Recommendation 119

HM Government Not Addressed

The 2021 Spending Review set out the government’s plan to cement the UK as a global science and technology superpower and demonstrates our commitment to delivering on the R&D Roadmap and the Innovation Strategy. The UK Government is providing the fastest ever sustained uplift in research and development (R&D) funding, increasing public spending on R&D to £20 billion per annum in 2024/25—£5 billion more than 2021/22, an increase of around a quarter in real terms over the Spending Review period. This represents a significant uplift against one of the most challenging fiscal positions of the last century and provides certainty to our R&D partners of government plans for the next three years. This will help the whole R&D sector plan ahead, which will be particularly welcome given recent fiscal challenges from Covid. This settlement will make significant progress towards the government’s ambition to increase public R&D spending to £22 billion by 2026/27, and drive economy-wide R&D investment to 2.4% of GDP in 2027. As the custodian of the R&D system, BEIS has been allocated £39.8 billion for R&D over the Spending Review period, the largest ever R&D budget committed to BEIS or its predecessors. During the Spending Review 2020, the UK Government took the difficult decision to reduce ODA spending target from the current 0.7% of GNI to 0.5% of GNI in 2021/22. The 2021/22 R&D ODA SR settlement reflected extraordinary challenges—the fiscal impact of Covid-19 on the UK economy and the overall ODA budget. The UK, however, remains a world leading aid funder, having committed over £11 billion of ODA in 2022/23 to fight poverty, tackle climate change, and improve global health. In light of the government’s careful stewardship of public finances and the strength of the recovery, the Spending Review 2021 set aside provision to take ODA funding to 0.7% of GNI in 2024/25, should the fiscal situation allow. This delivers on the government’s commitment made to Parliament to return to spending 0.7% of GNI on ODA when, on a sustainable basis, we are not borrowing for current spending and underlying debt is falling. The UK Government also recognises the importance of R&D to delivering ODA objectives, and including developing nations in the global research system, which is why we’re increasing our R&D ODA spend to £1bn per annum by 2024/25. International collaboration remains a vital aspect of the ambitions set out in the R&D Roadmap, and the government remains committed to delivering on this goal.