In last week’s Budget (30 October) statement, the Chancellor announced the highest ever government investment in research and development – £20.4 billion for next year.
The Budget will fully fund the UK’s association with Horizon Europe, providing scientists and innovators access to the world’s largest collaborative funding scheme, with over £80 billion available for cutting-edge projects under the EU scheme. The Department for Science, Innovation and Technology’s (DSIT) own R&D budget has increased to £13.9 billion, and core research funding has also been increased to a record £6.1 billion, bolstering the UK’s leading research base.
A significant part of this Budget is dedicated to the UK’s life sciences sector, a cornerstone for positioning the UK as a leader in science and innovation, through a £520 million commitment to the Life Sciences Innovative Manufacturing Fund.
Additionally, the Chancellor announced funding for several other programmes to be led by DSIT. Together, these investments underscore the importance of science and technology in driving economic growth essential to raising living standards and funding public services, positioning the UK at the forefront of global innovation and progress.
Science and Technology Secretary Peter Kyle said: “The Autumn Budget is clear recognition of this government’s view that driving economic growth and improving people’s lives cannot be done without investing in science and technology.
“That’s why we are taking R&D investment to record levels and matching our words with action by empowering researchers and businesses to solve real-world problems, grow emerging new industries and create high-quality jobs.”
DSIT’s Autumn Budget announcements include:
Life Sciences Innovative Manufacturing Fund
The Chancellor unveiled the Life Sciences Innovative Manufacturing Fund (LSIMF), starting with £70 million in grants, as part of a long-term commitment of up to £520 million to secure major life sciences manufacturing investments across the UK.
This fund strengthens the country’s ability to develop and produce life-saving treatments, ensuring quicker access to vital medicines and bolstering NHS stability.
The LSIMF is expected to unlock up to £1.8 billion in private investment, supporting thousands of high-skilled jobs and driving economic growth nationwide, while preparing the UK for future health emergencies and enhancing NHS resilience.
R&D Missions Programme
The new R&D Missions Programme (RDMP), which we are initially investing £25 million for, will address specific challenges our National Missions face, such as advancing healthcare and transitioning to cleaner energy. Partnering with private and third-sector organisations, this initiative aims to turn scientific advancements into real-world benefits, improving public services and quality of life across the UK.
Spin-Out Review Proof of Concept Fund
To support the UK’s Growth Mission, the government is investing £40 million over five years in a Proof of Concept Fund, to turn pioneering university research into successful companies. This initiative aids researchers in bringing their innovative ideas to the market, creating high-potential start-ups that drive job creation and economic growth.
Successful spinouts like Pragmatic Semiconductor, which raised £182 million to help expand its 300mm semiconductor wafer manufacturing facility and is set to create 500 high-skilled jobs, or Oxford Nanopore with over 1,000 employees, highlight the potential impact of research-led innovation.
Innovation Accelerators and Made Smarter Innovation programmes
The government has extended for a further year, two key programmes that promote innovation across UK regions and manufacturing. The Innovation Accelerator programme will continue for another year, focusing on high-potential clusters in the Glasgow City Region, Greater Manchester, and the West Midlands.
Successes include Chemify, a Glasgow-based spin-out developing new methods for chemical manufacturing, which has since attracted £28 million in private funding, and the Biochar Cleantech Accelerator in the West Midlands, which is creating new products to support green growth. These projects demonstrate the benefits of R&D across the country and its support for regional economic growth.
Meanwhile, the Made Smarter Innovation programme will continue to be funded with up to £37 million, and empowers manufacturers to adopt digital technologies, enhancing productivity and sustainability by connecting digital solution providers with industry.
Project Gigabit
The government will invest at least £500 million over the next year in Project Gigabit and the Shared Rural Network, accelerating the rollout of digital infrastructure to underserved regions in the UK. The funding aims to deliver full gigabit coverage by 2030, ensuring fast, reliable internet access for communities and businesses, enabling equal access to digital opportunities nationwide.
Shared Services Strategy
DSIT will invest up to £80 million to enhance corporate functions across nine government departments. It aims to transform shared services and streamline systems, making them more efficient, modern, and cost-effective, delivering better value for taxpayers.
Review of barriers to the adoption transformative technologies
The government has commissioned a review led by the government Chief Scientific Adviser, Professor Dame Angela McLean, and National Technology Adviser, Dr Dave Smith, to identify barriers to adopting transformative technologies. This review will focus on the high-growth sectors in the government’s Industrial Strategy, aiming to enhance and productivity and drive growth to boost the UK economy.
In response to today’s Budget, Sir Adrian Smith, President of the Royal Society, said: “It is very good news for the science sector and for the UK that the Chancellor has recognised research and innovation as a ‘crucial national asset’ for delivering long-term economic growth.
“Protecting the science budget, despite the challenges facing public finances, and investing £20.4 billion in 2025/2026, will create conditions that generate new knowledge, boost productivity and unlock opportunities for every corner of the UK.
“There is clear recognition that delivery of net zero and support for innovation in growth sectors, like AI, will be key to capturing these economic opportunities.
“The Chancellor rightly recognises that investing in education and skills today lays the foundation for the UK’s future prosperity and international competitiveness. Recruitment of specialist science teachers and reform of mathematical education as part of the upcoming curriculum review will be key to delivering this pledge.”
Richard Torbett, Chief Executive of the ABPI said: “Confirmation of the life sciences innovative manufacturing fund is very welcome and will be crucial in helping to capture high-productivity investment, and create valuable jobs at a time when they are most needed.
“The increased investment in the health service and commitments to put technology and innovation at the heart of the NHS are key to delivering an ambitious 10-Year Plan. Innovative medicines will be a vital part of delivering the shifts the Health Secretary is trying to achieve.
“Thanks to an agreement between our industry and government which caps the branded medicines bill, the NHS can invest in new medicines with full confidence that medicine spend will remain firmly under control.
“The research and development of new medicines and vaccines is a powerful contributor to economic growth. In the UK, the pharmaceutical industry is the largest private sector investor in UK R&D, and the key attractions underpinning that investment are our strong science base and the NHS.
“Increasing funding for the National Institute for Health and Care Research (NIHR) will help the government improve the environment to deliver clinical trials. We look forward to working with the government to boost our research health and life sciences ecosystem further.”
