Government announces £55bn of public funding for R&D in drive to make UK a science and technology superpower
30th October, 2025
The government has announced how £55bn of public funding for R&D activities will be allocated in the next four financial years prioritising research for high growth sectors such as AI, space and life sciences.
R&D is recognised as an important driver of economic growth. A government report published on Thursday 30 October 2025 states that, on average, each pound invested in R&D generates eight times as much in benefits for the UK’s economy.
Announcement
At a visit to IBM’s Headquarters, the Science and Technology Secretary Liz Kendall announced how £55bn of public funding will be allocated over the next four financial years telling City AM that “there’s no route to above-average growth without putting tech and innovation first”.
Allocation of R&D Funding
The Department for Science, Innovation and Technology is responsible for the £55bn of public funding which shall be allocated as follows:
- £38.586bn to UK Research & Innovation (UKRI), the lion’s share of which will be awarded to universities, research institutes and innovative businesses across the UK;
- £2.7bn to the UK Space Agency;
- £1.22bn to the Advanced Research & Invention Agency (ARIA) which was set up in the mould of the US DARPA agency to deliver paradigm shifts through science;
- £925m for the Office for Life Sciences;
- £910m for the national academies;
- £240m for the AI Security Institute;
- £1.4bn for the Met Office; and
- £8.7bn towards the UK’s involvement in EU research programmes.
A more detailed breakdown of the allocation has been published in this corporate report.
How will this funding be used?
Much of this funding will be awarded in the form of grants towards specified activities and projects. Clearly this gives rise to legal considerations including satisfying the relevant funding conditions and Subsidy Control.
In respect of Subsidy Control, much of the scientific research carried out by not for profit research organisations is capable of being designed to be non-economic activity and therefore capable of being funded on “no subsidy” basis.
However, universities and other research organisations are capable of undertaking economy activity (including when engaged in feasibility studies and industrial research, but also when investing in infrastructure that will be commercially exploited) and in such circumstances a subsidy can arise.
There are different routes to manage subsidies, including the R&D&I Streamlined Route, but care must be taken at the time the award of financial assistance is made to avoid a situation where a subsidy is at risk of challenge (which can lead to the recovery of the financial assistance from the beneficiary with compound interest backdated to the time of award).
The funding being confirmed today comes from the transformative £86 billion for public R&D confirmed by the Chancellor at the Spending Review, £55 billion of which is being detailed today. Funding for some further R&D programmes will be confirmed in due course.
Conclusion
The announcement of £55bn of public funding towards R&D activities over the next four financial years is to be welcomed. Whilst it is hoped that this public funding will make a meaningful contribution to economic growth, new jobs and greater prosperity, in practice securing this depend upon delivery – how projects are designed and the steps taken to ensure diligent implementation, including appropriate attention to meeting the compliance requirements.
Ward Hadaway is a leading law firm with offices in Birmingham, Leeds, Manchester, Newcastle upon Tyne and Teesside. We provide market leading advice on all aspects of public funding including Subsidy Control and Grant Agreements. If we can help you, please get in touch.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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