Treasury ‘sceptical’ of claims about economic value of research

Former political advisers say frequently used figures to advocate for research funding do not sway government thinking

January 19, 2023
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Blanket claims that increased spending on science leads to large economic benefits for the UK are distrusted by Treasury and government officials, according to political insiders who say powerful stories about the impact of research may be more effective in gaining additional funding.

In a new study by the Higher Education Policy Institute (Hepi) on how universities should engage with the government, several former ministerial advisers highlight what they view as misguided efforts to persuade the government to increase spending on research – namely, the use of econometric arguments that “increasing funding to research and development would automatically translate into amplified economic benefit”.

Those arguments have frequently featured in documents produced by funding bodies and even ministerial departments: for instance, UK Research and Innovation (UKRI) used its own economic modelling to state that “£1 of public R&D investment generates around £7 in benefit to the UK”.

The Hepi report, which was commissioned by Loughborough University, suggests that this kind of “easy causal relationship between R&D funding and economic benefit” is not seen as credible by the Treasury or 10 Downing Street. Such formulations “tend to be distrusted by anyone with economic influence in government”, it explains.

According to one former special adviser, Giles Wilkes, who worked for Vince Cable when he was business secretary in the Conservative-Liberal Democrat coalition government from 2010 to 2015, appeals of this kind are likely to be dismissed.

“The Treasury will shrug and say well, how would I ever know which extra job out there was because of this piece of R&D spending?” he is quoted as saying in the report.

Stian Westlake, policy adviser to three science minsters between 2017 and 2019, said calculations regarding the economic return multiples on science spending could be “somewhat useful” for providing something for a politician to put in a speech.

“But it is not going to be helpful in negotiating funding settlements between No 10 and the Treasury,” explained Mr Westlake, now chief executive of the Royal Statistical Society. “The more generalised and expansive these assertions are, the less compelling the figures become.”

Indeed, some research in the US context has found that science funding “is not a guarantee of short-term economic growth and job creation”, according to the Hepi report, referring to a 2009 article in Science by former White House science adviser Julia Lane.

“The econometric evidence for R&D is about as good as it can be, but it is not really that strong,” reflected Mr Westlake, who advised universities to focus on stories on the impact of research.

“Sometimes really specific anecdotes can be incredibly helpful for giving some sort of specific locus to stick in people’s minds,” he explained, pointing to the narratives around the research and development underpinning the supplies sent to help Ukraine fight the Russian invasion.

However, David Sweeney, former executive chair of Research England, said universities were under pressure to make these econometric claims “because the terms of trade from the government are: ‘Tell us about the return we will get for our investment.’ I am not sure what the other option is,” said Mr Sweeney, who nonetheless believed case studies could influence the position of ministers more than calculations of economic returns.

Commenting on the report, published on 19 January, Loughborough’s vice-chancellor Nick Jennings, a former government chief scientific adviser for national security, said “greater understanding and appreciation by policymakers of what research is and is not, balanced with how the academic community can better meet government needs, is needed”.

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