In the March 2020 Budget, the Chancellor said that the Budget puts “science, innovation and technology at the heart of the UK’s investment strategy”. Alongside the headlines there were some significant announcements affecting the Science and Innovation Sector. These included:
Later in the spring the government will publish a landmark National Infrastructure Strategy which will set out plans for a once in a generation transformation of the UK’s economic infrastructure.
The government is committing £5 billion to support the rollout of gigabit-capable broadband in the most difficult to reach 20% of the country, so that all areas are able to benefit. This investment will level up connectivity across the UK, particularly in rural areas.
Business and enterprise support
The government will extend the funding of the British Business Bank’s Start-Up Loans programme to the end of 2021‑22, supporting up to 10,000 further entrepreneurs across the UK to access finance to start a business.
To ensure that all businesses have access to high quality support and advice in their region, the government will invest £10 million to increase Growth Hub capacity and provide high‑quality, core business advice and guidance across all 38 Growth Hubs.
The government will invest £13 million to expand the British Library’s network of Business and Intellectual Property Centres to 21 cities and 18 surrounding local library networks across England, providing entrepreneurs with business support, free access to market intelligence, IP workshops and one-to-one coaching.
Investing in innovation
The Budget sets out ambitious plans to increase public R&D investment to £22 billion per year by 2024-25. This landmark investment is the largest and fastest ever expansion of support for basic research and innovation, taking direct support for R&D to 0.8% of GDP and placing the UK among the top quarter of OECD nations.
This increase in investment will support a range of objectives, including:
supporting world-leading research in all regions and nations of the UK, including by cutting bureaucracy, experimenting with new funding models, and establishing a new funding agency to focus on high-risk, high-reward researchmeeting the great challenges facing society, including climate change and an ageing population, and providing funding to pursue ‘moonshot’ scientific missioninvesting in the government’s own strategic science capability and improving public servicesbacking businesses to invest and innovate so that they can compete in the global technology-driven economy
Research and Innovation
UK Shared Prosperity Fund (UKSPF) – The UKSPF will replace the EU structural funds, levelling up opportunity in each of the four nations of the country. Funding will be realigned to match domestic priorities, with a focus on investing in people. It will, at a minimum, match current levels of funding to each nation from EU structural funds.
Leadership in key technologies – The government will invest over £900 million to ensure UK businesses are leading the way in high-potential technology and sectors, including nuclear fusion, space, electric vehicles, and life sciences.
High-risk research agency – The government will invest at least £800 million in a new blue-skies funding agency here in the UK, modelled on the extraordinary ‘ARPA’ in the US. This agency will fund high-risk, high-reward science.
Funding for world-leading research – The government will invest up to £400 million extra in 2020-21 to support world-leading research, infrastructure and equipment across the UK.
Specialist institutions – The government will invest £80 million to support the UK’s foremost specialist institutions. This includes organisations such as the London School of Hygiene and Tropical Medicine, the Royal College of Art and the Institute of Cancer Research, among others.
National Security Strategic Investment Fund (NSSIF) – The government will provide an additional £50 million to the NSSIF. The British Business Bank will operate NSSIF direct investments through a new government company called British Technology Investments Ltd.
Government science capability – To support cross-cutting strategic science capabilities, the government will provide an additional £2 million in 2020-21 to the Government Chief Scientific Adviser and the Government Office for Science.
Natural History Museum research facility – The Budget allocates £180 million capital funding for a new, state-of-the-art Collections, Research and Digitisation Centre for the Natural History Museum at Harwell Science, Technology and Innovation Campus in Oxfordshire. This new facility will be a world-leading centre for natural sciences research.
Materials Processing Institute – The government will provide up to £22 million, subject to business case, to support research and innovation in the steel and metals sector through the Materials Processing Institute.
Life Sciences Investment Programme – The Budget provides the British Business Bank with £200 million for a new dedicated equity investment programme that, invested alongside private sector capital, is expected to enable £600 million of investment to support the UK’s best health and life science innovations
Supporting world-leading research in all regions and nations
The government is providing an immediate funding boost of up to £400 million in 2020‑21 for world-leading research, infrastructure and equipment. This will help build excellence in research institutes and universities right across the UK, particularly in basic research and physical sciences.
In recognition of their excellence and global reach, the government will increase funding for the UK’s foremost specialist institutions by £80 million over the next five years. At the CSR, the government will examine how R&D funding as a whole can best be distributed across the country to help level up every region and nation of the country.
The OxCam Arc
The government has designated the corridor of land connecting Oxford, Milton Keynes, Bedford and Cambridge (the OxCam Arc) as a key economic priority. Earlier this year, the government announced the East West Rail Company’s preferred route for the new line between Bedford and Cambridge. The government will also, subject to planning consents, build a new rail station at Cambridge South, improving connectivity to the world-leading research facilities of the Cambridge Biomedical Campus – the largest cluster of medical and life sciences research in Europe.
The Budget announced plans to develop, with local partners, a long-term Spatial Framework to support strategic planning in the OxCam Arc. This will support the area’s future economic success and the delivery of the new homes required by this growth up to 2050 and beyond.
The government is also going to examine and develop the case for up to four new Development Corporations in the OxCam Arc at Bedford, St Neots/Sandy, Cambourne and Cambridge, which includes plans to explore the case for a New Town at Cambridge, to accelerate new housing and infrastructure development.
Invest in government science capabilities and public science estate
Cutting-edge science and innovation can also help the government to ensure that it is sufficiently equipped to foresee challenges and opportunities and improve public services.
The government will invest £2 million in 2020-21 to expand the cross‑cutting strategic science and resilience capabilities provided by the Government Chief Scientific Adviser and the Government Office for Science. Furthermore, by investing £1.4 billion over 10 years in the animal health science facility at Weybridge.
Backing businesses to innovate and grow
Private investment will be crucial to meeting the government’s objective of increasing economy-wide investment in R&D to 2.4% of GDP by 2027, and to creating an innovation intensive and technology-driven economy. The Budget will support and encourage this by increasing the rate of Research & Development Expenditure Credit from 12% to 13%.
The Budget will also invest over £900 million to ensure UK businesses are leading the way in high-potential technologies. This will involve commercialising nuclear fusion technology, offering potentially limitless clean energy, and supporting the government’s ambitious National Space Strategy and space innovation fund.
Growing a greener economy
HM Treasury will also publish two reviews this year – one into the economic costs and opportunities of reaching net zero, the other led by Professor Sir Partha Dasgupta into the economics of biodiversity.
Enterprise and business support
Enhanced local business support – Supporting enterprise is an important part ofthe government’s ambition to level up regions across the UK. To ensure that all businesses have access to high quality support and advice in their region, the government will:
invest £10 million to increase Growth Hub10 capacity and provide a high-quality, core
business advice and guidance offer across all 38 Growth Hubs
invest £13 million to expand the British Library’s network of Business and Intellectual Property Centres to 21 cities and 18 surrounding local library networks, providing entrepreneurs with business support, free access to market intelligence, IP workshops and one-to-one coaching
use the CSR to make it easier for businesses to access the information and support that is for them. As a first step, BEIS will lead the development of a digital service to provide businesses with tailored information about appropriate sources of support.
extend the funding of the British Business Bank’s Start-Up Loans programme to the end of 2021-22, supporting up to 10,000 further entrepreneurs across the UK to access finance to start a business. The government will set out plans to expand the programme at the CSR.
improve access to growth capital for innovative businesses – Since the 2017 Patient Capital Review, the government has announced substantial support for innovative businesses seeking access to long-term growth capital. To build on this, the Budget will provide the British Business Bank with the resources to make up to £200 million of additional investment in UK venture capital and growth finance in 2020-21.
Business rates review
The government is launching a fundamental review of business rates to report in the autumn. The Terms of Reference for this review are published alongside this Budget and a call for evidence will be published in the spring.
Capital Allowances: Structures and buildings allowance (SBA) rate – The annual rate of capital allowances available for qualifying investments to construct new, or renovate old, non-residential structures and buildings will increase from 2% to 3%.
Capital Gains Tax: Reduction in the Entrepreneurs’ Relief lifetime limit – From 11 March 2020, the lifetime limit on gains eligible for Entrepreneurs’ Relief (which offers a reduced 10% rate of Capital Gains Tax on qualifying disposals) will be reduced from £10 million to £1 million.
Review of Enterprise Management Incentives (EMI) scheme – The government will review the EMI scheme to ensure it provides support for high‑growth companies to recruit and retain the best talent so they can scale up effectively, and examine whether more companies should be able to access the scheme.