07.03.24 Market Intel

Budget 2024: Key points

What does the Spring Budget mean for innovation funding?

Granted Director, Jon Williams digs into the details. 

Chancellor Jeremy Hunt has delivered his latest Budget, likely to be the last before a general election is called. Alongside widely-publicised personal tax cuts, the budget unveiled new research & development initiatives to boost the UK’s science and technology sectors.

The Government has previously stated its ambition to make the UK a leader in advanced manufacturing. This Budget provided some much-needed clarity on how the previously announced £4.5 billion funding package would be distributed, particularly across key sectors such as automotive, aerospace, clean energy and life science manufacturing.

For the most part, details of the specific mechanisms the Government will use to distribute this funding remain elusive. However, the Budget did confirm the likely segmentation of the funds and the timeframe over which they will be distributed:

  • A five-year initiative, starting in 2025, will allocate over £2 billion to the automotive industry, with a focus on the Auto2030 program for zero-emission vehicle manufacturing and supply chains;
  • The aerospace sector will receive £975 million, channelled through the Aerospace Technology Institute (ATI) programme, which also offers R&D support for small businesses through the ATI SME competition

Additionally, the Government is expanding the Made Smarter Adoption program to promote advanced manufacturing practices. To support the development of low-carbon manufacturing supply chains across the UK, £120 million has been allocated to the Green Industries Growth Accelerator (GIGA) and up to £390 million each for supply chains in offshore wind & electricity networks and Carbon Capture Utilisation and Storage (CCUS) and hydrogen.

In addition to this strong focus on advanced manufacturing, other sectors that were specifically highlighted in the Budget include the farming and green-tech industries and life sciences. This includes:

  • Additional grant funding of £427 million for the UK farming sector to support investment in agricultural productivity and innovation;
  • £520 million has been allocated to advanced manufacturing in the life sciences sector. Competitions for both large-scale transformational investments and medium and smaller-sized companies will open for applications later this year.

Further support announced by the Government includes:

UK as an international leader in AI safety: to support the transition to an AI-enabled economy to fuel growth, funding of the world-leading Turing Institute will be boosted to £100 million. This will help cement the institute’s leadership in setting research agendas alongside supporting UK business and government’s adoption of AI. The funding comes on top of the £100 million already invested to establish the UK’s AI Safety Institute – the world’s first state-backed institute dedicated to AI Safety.

Investment Zones: The previously announced Investment Zones, aimed at stimulating business investment in Research & Development (R&D) through tax breaks and localised grants, have received further clarification. Specific zones, like the Tees Valley Investment Zone, will prioritize R&D investment in designated sectors, such as digital and creative industries.

R&D Tax Relief: To expedite and enhance R&D tax relief support for legitimate innovators, a new expert advisory panel will be established by HMRC (Her Majesty’s Revenue and Customs).

LIFTS (Long-Term Investment for Technology and Science): Clarification on the LIFTS program aims to unlock £1 billion in capital investment from pension funds and channel it towards innovative British companies. This clarification is expected to facilitate the flow of funds.

Unlock innovation funding

The UK Government’s focus on innovation funding is likely to be consistent irrespective of other political priorities given the UK’s need to continue to compete in a global arena. Innovation grants, used to stimulate private R&D investment, are currently plentiful due to prior government commitments and numerous funding deadlines are approaching in the next few quarters.

Regardless of political orientation, innovation funding will remain a priority. If you want to understand what grant funding your project could be eligible for, how to build grants into your innovation or financial plan, or ensure a stable cash flow to your already funded projectget in touch.


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