Spending Review 2025 submission
Maximising the value of the UK's world-leading universities and researchers will be crucial to driving growth, improving public services and raising living standards.
For our part, Russell Group universities will:
- Utilise our research, innovation and skills as engines for growth, transforming UK towns and cities
- Help break down the barriers to opportunity by addressing educational inequality and delivering the best value for students
- Act as key delivery partners for the Industrial Strategy, working with business to support growth across priority sectors
- Support efforts to build an NHS fit for the future, training the future workforce and providing a pipeline of innovations
- Champion UK prosperity whilst helping to safeguard national security
1. Research and innovation as engines for economic growth
Driving innovation is a key pillar of the government’s growth strategy, and continued support for research breakthroughs which advance healthcare, tackle climate change and rejuvenate business and the public sector will be crucial to transforming the UK’s economy.
To realise the benefits of R&D and create a more sustainable and resilient funding system, we recommend the government:
- Continues to grow R&D investment for the UK, including in discovery research
- Sets a spending profile for the UK’s research intensity to reach 3.25% by 2029/30, to become a leader in the G7. This would leverage over £10bn extra private investment per year by 2029/30
- Addresses the decline in value of QR and equivalent funding across the UK’s nations, and links future funding to inflation to prevent its value eroding over time
- Improves the cost recovery rates of research to help deliver a financially sustainable research system
2. Breaking down barriers to opportunity
The number of young students from the most under-represented areas studying at Russell Group universities is growing, with a 56% increase since 2019. Our universities have set ambitious targets to improve access even further but rising living costs are impacting every aspect of students’ lives.
Highly skilled graduates and postgraduates will form the bedrock of a resilient workforce. We will continue to work with UKRI and industry to secure a pipeline of research talent.
However, the OfS has warned that as many as 70% of England’s universities could run a budget deficit in 2025/26 without significant mitigating action.
We recommend the government:
- Helps to ease the growing financial pressures on students by improving the maintenance support package
- Supports high-level skills by significantly enhancing the funding package for the PhD training needed to meet the UK’s research ambitions
- Supports the financial resilience of the sector, including allowing tuition fee caps to increase with inflation, along with other measures that increase per student funding for teaching, such as the Strategic Priorities Grant
3. Research-intensive universities as key Industrial Strategy partners
Partnership between research-intensive universities, business, the public sector, central, local and devolved government must be central to the design and delivery of a new Industrial Strategy. Only universities can bring together science, technology, design and social science approaches to tackle complex industrial challenges from all angles. Making innovation and skills central to local and regional development policy – and bringing universities into the heart of this – will be crucial to supporting high-potential clusters around the UK.
The UK's research-intensive universities are already among the best in the world at commercialising their research. New evidence suggests large research-intensive universities deliver as much as £20 in economic impact for every £1 invested in Higher Education Innovation Fund (HEIF). However, the UK still lacks access to the scale of proof of concept, early-stage and scale-up funding needed.
To harness the full capabilities of the UK’s research-intensive universities, we recommend government:
- Helps universities increase their capacity to engage with businesses and drive innovation by significantly uplifting HEIF
- Creates a new ‘Spark Fund’ to bridge the early-stage funding gap
- Creates an inclusive Industrial Strategy for the whole UK. This should encourage and support universities to contribute to local growth plans and wider regional economic strategies
4. Building an NHS fit for the future
Research and innovation can make the NHS more sustainable, helping to deliver cutting-edge health and social care innovation. We should aspire to be the country of choice for clinical trials, open up digital health records, and build on pioneering work in genetics, AI-driven diagnostics, and advanced robotics to transform patient services.
Our universities train 3 out of 4 doctors and dentists, over 17,000 nurses and midwives per year and employ more than 4,200 (FTE) clinical academics. Given the current workforce challenges our healthcare system faces, a strategic approach from government is required to ensure training expansion is properly planned.
We recommend the government:
- Sets an ambition for our NHS to become the world’s leading health and life sciences research platform
- Sets funding milestones necessary for expanding training capacity through the 10-year Health Plan.
5. Strong foundations – championing UK prosperity whilst safeguarding national security
The government can work with universities to harness their strong networks and partnerships around the world to attract further overseas investment into the UK.
Higher education is also a major export activity in its own right, generating nearly £22bn in export income a year. International students bring skills, experience, cultural and social benefits – as well as significant economic benefits – to all the UK nations and regions. It is vital government supports universities to maximise global activities that drive UK economic growth.
It should remain a priority to strengthen our partnerships in Europe and beyond. R&D and university partnerships will be central to a refreshed UK-EU trade and investment relationship.
Research security is a shared national responsibility, and our universities work closely with government departments and the security services to identify and tackle hostile activity. However, more is needed to build on recent progress and respond quickly to emerging and dynamic threats.
We recommend the government:
- Ensures the UK remains a leading destination for international talent, with stable, affordable and internationally competitive visa routes, including retaining the Graduate Route as a priority
- Makes an early declaration of intent to associate to Framework Programme 10 – Horizon Europe’s successor programme
- Creates a dedicated research security fund to protect national security and secure valuable overseas partnerships
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