Sunak confirms £800m for "blue skies" research agency amid R&D funding boost

Chancellor says government will boost R&D spending to £22bn a year by 2024-25


Photo: Aaron Chown/PA Wire/PA Images

The government has committed “at least £800m” to developing a high-risk research institute modelled on the United States’ Defense Advanced Research Projects Agency, the chancellor has announced.

The “blue skies” research agency will fund “high-risk, high-reward science”, and was one of several funding announcements for R&D in today’s Budget.

Funding for the agency will come from a staggered increase in government R&D spending to £22bn per year by 2024-25 – £4bn more than previously promised – in what Sunak called “the fastest and largest increase in R&D spend ever”. The boost comes after Boris Johnson said in November that the government would double R&D spending to £18bn.


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“The government will invest that money in the people, ideas and industries that will cement the UK’s world-leading position in science and technologies ranging from nuclear fusion to electric vehicles and life sciences,” the Treasury said.

Further details of how the money will be distributed will come in the next Spending Review, which Sunak confirmed would take place in July.

However, the Red Book published alongside the Budget did set out some spending commitments, including funding for the British Business Bank to set up a £200m programme to invest in the life sciences industry.

The government will also increase the R&D tax credit – a form of tax relief businesses can claim if they spend on research and development – from 12% to 13%, Sunak said.

Establishing a UK answer to DARPA has long been one of the priorities of the prime minister Boris Johnson’s chief political aide, Dominic Cummings, whose WhatsApp bio once read that his priorities were to “get Brexit done, then Arpa”.

Sunak did not say when the agency would be set up, but his announcement comes after Chris Skidmore – who was science minister until the February cabinet reshuffle – said a UK ARPA could be set up this year.

“Research and innovation lead to better products, services and processes. These drive growth and prosperity across the country, and generate ideas and tools to tackle global challenges such as climate change and an ageing population,” the Red Book said.

In the last few months, Cummings has coordinated meetings of ministers and academics to discuss how to set up such an agency, and has in the past accused the civil service of “blocking” previous efforts to set it up.

The idea has previously won the backing of several politicians – among them Michael Gove, who as a Conservative leadership candidate in 2016 said he wanted to create “our own equivalent to DARPA, providing the capital for new tech innovation and helping the tech sector grow even faster”.

The measures announced in today’s Budget are intended to move the needle towards the government’s goal of increasing total public and private spending on R&D to 2.4% of GDP by 2027, and 3% in the longer term.

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