Independent report

Independent review of the research, development and innovation (RDI) organisational landscape: review recommendations and government action (Annex, November 2023)

Updated 22 November 2023

This was published under the 2019 to 2022 Johnson Conservative government

1. Government should take account of the true cost of ‘end-to-end’ research activity to generate a sustainable research, development innovation (RDI) endeavour. Government, working with UKRI and the UK higher education funding bodies, should review and when necessary reform competitive and response-mode grant funding, QR (and Devolved Administration equivalents), and full economic costs (fEC), and replace them with improved mechanisms. Overall objectives should be to optimise research delivery, remove perverse incentives and outcomes, and ensure the longer-term sustainability of the research system.

The government recognises the challenges of financial sustainability for organisations across the RDI landscape. The Department for Science, Innovation and Technology (DSIT), together with UKRI, the Department for Education (DfE), the devolved funding bodies, sector bodies including Universities UK and the Russell Group, and other funding groups such as the Association of Medical Research Charities, are reviewing the evidence and risks to research sustainability. This includes the risks for universities. Any changes to the funding framework for research, as recommended by the Review, will need to be considered in the context of a future Spending Review.

Analysis on university financial sustainability is being published by UKRI alongside this response. The data and analysis demonstrate how research organisations are funded and the financial sustainability risks and pressures they face.

2. Universities should develop plans to optimise their operations in support of research, to empower researchers and reduce their administrative loads, and to improve the quality of support services, core technical facilities, and well-found laboratory buildings and infrastructures. Government, working with UKRI, the UK higher education funding bodies and the wider sector, should consider more transparent mechanisms to provide assurance and accountability on QR funding.

The first part of this recommendation is addressed to universities.

Quality-related research (QR) funding and equivalent funding streams are devolved. Across the UK work is underway to improve transparency and accountability of these funding streams.

In England, Research England is undertaking a programme of work to improve the transparency of strategic institutional research funding including QR. Research England will engage with universities to drive this work forward, piloting new approaches to transparency from Academic Year 2025/26.

In Scotland, the Scottish Funding Council has already begun a programme of co-development with the sector to introduce new, more frequent, research accountability and assurance processes from Academic Year 2024/25.  This will build on existing Outcome Agreement processes which already seek information on uses of Scotland’s equivalent strand of dual support, the Research Excellence Grant (REG).

In Wales, the Higher Education Funding Council for Wales have recently revised its QR allocation methodology to ensure it is more focused on increasing quality of research.

In Northern Ireland, the Department for Economy is currently working to develop Outcome Agreements (OAs) in 2024/25 to provide increased accountability for public funding while simultaneously respecting the autonomy of universities.

3. Government departments should clarify the missions of their individual Public Sector Research Establishments (PSREs), allow them greater freedom of action, and ensure their effectiveness. Departments should improve internal awareness of PSREs’ capabilities, and use PSREs to inform RDI strategy and policy making, working within and across departments. Permeability and agility would be further improved by increasing the visibility, interactions and partnerships between PSREs, and between PSREs and the rest of the RDI landscape, including commercial organisations.

The UK has a rich heritage of RDI performed by the public sector. This constellation of public sector RDI organisations (including Public Sector Research Establishments and UKRI-owned institutes) and our world-leading RDI infrastructure base is a vital part of the UK’s organisational RDI landscape.

Government and public sector RDI organisations are working together as part of a comprehensive programme to ensure their missions meet key national science and technology capability needs. This includes through developing strengthened sponsorship models, clear missions and long-term plans.

The government will take specific action to raise the visibility and understanding of PSREs, for example establishing an annual PSRE day and publishing a guide for working with PSREs.

The creation of DSIT means there is a dedicated department that will champion public sector RDI organisations across the public sector landscape and more widely.

4. Funding streams for PSREs need to be protected and reformed to ensure long-term sustainability. Constraints, which appear to have their origins in the Treasury, over funding, pay and other conditions of working should be reduced. The reforms of funding proposed for the universities should also be applied to PSREs.

PSREs have a variety of funding models. Their sponsoring departments are responsible for ensuring their long-term financial sustainability. Government is continuing to work with PSREs on individual sustainable funding solutions, reducing barriers to collaboration and improving access to talent. We are improving public sector RDI organisations’ operational environment, including PSREs, by exploring whether providing a source of co-funding to PSREs will better enable them to bid for and complete UKRI grant based research, where that research is funded at less than full Economic Cost (fEC).

Last year, the Department for Business, Energy and Industrial Strategy (BEIS)/DSIT ran a £31 million pilot competition to fund small and medium-scale research infrastructure in PSREs. Following the success of this pilot, we will shortly be launching a further round of this fund worth £25 million, expanding the scope to all research and innovation organisations across the UK.

5. PSREs should be stringently reviewed, and those that have outlived their purpose or are not working effectively should be reformed, reduced or closed, and any savings generated recycled into Government R&D budgets.

PSREs are reviewed in line with the PSRE Value Framework and through normal processes of Arm’s-length bodies (ALB) reviews. DSIT agrees that wider consideration of the role of individual organisations in a landscape should be carried out systematically. Specific consideration of reform to PSREs is part of an ongoing strategic assessment of UK RDI capability which will be informed by the Research and Innovation Intelligence capability described in the response.

6. Institutes and units need sustained financial support, including un-hypothecated funding, to ensure ‘end-to-end’ research support. The funding arrangements of recently established institutes and units, particularly the ‘hub and spoke’ models, must be reviewed to make sure that they are fit for purpose. The reforms of funding proposed for the universities should also take account of the needs of institutes and units.

UKRI’s Research Councils actively consider the financial sustainability of research institutes and units they fund when they are reviewed and created, for example through Biotechnology and Biological Sciences Research Council (BBSRC’s) Institute Assessment Exercise and the Medical Research Council’s evolution of their unit model into Centres of Research Excellence. Further funding for research institutes will be considered alongside wider evidence on the financial sustainability of the research system, at the next Spending Review.

Hub and spoke Institutes are regularly reviewed by the research councils that fund them.

7. Institutes and units need a well-defined mission and purpose, and should be given the autonomy and funding necessary to achieve their objectives, which may be time limited. There need to be clear and agreed mechanisms by which institutes and units can be adapted, reduced or closed when necessary.

UKRI’s Research Councils work with the Institutes they fund to develop and evolve their research missions and purposes, ensuring that governance and funding models enable this to be delivered. UKRI’s Research Financial Sustainability programme has developed a set of key principles to guide the creation of new institutes and units.

8. Institutes and units must have high quality administrative as well as scientific leadership. They generally benefit from being co-located with other Research Performing Organisations (RPOs), but if their overall administration is the responsibility of another co-located or funding organisation, rigorous contractual arrangements must be in place to ensure independence of operation and quality of service.

UKRI’s Institutes operate on several different models, including ones where the Institute is embedded or hosted in a university. The funding its councils provide enables institutes to recruit both scientific and administrative leadership. UKRI has published an explainer which describes this in more detail^{[footnote 1]}.

Many UKRI Institutes are situated on wider campuses, such as Harwell or the Norwich Research Park, that co-locate them with other Institutes and university, public and private sector RDI capabilities.

9. New research institutes and units should be considered when strategic RDI priorities best supported by focused research missions are identified by government, UKRI and other funders. Possible examples include enhanced activities in climate change and its mitigation, antimicrobial resistance, synthetic biology, and artificial intelligence. Themes should be identified through mapping and reviewing, taking account of emerging technologies, scientific areas, and government priorities. Pre-existing institutes and units could be merged and expanded to create new institutes, and consideration should be given to co-location and co-funding with other RPOs. Establishment of new institutes and units should follow the principles outlined in the Review.

In response to the Review, DSIT will develop enhanced data-driven capability for regular strategic assessment of gaps and opportunities in the landscape that could be filled by new RDI organisations. DSIT is establishing a Research and Innovation Intelligence capability to consider when strategic RDI priorities may best be supported new organisations. UKRI’s Research Financial Sustainability programme has developed a set of key principles to guide the creation of new institutes and units.

The launch of the new AI Safety Institute and the new National Academy focused on mathematical sciences are both examples of new organisations which the government will support in response to a strategic need, and the Research Ventures Catalyst programme provides a further means to support innovative institutional models.

10. Government and the charitable sector should work together to ensure that ‘end-to-end’ funding is provided for research supported by philanthropy.

Government, charities and research funders are working together through established fora.

DSIT is collaborating with the Office for Investment to unlock philanthropic investment into UK science and technology. Government has already piloted an innovative public-philanthropic partnership to deliver £32 million of enhanced funding for UK Biobank, a world-leading biomedical database that enables researchers to make groundbreaking discoveries.

11. Support for research undertaken by galleries, libraries, archives, museums, and the heritage and cultural sectors should be increased, and support for long-neglected collections-based research put in place.

Government and different UKRI Research Councils are increasing funding for Galleries, Libraries, Archives, Museums and the heritage and cultural sectors in a variety of ways. For example, UKRI’s Arts and Humanities Research Council (AHRC) have launched two new national capabilities, Convergent Screen Technologies and performance in Realtime CoSTAR (£138 million of public and private investment) and RICHeS (£80 million AHRC investment).

Research England is delivering a review of funding for Higher Education Museums, Galleries and Collections in order to commence new funding arrangements from annual year 2024 to 2025.

12. Coherence between translational research organisations, including those embedded within other RPOs, and the rest of the landscape should be increased. Government is advised to optimise translational research organisations by increasing their number, widening access and promoting the benefits of translational research capability, including regionally. Government should explore routes by which RPOs across the RDI landscape, including PSREs, can contribute to translational activities.

Multiple initiatives are underway to increase translation between research performing organisations. At Autumn Statement 2022, the Chancellor announced that Innovate UK will increase their Catapult funding by 35%, totalling £1.6 billion over five years.

Alongside this document, government has announced that Innovate UK will invest £145 million in RDI organisations in areas of strategic advantage via a high growth sector boost for RDI organisations in 2023/24, to leverage private sector investment across the country in priority areas including health and life sciences, net zero, transformative technologies and security. Of this, we will invest a further £50 million in Innovate UK’s Catapults, expected to leverage significant private sector investment over time.

13. Government should use its convening power to create a favourable environment for business to invest in RDI, tackling causes identified by this Review as holding back further business investment, and where expedient, providing financial support. Examples of such support are funding which leverages private investment or promotes collaboration between industry and the rest of the RDI landscape.

Government’s ambitions are to facilitate coordination and partnerships between the public, private and third sectors to ensure that the UK’s RDI organisations reach their full potential and attract maximum private and philanthropic support. Government is taking a number of actions to unlock business investment to drive innovation-led growth, as set out in the S&T Framework and building on the 2021 Innovation Strategy. Support spans from direct funding to businesses, for example through the Innovate UK Innovation Loans programme (leveraged £280 million of private investment from £181 million of public investment in 207 businesses) to the ongoing promotion of innovation organisations, such as the Advanced Manufacturing Research Centre and Innovate UK’s Catapults, and targeted support for innovation clusters across the UK.

Alongside this document, government has announced that Innovate UK will invest £145 million in RDI organisations in areas of strategic advantage via a high growth sector boost for RDI organisations in 2023/24, to leverage private sector investment across the country in priority areas including health and life sciences, net zero, transformative technologies and security.

14. To understand the benefits of RDI for commercial activities and the economy, a culture change promoting openness, mutual respect, closer interaction, collaboration, and permeability of ideas, technologies and people has to occur in both business and academia. Government has a role in conveying the benefits of RDI investment to businesses, shareholders and academia, embracing practices from countries with high business RDI investment rates. Mechanisms to deliver this should be explored and implemented.

Many of the actions and initiatives highlighted above and in the response are designed to create incentives for culture change and communicate the benefits of investment in RDI to businesses.

These measures include UKRI’s Infraportal and the Innovation Hub which make it easier for the RDI sector and industry to learn about the UK’s RDI organisations and how they can collaborate with them^{[footnote 2] [footnote 3]}. Through the Scottish Funding Council, the Scottish Government has also invested significantly to drive creation of transformational partnerships through initiatives such as Innovation Centres, Alliances for Research Challenges and Interface, which continue to drive collaboration across themes and organisations and contribute to world-leading RDI in the economy.

15. Government should take particular responsibility for driving RDI that provides societal benefit as well as economic growth. Examples are health care delivery, equitable regional economic growth throughout the UK, and the delivery of net zero. Where appropriate, public-private partnerships should be encouraged.

Multiple initiatives are underway to ensure that societal benefit is considered in the funding of RDI. UKRI’s 2023 to 2024 Corporate Plan sets out how UKRI’s Managed Programmes target global and national challenges, delivering benefits to society and the economy.

Other sources of government funding are targeted toward specific areas. For example, government’s award winning £1 billion Net Zero Innovation Portfolio provides funding for low carbon technologies and systems, to help enable the UK to end its contribution to climate change, and Department for Digital, Culture, Media and Sport (DCMS’) Cultural and Heritage Capital Programme ensures that cultural, economic and social benefits are fully considered in assessment of the effectiveness of RDI programmes.

16. Government and RPOs should partner with local communities to support RDI relevant to their needs, to bring about more equitable regional economic growth based on local expertise and demands and driven by community benefit as well as academic criteria. Universities and other RPOs should support their local community and economy by enhancing their role as an information nexus and by helping local industries link to research capabilities wherever they are in the UK.

The government has launched the £60 million Regional Innovation Fund to boost capacity for universities and business engagement in support of regional economic growth – helping local industries link to research capabilities across the UK.

The government are focused on strengthening innovation clusters and the organisations anchored within them, and are providing targeted support - from Innovation Accelerators, Innovate UK launchpads, Investment Zones to Freeports – to help innovation clusters grow while promoting investment into their RDI organisations.

DSIT is developing an interactive digital tool to map every innovation cluster in the UK, and one of its purposes is to support clusters and their leadership to collaborate and develop. The tool will be launched in the coming months.

17. There is an urgent problem with the current mechanisms for clinician scientists to effectively develop and undertake their research careers. The government, taking into account devolved competencies, must rectify this to both improve the ability of the NHS to deliver more effective health care and to help the UK economy.

As outlined in the response, research funders, the devolved administrations and the wider sector are taking actions across the landscape to support the career paths of clinical researchers, to ensure that UK RDI organisations can benefit from the experience of clinicians.

For example, UKRI’s Medical Research Council funds fellowships for clinicians at all career stages, and the Academy of Medical Sciences run the Future Leaders in Innovation Enterprise and Research (FLIER) awards to develop future leaders who can create collaborations across academia, industry, the NHS and government, to drive innovation.

18. Government must work with UKRI and the wider RDI community to consider more stable and properly costed funding structures, aimed at ensuring the quality of the existing landscape and its sustainability.

The government views financial sustainability as a necessary enabler of both long-term efficiency and the government’s ambition to cement the UK’s place as a science and technology superpower. The government commits to increasing its understanding of the challenges facing the sector, with stronger joint working between DfE and DSIT – as government departments with elements of responsibility for universities – as well as with devolved administrations and funders of RDI. As part of this, government will examine the current funding framework for research in universities, research institutes and other research performing organisations and incorporate the evidence from this work and from the Review into its Spending Review planning.

19. Government must increase its long-term commitment to invest more in RDI. In addition to reviewing incentives in public funding for university research, Government should review the balance of funding across the landscape, and explore how planned increases in RDI public funding can provide more un-hypothecated core funding for RPOs to allow them to deliver their mission more effectively, to promote collaboration and interaction across RDI sectors, and to empower local RPO leadership and researchers.

Government investment in research and development (R&D) has increased to record levels of £20 billion per annum by 2024/25, up around a third from 2021/22. Future spending will be subject to the next spending reviews.

As outlined in the response, any restructuring of the research funding settlement would come with significant trade-offs. For example, uprating the fEC rate would likely either result in government procuring a smaller amount of research directly, or result in a shift in the balance of dual support away from QR. The government will work with the devolved administrations and the sector to identify the best path forward to achieve our mutual goals of optimising research delivery, removing perverse incentives and ensuring long-term financial sustainability. The government is aware, however, that there is a disparity between current fEC policy at 80% and the reported cost recovery rate on Transparent Approach to Costing (TRAC) for UK institutions (68.7% in 2021/22)^{[footnote 4]}. UKRI is currently investigating the causes of this disparity and the government will consider the findings in due course.

20. Government should ensure that international collaboration is protected and encouraged, and should resolve problems damaging the UK RDI landscape’s international links. This is particularly relevant to our close scientific collaborators in the EU, and it is essential that the UK associates with Horizon Europe. Government should take action, including consultation with devolved administrations, if its broader policy objectives on areas such as immigration, Official Development Assistance (ODA) and education are hindering wider objectives for long-term RDI policy.

The UK is committed to protecting and encouraging international Science and Technology (S&T) partnerships and collaborations. The Prime Minister announced a bespoke deal to associate with Horizon Europe and Copernicus on 7th September 2023. The International Science Partnerships Fund (ISPF), worth up to £319 million this spending review period, puts RDI at the heart of our international relationships. Through the S&T Framework, DSIT is coordinating and aligning policy across departments, to ensure it supports our Science and Technology Superpower ambitions. Government is further deepening cross-UK RDI collaboration through biannual meetings with science ministers from Scotland, Wales and Northern Ireland.

21. The UK should consider opportunities to host new intergovernmental multinationally funded institutes and international research infrastructures.

Under the Science and Technology Framework, DSIT is developing a long-term national plan for RDI infrastructure that will set out our domestic and international priorities, address challenges in accessing RDI infrastructure, and foster greater participation and collaboration across different users in the RDI landscape. This will set out how we will consider opportunities to host new RDI infrastructure, working with global partners including through groups such as the G7-mandated Group of Senior Officials on Global Research Infrastructures (GSO:GRI).

22. DSIT should define the overall architecture and governance for cross-Government RDI policy, setting out accountabilities from Cabinet and below. This should include the National Science and Technology Council (NSTC), as well as other key RDI spending departments, UKRI and other funders, to ensure roles are complementary, and to improve alignment on policies.

Responsibility for public sector RDI has become widely dispersed across UKRI and government departments. With the creation of the DSIT, there is now a dedicated government department to champion public sector RDI organisations, which range from UKRI institutes to PSREs.

23. From Cabinet level downwards, all interested parties in Government must take responsibility for the high level and effective safeguarding of the future success of the UK RDI landscape. This oversight should include an authoritative working group set up by DSIT, operating across Government, the RPOs and the funding organisations, which will take long-term responsibility for implementation of the recommendations of this Review.

DSIT is responsible for the high-level stewardship of the RDI landscape. As set out in the response, Sir Paul’s Review and the response will continue to be integrated into the implementation of the S&T Framework in the longer term, as our foundational guide to cement the UK’s place as a science and technology superpower by 2030. Each commitment in this document is being embedded within the relevant strand of the S&T Framework.

24. Government should establish a research vision and strategy including long-term programmatic, infrastructure and technological initiatives, which is especially relevant at the applied end of the research spectrum. This will give RPOs, investors and global companies the confidence to invest, operate and interact with the UK RDI landscape.

The government’s Science & Technology Framework is our long-term strategic vision and includes a focus on five technologies. A progress update on the Framework will shortly be published.

25. Government needs to develop effective mapping of UK RDI, covering the missions, financial investment in different sectors, research capabilities, and locations of RPOs, and also monitor international RDI activities to identify successful features and models. DSIT, working with UKRI and other interests across Government, could carry out this function. An agreed shared picture of the RDI landscape should be produced, together with a commitment to regularly update it.

Government agrees that all funders and research organisations should make decisions based upon a comprehensive understanding of the RDI landscape. The response therefore sets out how government will take an evidence-based, data-driven approach to evolving our RDI landscape.

UKRI have established measure to make it easier for the RDI sector and industry to learn about the UK’s RDI organisations and how they can collaborate with them. This includes Infraportal and the Innovation Hub^{[footnote 5] [footnote 6]}.

As outlined in the response, DSIT is developing an interactive digital tool to map every innovation cluster in the UK. This will be crucial in delivering three outcomes: firstly, supporting government to make even more informed decisions about how to support innovation across the country based on an understanding of how clusters are growing; secondly, by showcasing the strengths, assets and opportunities across clusters and their organisations, it will provide information that will lead to greater investment from overseas businesses; and thirdly it will support clusters and their leadership to collaborate and develop themselves. The tool will be launched to the public in the coming months and will provide users with unprecedented visibility of the UK RDI landscape and the organisations within it.

26. Government should increase efforts to link the different elements of the UK RDI landscape together with the commercial, industrial and societal components that benefit from research. To spread the benefits of research through communities across the UK, partnerships, collaborations and interactions must be built so that all components are mutually aware, and permeable with respect to ideas, information, technologies and people.

The response recognises the need to make the RDI landscape more open and navigable. We will improve our resilience through clearer signposting of funding and collaboration opportunities, building on existing work to map the UK’s RDI capabilities and clusters such as those mentioned above and tools such as Konfer, developed by the National Centre for Universities and Businesses and UKRI^{[footnote 7]}. Through the Scottish Funding Council, the Scottish Government has invested significantly to drive creation of transformational partnerships through initiatives such as Innovation Centres, Alliances for Research Challenges and Interface, which continue to drive collaboration across themes and organisations and contribute to world-leading RDI in the economy.

27. Government must replace frequent, repetitive, and multi-layered reporting and audit by Government departments and UKRI with a culture of confidence and earned trust, as also referenced by the Independent Review of Research Bureaucracy. Reporting and reviewing of RPOs should focus on the quality and appropriateness of the research being carried out. The framework by which ARIA will operate should be applied to other components of the RDI landscape.

Government is committed to reducing bureaucracy across the RDI system. The government will respond to the Independent Review of Research Bureaucracy led by Professor Adam Tickell in early 2024.

28. Public sector controls which reduce the agility and performance of RPOs need to be reformed. Salaries must be internationally competitive. Where Government-imposed pay limitations are damaging the mission of an RPO, they must be revised, and the decision-making mechanisms made more flexible.

Government recognises that some public sector RDI organisations face immediate challenges as they compete for rare skillsets and the brightest minds. We have identified from initial evidence that some of our public sector RDI organisations experience R&D workforce challenges in specific fields and seniority levels. Building a full picture of the nature of these pressures is an important step to forming a targeted and effective approach. Government will continue to work with the sector to improve the evidence base of RDI workforce challenges, drawing on robust quantitative data, for us to explore the merits of supporting further flexibilities for the sector.

29. Government should ensure that there is a well-trained RDI workforce available at all levels, and long-term educational planning to ensure a future pipeline of researchers and technicians. Career pathways for those roles that underpin effective research delivery, including technicians and project and programme managers, should be strengthened so the importance of these roles is better recognised. Training and career structures for early career researchers, including PhD students, post-doctoral researchers and starting faculty, need to be reviewed and reformed. Career path diversity and permeability between different RPOs should be encouraged.

Government is taking action to ensure UK RDI organisations have access to large and varied base of skilled, technical and entrepreneurial talent. Initiatives include those intended to attract global talent, such as the flagship Global Talent Visa; a fellowship approach to talent, such as the long-term world-class Discovery Fellowships, backed by a £250 million endowment, and improvements made to the skills system and research culture such as improving access to T levels and publishing UKRI’s response to a call for input on the new deal for postgraduate Research.

The Scottish Funding Council have also formed an Advisory Group on supporting Scotland’s Postgraduate Researchers to provide advice on opportunities to support PGRs in Scotland, including research culture. By continuing to implement the R&D People and Culture Strategy, the government are taking action to ensure that careers in RDI are open to people from all backgrounds, working within environments that nurture and get the best out of them.

1. https://www.ukri.org/publications/explainer-ukris-institutes/explainer-how-ukris-institutes-support-research-and-innovation/ ↩

2. UKRI ‘The UK’s Research and Innovation Infrastructure Portal’. Available from: https://www.infraportal.org.uk/ [accessed 17 November 2023] ↩

3. Innovate UK ‘The Innovation Hub’. Available from:  https://ukinnovationhub.ukri.org/ [accessed 17 November 2023] ↩

4. Office for Students (2023) ‘TRAC data’ Available from: https://www.officeforstudents.org.uk/data-and-analysis/trac-data/published-data-2021-22/. Accessed on 13 November 2023; Office for Students (2023) ‘TRAC data’. Available from: https://www.officeforstudents.org.uk/data-and-analysis/trac-data/published-data-2021-22/ [Accessed on 13 November 2023] ↩

5. UKRI ‘The UK’s Research and Innovation Infrastructure Portal’. Available from: https://www.infraportal.org.uk/ [accessed 17 November 2023] ↩

6. Innovate UK ‘The Innovation Hub’. Available from:  https://ukinnovationhub.ukri.org/ [accessed 17 November 2023] ↩

7. https://www.ncub.co.uk/solutions/digital-brokerage/ ↩