Corporate report

BEIS research and development (R&D) budget allocations 2021 to 2022

Published 27 May 2021

Summary

This publication outlines how the Department for Business, Energy and Industrial Strategy (BEIS) will allocate its £11.35 billion research and development (R&D) budget for the financial year 2021 to 2022.

Our allocations reflect government’s priorities of supporting the foundations of our world leading R&D system to ensure it is able to help lead the recovery from coronavirus (COVID-19), whilst also investing in strategic outcomes for R&D investment including innovation, net zero, space and levelling-up.

Government spending on R&D in 2021 to 2022 is £14.9 billion, its highest level in four decades, demonstrating progress towards our target to increase total public and private R&D investment to 2.4% of gross domestic product (GDP) by 2027. We are investing more money than ever before in core research, in line with the announcement at the Spending Review in November 2020 that government will increase investment in core UKRI and National Academy funded research by more than £1 billion by 2023 to 2024.

As part of the UK-EU Trade and Cooperation Agreement (TCA) published on 24 December, the UK has agreed to associate to Horizon Europe and other EU programmes including Euratom Research and Training. This will ensure UK researchers and business have access to the largest collaborative research and development programme in the world - with a budget of c. €95 billion. We want to make the most of association to these programmes and are encouraging UK researchers and companies from all parts of the UK to take advantage of this opportunity.

The government will be prioritising innovation as part of its Build Back Better Plan for Growth published at Budget 2021. We will publish an Innovation Strategy in Summer, which will outline our plans for boosting innovation which will be a key part of our plans for reaching the 2.4% target by 2027.

We have also allocated up to £50 million in 2021 to 2022 for the Advanced Research and Invention Agency (ARIA), which we expect to be established later this year and will focus on high risk, high reward research. The government is committed to investing £800 million in ARIA over its first 4 years.

This settlement supports the government’s ambitious commitments to achieve net zero and deliver the Green Industrial Revolution. BEIS will be investing £243 million in net zero programmes, including the Net Zero Innovation Portfolio, the Advanced Nuclear Fund and trials of new hydrogen heating technologies. This complements the wide range of net zero programmes delivered by UKRI and our other partner organisations, including work done under the Faraday Battery and Transforming Construction Challenges. This investment in clean technologies supports our ambition to cut emissions and secure long-term growth for the country.

Alongside delivering these priorities, we will make a contribution to the work of medical research charities, whose fundraising and lifesaving work has been disrupted over the course of the pandemic. £15 million from BEIS together with £5 million from the Department of Health and Social Care (DHSC) will support early career researchers supported by charities, helping to protect the pipeline of research superstars who will have a fantastic impact, and improve patient lives, in the future. This will be in addition to other UKRI funding that complements the work of medical research charities, including MRC funding, the charity research support funding element of Quality-related Research (QR) funding, MRC’s funding for the Crick Institute and our investment in vaccine manufacturing and innovation to combat COVID-19 via the Vaccines Taskforce.

Table 1: BEIS R&D allocations 2021 to 2022

Organisation or Programme	R&D allocation 2021 to 2022 (£ million)	Of which Official Development Assistance (ODA) (£ million)
UK Research and Innovation [footnote 1][footnote 2][footnote 3]	7,908	139
UK Space Agency	534	6
UK Atomic Energy Authority [footnote 4]	217	-
National Academies	207	17
Met Office [footnote 5][footnote 6]	186	14
National Measurement System	110	-

BEIS programmes

Organisation or programme	R&D allocation 2021 to 2022 (£ million)	Of which Official Development Assistance (ODA) (£ million)
Core programmes [footnote 7]	106	11
Advanced Research & Invention Agency [footnote 8]	50	-
Aerospace Technologies Institute	150	-
Automotive Innovation Programmes	87	-
Centre for Connected Autonomous Vehicles	19	-
Government Office for Science	14	-
Materials Processing Institute	5	-
Knowledge Assets [footnote 9]	17	-
Net zero programmes [footnote 10]	243	-
Nuclear Decommissioning Authority [footnote 11]	201	-
Provision for UK contribution to EU R&D programmes [footnote 12]	1,293	-
Total [footnote 13]	11,347	187

Table 2: UKRI R&D allocations 2021 to 2022

Research and innovation

^{[footnote 14]}

Council	£ million
Arts and Humanities Research Council	110
Biotechnology and Biological Sciences Research Council	364
Economic and Social Research Council	183
Engineering and Physical Sciences Research Council	946
Innovate UK [footnote 15]	907
Medical Research Council	709
Natural Environment Research Council	352
Research England [footnote 16]	1,772
Science and Technology Facilities Council	554
Other	37

Science Infrastructure Capital

Council	£ million
Arts and Humanities Research Council	-
Biotechnology and Biological Sciences Research Council	65
Economic and Social Research Council	36
Engineering and Physical Sciences Research Council	145
Innovate UK	-
Medical Research Council	82
Natural Environment Research Council	60
Research England (of which UK Research Partnership Investment Fund)	282 94
Science and Technology Facilities Council	213
Other	51

ODA

Council	£ million
Global Challenges Research Fund	106
Newton Fund	19
International Climate Finance [footnote 17]	14

Strategic Programmes

^{[footnote 18]}

Council	£ million
Industrial Strategy Challenge Fund	543
Skills and talent	31
Funds for International Collaboration	48
Strategic Priorities Fund	192
Strength in Places Fund	69
Future Leaders Fellowships	98
Dual Support: Research England funding	289
Other	85

Corporate funding, Vaccine Manufacturing and Innovation and DfE Strategic Priorities Grant

Programme	£ million
Corporate funding	151
Vaccine Manufacturing and Innovation [footnote 19]	98
DfE Strategic Priorities Grant [footnote 20]	47

Total for Table 2

£8,656 million. ^{[footnote 21]}

1. UKRI was originally allocated £8,447 million for the last financial year. The government subsequently announced a £300 million additional, one-year investment to upgrade scientific infrastructure through the World Class Labs funding scheme. As a result of this and other adjustments, UKRI’s budget for 2020/21 was £8,668 million. The allocation for 2021/22 represents a significant increase on UKRIs £7,347 budget in 2019/20. See further detail on UKRI’s allocation and historical comparison ↩

2. Excludes £37m funding transferred from UKRI to BEIS for Advanced Nuclear Fund. ↩

3. ODA element includes International Climate Finance (ICF) funding for ICF eligible R&D programmes. ↩

4. Includes £14m for the UK contribution to the Joint European Torus (JET) programme. ↩

5. Met Office have been allocated £37.1m in 2021/22 to start delivery of the new Supercomputer announced by the Chancellor in February 2020 and approved by the Chief Secretary to the Treasury in March 2021. ↩

6. ODA element includes International Climate Finance (ICF) funding for ICF eligible R&D programmes. ↩

7. Includes £15m, subject to business case approval, to support the lifesaving work of medical research charities by helping develop the pipeline of early careers researchers working in related fields. BEIS will be asking UKRI to deliver this programme. DHSC will be providing an additional £5m. ↩

8. Up to £50m will be available to spend on ARIA in 2021/22, which we expect to be formally established later this year following the completion of the Advanced Research and Invention Agency Bill, as part of an initial commitment of £800 million over the next four years. ↩

9. BEIS has taken on responsibility for the Government’s Knowledge Assets programme which has been allocated up to £17m in 2021/22. The programme will support the exploitation of government-owned intangible assets by launching a new unit and fund to scout for and develop government ‘knowledge assets’ (IP, data, R&D, tech and other intangibles). ↩

10. Includes the Net Zero Innovation Portfolio (NZIP) announced in the Prime Minister’s Ten Point Plan for a Green Industrial Revolution, the Advanced Nuclear Fund (ANF) and hydrogen programmes. ↩

11. NDA R&D is included in BEIS’s 2021/22 headline settlement figure. Read more on NDA R&D. ↩

12. This includes provision for funding the United Kingdom’s contribution to EU programmes including Horizon Europe, Euratom Research & Training, and associated volatility risk. We will pay a fair share towards Horizon Europe (around £1bn) and other EU programmes such as Euratom Research and Training (around £200m), the terms of which are set out in the UK-EU Trade and Cooperation Agreement (TCA). The exact annual cost will vary depending on factors including whether the UK is excluded from any parts of the programme, GDP and foreign exchange rate considerations. We expect the funding set aside to cover these costs. We will not pay for any parts of the programme we are unable to access. Government will separately be providing funding for ongoing UK research projects already awarded under Horizon 2020, Euratom and Copernicus, which is worth over £500 million in 2021/22 for UK scientists and innovators. ↩

13. BEIS has an ODA R&D budget allocation of £170m and has been allocated £17m of ICF ODA for eligible R&D programmes. In addition we have a target to ensure £70m of core R&D spend is ODA eligible. ↩

14. From 1 April 2021, all Public Sector Research Establishments (PSREs) will be able to access Open Research Council grants on the same terms as other institutions. Widening the access to research projects to a broader range of talented individuals will drive up the quality of research. ↩

15. Includes £240m of programmes that Innovate UK manages on behalf of BEIS. ↩

16. BEIS has asked UKRI to maintain the balance of dual support at no less than 63p in the pound. UKRI has advised us that they will hold the balance of dual support (including ODA funding) at around 64p in 2021/22. ↩

17. This is additional funding from the International Climate Finance portfolio to support ICF eligible R&D programmes and the Singapore Marine Plastics programme. ↩

18. The National Productivity Investment Fund (NPIF) ringfence has now been removed, enabling a more strategic approach to funding R&D programmes. UKRI will continue with its 2021/22 delivery plans for programmes funded through NPIF. ↩

19. Initial allocation to fund programmes relating to vaccine manufacturing and innovation, ringfenced for Covid-19 activity. Further proposals are expected within the current financial year, yet to be approved. ↩

20. This funding is not included in BEIS’s total UKRI R&D allocation in Table 1 because funding is held by the Department for Education and transferred quarterly to UKRI via BEIS. ↩

21. Planning allocations to individual bodies are £363m higher than the budget limit to mitigate risk of underspends and ensure best use of available funding. ↩