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Markel Tax

09 Apr 2020

How this Government intends to fund UK R&D

The mid-to-long-term outlook for UK public investment in R&D is extremely positive. 

In the immediate term, the COVID-19 pandemic will heavily influence both the availability and application of UK Government funding. However, for those ambitious organisations who are able to capitalise, a significant number of well-established public funding options remain open and accessible.
 
It is vital that technology and innovation continues to be invested in and supported going forward and the Government has announced significant increases in funds across all sectors. In the budget the Chancellor of Exchequer announced a series of measures to supercharge public investment in science R&D. Some of the highlights include £800 million towards a new blue-skies funding agency to invest in high-risk, high-reward science, modelled on ‘ARPA’ in the United States, £200 million investment programme with the British Business Bank towards health and life sciences innovation and £400 million for investment in research, infrastructure and equipment across the UK, particularly in basic research and physical sciences. Investments in technologies such as artificial intelligence, mining ‘big data’, novel vaccine technology and co-networking are now all proving their value in the current crisis.

Focus areas

The increase in R&D investment will support a range of objectives: 
 

1. Backing businesses to innovate and grow

  • £200 million in equity commitments for the Life Sciences Investment Programme 
  • £900 million for high-potential technologies - Focusing on clean energy, and supporting the National Space Strategy and space innovation fund

2. Supporting world-leading research in all regions and nations

  • £400 million in 2020-21 for world-leading research, infrastructure and equipment 
  • £300 million for experimental mathematical research to attract the very best global talent
  • £800 million in a new blue-skies funding agency that will fund high-risk, high-reward science
  • £80 million for the UK’s foremost specialist institutions over the next five years

3. Overcoming societal challenges

  • £12 million to aid in reducing the burden of illness in the future for the National Institute for Health Research in 2020-21
  • £2 million in 2020-21 to the Government Chief Scientific Adviser and the Government Office for Science for cross-cutting strategic science and resilience capabilities 
  • £1.4 billion over 10 years in the animal health science facility at Weybridge
  • £180 million over six years for a new state-of-the-art storage and research facility for the Natural History Museum at Harwell Science and Innovation Campus

4. Growing a greener economy

  • Doubling the size of the Energy Innovation Programme 
  • £270 million of new funding to enable new and existing heat networks to adopt low carbon heat sources
  • Reducing vehicle pollution by providing £403 million for the Plug-in Car Grant, and £129.5 million for vans, taxis and motorcycles. With £500 million over the next five years to support the rollout of a fast-charging network for electric vehicles 
  • Natural environment: £640 million in tree planting and peatland restoration 
  • Waste and recycling: £700,000 will establish the Extended Producer Responsibility scheme, designed to encourage producers to make their packaging more recyclable and reduce the amount of unnecessary packaging
The Health and Life Sciences sector has been of particular focus in the last few weeks as a result of the ongoing Covid-19 pandemic that is sweeping through the UK and the wider world. The sector is now figuring out how best to continue to work and critically examining what can be done remotely and what needs to be kept running on site.
 
The European Commission released an urgent funding competition dedicated to COVID-19 as part of the EIC Accelerator programme last week, they will continue to look for technologies in treating, testing, monitoring or other aspects of the Coronavirus outbreak. It is likely they will release other specific competitions alongside their rolling EIC accelerator programme.
 
It is clear that grant funding competitions will continue to be a key tool to develop the technologies that will make the UK one of the leading innovation-based economies in the world. Typical funds have a six-month timeframe from submission to project start, meaning projects submitted now will be coming on stream precisely when the economy needs an innovation stimulus. Rather than a time to reduce the priority of funding, now is the time to put in place the plans and projects that will help both companies and recover.
 
For further information about funding, or any other tax incentives and reliefs, please contact Simon Day on 0333 920 5708.
Tagged Grant funding COVID-19
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