Autumn Statement: Science and innovation

The government said it will continue to prioritise investment in science and innovation

The Chancellor made significant number of announcements in the Autumn Statement and Spending Review today - those affecting the science and innovation sector are summarised below.

According to the Chancellor: “The Spending Review and Autumn Statement reasserts the government’s firm commitment to the UK remaining at the forefront of world science.”

The government said it will continue to prioritise investment in science to ensure the UK remains a world-class centre of research. Already the UK is attracting more research and development (R&D) investment from abroad than China, Japan, Canada and Russia combined.

Long-term investment

Science funding of £4.7 bn will be protected in real terms and total spend will be over £500m higher by the end of the Parliament compared to 2015-16. This will include a £1.5 bn new Global Challenges Fund.

Research Councils

The government is taking forward the recommendations of Paul Nurse’s independent review and, subject to legislation, will introduce a new body – Research UK – which will work across the seven Research Councils. This will take the lead in shaping and driving a strategic approach to science funding, ensuring a focus on the big challenges and opportunities for UK research.

Innovate UK/Research UK

The government will also look to integrate Innovate UK into Research UK in order to strengthen collaboration between the research base and the commercialisation of discoveries in the business community. Innovate UK will retain its clear business focus and separate funding stream


The government will also take forward a review of the Research Excellence Framework in order to examine how to simplify and strengthen funding on the basis of excellence, and will set out further details shortly.

The Spending Review and Autumn Statement extends the freedoms granted to Research Institutes at Budget 2015 to all Department for Business, Investment and Skills (BIS) Sector Research Establishments which are not public corporations, and will also grant access to accumulated reserves of commercial income, subject to a cap.


The Spending Review and Autumn Statement also increases investment in catapult centres and protects and extends funding for the Aerospace Technology Institute (ATI) and the Advanced Propulsion Centre (APC).

Northern Powerhouse

The Northern Powerhouse is the government’s plan to boost the economy across the North of England.

The Chancellor said it means "backing the science and innovation strengths of the North, so that new ideas can be turned into new products and new jobs".

A £400m Northern Powerhouse Investment Fund is set to be created to help small businesses grow following agreement with the British Business Bank and local enterprise partnerships. The fund will have more than £400m to invest in smaller businesses, subject to European funding arrangements.

To back science-based and innovative companies in the North the government is providing £250 million for small modular reactor development and wider nuclear R&D, creating opportunities for the North’s centres of nuclear excellence in Sheffield City Region, Greater Manchester and Cumbria, as well as the nuclear research base across the UK.

This builds on £25 million of UK funding for a Joint Research and Innovation Centre with China, to be based in the North West.

The Chancellor also announced the doubling the size of the Enterprise Zones programme in the Northern Powerhouse and also announced the appointment of Prof Julia King as Chair of the £235m Sir Henry Royce Institute, which will build on the North’s strengths in advanced materials research and innovation.

The Chancellor also announced £50 million for two new agricultural technology centres, headquartered in York, which will support innovation and skills in the food and farming supply chain, enabling the UK to grow its share of the £250bn global agri-tech market.

Midlands Engine for Growth

Building on the historic settlement with Greater Manchester, this year further devolution agreements have been reached with civic leaders in the Sheffield City Region, the North East, Tees Valley, Liverpool City Region and the West Midlands, giving local areas control over major budgets and responsibilities and creating directly elected mayors.

The government will work towards further devolution deals with other major city regions.

The government wants to build on the success of Britain’s Engine for Growth in the Midlands. Over 250,000 more people were in work in the Midlands by the end of the last Parliament compared to 2010.

The recent West Midlands Devolution Agreement means:

  • A new, directly elected Mayor for the West Midlands
  • Devolution of powers over adult skills, employment and transport
  • An additional £36.5m a year funding allocation over 30 years, to be invested to drive growth
  • Supporting the Curzon Street Enterprise Zone extension in order to help deliver the ambition of the HS2 Growth Strategy
  • The government is also investing £60m in the proposal by six universities across the Midlands for a new Energy Research Accelerator, a major project to develop the energy technologies of the future
  • Committing £18m to the Excellence in Precision Agriculture Innovation Centre, which will be partly headquartered in Shropshire. This will be one of four agri-tech centres, which will develop new engineering technologies to increase the productivity and sustainability of UK agriculture
  • Building on their ongoing collaboration, all 11 LEPs in the Midlands are working with government to maximise the impact of the new round of European financing for smaller businesses across the Midlands
  • The government will create a new Enterprise Zone in Stoke/Staffordshire Ceramics Valley and the extend the existing Enterprise Zone at Infinity Park Derby.

Implications for BIS

The Department for Business, Innovation and Skills (BIS) budget is reported to have been cut by 17%. BIS said the settlement:

  • Prioritises key growth and productivity objectives by protecting science resource funding in real terms, and maintaining Innovate UK support for businesses and funding for aerospace an automotive technologies in cash terms
  • Protects funding for the core adult skills participation budgets in cash terms creating five National Colleges, and providing funding for a real terms protection for the overall budget for STEM subjects in higher education
  • Delivers three million high quality apprenticeships by 2020, compared to 2.4 million in the last Parliament

In order to prioritise spending on economic growth, BIS will reduce departmental administration spending by a further £100m by 2020. This will contribute to a wider programme of reform, including further reducing the number of Arm’s Length Bodies (ALBs), unlocking efficiencies through increased digitisation and increasing the pace of estates and workforce reform.