19 May 2025

Towards certainty and stability, UK Government to set out new ten-year budgets for R&D funding

techUK welcomes the announcement on ten-year R&D budgets, a major ask of techUK members in our UK Tech Plan and Spending Review. This support will provide added stability for cutting-edge UK companies and improve private sector confidence in backing the best new research has to offer. We look forward to seeing further reform to make the UK’s R&D ecosystem as attractive an offer as possible.

The announcement today may come as no surprise as part of the Government’s manifesto included a commitment to scrap short funding cycles for key R&D institutions “in favour of ten-year budgets”. The Government has also announced measures to bolster fiscal incentives and direct support to firm R&D and innovation, including a consultation on the R&D tax relief and an HMRC Expert Advisory Panel. Our members consistently call for stability and certainty, so the steps outlining mechanics of 10-year funding for research are welcome and will give clarity on the Government’s R&D priorities.

The commitment to longer-term certainty is accompanied by new criteria unveiled by Science Minister Lord Vallance. This will be used to decide whether to award 10-year funding to institutions or activities. Criteria will be relevant to R&D projects across cutting-edge research that may have longer time scales to fully develop, deploy and commercialise their technologies – whether quantum computing or human health. techUK are also supportive of these criteria, as they will encourage more meaningful partnerships with industry and allow the UK to stay competitive and at the forefront of global innovation

Outlined priority areas for funding include infrastructure and core capabilities; talent attraction and retention; international collaboration; partnerships and business collaboration. These areas align with the Industrial Strategy Green Paper and priority areas to deliver a pro-business environment. Indeed, ten-year budgets will act as a signal of UK Government’s long-term priorities in key sectors, a nod to help underpin delivery of the Government’s upcoming Industrial Strategy, ‘Invest 2035’.

techUK, and our members, strongly believe that greater R&D investment is an economic growth opportunity. Every £1 invested in public R&D leverages double that in private investment. A study also found an average rate of return to public R&D of 40%, 6 years after the investment is made. Or, in other words, £100 million of public R&D investment could be expected on average to yield, in 6 years’ time, an increase in annual private sector productivity worth £40 million. The Government’s announcements will reinforce these gains with longer-term certainty that will support private sector confidence in the UK’s R&D environment and drive further private investment.

Read the full UK Government criteria here.

“techUK is delighted to see this commitment to longer-term R&D budgets. A strong R&D environment will spur private investment, drive growth and support the delivery of the Government’s missions. All eyes are now on the Spending Review as these longer-term R&D budgets will need to be backed up with ambitious spending envelopes. techUK has called for a front-loaded spending profile for R&D to reach 3% of GDP by the end of this Parliament.”

Antony Walker, Deputy CEO, techUK