Science Industry Partnership

28 Oct 2021

Chancellor announces 2021 budget and spending review

The UK Government announced its latest spending plans yesterday, with the launch of the 2021 Budget and 2021 Spending Review. This included numerous policy updates, with some notable announcements in key areas such as: Skills, Education, and Research & Development, with strong support also shown for the UK Life Sciences Sector. 



The Government announced that total spending on skills will increase by £3.8 billion by 2024-25, a real terms increase of 26% compared to 2019-20. This additional funding will help to:

  • Expand the Lifetime Skills Guarantee, giving more adults access to free Level 3 courses and qualifications in in-demand areas such as engineering and digital skills.
  • Quadruple the number of places offered on Skills Bootcamps including in areas such as artificial intelligence, cybersecurity and nuclear science.
  • Open 20 new Institutes of Technology (IoTs) throughout England, which will bring together local employers with further and higher education providers to deliver technical qualifications.
  • Provide more specialist equipment and facilities to support T Levels delivery.
  • Provide extra classroom hours for up to 100,000 T Level students.

There is also increased support for UK-wide ‘Help to Grow’ schemes, which aim to provide world-class management skills training and support for digital adoption to over 100,000 SMEs.


Apprenticeships funding will increase to £2.7 billion by 2024-25. A significant part of this is the government's continuing commitment to meet 95% of the apprenticeship training cost for employers who do not pay the Apprenticeship Levy. The 2021 Budget’s technical document also notes the government’s intention to deliver some apprenticeship system improvements for all employers, including:

  • An enhanced recruitment service by May 2022 for small and medium-sized enterprises (SMEs), helping them hire new apprentices.
  • Introducing a return on investment tool in October 2022 to ensure employers can see the benefits apprentices create in their business.


The Government also promise to consider changes to the “provider payment profiles aimed at giving employers more choice over how the apprenticeship training is delivered, and explore the streamlining of existing additional employer support payments so that they go directly to employers”.

It was also confirmed that the £3,000 cash incentives for each apprentice an employer hires will end on 31 January 2022.

Research & Development

The Government is also increasing public R&D to £20 billion by 2024-25. This is an increase of around a quarter in real terms over the Spending Review period (Government had previously announced its ambition to spend £22 billion on R&D by 2026-27). This will help the government deliver on its Innovation Strategy by investing in pioneering scientific and technological breakthroughs, boosting productivity and creating high skilled, high paid jobs. Specifically, the support will:

  • Provide significant backing for priorities identified by the new National Science and Technology Council including AI, quantum computing and space technologies
  • Include a £800 million investment by 2025-26 for the new Advanced Research and Invention Agency, supporting ground- breaking discoveries that could transform people’s lives for the better.
  • Increase funding for core Innovate UK programmes, reaching circa £1 billion per year by 2024-25, over £300 million more per annum than in 2021-22.

There are also plans to reform R&D tax reliefs to support modern research methods, with the government announcing it will expand qualifying expenditure to include data and cloud computing costs.

Another announcement saw increased support for the Made Smarter adoption programme to boost the productivity of manufacturing SMEs through the use of advanced digital technologies.

Life Sciences

The Spending Review settlement details £5 billion for health-related R&D. The support includes:

  • £95 million for the Office for Life Sciences for delivery of the government’s life sciences Vision, including launching the Prime Minister’s healthcare missions in cancer, obesity and mental health and to address systemic barriers to the access and uptake of cutting-edge innovations in the NHS.
  • Further support for the UK’s world leading genomics industry, including Generation Genome, a new pioneering new-born screening programme to detect over 200 rare diseases, and ‘Diverse Data’, to increase representation of minority groups in genomic research.

Additionally, a £354 million investment for life sciences manufacturing was announced, including medicines, diagnostics and vaccines, to increase health resilience and create thousands of jobs.


In spring 2022, the government will launch the ‘Scale up’, ‘High Potential Individual’, and ‘Global Business Mobility’ visas to attract highly skilled people and support inward investment. The government is also launching a ‘Global Talent Network’ to proactively find and bring talented people to the UK in key science and technology sectors.


For all the latest Skills and Policy updates follow our Social Media channels:

Twitter @SIP_members

LinkedIn @Science Industry Partnership