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November 29, 2011

Why almost £500m more spending in the Autumn Statement is only half Osborne's good news for science & technology

The Autumn Statement today has confirmed not only hundreds of millions of new money for science, but an increased prominence for science in the growth narrative being developed by the government.

That bodes well for the two announcements we are waiting for before Christmas, publication of both an overarching Innovation and Research Strategy and a plan for improving the environment for translational medical research in the UK. More generally, it tells the science community that the door is open, even in an age of austerity. Go to government with a convincing case and it is possible to win increases in funding.

In his speech, George Osborne said, "Today we’re confirming almost half a billion pounds for scientific projects, from supercomputing and satellite technology to a world-beating animal health laboratory."

The almost £500m seems to be composed of:

  • £200m for the research councils (and possibly TSB), including an £80 million investment in the Institute of Animal Health and £25 million for large- scale technology demonstrators
  • £75m for technology-based SMEs to develop, demonstrate and commercialise new products and services
  • £50m for the new National Graphene Institute announced last month
  • £145m for High Performance Computing announced last month
  • £10m over five years from 2013-14 for Project Enthuse, matched by investment from the Wellcome Trust, to improve the quality of science teaching in schools.
  • £8 million to pump prime the procurement of low emission HGV technologies and their supporting infrastructure via the TSB.

If there is expected to be additional spending on R&D tax credits due to the changes announced there, it seems not to be quantified anywhere. There is also a commitment to link primary and secondary healthcare datasets, which could be both very important to the pharmaceuticals industry and potentially expensive but which is uncosted. I think this could be as big as the graphene announcement when it is fully formed.

The mysteries of government accounting mean that alongside all these announcements, the Autumn Statement also contains a table listing the net increase in spending on science as just £90m over the next three years [1]. So please don't ask me how much extra money there "really" is.

 

Screen shot 2011-11-29 at 15.10.53

Beyond the welcome increase in science spending now, there are grounds for optimism about the future, too. For the Chancellor emphasised the importance of science when considering the state's role in generating growth in his speech, saying:

For if we don’t get the private sector to take a greater share of economic activity in the regions, then our country will become more and more unbalanced – as it did over the last ten years.

Government should not assume that this will happen by itself.

We must help businesses to grow and succeed.

We can do that at a national level too.

With our commitment to British science.

At a time of difficult choices, we made ours last year when we committed to protect the science budget.

Today we’re confirming almost half a billion pounds for scientific projects, from supercomputing and satellite technology to a world-beating animal health laboratory.

And government can encourage many more of our small firms to export overseas for the first time.

So we’re doubling to 50,000 the number of SME we help and extending support to British mid-caps who can sometimes lack the overseas ambition of their German equivalents.

We will make it easier for UK-based firms to compete for government procurement contracts and make new applications out of government data.

We will provide funds for smaller technology firms in Britain who find it difficult to turn their innovations into commercial success.

We have listened to the ideas from business groups about encouraging innovation in larger companies, and we will introduce a new ‘above the line’ research and development tax credit in 2013 that will increase its visibility and generosity.

And we will give particular help to our energy intensive industries.

This great positioning for science is emphasised in the table that summarises the spending the government is making on growth:

Screen shot 2011-11-29 at 15.08.46

The strong position given to science in the mix of pro-growth spending chosen by the government appears again in the passage in the statement dealing with growth:

These one-off investments in transport, broadband, science, regional growth and education will boost economic growth, unlock private investment and help businesses grow and compete effectively in the global economy.

[I have not yet had a chance to read through the first update on the government's Growth Review, also published today]

Footnote

[1] Table 2.1 shows the cost or yield of Autumn Statement policy decisions with a direct effect on public sector net borrowing (PSNB). This includes tax measures, measures affecting Annually Managed Expenditure (AME) and changes to Departmental Expenditure Limits (DEL).

Extracts from the Autumn Statement

Translational research

The government has promised that in December 2011 David Cameron will set out the Government’s strategy to ensure that the UK is the best location for undertaking translational research in life sciences. The strategy will outline how the Government will support the life sciences work of universities, the NHS, private investors and businesses, to attract and develop talent, and improve incentives.

Education

A.81 Science teaching – The Government will invest £10 million over five years from 2013-14 in Project Enthuse, matched by investment from the Wellcome Trust, to improve the quality of science teaching in schools.

A.82 Undergraduate mentoring – The Government will offer undergraduates access to mentoring support drawn from the existing network of STEM Ambassadors to give undergraduates insight into STEM occupations and raise the profile of the STEM sector.

A.78 Course kite-marking – A group of Science, Technology, Engineering and Mathematics (STEM)-focused sector skills councils (the Sector Skills Council for Science, Engineering and Manufacturing Technologies; the Sector Skills Council for Chemicals, Pharmaceuticals, Nuclear, Oil and Gas, Petroleum and Polymer Businesses; and e-skills), with support from the Confederation of British Industry and Skillset, will lead an industry group to kite-mark courses, helping students understand better which courses are valued by employers. The Government will encourage other sector skills councils to do the same. Students will be able to access initial information on employer endorsement as part of the 2012 Key Information Sets.

Pharma

A.137 Linking primary and secondary healthcare datasets – The Government will provide a service to link primary and secondary healthcare datasets from September 2012 to reinforce the UK’s position as a global centre for research and analytics and boost UK life sciences.

A.138 Publishing prescribing data – The Government will publish further prescribing data by September 2012 and additional health and social care datasets by September 2013 to support health and social care data-based product and analytics markets.

Innovation

1.123 The Government will publish its Innovation and Research Strategy shortly to set out how it will support innovation in the UK. The Government is today announcing that it will:
•    invest an additional £75 million in supporting technology-based SMEs to develop, demonstrate and commercialise new products and services;
•    invest an additional £200 million in science, including an £80 million investment in the Institute for Animal Health and £25 million for large-scale technology demonstrators; and
•    introduce an ‘above the line’ tax credit in 2013 to encourage research and development (R&D) activity by larger companies. The Government will consult on the detail at Budget 2012 and will ensure that SME R&D incentives are not reduced as a result of this change. This builds on measures at Budget 2011 to increase the generosity and accessibility of R&D tax credits for SMEs.

Low emission technology

A.42 HGVs: low emission technology – The Government will invest £8 million to pump prime the procurement of low emission HGV technologies and their supporting infrastructure. The Government will work with the Technology Strategy Board to launch a competition for this funding in March 2012.

 

 

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