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Innovate UK wins big in autumn statement

Agency has requested ‘hundreds of millions’ from Treasury

The chancellor Philip Hammond will announce a real terms increase in public research and innovation investment of £2 billion per year by 2020 when he delivers his first autumn statement on 23 November.

Part of this funding will be channelled through an innovation fund for technology development, dubbed the Industrial Strategy Challenge Fund. Research Fortnight understands that the proposal, submitted by Innovate UK, aims to support different technology areas and has a strong emphasis on commercialisation. The size of the fund remains unknown, but the agency is said to have requested “hundreds of millions of pounds”. It would mainly target businesses, but would also benefit universities.

The fund, expected to be run by Innovate UK, will be labelled by the chancellor as being “owned” by UK Research and Innovation. The initiative would allow the government to convey that Britain remains a science and innovation powerhouse.

A green paper outlining the government’s plans on industrial strategy will be published later this autumn, followed by a white paper in early 2017, prime minister Theresa May said in a speech on 21 November.

Research Fortnight understands that the Department for Business, Energy and Industrial Strategy is urging the Treasury to increase R&D spending in light of Brexit.

Sarah Main, director of the Campaign for Science and Engineering, said that Whitehall was warming to the idea of a roadmap raising R&D spending to 3 per cent of GDP by 2025. Such a proposal could be easier for the Treasury to endorse, as it would not require cash in the next financial year. “We are quite excited at the possibility that there might actually be a positive step forward for science in the autumn statement,” Main said.

An infrastructure bank modelled on the British Business Bank is said to have been discussed to fill the gap left by the European Investment Bank after Brexit, according to the Financial Times. Over the last decade, the EIB has lent more than £1.8bn to UK universities.

The autumn statement is likely to repeat commitments announced in the 2015 spending review. One example could be the Rosalind Franklin Institute, a national research centre on the physical and life sciences, to be constructed near Oxford. BEIS is said to have been reassured on several aspects of the project’s business case, including responsibility for its operational costs.

The fate of the Northern Powerhouse and Midlands Engine brands, coined by former chancellor George Osborne, hangs in the balance under May’s government. Koen Lamberts, vice-chancellor of the University of York, calls for these initiatives to not be abandoned. Kieron Flanagan, a senior lecturer in science policy at the University of Manchester, is predicting that Hammond will announce a science capital project outside the golden triangle “in the low hundreds of millions”.

The chancellor is also expected to confirm his commitment to boost by £100 million the Biomedical Catalyst programme, which helps life science companies to commercialise health technologies. And Main says that she would be “very surprised” if the industrial strategy were to exclude the arts, the humanities and the social sciences.

In August, the Treasury promised that Horizon 2020 grants would be underwritten until the UK leaves the European Union and for the lifetime of the project. Hammond is expected to confirm this commitment in his statement, and it is important to check whether the two elements—the funding and the duration—are present.

Hammond may also announce that the government will shoulder any extra costs for subscriptions to international facilities caused by the fall of the pound after the Brexit referendum—formalising a deal with BEIS first reported by Research Fortnight in September.

But two questions are likely to remain unanswered: who will fund EU research projects won by UK scientists between the date that Britain leaves the EU and the end of Horizon 2020 in December 2020; and what will happen to EU researchers in the UK. The government has said that both will be subject to negotiations with the EU.

This article also appeared in Research Fortnight