Repost of Dr. Clare Flanagan’s helpful summary of the budget and it’s impact on grant funding:
💡 Key takeaways 💡
✅Overall government commitment to protect record levels of R&D funding with an initial £20.4Bn allocation for 2025-26 🎉 🎉 🎉
Note Innovate UK, the UK’s national innovation agency, had a 50% uplift in the previous budget allocation to £2.5Bn 2022-2025 resulting in an unprecedented number of funding opportunities over the past few years so hopefully this will continue
✅Key departmental budgets (DSIT/DESNZ/Defra) will increase: DSIT funds UKRI which includes Innovate UK; DESNZ (formerly BEIS) programmes support development of energy innovations such as through the more recent Net Zero Innovation Portfolio; and Defra’s flagship Farming Innovation Programme provides support for innovators to work with farmers to develop agri-tech innovations. Again, closely monitoring to see how these programmes evolve
✅Several mentions of 10-year budgets to provide long-term certainty to benefit SMEs (and universities – see post 2/3): making it easier for start-ups and scale-ups to access external sources of financial support e.g. Enterprise Investment Scheme, Venture Capital Trust schemes to 2035 plus funding commitments (>£250Mn in 2025-26) for the British Business Bank’s small business loans programmes. The government will be consulting SMEs on support for accessing finance (e.g. recent Bank Referral and Commercial Credit Data Sharing schemes).
✅Creation of a National Wealth Fund to catalyse £70Bn of private investment to support the recently published Industrial Strategy (October 2024). This identified 8 growth-driving sectors for support: advanced manufacturing; creative industries; clean energy industries; defence; digital and technologies; financial services; life sciences; and professional and business services
✅Commitments for long term funding in line with the Industrial Strategy included £975Mn for aerospace, >£2Bn for automotive, and, <£520Mn a new Life Sciences Innovative Manufacturing Fund over 5 years.
✅A drive towards a digital transformation across the public sector & services
It will be interesting to see how this is delivered and could provide opportunities for innovators. Current mechanisms for support are Contracts for Innovation (formerly SBRI) where public sector organisations deliver funding procurement competitions with small businesses to develop and adopt new solutions and technologies.
✅£25Mn for a multi-year R&D Missions Programme to solve targeted problems
£25Mn is a not a huge pot of money (e.g. one round of Smart grants is usually allocated ~£25Mn) but this will be boosted by private and third sector investment.
🔥🔥Hot topics, regions & areas for support🔥🔥
💉Health & life sciences 💉
💉A real terms increase in funding for the National Institute for Health and Care Research (part of >£2Bn R&D funding) supporting life sciences innovation and accelerating the delivery of the health and growth missions
💉A boost to capital investment in public services in 2025-26 including £1.5Bn to increase capacity: 30,000 NHS procedures; >1.25Mn more diagnostic scanners & tests
🔌Net Zero/Clean Energy🔌
🔌Support for the first round of electrolytic hydrogen production contracts
🔌Accelerating grid connections and building new network infrastructure to deliver growth in clean energy industries and other growth sectors like AI, data centres, and manufacturing. Working with the new National Energy System Operator (NESO) and Ofgem
💻AI💻
💻Publication of an Artificial Intelligence Opportunities Action Plan setting out a roadmap to capture the opportunities of AI for enhanced growth and productivity
💻 Creation of a National Data Library giving researchers and businesses access to public data assets, enabling cutting-edge innovation, including AI
📖Universities📖
📖£13.9Bn for DSIT to invest in R&D in 2025-26. This includes at least £6.1Bn of support for core research
📖Support for commercialisation of academic research: >£40Mn over 5 years for proof-of-concept funding and improvements to support for researchers
📖10 year budgets to provide stability and long-term certainty with reference to industry partnerships
🚀Regions🚀
🚀Continuing the UK Shared Prosperity Fund at a reduced level for a further year, providing £900Mn
🚀Introducing integrated settlements for Greater Manchester & West Midlands with local funding landscapes simplified and consolidated into Local Government Finance Settlements
🚀£100Mn over the next three years to deliver innovative projects, partnering with Mayors and local leaders, and developing new approaches to public service reform with a focus on experimentation and learning
🚀Continued support for Innovation Accelerators, in the Glasgow City Region, Greater Manchester & the West Midlands
💸Grants schemes💸
🔌Continued support for the Industrial Energy Transformation Fund (IETF): £163Mn fund to support introduction of technologies into industrial processes that will cut energy use and/or reduce emissions. Announcements around this have been delayed since before the election so this is good news! 🎉
✈️Extension of the Advanced Fuels Fund for aviation decarbonisation for another year
🏭Made Smarter Innovation programme: <£37Mn funding in 2025-26. Funding for the Made Smarter Adoption programme will double to £16Mn in 2025-26, supporting more small manufacturing businesses to adopt advanced digital technologies and enabling the programme to be expanded to all 9 English regions
🌎Horizon Europe association is fully funded so UK researchers & businesses can continue to fully participate in the >£80Bn programme
Looking forward to more details on all of yesterdays announcement as Phase 2 of the spending review completes over the next few months (due late Spring 2025) and how this will be implemented in future funding support mechanisms.
In the meantime, get in touch if you would like to explore current grant funding opportunities and how we can support you with writing your application.
