The Office for National Statistics (ONS) have published the latest Government Expenditure on R&D (GovERD) statistics for 2023, which provide estimates of research and development (R&D) performed in and funded by UK government departments and the devolved administrations.

Overall Picture

In current (cash) prices, we have seen substantial increases in overall R&D expenditure by the Government since 2016. This trend has continued in the latest ONS figures for 2023, with an overall increase of 8.2% from £16.1 bn in 2022, to £17.4 bn in 2023. These annual increases are a positive outcome for R&D and demonstrate that the previous Government followed through on its commitment to increase public investment in R&D.

However, when considering these figures in constant prices, which account for inflation, much of the cash increase in recent years has been eaten up by high inflation. In 2023, the Government invested £14.8 bn in R&D (excluding defence), which, while significantly higher than the £12.2 bn in 2016 (adjusted for inflation), is broadly unchanged from an investment of £14.9 bn in 2019. It is not possible to include defence expenditure before 2019 as the figures are not directly comparable due to a change of methodology in 2018. When defence is included (from 2019), overall investment has continued to increase.

It is notable that the total expenditure in 2023 at £17.4 bn, is significantly lower than the £19.4 bn that was allocating for R&D at the 2021 Spending Review. This decrease is mainly due to delays in the UK reassociating with Horizon Europe and Euratom, which led to the former Department of Business, Energy and Industrial Strategy (BEIS) surrendering £1.6 bn of allocated funds back to the Treasury in 2023.

It is critical that the breadth of UK R&D continues to be supported by the UK Government if R&D is to drive economic growth and deliver wide-ranging benefits to society. This is why it was a positive step that the Government protected R&D investment in the October 2024 Budget with an R&D budget of £20.4 bn in 2025/26.

UKRI expenditure on R&D

We observe a continued downward trend in the proportion that UK Research and Innovation (UKRI) makes of the total R&D expenditure by the Government (excluding EU budget contributions).

There has been a steady increase in the proportion of departmental R&D expenditure within civil departments and the Ministry of Defence in recent years and, as such, the proportion of UKRI expenditure has fallen steadily, from 42% of expenditure in 2019 to 37% in 2023.

It is vital that the Government continues to support basic research through UKRI as this is the crucial underpinning of the UK’s research base. Increasing departmental and overall R&D investments are very welcome, but UKRI must not get left behind.