Budget 2021: UK pushes research spending pledge back to 2026-27

Chancellor confirms delay to funding increase but says government will maintain commitment to overall target

October 27, 2021

The UK government has pushed back its pledge to increase spending on research to £22 billion by two years.

In his budget speech, Rishi Sunak, the chancellor, confirmed that the government would “maintain our target to increase R&D investment to £22 billion, but in order to get there and deliver on our other priorities we will reach the target in 2026-27”.

The government would be “spending, by the end of this parliament, £20 billion a year on R&D”, he added.

Last year, the government pledged to spend to £22 billion a year by 2024-25, as part of its plan to invest 2.4 per cent of gross domestic product in research and development by 2027.

There were growing fears in the research sector that the government had been planning to drop its pledge or to remove any concrete dates from the promise.

Mr Sunak confirmed that this this £20 billion outlay was in addition to the cost of research and development tax relief. Combined total public investment in R&D is increasing from 0.7 per cent of GDP in 2018 to 1.1 per cent by the end of the parliament, Mr Sunak said.

R&D tax relief will now also include cloud computing and data spending, he added.

The government would meet the full cost of associating with Horizon Europe and would increase Innovate UK’s budget to £1 billion, the chancellor said. Mr Sunak also confirmed the £800 million budget for the new Advanced Research and Invention Agency.

“We are making this country a science and technology superpower”, he said.


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