Russell Group calls for Government to prioritise science and innovation-led growth ahead of medium-term fiscal plan

19 October 2022

Science, skills and innovation will deliver jobs, investment and the productivity boost needed to land the Government’s plans for economic growth, the Russell Group of universities has said today (19 October 2022).

Ahead of the Government’s medium term fiscal plan on 31 October, the group which represents 24 of the UK’s top universities has set out a series of proposals that will help to leverage in private investment and encourage more businesses to collaborate with universities on innovative R&D to create high value jobs and boost economic activity.

Government investment in R&D is one of the most effective forms of seed funding to grow the economy with every £1 of public money spent on R&D at a Russell Group university returning an average of £9 to the exchequer.

Those returns demonstrate the potential of universities to be the engines that will drive the growth the Government wants and underlines the importance of maintaining plans to increase public investment in R&D to £20bn per year by 2024/25. 

According to new analysis from the ONS, public spending on research is stimulating even higher levels of private investment than previously thought meaning the amount of additional funding in ‘crowded in’ as a result of this spend could rise to as much as £50bn.

Commenting, Dr Tim Bradshaw, Chief Executive of the Russell Group, said:

"The Chancellor’s fiscal plan is a golden opportunity to put R&D at the centre of a long term political and economic strategy to deliver for businesses and communities in towns and cities across the country.

"As well as a proven return on investment for the taxpayer, building the capacity of the UK’s world-class research base will enable the UK to maintain its strategic advantage in science and technology and better equip it to address the global challenges we face, such as the transition to net zero and public health."

The Russell Group has also called on the Government to maintain UK leadership in global R&D collaboration, a key plank of the UK’s strength in science. It has cautioned that the visa system must remain competitive to ensure the UK can continue to attract top quality international students and researchers. Urgent action to deliver association to the Horizon Europe programme and the benefits it provides should also remain a top priority. However, the Russell Group is ready to work with the Government to develop an ambitious alternative programme, should it be needed, backed by the full funding set aside for Horizon and other science programmes.

Proposals set out by the RG include:

• Align new ‘investment zones’ with regional innovation clusters centred around research-intensive universities as key anchor institutions. By drawing on the research excellence and commercialisation expertise of our world leading universities, these innovation hubs have the potential to be a magnet for investment – creating high-value jobs, new homes and vital infrastructure in towns and communities across the country. For example, the University of Manchester’s new £1.5bn innovation district, ‘ID Manchester’, will help to commercialise cutting-edge research in the North West, supporting up to 10,000 new high-quality jobs and adding £800m GVA to the regional economy annually.
• Expand proven R&D funds to support UK spinouts and start-ups. Expanding established R&D schemes with a track record of proven returns, such as the Higher Education Innovation Fund and Research Partnership Investment Fund will strengthen local research and innovation ecosystems, supporting UK-based spinouts to reach their potential and support jobs and growth in the UK.
• Reform VAT rules to encourage increased collaboration between universities and businesses.
• Prioritise low burden, low bureaucracy Quality Related (QR) funding. QR was key to the development of the Oxford AstraZeneca Vaccine and is used to nurture agile and innovative responses to challenges such as net zero and other health inequalities. For instance, investment in discovery research across Russell Group universities is leading to more efficient energy systems, from improving the efficiency of heat pumps at the University of Glasgow to increasing electricity generation through solar panels at the University of York. This will bring down household bills as well as generating valuable UK exports.

The Russell Group's full submission to the medium-term fiscal plan can be found below.