Dear research and innovation community,
In recent days there has been concern and speculation about the levels of investment for curiosity driven and applied research. At the same time details of a significant programme of savings that are required to put the Science and Technologies Facilities Council (STFC)’s finances on a sustainable footing have become public.
I know that periods of change and uncertainty are unsettling and so I wanted to write directly to you and be as clear as possible about what is happening.
The new approach UK Research and Innovation (UKRI) is taking to deliver its mission (to advance knowledge, improve lives and drive growth) means that simple year-on-year comparisons of investment levels are not possible.
I understand the desire for certainty over budgets and want to assure you that we are working to provide this as quickly as possible. I also appreciate that the hard decisions UKRI is making will result in negative outcomes for some. That is an unfortunate reality, of which we are acutely aware, but we cannot avoid.
The fact that you are so passionate about your specific endeavours is precisely what makes you good at it; without that passion the UK would not have its prominent international position. I know just how acutely you feel these investment choices, precisely because I’ve felt exactly that disappointment myself when projects I’ve been involved with have not been funded. However, you, and the public we serve, should expect UKRI to make hard choices, to be decisive, and to support research and innovation which delivers the biggest impact against our mission to advance knowledge, improve lives and drive growth and that includes making sure that the long term nature of curiosity driven research is not only protected but can grow as the economy grows.
The overall budget rises
I want to be clear that in this Spending Review (SR) period (2026 to 2030) UKRI’s overall budget for research and innovation is rising. That is a privileged position at a time of constrained public finances, and we should recognise it represents a vote of confidence in the research and innovation community from the government.
As a result of UKRI’s allocations, the overall level of funding available for universities, researchers and innovators increases to almost £10 billion a year by the end of the SR period. At the same time as this vote of confidence, we have had clear direction from government that we need to focus and do fewer things better. This includes more clearly aligning with national and societal priorities to ensure public money is invested to deliver outcomes for the nation and its people.
What we are changing and why
In response we are changing to focus our investment across three ‘buckets’: curiosity-driven research; strategic government and societal priorities; and supporting innovative companies to start and scale. All underpinned by investment in infrastructure, facilities and skills. UKRI has always funded these three areas but has not been as clear as it needs to be on what goes where and what outcomes are expected.
To deliver this investment effectively UKRI is changing. Many programmes will still be delivered through the councils, as the domain and subject matter experts. However, where multiple councils have a significant interest in a field, like artificial intelligence, we will bring teams together and have one UKRI-wide targeted programme, instead of running multiple programmes from within several councils. This type of change of course was one of the clear aims when UKRI was first proposed.
It is one reason why like-for-like comparisons are not possible. However, across all buckets, the overall investment available to universities across block grants and competitive funding opportunities will increase across the SR period.
I want to emphasise that support for curiosity driven research is protected across the SR period, comprising around 50% of our investment, with the other half of our budget supporting applied research and innovative companies. This proportion is not a change, it is reflection of the position over the past years.
Curiosity-driven research is vital to the health of the sector and is a priority for UKRI and the government because this is where the truly transformational discoveries and novel ideas are most likely to arise. Funding for this will grow as the economy allows.
What that means now
To meet these goals, we are in a review period to develop implementation. We expect to have fully transitioned to the new model by the start of the 2027 and 2028 financial year.
Speed is imperative to deliver against our mission, so we need to move quickly.
UKRI is a complex organisation, and we deliver many programmes across the seven research councils, Innovate UK and Research England with both our direct allocation and with money from other government departments. Moving to a new model, including creating new cross-council programmes and those aligned to national priorities, is a significant organisational change.
You may be aware of recent pauses to some programmes. For our curiosity-driven research programmes, headroom in funding will increase, as existing commitments continue to wind down and you can expect to see new opportunities opening later this year. To repeat the point: levels of funding for curiosity-driven research will remain stable across this SR period and are reflective of recent years.
In the strategic government and societal priorities bucket, or the ‘applied’ bucket, which will be designed to deliver nearer term outcomes, we will largely (but not exclusively) align programmes with the eight Industrial Strategy Sector Plans. We are scoping new programmes that will deliver across applied research and support for innovative companies, and new activity will begin to launch from spring this year.
I have been clear since joining UKRI that doing fewer things better means that tough decisions will be necessary. This is not about choosing between disciplines, one of the best things about UKRI is that we support such a broad range of research and innovation. But it does involve making concerted choice of areas of focus within disciplines.
Making those choices means that some activities will benefit from increased investment, but other areas will unfortunately experience some reductions, and you can expect to see UKRI making more of these decisions in the coming months. I believe that unless we make those choices we will all lose out in the long run because we won’t be supporting anything at the critical levels needed to truly succeed.
Situation at STFC
The situation at STFC is unique among the UKRI councils because its cost base has increased significantly due to the type of facilities and services it manages, the research it funds and some projects with higher costs than foreseen.
Over the previous SR period, rising energy costs and unfavourable movements in foreign exchange rates increased STFC’s annual costs by over £50 million a year. These unforeseen costs and an ambitious programme from the previous SR have increased the pressure on STFC’s budget. Despite a record UKRI settlement for 2026 and 2030 and STFC’s core budget holding relatively flat from £835 million to £842 million over this period, a reset is needed as currently STFC’s costs will outpace the funding available and would eat into other parts of the UKRI budget.
In order to remain sustainable, STFC must make significant cumulative savings: a decrease of £162 million relative to our forecasts for their operational costs. The £162 million is the total net reduction in STFC’s annual costs that they must achieve by the end of the 2029 and 2030 financial year. It is not a £162 million saving in each year of the current SR period. Instead, STFC needs to reshape its cost base over the whole SR period so that their budget is balanced by 2029 and 2030 and key facilities are funded properly and sustainably.
That is not the situation at other councils and we do not anticipate equivalent measures will be necessary outside of STFC.
It is important to understand that the specific measures STFC must take should not be confused with the broader changes taking place across UKRI.
I hope this helps assuage some of the concerns that have been raised. I do not expect everyone in the sector to agree with the choices we are making, but I feel it is important to be transparent about those decisions. I will continue to update the community as we move through these changes.
I firmly believe that these decisions not just benefit the UK research and innovation community in the long term, but our real customer, the UK public, as we deliver on our mission to advance knowledge, improve lives and drive growth.
Yours faithfully,
Ian