The Chancellor of the Exchequer, Rachel Reeves MP, presented the Autumn Budget 2024 to Parliament on yesterday 30 October. Ahead of this much anticipated event, AIRTO – the Association of Innovation, Research & Technology Organisations – had put forward representation to His Majesty’s Treasury calling for growth to be enabled by applied research, development and innovation, highlighting the key policy interventions needed for a clear, consistent strategy to address immediate economic and societal challenges, and build a strong, energy-secure Net Zero economy.
AIRTO welcomes HMG’s prioritisation of growth and commitments for applied R&D and innovation announced in the Budget. In particular, we welcome specific commitments to:
- protecting record levels of R&D investment with £20.4 Bn allocated in 2025-26.
- provide stability and long-term certainty for key R&D activities through 10-year budgets, creating an environment for productive long-term partnerships with industry.
- extend Innovation Accelerators into 2025-26 to bolster high-potential innovation clusters in the Glasgow City Region, Greater Manchester, and the West Midlands.
- allocating at least £25 m in 2025-26 for a new multi-year R&D Missions Programme to solve targeted problems and attract private and third sector investment.
- a boost for life sciences (to the National Institute for Health and Care Research (NIHR) as part of over £2 bn of R&D funding, supporting life sciences innovation).
- support in for fusion energy research (in 2025-26 to build on the UK’s position as a global leader in sustainable nuclear energy).
- provision of at least £40 m over five years for proof-of-concept funding and improvements to support researchers spinning out the UK’s cutting-edge research into firms of the future.
- a pledge to publish the Artificial Intelligence Opportunities Action Plan to capture the opportunities of AI to enhance growth and productivity.
- creation of a National Data Library to unlock the full value of public data assets, providing simple, ethical, and secure access to public data assets.
These commitments reflect the government’s stated recognition of the critical role that science, research, and innovation play in driving economic growth and addressing societal challenges.
AIRTO’s input ahead of the Budget, called for the new government to:
- Make closer-to-market innovation across the UK an integral part of the new Industrial Strategy by re-balancing public funding for research, development and innovation (RDI) to provide more support for the close-to-market innovation infrastructure for key sectors and industries, to help reduce the cost and time to translate technologies to market.
- Build on the UK’s world-leading RDI infrastructure by investing in the innovation ecosystem to create a recapitalisation mechanism for non-profit distributing Innovation, Research & Technology (IRT) sector organisations which do not have recourse to share holder funding for investment in buildings and facilities.
- Instil confidence for industry in the UK’s resilience and consistency, to make critical research, development and innovation investment in the UK by committing to clear, consistent, and ambitious long-term government policies and funding.
- Prioritise people and skills via development of a comprehensive ‘workforce plan’ for RDI in the UK, encompassing education and skills, and involving the key players from industry, the IRT sector, and academia.
- Achieving immediate short-term growth through targeted research and development by maintaining current funding for public funding of RDI.
- Ensure sustained and growing long-term investment in R&D, advancing beyond 3% for Gross Expenditure (public and private) on R&D as a percentage of GDP by 2030 to sit in the top quartile of OECD nations.
Read the full submission here.
In addition, to welcoming the Chancellor’s initiatives highlighted above, AIRTO looks forward to the implementation of the new Industrial Strategy.
Commitments to 10 year funding plans for R&D are hugely welcome, as are the commitments to addressing skills challenges via Skills England and pledges of an additional £300 million for further education in England. Planned steps to transform the Apprenticeship Levy into a more flexible Growth and Skills Levy with £40 m for partnership with employers are also commendable. However, there is some concern that the impact of tax rises may curtail industrial investment in workforces, skills initiatives and R&D. Confidence from industry remains fragile so the manner of implementation of the new Industrial Strategy will be critical in stimulating industrial partnership for UK growth.
AIRTO will continue pressing government on these areas of priority through responding to HMG on the recently published Green Paper under consultation: Invest 2035: the UK’s modern industrial strategy
About AIRTO
AIRTO is the Association of Innovation, Research and Technology Organisations. Its membership comprises approximately sixty of the principal organisations operating in the UK’s innovation, research and technology (IRT) sector. The IRT sector has a combined turnover of £6.9Bn, employing over 57,000 scientific and technical staff (equivalent to the academic staffing of the Russell Group of universities) and, for comparison, it is significantly larger than the network of Fraunhofer Institutes in Germany both in size and scope of activities. The sector contributes £34Bn to UK GDP. AIRTO’s members work at the interface between academia and industry, for both private and public sector clients in the UK and overseas. Members cover a very wide range of industries from for example, agriculture and food, pharma and bio, energy generation and distribution, manufacturing and the built environment. They may be industry specific or have cross-sectorial expertise. Members include Independence Research and Technology Organisations, Catapult Centres, Public Research Establishments, National Laboratories, university Technology Transfer Offices and privately held innovation organisations.
