Last month, the UK government released its “Autumn Statement,” which discussed the future of the British economy and federal funding allocations. According to the Statement, the UK is estimated to be the fastest growing region in the G7 in 2016, with a 2.3% growth in economic activity in Q3 FY16 and a 60.4% decrease in national deficit. The UK is assumed to undergo a period of unpredictability as it regroups from the impact of Brexit, due to which the Office of Budget Responsibility (OBR) forecasts that growth of GDP will slow to 1.4% in 2017 and reach a rate of 1.7% in 2018, 2.1% in 2019 and 2020, and 2.0% in 2021. The decrease is estimated to be largely due to less business investment and household spending.

The Statement refers to a new National Investment Policy Fund (NIPF), a fund put in place by the government to focus on housing, transport, digital communications and R&D. As part of the NIPF, between 2017–2018 and 2021–2022, the government will allocate £23 billion ($29.2 billion = £0.79 = $1), with total spending of £170 billion ($215.6 billion) over the next five years, or 1.7% of GDP by 2022. The expenditure includes £4.7 billion ($6.0 billion), or an extra £2 billion ($2.5 billion) per year, for R&D to improve the UK’s position in global science and innovation. This is a 20% increase to total federal R&D expenditure, marking the largest increase passed by UK Parliament since 1979. The government will also reevaluate the current R&D tax credits to make UK R&D more competitive.

Enhancing UK R&D is a vital aspect of the government’s Industrial Strategy, and through the NIPF, the government will allocate funds for an Industrial Strategy Challenge Fund to encourage and foster scientific collaboration in the UK, as well as for improving the UK’s research and business innovation through grants. An additional £100 million ($126.8 million) will be allocated to improve R&D programs such as the Biomedical Catalyst, as well as R&D facilities, technology transfer and research-to-business channels.

Source: HM Treasury

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