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Cross-government funding of research and development

Government needs a coherent view of the UK’s research strengths relative to other nations and an analysis of funding in key areas of research, so that it can prioritise areas where activity is lagging behind and ensure the UK is investing in the right areas, according to today’s report from the National Audit Office.

In 2015, total UK government expenditure on research and development was £8.75 billion. In 2016, the Government announced that it would provide an additional £4.7 billion of research and development funding by 2021. The Department for Business, Energy & Industrial Strategy (BEIS) has responsibility for the majority of government spending on science. However, around a third of public funding comes from other government departments. This cross-government investment in science requires strategic vision and clear information about how funding is used.

Today’s report finds that there is a risk that funders do not have coherent data across research areas on capability, funding gaps, or outcomes of research and development to inform decisions on national priorities and strategic direction.

While some of the more mature areas of research the NAO examined, such as human health research, have well-established arrangements to support co-ordination and collaboration between public sector funders, the NAO found that some important areas of science need more effective leadership. Despite consensus that it is needed, government has not yet established leadership and a strategy for investing in robotics. Government has also faced challenges in establishing stable leadership in advanced materials research.

Where there is effective leadership, funders work together to prioritise research investment. However, collective action is needed to prioritise investment in the three research areas the NAO examined (climate research, robotics and autonomous systems, and advanced materials) to ensure efforts are focused on addressing the principal challenges.

The report finds that most research areas the NAO examined lacked coherent and complete information on funding of research, skills and infrastructure. Many examined also lacked consolidated analysis of the impact of research and development.

The UK’s withdrawal from the European Union could affect how UK research is funded in future. The UK is a net receiver of competitive EU funding for research. Between 2007 and 2013, the UK contributed 5.4 billion euros and received 8.8 billion euros. The UK needs good information on funding, skills and infrastructure to establish which research programmes and facilities are potentially affected by the UK leaving the EU to inform future priorities for UK investment in science.

Among the NAO’s recommendations is that the UK Research & Innovation (the new organisation which will be in place from April 2018 to create an integrated research and innovation system) and BEIS should begin work with other government departments and the Government Office for Science to identify the areas of research that need strategic leadership and co-ordination. The NAO has separately published an evaluative framework to help funders assess and develop leadership arrangements in their areas of research.

“Some areas of research have well-established arrangements to support coordination and collaboration between public-sector funders. But some newer areas, including important emerging technologies and areas of national importance, need more effective leadership.As a proportion of GDP the UK spends less on research and development than many comparable nations. Government needs a coherent view of the UK's research strengths relative to other nations and analysis of funding in key areas of research, so that it can prioritise areas where activity is lagging behind and ensure the UK is investing in the right areas.”

Amyas Morse, head of the National Audit Office, 15 November 2017

Notes for Editors

£8.75 billion
Total expenditure on research and development by UK government departments, the research councils and the Higher Education funding councils in 2015

1.7%
Total UK expenditure on research and development in 2015 as a proportion of GDP

£4.7 billion
Additional government investment in research and development by 2021

Around £3.0 billion

Total estimated expenditure on research in 2015-16 by the Ministry of Defence, the Department of Health, the Department for International Development and the Department for Environment, Food and Rural Affairs

6

Number of research areas we examined in detail in this report: human health, animal and plant health, energy, climate, robotics and autonomous systems, and advanced materials


Above £3.0 billion

 

Total estimated annual expenditure in these 6 research areas

  1. The UK research environment is undergoing significant change. In 2015, Sir Paul Nurse's review of the research councils recommended better coordination of the research landscape and new cross-government arrangements to facilitate strategic research priorities. A new body, UK Research & Innovation (UKRI), will bring together the research councils, Innovate UK and Research England (HEFCE's research funding functions). UKRI will be in place from April 2018, and is intended to create an integrated research and innovation system. In January 2017, the government published its industrial strategy green paper which highlighted the importance of research for economic growth.
  2. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
  3. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 785 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services. Our work led to audited savings of £734 million in 2016.

 

Contact

NAO Press Office
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk

PN: 56/17