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What the Spending Review means for physics in the UK

27 November 2020

The IOP responds to the UK government’s one-year Spending Review, announced this week. Here we consider how this latest financial settlement is likely to affect our sector in the UK, including research and development, innovation, and education.

On Wednesday 25 November, HM Treasury (HMT) published its Spending Review (SR) after undertaking an assessment of public investment.

Spending reviews fix departmental spending limits for between two and four years in areas which can be reasonably planned in advance. However in response to the extraordinary challenges facing the UK, this year the SR was shortened to a financial plan for 2021-22.

IOP chief executive Professor Paul Hardaker has welcomed the commitments to science in the SR, which despite the economic pressures facing the nation, invests in research and innovation to help the UK to be a prosperous and productive society in years to come.

Top government priorities

1. The government has confirmed the nation’s response to the COVID-19 pandemic as its key priority. Its primary aim is to control the virus and support public services, jobs and businesses.

2. Across the next year the government will launch an ‘infrastructure revolution’, consisting of £100bn in capital infrastructure and a new National Infrastructure Strategy, designed for economic recovery, levelling up, and achieve net-zero emissions. HMT has boosted research and development (R&D) budgets for the health and life sciences, committing £128m for R&D and vaccines manufacturing.

3. The government is looking to deliver on its commitments to level up the economy and opportunities in all regions and nations of the UK. It has announced a new Levelling Up Fund worth £4bn for England, and will deliver £0.8bn for Scotland, Wales and Northern Ireland. This aims to invest in local infrastructure and support economic recovery.

4. The government has made commitments to a green recovery from COVID-19, in order to reach the global goal of reducing greenhouse gas emissions. The SR resources the government’s Ten Point Plan to tackle climate change, and brings the total investment committed to support a ‘green industrial revolution’ to £12bn.

The announcements for physics

1. Investment in R&D

In a move to put the UK on track to become a ‘science superpower’, the SR committed £14.6bn for R&D in 2021-22. Investment in R&D is crucial for the long-term health, wealth and prosperity of the nation, and the IOP applauds the progress made in the SR towards R&D funding targets of 2.4% of GDP by 2027.

Of this investment into R&D, the government has allocated the Department for Business, Energy and Industrial Strategy (BEIS) £11.1bn in R&D funding to drive economic growth. This settlement will resource technologies and businesses through Innovate UK, support strategic government priorities, build new science capability, and support the research and innovation ecosystem, including the first £50m towards an £800m investment by 2024-25 in high-risk, high-payoff research. The IOP supports the beginning of investment for high-risk, high-reward R&D, and awaits clarification on how projects of this style will be undertaken.

The IOP welcomes the government’s substantial investment in science and technology across 2021-22, an investment which will significantly boost the physics community and the UK’s innovation capabilities.

2. International collaboration

The UK’s transition period with the European Union (EU) ends on 31 December. The Treasury has announced the UK is continuing to negotiate with the EU to gain associate membership of framework programme Horizon Europe.

The IOP has asked the government to urgently protect physics by securing association status of Horizon Europe and other EU funding programmes the UK physics sector contributes to and benefits from, or resourcing a domestic alternative which matches, or exceeds, funding which would have been available if the UK were a full member of the framework programme as an EU member state.

A resolution must be timely, to ensure a smooth transition to the programmes’ successors and to avoid a hiatus in funding.

3. The budget for education

The government has announced that the schools and education budget will increase from £47.6bn in 2020-21 to £49.8bn in 2021-22, an uplift of £2.2bn. In light of the significant pressures facing public resources, the IOP welcomes this uplift, in line with the SR in 2019.

This investment will boost the resources and delivery of the school curriculum, making steps towards building a workforce able to adopt and develop next generation innovation, and a society which thrives in the next industrial revolution.

Research has found that around the country, COVID-19 has exacerbated inequalities in education; the Institute for Fiscal Studies (IFS) has reported that “the closure of schools to most pupils during lockdown has led not only to a significant loss of learning but also to a widening of existing educational inequalities. Mitigating these effects will be a major challenge facing the school sector over the next few years.

In light of this, we applaud the government’s commitment of an additional £1.4bn in funds for ‘catch-up learning’. The catch-up learning fund announced by the government will be a vital resource for schools, enabling them to help students catch up on their learning.

Looking to the future, the IOP will be recommending that in the next Comprehensive Spending Review (CSR), the government invests in the next generation by resourcing a world-class system of subject-specific continuing professional development (CPD) for teachers, to provide them with the necessary subject knowledge quickly and efficiently and to build a more confident, engaged teaching profession.

Read our full analysis of the SR and what it means for physics (PDF, 293KB).