The UK is falling behind its competitors in R&D investment and the Government will be putting competitiveness, productivity and jobs at risk if it does not set out a clear roadmap to increase science funding in the Spending Review, the cross-party Science & Technology Committee is warning.
Committee Chair Nicola Blackwood MP: “The UK is a science superpower. With less than one per cent of the world’s population the UK produces over 15% of its scientific research. We have four of the top six universities and our academics are cited in 10% of all patent applications.
Our science spending, however, has now fallen below the OECD average and is well below key competitors like Germany and the US. The UK risks losing its status as a world leader in research if the Treasury does not make a long term commitment to increase science funding in the Spending Review.
Spending on science and innovation is not a state subsidy, it is a strategic investment that creates jobs, increases productivity and attracts inward investment.
Committing the UK to a 3% GDP target for science spending would send a crucial signal about the long term stability and sustainability of our science and innovation ecosystem, supercharging private sector R&D investment from industry, charities and overseas investors alike."
The MPs are calling on the Government to produce a long term ‘roadmap' for increasing public and private sector science R&D investment in the UK to 3% of GDP — the EU 15 Target. Since 2010 there has been a flat-cash settlement for resource spending in the Science Budget that has seen the real world value fall by around 6%. This has left the UK spending 1.7% of GDP on science and research, below the OECD average of 2.4% and behind the 2.8% and 2.9% spent by the US and Germany.
Capital and resource funding
The MPs also points out that capital spending on new science infrastructure must be matched by sufficient annual resource funds to run the facilities at full capacity. The inquiry heard that the £400m ISIS neutron source at Harwell will only run for approximately 120 days this year, instead of an optimal 180 days, reportedly due to in insufficient operational funding. The Committee is calling for a more robust system to integrate capital and resource funding. It recommends that the Government conducts an urgent review of all capital allocations to ensure sufficient resource is in place to ‘sweat our assets’
Nicola Blackwood MP: “At a time when the Government is focussing on productivity, it is farcical that we are not realising the full value of our capital investments because new science research facilities do not have the annual resources to run at capacity – because ‘batteries are not included’ with capital spending – this must be put right as a matter of urgency, not to mention common sense.”
Multiplier effect of public science spending
There is clear evidence that publicly funded R&D creates a strong ‘multiplier effect' and ‘crowds-in' private sector, charitable and inward investment, stimulating around 30% more self- investment from industry. For every £1 spent by the Government on R&D, private sector R&D productivity rises by 20p per year in perpetuity.
Nicola Blackwood MP concluded: “The Spending Review will have a profound impact on our science base and our future prosperity.
We face a century of complex societal challenges - from ageing to contagious diseases, climate change to antibiotic resistance – and it will be our researchers and innovators who are at the forefront of sustaining our way of life. We have responsibility to safeguard both the quality and the productivity of our science base to ensure we are in a position to meet that challenge.
In our increasingly knowledge-based economy, the pursuit of excellence in research and innovation will be at the heart of effective strategies for sustainable growth, increasing productivity, competitiveness and creating high-value jobs.”
Background
The Science Budget is managed by the Department for Business, Innovation and Skills. The March 2015 Budget announced an inflation-proofed ‘capital’ budget of £1.1b a year up to 2020-21. The Government's Spending Review on 25 November will determine the science — and innovation — ‘resource’ budgets for the rest of this Parliament.
The Government's own research shows that 51% of productivity growth between 2000 and 2008 was due to innovation and that firms that consistently invest in R&D were 13% more productive. The knowledge economy already accounts for one third of all jobs with STEM jobs commanding salaries 20% above the average.
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