The Spending Review 2025 signals confidence in research. But will QR funding keep pace?

The UK government’s Spending Review signals government confidence in the value of university research and development (R&D). 

With the Department for Science, Innovation and Technology (DSIT)’s internal allocations yet to be set, the role of a little-known but vital funding stream called quality-related research funding (QR) will prove essential for the government to achieve its aims.

The government’s much-anticipated Spending Review was an overall boost to the UK research sector. In the review, the government has put aside £22.6 billion per year for research and development by 2029–30 – a 2.8% increase in real terms. 

The government’s Industrial Strategy and five of the eight sector plans are now out, giving us a clearer picture of where UK R&D is heading.

There’s a strong focus on using public R&D investment to drive long-term economic growth, which also includes a commitment to advancing basic curiosity-driven research and a push for UK Research and Innovation (UKRI) to pivot its programmes and budgets towards research and innovation priorities set out in the Strategy. 

Major announcements in the Spending Review include:

• a £500 million R&D Missions Accelerator Programme that directly supports the government’s five missions
• £750 million for a new supercomputer at Edinburgh University, a piece of research infrastructure critical to projects ranging from drug discovery to engineering and clean energy
• £1 billion over the course of the Spending Review for the Advanced Research and Invention Agency (ARIA). 

QR funding is allocated to universities every six years based on their research performance. Following this, they get a set sum of money annually that they can use on anything research-related.  

QR funding is unique because it’s so flexible that it can be deployed based on the unique priorities and expertise of each institution. These priorities could include new research labs, investing in new talent, or upskilling skilled technicians. It enables universities to respond quickly to new opportunities and build capacity in priority areas, such as those identified in the Industrial Strategy.  

Most research funding in the UK is grant-based, meaning that it’s granted only for very specific projects, and usually doesn’t cover all overheads. QR funding is critical in bridging this financial gap. It supports the foundational, curiosity-driven research that often leads to breakthrough discoveries, while also giving institutions the flexibility to pursue more ambitious, strategic projects. 

The Spending Review’s real-term increase in research funding is much needed, as since 2010 QR funding has dropped by 15% across the UK. 

QR funding underpins many university research projects that support the government’s key priorities, enabling universities to contribute directly to national goals. 

The Universities of Newcastle and Leeds have worked directly with the NHS to deliver research that has led to improvements such as tiny robots that can take highly precise, non-invasive virtual biopsies of tumours, or new treatments for type 2 diabetes using targeted low-calorie diets.  

Newcastle has also worked with the NHS to integrate community pharmacies into the NHS 111 referral system, helping to refer over 55,000 patients to their local pharmacies for minor ailments and reducing strain on GPs and Emergency Departments. 

Swansea University is working on making nanomaterials safe for medical and commercial use, developing standardised safety tests and 3D tissue models to ensure new materials and products are safe for both medical and commercial applications.  

The Royal College of Art’s Regenerative Fashion Hubs have inspired designers and SMEs to use biotextiles and adopt a circular economy approach to their business practices.  

Additionally, Imperial College London is hosting an international consortium known as the Future Vaccine Manufacturing Research Hub to develop disruptive vaccine manufacturing technologies. 

With DSIT’s internal R&D budget allocations - including those for partner bodies like UKRI  on the horizon, both QR’s real-term value and its role as a flexible, strategic funding tool that is non-directed must be upheld.  

QR embodies the ability to pivot, resilience, long-termism, and cost effectiveness that the government is seeking to establish across the R&D ecosystem. It will be a key enabler for universities to both autonomously support government priorities as well as conduct more directed research supporting the government’s aims. 

Between now and the Autumn Budget, whatever the discussions taking place in Whitehall regarding R&D, the economy, or the financial sustainability of university research, it’s important that QR remains central to discussions. While it might not be well-known, it might well hold the key to the government’s ability to hold on to its promises of national renewal.