The UK government will “protect the entire research budget” and go ahead with plans to increase it to £20 billion by 2024, while refocusing investment zones so they are centred on universities in “left-behind areas” building growth sectors, the chancellor has announced.
Jeremy Hunt delivered better-than-expected news for universities when he presented the autumn statement on 17 November.
However, he did also announce that growth in departmental budgets would slow to 1 per cent a year for three years once the current spending review period is over – meaning that although the government announced increases for the core schools budget, the rest of the Department for Education’s spending, including on higher education, will be under pressure.
The chancellor acknowledged speculation that the government would be cutting research spending, but said that would be a “profound mistake”. Noting that recent Office for National Statistics figures show that the UK is meeting the government’s target to invest 2.4 per cent of gross domestic product in research, he said he wanted to “go further”.
The government would “protect our entire research budget” and “increase public funding for R&D to £20 billion by 2024”, helping to ensure that the UK is a “science superpower”, said Mr Hunt. There had been fears that the government would backtrack on that commitment as it pursued spending cuts.
In a further boost to universities, Mr Hunt said the investment zones programme – which Liz Truss, the previous prime minister, had intended to focus on tax cuts and deregulation – would undergo a “change in approach”.
Investment zones would now be focused on “leveraging our research strengths by being centred on universities in left-behind areas to help build clusters for our new growth industries”, Mr Hunt said.
The Treasury’s accompanying document says: “The government will refocus the investment zones programme. The government will use this programme to catalyse a limited number of the highest potential knowledge-intensive growth clusters, including through leveraging local research strengths. The Department for Levelling Up, Housing and Communities will work closely with mayors, devolved administrations, local authorities, businesses and other local partners to consider how best to identify and support these clusters, driving growth while maintaining high environmental standards, with the first clusters to be announced in the coming months.”
It adds of the Truss government plans: “The existing expressions of interest will therefore not be taken forward.”
Mr Hunt did not address the subject of the UK’s plan to associate to the European Union’s Horizon Europe research programme – stalled in wider political wrangles with Brussels – for which the government has previously allocated funding.
Greg Clark, the House of Commons Science and Technology Committee chair and former business secretary, said: “It is very welcome that the chancellor has reaffirmed the government’s commitment to invest £20 billion a year in research and development by 2024-25.
“I am pleased the government continues to recognise that R&D is the long-term engine of growth and productivity, and crucial to the UK’s future prosperity. The decision is a vote of confidence in UK science and innovation and should bolster our world-class institutions.”
Daniel Rathbone, assistant director at the Campaign for Science and Engineering, said the research funding announcement “will help R&D power the growth and opportunity that will improve lives and livelihoods of people across the UK”.
But he warned that changes to R&D tax credits for small and medium-sized enterprises also announced by Mr Hunt “could make the system less generous for SMEs, and this could work against the chancellor’s ambitions for the sector”.
The autumn statement also referred to the lifelong loan entitlement (LLE), seemingly restating the government’s commitment to allowing people to borrow up to four years’ worth of student loans over the course of their working lives, originally announced by Boris Johnson. And Mr Hunt announced that Sir Michael Barber, the former Office for Students chair, had been appointed as adviser to the government on skills reform.
“To help maximise the impact” of skills policy plans including the LLE, Sir Michael “has been appointed to advise the chancellor of the exchequer and the secretary of state for education on the implementation of current reforms”, the Treasury document says.
Rachel Hewitt, chief executive of the MillionPlus group of modern universities, welcomed the announcements on research funding and levelling-up, but said: “The cost-of-living crisis continues to cut into university and personal finances, and I remain deeply concerned that the further measures that MillionPlus identified to insulate students from rising prices have not been adopted and students therefore remain excluded from cost-of-living payments for individuals.
“Jeremy Hunt is correct in his assessment that investment in education is investment in growth, and it would be tragic if the cost of living is the barrier which stops someone taking the opportunity to study and boost their skills.”
The Treasury document also says the government “will review retained EU law to identify changes that can be made over the next year with the greatest potential to unlock growth in key growth industries – digital technology, life sciences, green industries, financial services, and advanced manufacturing”. Sir Patrick Vallance, the chief scientific adviser, will “lead work to consider how the UK can better regulate emerging technologies, enabling their rapid and safe introduction”.
