Backing Innovation: Highlights from the UK Government’s Spending Review – for R&D

There are some very positive announcements in the Spending Review for R&D.

The UK Government will grow its annual spend on R&D across the UK from £20.4 billion in 2025-26 to over £22.6 billion per year by 2029-30 – a sustained commitment to world-class research.

• £500m to launch a new R&D Missions Accelerator Programme.
• £410m for Local Innovation Partnerships, giving local leaders a bigger role in shaping the R&D landscape.
• £2bn to back UK leadership in AI, including:
  • £500m for a UK Sovereign AI Unit (via British Business Bank)
  • £600m for Life Sciences & Health Data Research Service
  • £240m for the AI Security Institute
  • £48m for the Tech Expert Programme

The Spending Review delivers increased investment in the innovation infrastructure to encourage early-stage investors:

• British Business Bank – investment capacity expanded to £25.6 billion
• Research & Innovation budget (via Innovate UK and related bodies) – £86 billion committed over four years, supporting the pipeline of fundable ventures.
• £30bn for nuclear + £2.5bn for carbon capture – major backing for energy security and green tech.

Jenny Hill, Head of Climate Analysis at HM Treasury, has commented:

“On the innovation side, some of the biggest investments are in nuclear (SMRs and fusion) plus a number of important programmes in the Advanced Manufacturing space and linked to the Missions. AI will play a critical role – as will blended finance… Colleagues are separately putting the finishing touches to the Industrial Strategy and 10 Year Infrastructure Strategy, which will be out in the next few weeks.”

The Government’s commitment to regional innovation was particularly notable, with significant investment allocated to high-impact infrastructure. A key highlight is the £750 million pledge to establish the UK’s most powerful supercomputer in Edinburgh, alongside recognition of Scotland’s distinguished history in R&D. This advanced system

“will give scientists in all UK universities access to computational power that can only be found in a handful of other nations”.

Overall, the Spending Review sends a strong signal that the Government is backing technology and innovation as fundamental drivers of economic growth across the UK.

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