The research council for engineering and physical sciences has joined the list of councils to confirm a cut in research grants.
The Engineering and Physical Science Research Council has warned that researchers should expect a "slight reduction in real terms in the level of research volume over the period". Blue-skies research will be hit.
Catherine Coates, EPSRC's director of planning and communication, said the cuts were "nothing to do with" the additional financial burden posed by having to meet more of the "full economic costs" of grants that the councils fund. This has been cited by the Arts and Humanities Research Council and the Science and Technology Facilities Council as a reason for their cutbacks.
"It is to do with council decisions as to what our priorities should be for the next three years," Ms Coates said.
An additional £18 million that the council received in its budget settlement, once FEC is removed, is to be spent in "priority areas" including nanoscience, IT and next-generation healthcare. This leaves a "flat cash" allocation for blue-skies research - equivalent to a reduction when inflation is taken into account.
"It is not a large volume (reduction)," said Sue Ion, an EPSRC council member and vice-president of the Royal Academy of Engineering. "There was a wish by council to see things that EPSRC has chosen as its priority areas properly and appropriately funded."
The EPSRC has a budget of about £2.5 billion spread over the next three years.
The council was "unable to offer any specific prediction" of future success rates. "The proportion of applications that are funded is as much as function of demand as it is of available funding," it said.
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