The challenge and promise of ten year R&D budgets

It has been a frequent complaint of anyone working in R&D that the constantly changing policies and priorities make long-term planning impossible. And we know from the NAO report into UKRI that even if long-term planning was possible there is little spare funding to go with it.

In lieu of long-term funding there have been lots of ideas that have had various degrees of success depending on enthusiasm, funding, or appetite for big change. We’ve had frameworks now folded into business as usual. Reviews of bureaucracy, funding, and the landscape, that are in various states of being answered, unanswered, and implemented. And the strategic debates on whether research should prioritise excellence everywhere, economic growth, regional distribution, or something else, have all gone unanswered.

It isn’t due to a lack of good ideas that R&D has ended up like this but because the incentives are misaligned. R&D is a system of funding ideas for delivery, reliant on a system of government departments, universities, and the private sector, which in turn is made effective by a supporting (and sometimes countervailing) ecosystem of measurements, funders, fiscal policies, and other interventions which make up the wider R&D universe.

The only thing that can drive the direction of such a disperse system is a clear direction for all of the components to rally round. The guidance issued to departments on the adoption of ten-year R&D budgets by DSIT minister Patrick Vallance is a signal of intent as well as a significant policy intervention.

There are two key criteria for departments to consider when awarding an organisation a ten-year funding settlement (or a longer or short settlement depending on specific conditions being met). The first is whether doing so has a scientific benefit. The second is whether doing so has an economic benefit. Overlaying these core criteria are then a set of further considerations including the strength of evidence that additional benefits will be realised, alignment with government priorities, and the levels of additional benefits realised. The guidance also provides four kinds of benefits that should be considered when awarding an organisation a long-term settlement.

There are some activities that are eligible for support that read as obviously sensible to anybody with even a passing knowledge of R&D policy. The idea that “core national infrastructure” should by default be funded on short-term basis is obviously a disaster for anyone that wants to invest in the UK’s core research capabilities. The benefit of infrastructure like laboratories, or data collections, or particle accelerators, is that while they might sit with a specific institution they benefit the whole nation. The more certainty they have about their existence the more they can plan, the less they can worry about funding, and the greater their collective impact should be.

Another targeted benefit is collaboration with businesses. Businesses often operate asynchronously to the wider research landscape. They are interested in both a long-term profit and outside of patiently backed venture capital firms they will usually avoid running up long-term losses. Unlike the public sector their viability also depends on their ability to return a profit. As such, funding collaborative capacity over ten-years should not only add a shared financial framework but a clarity around incentives on the basis in which research institutions and businesses may work together.

International collaborations are also in scope and there are some cases where they will plainly benefit from longer funding periods. The reason enormous multi-lateral partnerships like Horizon are funded over multi-years is that it elongates the lifecycle for frameworks to develop, for partners to coalesce under them, and for projects to be delivered. Collaborations like this should neither be so long as to encourage staleness or inertia as technology changes nor so short that focus is lost on programme delivery. It will therefore be interesting to see which collaborations are funded, on which basis, and as the guidance allows whether they are longer or shorter than ten years in some instances.

And in another targeted benefit it is easy to see the upsides of ten year funding settlements for skilled researchers, scientists, and engineers but this is where research policy begins to bump into wider problems with the UK’s economy. The UK has a lack of both absorptive capacity to make the most of people who have higher level skills, and skills policy has failed to close long-standing gaps in higher technical skills including roles like engineers. This development will only work if it’s linked to wider skills investment in the yet to be published final version of the industrial strategy.

There is much still to answer. Although funding will be for departments to decide within guidance this risks opening up new silos across departments and between departments and Labour’s industrial strategy and growth mission. If funding is ten years long it will be necessary for funding to be checked in on from time to time and the mechanisms and tools to do so have not yet been tested across departments. And there is of course the inescapable political gravity that over ten years funding could be subject to changes of government, cuts to funding, changes to priorities, and world events. All inevitabilities which could divert even the best made plans.