Impact of the Autumn 2021 Budget and Spending Review on Grant Funding

The innovation funding landscape is at the core of PNO’s services and yesterday’s Autumn Budget and Spending Review was a key event with implications across many industries/sectors. Generally, the announcements are positive and here we will take a closer look at those relating to innovation funding in the context of R&D grants.

Innovation key theme Chancellor’s budget

Innovation, alongside skills and infrastructure, was a key theme in the Chancellor’s budget. Therefore, it is no surprise to see innovation is included almost 70 times in the government’s official Budget 2021 document. The overall R&D budget will be £20 billion per year by 2024-25, which, although a reduction on a previous target of £22 billion, is substantial and provides certainty over the next 3 years. Furthermore, the previous target of £22 billion has been delayed by 2 years (to 2026-27) rather than being dispensed with entirely.

This funding commitment from the government is intended to cover wide-ranging investments. This includes an increased R&D budget of £14.5 billion in 2024-25 (from £11.3 billion in 2021-22) for the Department for Business, Energy and Industrial Strategy (BEIS), of which:

  • £5.9 billion in 2024-25 (up from £4.8 billion in 2021-22) will be for the ‘Core Research’ of UK Research and Innovation (UKRI) and National Academies thus supporting the UK’s world-leading universities and research institutions;
  • total funding of £2.5 billion (up to and including 2024-25) will be allocated to Innovate UK;


  • total funding of £6.9 billion will be to cover full funding for ‘EU Programmes Association’, which notably includes Horizon Europe.

There is an increased R&D budget of £2 billion in 2024-25 (from £1.4 billion in 2021-22) for the Department for Health and Social Care (DHSC), with the UK Bioindustry Association commenting further on life sciences related funding in their analysis.

A total of £12.8 billion (up to 2024-25) will be available for several other government departments including the Department for Digital, Culture, Media and Sport (DCMS), the Department for Environment, Food and Rural Affairs (DEFRA) and the Department for Transport (DfT).

Budget supports priorities agreed by NSTC

The commitments made in the Budget support priorities agreed by the Prime Minister’s new National Science and Technology Council, which include Quantum Computing, Artificial Intelligence, Bioinformatics and Space technologies. The government has also guaranteed funding for the Aerospace Technology Institute (ATI) to 2031.

Of almost £30 billion allocated to Net Zero and other green investments, it is expected that £1.5 billion will be directly allocated for Net Zero innovation (including R&D by BEIS, DEFRA and DfT) and this is in addition to the funding allocated to specific areas such as Transport, Buildings and Energy.

There is also £800 million to be allocated by 2025-26 to establish the new Advanced Research and Invention Agency (ARIA), which will carry out high-risk, high-reward research to support ground-breaking discoveries across the UK.

The commitments made in the 2021 Autumn Budget and Spending Review have been welcomed by organisations such as UKRI and The Russell Group.

R&D funding across the board

PNO are pleased to see R&D funding increases across the board, in particular for UKRI and Innovate UK. With our involvement across regional, national and European R&D funding competitions, we see the beneficial effects that R&D funding has across the UK and beyond. Whether it be energy efficiency, new drugs or medical devices, improved transportation, digital solutions or many other areas, we see the positive outcomes. Innovation from R&D funded by public investment such as that announced in this Budget has an impact on people, businesses, universities and other public organisations.

Looking for support?

PNO can support organisations in any industry/sector to win a share of this R&D funding for their innovations. Our expertise covers the entire grant acquisition process, including project qualification at no cost, a highly successful flexible writing or peer review service, and efficient project compliance/reporting. To explore the options for your organisation please call us on 0161 488 3488 or email