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Research and innovation funding 2017-21

In today’s blog, Jonathan Rans looks at the BEIS research funding allocations for 2017-21. He discusses what the figures tell us and the areas to keep watch on.

Although it isn’t the only UK Government department funding Higher Education sector research and development, the UK Department for Business, Energy, Innovation and Skills (BEIS) delivers the lion’s share. As such, it dominates research policy and the publication of its Research & Innovation funding allocation in July of this year gives vital insights into the likely shape of the sector over the coming 3-4 years.

Headline figures for the next three years are:

All amounts £m

2017-18 2018-19 2019-20
Research and Innovation 5,655 5,497 5,421
National Productivity Investment Fund (NPIF) 423 769 1,165
Overseas Development Assistance (ODA) 320 414 408
Science Infrastructure 1,113 1,231 1,163
To be allocated (contains a mix of unallocated NPIF and ODA funding) 71 456
TOTAL 7,511 7,982 8,614

UKRI research and innovation allocations

Making up the bulk of BEIS research and innovation allocation, two-thirds to three-quarters of the annual budget will be spent on UKRI core funding. This means the majority of funding will be managed through the Research Councils. While absolute figures are expected to take a small drop over the budget period (around a 4% drop between 2017-18 and 2019-20), increases in challenge-led funding budgets will more than make up for this.

Drilling down into the UKRI figures we can see that the budget changes will not be evenly distributed across the individual Research Councils. Clear beneficiaries will be AHRC, EPSRC and Innovate UK (largely due to a sizeable injection of funding supporting wave 2 of the Industrial Strategy Challenge Fund (ISCF)). Conversely, NERC is seeing a drop in absolute figures across the three-year period. The recently announced allocation of £60 million from the Strategic Priorities Fund to support climate change research will go some way towards redressing the balance.

National Productivity Investment Fund

The National Productivity Investment Fund (NPIF) delivers the majority of UK Government funding in support of the Industrial Strategy. Rising from £423m in 2017-18 to a projected £1.16billion in 2019-20, with the possibility of further additions, the UK Government’s commitment to boosting UK economic growth through science and innovation is clear.

Digging into the figures, NPIF will be used to fuel two main initiatives. The first is the Industrial Strategy Challenge Fund which channels funding into strategically important research areas and promotes multidisciplinary research with a commercial component. I’ve written more about the ISCF here.

Strategic Priorities Fund

The second NPIF initiative is the Strategic Priorities Fund. This will be administered by UKRI. It represents a common fund of the type proposed by Paul Nurse in his review of research councils. As such it will support strategically important, challenge-type priorities and will emphasise inter- and multi-disciplinary responses. In practice, this will complement the other challenge-led funding streams addressing global challenges (GCRF) and industrial strategy (ISCF).

A sizeable portion of the fund will support climate change research with the recent announcement that £60 million will be allocated to four programmes headed by NERC. As for the remainder of the fund, there is little indication of what themes might be covered. However, the agenda is likely to be driven by UK Government departments not currently plugged in to the GCRF or ISCF, as with Defra’s involvement in the climate change strands. This will enable strategic investment in previously unsupported cross-cutting issues.

Official Development Assistance funding

Official Development Assistance (ODA) funding is also set to rise over the period 2018-2020. Comprising the Newton Fund and the Global Challenges Research Fund (GCRF), it is the multi-disciplinary, challenge-led GCRF which will benefit from the ODA budget increases. Its allocation is set to rise from £215m in 2017-18 to £393m in 2019-20.

One interesting detail is the introduction of Innovate UK into the ODA landscape. Previously uninvolved in this particular strand of funding, Innovate UK remains a relatively small partner, controlling just 4% of the currently allocated budget over the period. However, for ODA projects with an industrial component, this will be a welcome addition.

Increased importance of challenge-led funding

The implications for UKRI budgets are clear – over the following three years there will be an increased emphasis on challenge-led funding opportunities as part of the research councils’ core business. Responding to this change demands an increased focus on the formation of broad, interdisciplinary research groups, able to engage convincingly with global concerns. The agility that research institutions show in adapting to the evolving landscape will be a key factor in defining success over the near future.

If you have any questions about challenge-led funding, please contact your Research Funding Specialist for advice and guidance.

Jonathan Rans is Strategic Research Executive in the Strategic Research Development Team.

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Jonathan Rans


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