2019-20. This was an increase of £1,082,105,135 compared to 2017-18, when spending reached £9,955,971,879.
  
  
• The highest spending department was the Department for Business, Energy & Industrial Strategy (DBEIS) which spent a total of £8,046,000,000 on UK Research and Innovation (UKRI) and departmental research funding in 2019-20.
  
  
• UKRI’s highest spending council on research was Research England. The organisation spent a total of £2,383,394,000 on research segment spending in 2019-20. This amounts to 35 per cent of UKRI’s total research segment spending. Research segment spending is the portion of the business expenditure spent on research and innovation.
  
  
• Innovate UK funded the most expensive single project over the three years 2017-2019: the High Value Manufacturing Catapult Core Delivery Programme cost £642,853,000 and runs from April 2018 to March 2023. This project is a segment of funding for the Catapult Network – a network of R&D centres around the UK, comprising physical sites where UK businesses, scientists and engineers can work collaboratively on late-stage R&D projects and services.
  
  
• The Engineering and Physical Sciences Research Council was the research council with the most expensive single project. The project was titled The Faraday Institution, costing £100,911,513. The project runs from January 2018 to March 2023. The Faraday Institution is an independent institute for electrochemical energy storage research, skills development, market analysis, and early-stage commercialisation.
  
  
• UKRI’s National Productivity Investment Fund received a 296 per cent one-year increase in research and innovation spending – the largest increase of any UKRI research and innovation fund. It rose from £85,417,000 in 2018-19 to £338,487,000 in 2019-20. The National Productivity Investment Fund is distributed across all research councils.