This is an overview of some of the structures by which the
UKgovernment allocates public funding for R&D in the UK,
asoutlined in the science budget. In addition to public
investment in R&D the government encourages further private
investment in a number of ways, such as R&D tax credits.
The vast majority of government investment in UK R&D is
allocated by ‘partner organisations’ who administer an
agreed distribution of funding. The criteria for how this is
distributed varies based on the organisation, or the
schemethey are administering. Not all of this investment
isspent on R&D in the UK.
How does the UK government invest in R&D?
Devolved counterparts
The Research Councils and Innovate UK carry out activities reserved for the
UK government and so operate across the UK. Funding of Higher Education
Institutions is a devolved matter and so a similar function to Research
England is performed by Higher Education Funding Council Wales (HEFCW),
the Scottish Funding Council (SFC), and the Department for the Economy
(Northern Ireland).
National Academies
The UK’s four independent National Academies, receive funding for key
programmes that help to deliver Government priorities, including supporting
excellent researchers and distributing some of the funding for schemes
such as the Global Challenges Research Fund (GCRF) and Newton Fund.
Departmental R&D
Government departments, including those of devolved administrations,
fund specific R&D activities leading to the production and synthesis of
anevidence base which contributes to good policy development and
evaluation. This may be done through Public Sector Research Establishments
(PSREs) such as the Met Office.
The National Institute for Health Research (NIHR) is funded by the
Department of Health to conduct health and care research within the NHS
that will improve the health and wealth of the nation.
Natural
Environment
Research
Council
Science and
Technology
Facilities
Council
Biotechnology
and Biological
Sciences
Research
Council
Engineering
and Physical
Sciences
Research
Council
Economic
and Social
Research
Council
Medical
Research
Council
Arts and
Humanities
Research
Council
Innovate UK
Departmental
R&D
National
Academies
Research
England
UK Research &
Innovation (UKRI)
POWERS TO WORK JOINTLY
UKRI
Created by the Higher Education and Research Act 2017 and
operational from April 2018, UKRI is the strategic body which brings
together the 7 Research Councils, Innovate UK and Research England.
The purpose of UKRI is to create a strong, agile and joined up funder
ofresearch and innovation for the UK. UKRI will fund research in two
distinct and complementary ways – one allocated by the seven
Research Councils to their respective disciplines, and the other as
blockgrants to Higher Education Institutions. Collectively referred to
asthe dual support system.
Innovate UK
The UK’s innovation agency, works with companies to de-risk, enable
andsupport innovation, including through providing innovation grants
and investing in Catapult centres.
Research Councils
The seven Research Councils, divided by scientific discipline, support
excellent research by providing grant funding, access to excellent
research facilities and investing in infrastructure and institutions.
Research England
Research England takes over the England-only funding of knowledge
exchange formerly performed by HEFCE. This takes the form of quality
related block grants to Higher Education Institutions.
UK Research and Innovation (UKRI)
SFC
Scottish
Funding
Council
HEFCW
Higher Education
Funding Council
for Wales
DfE (NI)
Department
for the Economy,
Northern
Ireland
INVESTING IN UK R&D 1
What is R&D?
R&D is defined as creative work undertaken on a
systematic basis in order to increase the stock of
knowledge, including knowledge of man, culture and
society and the use of this stock of knowledge to devise
new applications. It includes basic research, applied
research and experimental development
1
. Innovation
often draws on R&D, but R&D is not always part of the
activity of innovation. An innovation is defined as the
implementation of a new or significantly improved
product (good or service), or process, a new marketing
method, or a new organisational method in business
practices, workplace organisation or external relations
2
.
What is the science budget?
Government investment in R&D is allocated largely
through the ‘science budget’. This is generally divided
into resource and capital. Resource spending isused
tocover the day to day costs of research, and also
provides research and innovation grant funding.
Capitalspending focuses mainly on investment in
infrastructure, such as laboratory equipment, setting
upworld class research institutes and or creating
innovation centres.
What is the science ring-fence?
The science ring-fence traditionally refers to ‘resource
spending’. Since 2015, the government has committed
to increasing the ring-fenced science budget in real
terms (in line with inflation). Capital spend, departmental
R&D, Innovate UK and other non-departmental funding
sit outside this. The science ring-fence provides
stability and a degree of certainty to funding decisions
which is crucial for research that spans decades or
evenlifetimes.
Key terms
Examples of R&D funding programmes
Development Funding
Global Challenges Research Fund (GCRF)
andNewton Fund
GCRF is a funding stream which aims to harness the
expertise of the UK’s research base to pioneer new ways of
tackling global challenges, in particular problems faced by
developing countries. The Newton Fund aims to develop
science and innovation partnerships to promote economic
welfare in collaborating countries. R&D which isfunded by
these schemes, but does not take place in theUK, is not
accounted for within UK domestic R&D investment figures.
Industrial Strategy
Industrial Strategy Challenge Fund (ISCF)
ISCF was created to provide funding and support to UK
businesses and researchers, to meet the major industrial
andsocietal challenges of our time. Six challenge areas
were named by the government in 2017 including
Healthcare and Medicines and Robotics and Artificial
Intelligence. UKRI will be responsible for the
implementation of ISCF.
Knowledge Exchange Funding
Higher Education and Innovation Fund (HEIF)
HEIF is designed to support the range of knowledge
exchange activities that result in economic and social
impact. The funding provides incentives for English Higher
Education Institutions to work with businesses, public
andthird sector organisations, community bodies and
thewiderpublic. The devolved administrations are
responsible for any equivalent funding to their HEIs.
Capacity Funding
UK Research Partnership Investment Fund (RPIF)
RPIF provides capital funds to enhance the research
facilities of UK Higher Education Institutions undertaking
world-leading research. It aims to do so through
strategicpartnerships between Higher Education
Institutions and other organisations active in research
including business. Applications must leverage public
fundsby a proportion of 2:1.
1. Frascati Manual: http://www.oecd.org/science/inno/frascatimanualproposedstandardpracticeforsurveysonresearch
andexperimentaldevelopment6thedition.htm
2. The Measurement of Scientific and Technological Activities: Guidelines for Collecting and Interpreting Innovation Data:
Oslo Manual, Third Edition, OECD (2005).
INVESTING IN UK R&D 2