Autumn budget 2024: Sector seeks clarity over £20.4 billion investment that “fully funds Horizon association”
Chancellor Rachel Reeves has unveiled a budget and one-year spending review that includes an allocation of £6.1 billion “to protect core research funding”—but the sector is still working to “unpack and understand” what that will mean in practice, following earlier fears of an effective cut.
Announcements in the first Labour government budget for 14 years, delivered on 30 October, also included £25 million in 2025-26 “to launch a new multi-year R&D Missions Programme to solve targeted problems that will crowd in private and third sector investment to accelerate delivery of each mission”.
The chancellor’s speech included a pledge to “protect research and development with more than £20bn worth of funding”.
“This includes £6.1bn for areas like engineering, biotechnology and medical science, for Research England, other research councils and the national academies,” she said.
Research Professional News revealed fears for the research budget in the lead-up to the announcement, centred on concerns that up to £1bn of additional costs related to UK membership of the EU research programme Horizon Europe could be folded into the Department for Science, Innovation and Technology (Dsit) budget from 2025-26, delivering an effective cut to the domestic research budget. Sector sources told RPN that a reduction on that scale could leave the national funder UK Research and Innovation (UKRI) unable to make new grants in 2025-26.
The budget red book, published following the chancellor’s speech, says: “The UK’s science base is a crucial national asset. To fully harness its potential and foster a dynamic investment economy, the budget protects record levels of government R&D investment with £20.4bn allocated in 2025-26. This includes at least £6.1bn of support for core research.
“The government’s R&D investment also fully funds Horizon association, meaning that UK researchers and businesses can participate confidently in the world’s largest programme of research cooperation, worth more than £80bn.”
In a section on the Dsit budget, meanwhile, the red book refers to an allocation of £13.9bn for “Dsit to invest in R&D in 2025-26”, including “at least £6.1bn of support for core research, growing allocations at least in line with inflation to help our world-leading universities and researchers continue to deliver the cutting-edge ideas that drive growth”.
“Core research for these purposes covers Research England, research councils, UKRI talent, UKRI international subscriptions and national academies funding,” the document explains.
However, with UKRI typically having a budget of over £8bn per year, research organisations are still working to understand the budget implications for those aspects of funding not covered by the red book’s definition of “core research”.
Horizon costs
The Dsit settlement also includes “£2.7bn for association to EU research programmes and partnerships and the costs of the Horizon Europe guarantee scheme”, the red book says.
There are two factors behind the rise in Horizon costs coming next year, as RPN has reported. As part of the deal for UK association to Horizon, the government agreed with the European Commission to pay a higher bill in 2025.
Dsit also pays for the UK’s Horizon guarantee scheme, which funds researchers who successfully applied for EU funding from 2021 to 2023 but were unable to access it due to there being no association deal in place. Until now, costs for the guarantee scheme have been covered by money set aside for Horizon membership since 2021, but sources say this will not be an option in 2025.
Sector response
Ottoline Leyser, UKRI’s chief executive, said: “We welcome the government’s continued commitment to research and innovation in today’s budget, recognising their crucial role in driving sustainable economic growth, creating jobs and improving public services for people across the UK.
“We appreciate the chancellor’s prioritisation of research and innovation, given the difficult choices to be made on public expenditure. We will work closely with the secretary of state, science minister, across government and with our research and innovation partners to maximise the impact of our investments and create a strong platform for an ambitious programme of research and innovation in the multi-year spending review next spring.”
Alicia Greated, executive director of the Campaign for Science and Engineering, said: “I am pleased to hear such positive support for UK R&D and innovation from the chancellor, and recognition that, if supported, it will drive economic growth.”
She added: “Beyond the positive intent, it is the detail we must now turn to. It is reassuring to hear pledges to protect core R&D funding and to increase Dsit’s R&D budget, but it will take time to unpack and understand what this means in practice. We look forward to receiving more detail about Dsit’s budget allocations to enable us to build a fuller picture of the changes announced.”
Chi Onwurah, the Labour MP who chairs the Commons Science, Innovation and Technology Committee, said: “It’s vital that UK R&D gets long-term funding to keep up the momentum and level of expertise needed to drive our future prosperity. I welcome the commitment to protect core research funding, as well as the specific investments planned for R&D in high-tech industries like aerospace, automotive and clean energy.
“The committee looks forward to scrutinising the budget in detail.”
Innovation and 10-year budgets
It was also announced in the budget that the Innovation Accelerators programme, operating in the Glasgow, Greater Manchester and West Midlands regions, will be extended.
And the Dsit settlement includes “support for the commercialisation of university research with at least £40m over five years for spinouts proof-of-concept funding, and improvements to the support for researchers spinning out the UK’s cutting-edge research”.
Labour’s pre-election pledge to introduce 10-year budgets for key R&D institutions is picked up in the budget red book. “To create a stable environment for productive long-term partnerships with industry, the government will set 10-year budgets for key R&D activities,” it says. “These will be set out as part of phase two of the spending review.”