The UK Government has released a detailed report on R&D spending across the country, shining light on a clear divide in public funding. 

Previously, the UK Office for National Statistics (ONS) would run an R&D survey, asking each government department what R&D is conducted and where in government it is performed. This method left a gap, failing to collect data on where in the country R&D contracted outside of government takes place.

With a new interest in supporting semiconductors, understanding the distribution of R&D is vital to creating an effective strategy. In order to meet this need, they gathered detailed expenditure data from the three departments with the largest expenditure on R&D; the Department for Health and Social Care (which includes the NHS), the Business department, (which includes UK Research and Innovation) and the Ministry of Defence. These three departments constitute 88% of UK government gross capital and non-capital R&D expenditure.

The data can be accessed here: https://www.ons.gov.uk/visualisations/dvc2446b/fig2/datadownload.xlsx

When combined with the existing survey data, a clearer and more granular picture could be acquired, expanding the view to see externally contracted R&D. This 2021 regional data shows:

• The Greater South East (International Territorial Level 1 (ITL1) regions of London, the South East and the East of England) account for 49.9% of total UK public-funded expenditure on R&D.
• London and the South East had the two highest values of UK public-funded gross R&D expenditure of all UK countries and regions, whereas Northern Ireland had the lowest R&D expenditure value.
• Just over half (53.9%) of total UK public-funded purchased or funded R&D was performed outside the Greater South East in 2021.
• Of the total in-house performed UK public-funded R&D, 62.5% was conducted in the Greater South East, with just over one-quarter (28.0%) of total in-house R&D taking place in the South East.

This information will be directed towards building an effective strategy as well as reducing UK regional disparities.

Who We Are:

Swanson Reed is one of the UK’s leading R&D Tax Relief consultancies. We manage all facets of the SR&ED tax credit program, from claim preparation and audit compliance to claim disputes.

If you would like to find out more about how your business could benefit from R&D Tax Credit, contact a Swanson Reed R&D Tax Advisor today.