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Regional distribution of funding

UKRI’s mission is to work with our partners to ensure that world-leading research and innovation continues to grow and flourish in the UK.

The government has committed to ‘the fastest ever increase in domestic public R&D spending’, to accelerate its ambition of raising R&D intensity to 2.4% of gross domestic product (GDP) by 2027 and 3% in the longer term.

Reaching this goal will require raising R&D intensity in all regions and nations of the UK, to ensure the whole country benefits from increased public and private investment.

World-class research and innovation takes place right across the UK. But there are clearly significant concentrations of activity, funding, skilled people and more mature ecosystems in some of the more prosperous parts of the UK – most notably in London, the South East and the East of England.

As shown in Table 1, between them, these three regions make up 52% of national Gross Expenditure on R&D (GERD) in 2017-18.

Table 1: R&D activity by region 2017-18
Gross expenditure on R&D (GERD) [1] GERD % Business enterprise R&D (BERD) [2] BERD %
NUTS 1 region [3] 2017, £m 2017 2017, £m 2017
East Midlands 1,938 6% 1,521 6%
East of England 5,938 17% 4,677 20%
London 5,548 16% 2,796 12%
North East 707 2% 384 2%
North West 3,040 9% 2,174 9%
Northern Ireland 695 2% 512 2%
Scotland 2,529 7% 1,247 5%
South East 6,730 19% 4,860 21%
South West 2,334 7% 1,652 7%
Wales 744 2% 457 2%
West Midlands 2,965 9% 2,467 10%
Yorkshire and the Humber 1,641 5% 938 4%
United Kingdom 34,809 100% 23,685 100%

Building our regional data on funding

It is essential that UKRI is transparent about where our funding is delivered.

We are taking the first step in a programme of work to improve the public visibility of the regional footprint of our funding, starting with Research England’s quality-related research funding allocations (QR) and Innovate UK’s funding.

Next steps

The data release here is the first step in our programme to publish annually comprehensive regional funding data that includes research council and cross-cutting investments.

Improving our data will allow a more in-depth understanding of how UKRI funding supports R&D related growth in different places and different contexts.

This will be part of a wider work programme in partnership with BEIS and other government departments to understand the evidence on regional R&D activity and the opportunities for further investment in R&D across the country.

Regional breakdown of quality-related funding

Table 2 below provides a breakdown of QR funding, allocated to eligible higher education institutions in England by Research England and determined through the devolved higher education funding bodies for QR-equivalent funding in Wales, Scotland and Northern Ireland.

The distribution of Research England’s QR allocations is largely driven by the scale, cost and quality of research activity in universities.

Table 2 shows high concentrations in London, the South East, Scotland and East of England, reflecting the presence of very large research-intensive institutions in those regions. Taking the number of universities receiving research funding in a region into account, the picture changes, bringing the North East into the top four best performing regions.

Accounting for the number of researchers in each region receiving QR (or equivalent), funding is still reflective of the concentration of research-intensive universities and skills, however it shows a different distribution with Northern Ireland emerging as the top recipient.

Table 2: QR research, postgraduate research funding and research excellence grant, academic year 2017/18
NUTS 1 region  QR, PGR and REG research funding allocated [4] QR, PGR and REG research funding per researcher approx. (£) [5] QR, PGR and REG research funding per research active university (£m) [6]
East Midlands 101 6,078 11
East of England 165 8,753 16
London  476 10,080 12
North East 68 6,679 14
North West 146 5,755 10
Northern Ireland 49 10,339 12
Scotland 278 9,979 15
South East 291 8,517 15
South West 107 6,862 8
Wales 63 6,265 7
West Midlands 99 5,546 8
Yorkshire and the Humber 135 6,329 12
United Kingdom  1,978 7,916 12

Regional breakdown of business-led innovation

Innovate UK funding is focused on supporting UK business innovation, including in collaboration with research organisations.

The regional distribution of Innovate UK allocations is closely linked to the economic composition of each part of the country. The data shows large year-on-year fluctuations in funding allocations, driven in part by occasional large grants for centres such as the Catapult network.

To account for the differing economic structure and number of innovative businesses in each region, we normalise by the number of businesses claiming R&D tax credits, over multiple years.

This shows the North East, West Midlands, South West and Scotland emerge as the top four beneficiaries of Innovate UK R&D funding.

The North West, Wales and Northern Ireland on average receive the least Innovate UK funding.

Table 3: Innovate UK funding, 2017-18 financial year
Innovate UK total allocation [7] Innovate UK total allocations per business claiming R&D tax credit [8]
NUTS 1 region 2017-18 FY (£m) 2017-18 FY (£)
East Midlands 65 20,870
East of England 114 24,267
London 214 22,126
North East 32 19,958
North West 55 11,150
Northern Ireland 9 6,576
Scotland 44 19,801
South East 184 24,685
South West 134 36,463
Wales 20 13,003
West Midlands 235 56,659
Yorkshire and the Humber 47 13,964
United Kingdom 1,152 24,149

What the above data shows us is that the overall level of QR (or equivalent) and Innovate UK funding reflect the regional R&D concentrations across the wider economy.

When taking the research-active business and university populations into account, these UKRI funding streams build on strengths in all parts of the UK, but there are still variations which require further investigation.

Notes

1, 2. Source: ONS

3. The data uses NUTS 1 regional classifications which divide the country into 12 major nations and regions.

4. Figures for 2017/18 are the latest available for funding received. QR funding is allocated within the academic year. Source: HESA

5, 6, 8. Please note that Researchers is the combination of staff and student researchers. Staff researchers have been defined as staff who are on an ‘Academic contract that is research only’ or an ‘Academic contract that is both teaching and research’. Student researchers have been defined as those registered for a ‘Doctoral degree that meets the criteria for a research-based higher degree’. Source: HESA microdata

Source for number of businesses claiming R&D tax credits: HMRC
If you would like more information about the denominators used in calculations contact: lyuba.dimitrova@ukri.org

7. Includes all Innovate UK allocations in financial year 2017-18 from transparency data. Value is calculated using grant offered variable, and project start date. Source: Innovate UK funded projects since 2004

Note: Innovate UK total allocations are subject to annual variation. Additionally, the figures do not account for a headquartering effect, whereby a grant location may be recorded as the headquarter of a firm and not where the R&D takes place.

Last updated: 20 November 2020

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