UKRI has two functions. The first is to coordinate the work of seven research councils to improve research quality, impact, and infrastructure. The second is to use this convening power to achieve social good such as economic growth. The National Audit Office criticised the impact of UKRI against both of these missions.
The standard approach of UKRI has been to fund blue-sky research, things that universities and others do that push the boundaries of accepted knowledge, and to fund a portfolio of other projects, buildings, and people, to achieve a broader set of missions shaped by DSIT.
The forever tension is that this approach can lead to a great sprawl. The internal competition to establish grants underneath each research council requires a great degree of internal coordination. The bidding process for these grants is even sprawlier still. And there is no guarantee that blue-sky research will produce the kinds of things the government wants in order to achieve its mission of economic growth.
Until now, research funding has been the story of nudges toward the things government wants through bodies it influences but does not control, and through setting the legal and reporting guardrails for the train of unrestricted and unhypothecated research funding largely allocated through QR. This is now going to significantly change.
Bucketing down
UKRI’s budget allocation process is the single most powerful tool it has to shape the research ecosystem.
Today’s new settlement for the next four years of research investment has gone all in on developing cross-disciplinary funding to meet government priorities such as the industrial strategy, targeted investment in key technologies, protecting curiosity-led research, and significant increases to skills and infrastructure. It is funding that follows a government’s plan, and it’s also a marked shift in how the funder operates as an organisation.
One instructive way in to what’s going on is to compare the newly published allocations explainer to the one covering 2025–26. That previous document was a slim six-page, 1000-word canter through how much each of the funding councils was getting, in essence. UKRI’s new allocations for the rest of the spending review period are a very different beast.
First up, we’re told that it is “not possible to directly compare these allocations to previous budgets,” such is the nature of the overhaul. And while this sounds like it could be spin to distract from subtle cuts in less politically trendy areas, it is basically true – the whole budget process has been reimagined. It’s also worth observing from the get-go that the generous overall R&D spending review settlement makes it much easier to get away with these big and potentially thorny changes – compare the prompt announcement here with the ongoing wait for news about how the Office for Students’ strategic priorities grant will be reformed.
In headline terms, it should come as little surprise to see the “bucket theory” front and centre – this had already been established by the Liz Kendall and Ian Chapman speeches last month. To recap, though, overall across the four years there is £14.5bn for curiosity-driven, foundational research (Bucket 1), £8.3bn for targeted R&D addressing strategic government and societal priorities (Bucket 2), and £7.4 billion to support innovative companies’ growth (Bucket 3), as well as £8.4bn for what is basically a fourth bucket, “enabling and strengthening UK R&D”.
What we see today is that while Bucket 1 will be the largest part of the overall settlement, the increases on offer are located elsewhere – the exact figures are tricky to definitively pinpoint, given how certain elements are slowly moved from one bucket to another over the four years.
Most surprising is how fundamentally the new way of thinking about what UKRI funds translate into research council settlements. The only per-council announcements we get are for applicant-led research, where each council is seeing increases over the period. It’s tempting to try to draw lines back to previous settlements – but it fundamentally doesn’t work like this.
For buckets 2 and 3, there is no breakdown by funding council. Rather, each industrial strategy area gets its own separate item (in fact, for the digital and technologies sector, it’s split into four: engineering biology, AI, quantum, and the other stuff). The majority of the investment in bucket 2 for these areas “will be delivered by research councils,” we are advised – but this will be a separate process. Aside from specific investments such as the R&D Missions Programme and the Edinburgh supercomputer, this will flow via programmes, each led by an executive chair but described clearly as cross-UKRI.
Over in bucket 3 we can find HEIF, but much of the rest will be run through Innovate UK, with a growing focus on industrial strategy sectors. After plenty of debate within the sector about where QR should sit, it’s firmly in bucket 1 despite some suggestions that this would both misunderstand its role as a flexible fund and leave it more at risk to future cuts. The UKRI thinking is that basically QR is not government-directed, and therefore it goes in the first bucket.
Elsewhere we see a substantial investment in the collective talent doctoral funding line item (up to more than £800m next year and over £900m by 2028–29). And we understand that other doctoral funding could come from, for example, bucket 2 cash where linked to industrial strategy priorities.
A single mission
UKRI chief executive Ian Chapman describes the budget as being aligned to a “single mission”. He’s talking about the mission of advancing knowledge, improving lives and driving growth – but there’s also a clear sense that the way in which the funding landscape is being restructured gives a much firmer central UKRI steer regarding what gets spent and why, with the role of the funding councils, and Research England, more focused on delivery and detail.
The role of the industrial strategy in choosing what research investment will be made is even more prominent than many will have expected. Predictably, it’s also very lopsided – AI-related programmes will swallow £400m a year by the end of the decade, while other areas see much less frugality.
Whether this focus on the IS-8 sectors will translate through to choices about where funding gets invested, as we looked at earlier this week, remains to be seen. But the other issue with the industrial strategy lens, one that as the decade progresses will come into ever sharper focus, is what this will mean for the year after the spending review period, when a new government is likely and other priorities will suddenly have to be accommodated.
For now, it’s a big ambitious reordering of how research money gets invested, which will have to be reflected within UKRI and its component parts, as they are being asked to work in different ways and pursue fundamentally different goals.