In a difficult financial climate, the UK government’s Department for Science, Innovation and Technology (DSIT) has announced a small rise in its R&D budget for the new financial year. However, funding for UK Research and Innovation (UKRI), the country’s largest public funder of research, remains flat, which represents a cut in real terms. The cut has prompted some organisations to voice concerns over future funding for fundamental research.

The government’s total R&D budget is £20.4 billion for the financial year 2025–26. Of this, DSIT receives £13.9 billion, up from £13.3 billion last year. DSIT has allocated £8.8 billion to UKRI and £2.7 billion to EU programmes, including the UK’s contribution towards Horizon Europe. National Academies receive £217 million and the Advanced Research and Invention Agency, which invests in high-risk, high-reward research, gets £184 million.

UKRI has seen a cash terms increase in its budget in recent years, rising 14% from 2020–21 to £8.9 billion in 2024–25. But high inflation has swallowed much of this increase, with this year’s settlement representing a real terms budget cut.

Despite a broadly positive outlook, the allocations mean that the financial year will be tight for UKRI, which appears to be receiving a flat cash settlement, says Daniel Rathbone, deputy executive director at the Campaign for Science and Engineering (CaSE). ‘Unlike previous years, funding for the Faraday Battery Challenge and Zero Emission HGV programmes are not included in the 2025–26 budget allocated by DSIT to UKRI, as UKRI will receive funding for those programmes from the Department for Business and Trade and the Department for Transport, respectively,’ he adds. ‘Once this is taken into account, it is likely that the UKRI budget will be broadly flat in cash terms, which is a cut in real terms.’

Spending priorities

CaSE also notes that the proportion of funding for UKRI has not been increasing in line with increases to overall government spending on R&D. In 2018–19, 54% of total R&D spend went to the UKRI, but this has fallen to 43% this year. Meanwhile, the proportion of funding from DSIT’s budget going to UKRI has dropped by 10% to 63% compared to last year. With UKRI being the main funder of discovery research in the UK, CaSE is concerned that this change in the balance of funding could have implications for fundamental research. Rathbone expects difficult decisions in the coming year on where to focus resources.

‘The announcement of a flat cash settlement for UKRI and others in the sector offers some stability at a time of significant economic uncertainty,’ says Adrian Smith, president of the Royal Society. ‘Amid a challenging funding envelope, the increased allocation for the science budget in DSIT can be seen as an acknowledgment of research’s central role in the UK’s future. We now await the spending review [in June] for the crucial detail of the government’s long-term vision for science.’

Tim Bradshaw, chief executive of the Russell Group, also welcomes a real terms increase in DSIT’s R&D budget but notes: ‘It’s important that flexible, longer-term funding like quality-related research is prioritised in UKRI’s budget to protect the pipeline of new ideas, talent and infrastructure.’

However, Sue Ferns, senior deputy general secretary of Prospect union, says the ‘funding cut’ for UKRI is disappointing and could have a direct negative impact on the economy. ‘This sector was already playing catch up after Brexit,’ she adds.

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