Annual report and accounts 2023 to 2024: summary

Introduction by the Chair

I am delighted to introduce UK Research and Innovation (UKRI) Annual Report and Accounts (ARA) for 2023 to 2024.

This marks the end of the second year of our ambitious five-year strategy, Transforming Tomorrow Together, and I am inspired by the way the organisation has risen to the challenges set out within it. By engaging broadly and deeply as a trusted partner across our communities and across the whole of government, we have continued to deliver transformative impacts across the UK from public investment in research and innovation (R&I).

Our record in delivering on the promise of R&I year after year is rooted in our core commitment to research excellence and to the long-term investments in infrastructure and skills that make our goals achievable. Whether through the new interdisciplinary programmes we have launched this year; our continued commitment to experimentation in the way we invest, led through the new Metascience unit set up in partnership with the Department for Science, Innovation and Technology (DSIT), or the work to harmonise and improve our studentship and fellowship programmes, we have strengthened our ability to continue this trend in the years and decades to come.

The breakthroughs from R&I are a crucial driver of long-term growth and play a foundational role in improving lives and helping to tackle societal challenges. UKRI has a duty as a smart investor to deliver value and to maximise the economic impact of every pound of public money entrusted to us. Over the last year UKRI has invested innovatively, responding with agility as a single organisation, to systematically shape our portfolio to deliver against the national priorities detailed in the UK Science and Technology Framework and the five critical technologies it outlines.

Additionally, we have made good progress in partnership with organisations across public and financial sectors to develop a more cohesive and actionable framework to attract more private investment into all stages of innovation, with a particular focus on scale-up.

I thank Professor Dame Ottoline Leyser for continuing to inspire and lead the organisation through a year of extensive change and challenges, as UKRI’s organisational change programmes accelerated. Through her leadership we have embedded the recommendations of the independent review of UKRI led by Sir David Grant and improved the organisation.

The recommendations from this review and the wider reviews carried out by Professor Adam Tickell and Professor Sir Paul Nurse have made sure that UKRI is effectively positioned as the UK’s largest public investor in R&I which delivers value to the taxpayer. We unlock increased productivity and innovation across the UK R&I ecosystem both through direct investments, and through our unique role across the R&I ecosystem with DSIT and wider departments to create opportunities for the whole of government to deliver on our shared strategic agenda for R&I.

I thank Professor Julia Black and Lord David Willetts who stepped down from the UKRI Board this year for their invaluable contributions to the success of UKRI. I also warmly welcome the Baroness Bull and Professor Sir Ian Chapman to the board of UKRI from April 2024. Their experience and expertise will be invaluable and will further strengthen the board’s important work to help guide UKRI in the coming years.

Nationally and globally, we face a period of intense change. The whole of the R&I system is going through a period of significant financial challenge and uncertainty and will need to make difficult decisions in the years ahead. I am reassured that, as UKRI continues to mature and improve its organisational effectiveness, and through the dedication of its talented staff, we are in the best position to rise to the challenge.

Sir Andrew Mackenzie, Chair

Introduction by the CEO

There is now a critical window for the UK to harness our outstanding strengths in research and innovation to deliver prosperity across the UK. Research and innovation underpin the high-productivity, innovative businesses and world-class public services that we need, creating high-quality jobs and empowering people and communities to thrive. UKRI is a key national asset in this endeavour, which is at the heart of our five year 2022 to 2027 strategy, Transforming Tomorrow Together. I am delighted to report on progress in implementing our strategy, as set out in our Corporate Plan and Council Strategic Delivery Plans.

This year, I have continued to engage broadly with our communities across the UK, for example, through our UKRI Connect programme, providing a valuable national platform for discussion. I have been privileged to see first-hand some of the extraordinary work UKRI enables, and how this is driving forward new knowledge and delivering real-world benefits.

This has been the first full year of operation of our new sponsoring department, the Department for Science, Innovation and Technology (DSIT), and of the Science and Technology Framework, creating unprecedented opportunities to maximise the impact of UKRI’s work in delivering for the UK and beyond.

Reflecting these opportunities, this year has seen significant investment in the five critical technologies set out in the Science and Technology Framework. In line with the framework and with our strategy, our investments span skills, infrastructure, cutting-edge discovery research development, innovation and support for adoption and diffusion across the full research and innovation landscape.

Another highlight this year has been the launch of new programmes to support interdisciplinary research and innovation. This includes our cross-research council responsive mode programme, allowing researchers and innovators to secure funding to pursue ideas that transcend disciplinary boundaries. The programme has proved extremely popular, with 976 outline applications, and 1,300 researchers and innovators from across our communities applying to join our Interdisciplinary Assessment College.

Interdisciplinarity is also a cornerstone of our five Strategic Themes, which seek to address major national and global challenges. The themes amplify and connect disciplinary investments through targeted investments to bridge gaps, capture synergies and build partnerships with departments across government, and international funding agencies. Examples from this year include a £9.5 million programme co-funded with the Foreign, Commonwealth and Development Office to explore opportunities for equitable nature-based climate resilience in Sub-Saharan Africa, and £11.5 million of funding with the Department for Environment, Food and Rural Affairs to enhance the resilience, health and wellbeing of UK coastal communities and seas. Through the themes we have also partnered with Malaysia’s Ministry of Higher Education, Thailand’s Agricultural Research Development Agency and other Southeast Asian leading funders, in a £21 million funding opportunity to support research on infectious diseases with epidemic or antimicrobial resistance (AMR) potential.

Our work with departments across government has been greatly facilitated by the welcome boost to their research and development (R&D) budgets at the last spending review. Beyond UKRI’s budget allocated through DSIT, we are delivering a wide range of collaborative and managed programmes with government departments and agencies totalling approximately £2 billion across the current spending review period. The creation of DSIT, with its cross-government remit, along with our close relationships with the network of Chief Scientific Advisors, offers the opportunity of a much more joined-up and effective approach to public R&D investment.

International collaboration has also received a major boost this year with the welcome news of the UK’s association with Horizon Europe, the EU’s €95.5 billion R&D programmes. UKRI’s delivery of the UK government’s Guarantee programme, allowing UK researchers and innovators to participate in the programme from its inception, is helping to smooth our transition to capturing the full benefits of association.

Collective working across UKRI on our studentship and fellowship programmes has also made significant progress this year, for example, by simplifying and harmonising our PhD studentship programmes. UKRI’s unique power to catalyse and convene is demonstrated by the unprecedented levels of partnership underpinning this year’s £1 billion investment in doctoral training support across engineering and the physical sciences. The investment has leveraged partnerships with more than 1,400 companies, higher education institutions, charities and civic organisations, which will develop the UK’s researchers and innovators of the future. We are on track to achieve our commitment to increase investment in our people and careers portfolio by 26% in this spending review period. High inflation, and the need to provide adequate support for early career researchers, has underpinned our decision to support fewer people better.

In this highly challenging economic environment, our ability to build a balanced, connected investment portfolio, with every pound we invest delivering on multiple objectives, is more important than ever. This kind of coordinated, expert, evidence-based investment is essential in shaping the diverse, connected, resilient and engaged research and innovation system needed for success. To build the evidence base for effective, efficient R&I investment we have been supporting the Research and Innovation Caucus. Extending this work, this year saw the establishment of the new Metascience unit, in collaboration with DSIT, through which we will enhance our work to experiment with new approaches to investment, for example, by testing some of the ideas set out in our Review of Peer Review published this year.

All of this work is of course dependent on UKRI’s extraordinary staff. I would like to take this opportunity to thank them all, across our national labs and institutes and our professional service teams. Our staff continue to work tirelessly, serving R&I in the UK as we deliver our strategy. I continue to be inspired by their dedication as we implement significant organisational change, replacing our main digital platforms including the antiquated Je-S grant application system, and changing the way we work together through our new operating model. We are delivering this change in parallel with meeting challenging targets in operational expenditure for our professional service activities. This is driving workload pressures on the organisation, and I recognise the significant impact this is having on our staff.

A high point in the year for me was the showcase event held to celebrate our Leadership Through Change programmes to develop 177 leaders across the organisation to support the adoption of the changes we are implementing, and the new ways of working at the heart of our operating model. It was inspiring to hear of the great ideas being implemented to create an environment where everyone feels valued and empowered to work together to deliver on our strategy.

Through our change programmes, this year has also seen major progress in delivering on the recommendations of the Grant and Tickell reviews. Both reviews endorsed our existing plans for organisational change and provided advice on how we can work in partnership with the sector to go further, which we have incorporated into our work. We are already one of the world’s most efficient funding agencies with operational expenditure 3.3% of budget, despite the complexity of our investment portfolio. Our ambition is for continuous improvement, tackling key performance indicators such as the time from application to award for our research grants, which currently stands at a mean of 156 days.

I want to thank Sir Andrew Mackenzie for his role in UKRI’s success and would like to echo his thanks to our outgoing Board members for their immense contribution to UKRI. This has been a year of much change across UKRI’s senior leadership, and I would like to express my deepest gratitude to Professor Sir Duncan Wingham, Professor Dame Lynn Gladden and Professor Dame Melanie Welham, for their many years of contributions to UKRI’s senior leadership as Executive Chair for Natural Environment Research Council (NERC), Engineering and Physical Sciences Research Council (EPSRC), and Biotechnology and Biological Sciences Research Council (BBSRC), respectively. I also wish to thank Professor Alison Park, Professor Guy Poppy, Professor Sir John Iredale, Professor Miles Padgett and Professor Peter Liss for their contributions throughout last year as Interim Executive Chair for the Economic and Social Research Council (ESRC), BBSRC, Medical Research Council (MRC), EPSRC and NERC, respectively.

I also thank Emma Lindsell, Isobel Stephen and Tim Bianek for their crucial work as Directors of Strategy, Performance and Engagement, and Chief Operating Officer, respectively.

I have been delighted to welcome Professor Charlotte Deane, Professor Louise Heathwaite, Professor Patrick Chinnery and Stian Westlake as Executive Chair for EPSRC, NERC, MRC and ESRC, respectively, and Christine Ashton, as UKRI’s new Chief Information Officer.

This coming year will be another year of much change. The work we have done together puts us in a strong position to capture the opportunities and navigate the challenges it will bring, transforming tomorrow together.

Professor Dame Ottoline Leyser, Chief Executive

Performance overview

UK Research and Innovation (UKRI) is the largest public funder of research and innovation (R&I) in the UK, spanning all disciplines and all sectors. We invest in people, places, ideas, innovation and impacts, empowering researchers, innovators and entrepreneurs to turn the many challenges we face into opportunities.

We leverage our breadth and depth of knowledge of R&I to harness the full potential of the UK’s talent and creativity. We work with partners to transform tomorrow together, creating tangible benefits: advancing knowledge, improving lives and creating the industries and jobs of the future. Some examples are shared in the ‘Case studies’ section.

The six strategic objectives in our strategy, Transforming Tomorrow Together, will ensure that the UK has the people, institutions, infrastructures and partnerships to support a thriving R&I system. Our vision is for an outstanding research and innovation system in the UK to which everyone can contribute and from which everyone benefits, enriching lives locally, nationally and globally.

Our purpose – transforming tomorrow together

UKRI is the engine for the UK as a research and innovation powerhouse. We invest more than £8 billion each year on behalf of the UK government, leveraging expertise across all disciplines and sectors. We inspire and enable talented people and teams to push the boundaries of discovery, support innovative businesses to grow and scale, and target solutions to national and global priorities. Our strategy sets out how we will work with our many partners and stakeholders to foster an outstanding research and innovation system in the UK that drives economic, social, environmental and cultural benefits for all citizens, transforming tomorrow together.

Our principles for change

We will embed these principles across all our work, to drive change and create the conditions for an outstanding research and innovation system:

diversity of ideas, people, activities, skills, institutions and infrastructures advances knowledge, increases quality and creativity
connectivity across disciplines, sectors and borders catalyses new ideas and approaches to deliver impact
resilience ensures the agility, capability, and flexibility needed to withstand shocks, deliver long-term goals and capture new opportunities
engagement shapes research and innovation to reflect the needs, perspectives and motivations of diverse stakeholders and the public

Our strategic objectives

These provide the framework for how we will achieve our vision and realise our principles, through world-class:

people and careers: making the UK the most attractive destination for talented people and teams from the UK and around the world
places: securing the UK’s position as a globally leading research and innovation nation with outstanding institutions, infrastructures, sectors and clusters across the breadth of the country
ideas: advancing the frontiers of human knowledge and innovation by enabling the UK to seize opportunities from emerging research trends, multidisciplinary approaches and new concepts and markets
innovation: delivering the government’s vision for the UK as an innovation nation, through concerted action of Innovate UK and wider UKRI
impacts: focusing the UK’s world-class science and innovation to target global and national challenges, create and exploit tomorrow’s technologies, and build the high-growth business sectors of the future

The objectives are supported by a world-class organisation, making UKRI the most efficient, effective and agile organisation it can be.

UKRI shapes and supports a diverse and connected R&I landscape that is resilient and deeply engaged with society. We enrich lives by increasing our understanding of ourselves and the world around us, supporting innovative businesses and public services, and creating high-quality jobs throughout the UK.

We seek to be a responsible organisation in the activities, research and innovation we fund, and in how we inspire, lead and engage our staff, our partners and our communities. Our four principles for change – diversity, connectivity, resilience and engagement – are fundamental to how we work as an organisation and will help to create the conditions for the UK’s research and innovation system to flourish.

This 2023 to 2024 Annual Report and Accounts sets out the progress we have made against our ambitions and activities as laid out in our 2022 to 2025 Corporate Plan. The Corporate Plan and its annual updates, alongside the nine Strategic Delivery Plans of our councils, describe the ways in which we deliver through the current spending review period (2022 to 2025) and how we monitor our progress in delivering against our six strategic objectives, which underpin the analyses presented in this Performance Report.

Case studies

Accelerating biomedical research

Biobank, funded from conception by the Medical Research Council (MRC), enables research to improve the prevention, diagnosis and treatment of diseases. For example, Biobank data was used in a study showing that smartwatch data has the potential to predict Parkinson’s disease seven years before diagnosis . This year, the whole genome sequencing data for Biobank’s 500,000 participants was added to the database, allowing genetic and physiological links to conditions such as heart disease and cancer to be explored.

Addressing big industrial and societal challenges

Our Challenge Fund is testament to our ability to collaborate with UK businesses and researchers to shape and deliver comprehensive programmes that addresses major industrial and societal challenges. The fund has supported cross-sector R&I, creating over 4,400 jobs and retaining another 8,240 to date. With co-investment reaching £4.9 billion, far exceeding the initial £2.8 billion target, the business-led programmes within the fund demonstrate our unique ability to design and deliver large-scale initiatives. We effectively leverage diverse sectors and disciplines across the UK, collaborating with businesses, policymakers, and academia to implement complex, often mission-oriented projects.

Tackling economic crime

Insights from a team of researchers supported by the Economic and Social Research Council (ESRC) are helping counteract the UK’s vulnerability to illegal trade and threats to national security. UKRI research into the impact of organised and economic crime informs government policy, helping introduce reforms to the legal system and the introduction of new anti-corruption sanctions. Economic crime, driven by kleptocratic sources, costs the UK economy billions every year.

Transforming how we monitor wildlife

Early career Impact Award 2023 winner Dr Hannah Cubaynes and colleagues from the Natural Environment Research Council’s (NERC) British Antarctic Survey (BAS), developed techniques using high-resolution satellite technology to survey polar wildlife from space. Along with the charity WWF, more than 26,000 citizen scientists scoured 500,000 satellite images. Risks to researchers were reduced, as were costs, emissions and disturbances to wildlife. This project inspired government agencies, businesses and wildlife organisations in the UK, US, Canada and Germany to invest millions in further development of satellite imagery to study whales.

Reducing flood risk

CAFlood rapidly and accurately assesses flood risk to inform protection measures and reduce flood damage. Developed through funding from the Engineering and Physical Sciences Research Council (EPSRC), CAFlood helps governments and industries quickly coordinate emergency responses, with the artificial intelligence tool used by businesses in the UK, Taiwan and Italy. In Torbay, a £3.4 million flood defence is estimated to have prevented £78 million worth of potential damage and protected 3,000 people.

UKRI Framework for Performance

Our UKRI Framework for Performance allows us to consider our performance at stages across the R&I cycle and is underpinned by a high-level logic model that links our inputs and activities to the anticipated outputs, outcomes and impacts that realise our strategic ambitions.

Key reports throughout the year provide regular monitoring of how we are delivering the activities and near-term outputs identified in our Corporate Plan and Strategic Delivery Plans, as well as reviewing longer-term trends and how we are enabling the outcomes and impact identified within our Strategy using a balanced scorecard approach. Our refreshed Corporate Plan will set out our activities for 2024 to 2025 as we continue to deliver against our strategic objectives and ambitions.

The Framework for Performance provides assurance for the delivery of our strategy across the full logic model, from activities we set out in our Strategic Delivery Plans and Corporate Plan, to the outcomes and societal benefits these activities collectively realise. The components feeding into the framework are summarised in the following points.

Local performance reporting and monitoring (inputs)

Managed at a fund, programme or directorate level, and supports development of the following reporting products.

Progress and Performance Report (activities)

Providing assurance on our quarterly progress against delivering our strategic and key government priorities as set out in our Strategy and Corporate Plan.

Implementation reviews and deep dives (outputs)

Providing in-depth exploration against the strategic objectives or within key areas, supporting delivery confidence and performance.

Annual Balanced Scorecard (outcomes)

Providing a holistic overview of our performance, focusing on the outcomes that arise from the activities UKRI delivers, in the context of the wider R&I system and longer-term trends.

Annual Report and Accounts (impact)

Demonstrates how we have met our legal requirements, what and how we have delivered against our Corporate Plan and how we have added value over the year in realising our strategic ambitions.

How we are organised and governed

UKRI is a non-departmental public body sponsored by the Department for Science, Innovation and Technology (DSIT). We are nine councils, working individually and collectively across all disciplines and sectors. We use our broad reach and deep expertise to support a dynamic investment portfolio with aligned incentives.

The UKRI Board is our primary governing body. It oversees our activities, including delivery of our Strategy. The Board provides updates and advice to the DSIT Secretary of State for Science, Innovation and Technology.

Our Executive Committee provides strategic advice to the Board and is responsible for delivering the Board’s vision by overseeing the organisation’s overall performance and delivery. The Executive Committee comprises primarily the Executive Chairs of each of our nine councils, each of whom is advised by a Council of external members.

Risk summary

We use effective risk management to support delivery of the objectives and priorities identified in our strategy. Our goal, through early identification and active management of risks, is to anticipate uncertainties that may impact the delivery of priorities, undertake relevant and timely assessments, plan mitigations and manage issues (should they arise) with an agile and effective response.

Our approach to managing our principal risks includes a robust schedule of deep dive evaluations of each of our principal risks in our monthly ExCo meetings.

These deep dives enable the Executive Committee to scrutinise the risk elements and the measures we are taking to reduce risk. Through these dives, we analyse the flight path of each risk and track the planned activity from residual score through to our target, where the risk is expected to come within our risk appetite.

Our principal risk areas include:

financial sustainability of the UK research system (high likelihood, very high impact, risk target score medium)
managing strategic direction to achieve UKRI’s intended impact (high likelihood, very high impact, risk target score medium)
failure to influence or respond to changes in the policy landscape (high likelihood, very high impact, risk target score medium)
failure to deliver against UKRI environmental sustainability and greening government commitments (high likelihood, very high impact, risk target score low)
trusted research and innovation (high likelihood, very high impact, risk target score medium)
major gap or failure in our internal control environment (high likelihood, high impact, risk target score low)
failure to deliver the benefits of UKRI’s organisational change (high likelihood, critical impact, risk target score medium)
UKRI staff capability and capacity (very high likelihood, very high impact, risk target score medium)
effectiveness of UKRI systems and IT infrastructure (very high likelihood, high impact, risk target score medium)

Performance summary

In the 2023 to 2024 financial year we invested £9.3 billion, including:

£1,578 million (18%) in our rolling portfolio of research and development grants, including fully open funding opportunities and strategically targeted opportunities focused on specific priorities (£1,514 million in 2022 to 2023)
£2,309 million (26%) strategic institutional funding to higher education providers in England for research and knowledge exchange (£2,204 million in 2022 to 2023)
£636 million (7%) in dedicated skills investments for the next generation of researchers, innovators and technicians, noting that almost all our investments involve significant people and skills development (£647 million in 2022 to 2023)
£946 million (11%) in infrastructure, from laboratory equipment to major international research facilities (£1,120 million in 2022 to 2023)
£1,427 million (16%) towards specialist institutes, centres, facilities and Catapults that provide national capabilities in specific R&I areas, including specialist equipment, expertise and knowledge (£1,340 million in 2022 to 2023)
£472 million (5%) in collaborative challenge-led funding to address specific national and global priorities (£472 million in 2022 to 2023)
£729 million (8%) in innovation project grants that support innovative small and medium-sized enterprises (£523 million in 2022 to 2023)
£688 million (8%) in international partnerships funding to enable specific opportunities for UK researchers to collaborate with their peers globally (£580 million in 2022 to 2023)

In addition, we also invested £12 million (less than 1%) in public engagement activities to involve wider society in R&I, ensure that its benefits are widely shared, and inspire and engage the next generation of researchers and innovators (£12 million in 2022 to 2023).

More information on our R&I grant investment portfolio is available through our explainer series and data on our awards and outputs.

In 2023 to 2024 we:

assessed over 29,160 applications for R&I funding (2022 to 2023: 22,300) and made 6,145 new awards (2022 to 2023: 6,118)
supported 5,032 organisations (2022 to 2023: 3,661), including 138 universities, our 61 institutes, centres and Catapults, and 3,912 small and medium-sized enterprises
56,099 (2022 to 2023: 57,889) individuals, including principal investigator, co-investigators, fellows, researcher co-investigators and students

Delivering our strategic objectives

Examples of how we have delivered against our strategic objectives 2023 to 2024.

April 2023

£1 billion milestone reached by the Horizon Europe Guarantee fund, delivered by UKRI, which enabled UK-based researchers and innovators to participate in Horizon Europe during the delay to association.

NERC’s British Geological Survey delivered an assessment of the UK’s geological potential for critical raw materials, meeting a key priority of the government’s Critical Minerals Strategy. Materials such as lithium and cobalt are essential components of many modern technologies and are vital to our wellbeing, security and journey to net zero.

The interim evaluation report on Innovate UK’s Future Flight Challenge demonstrates that the visionary £300 million programme has led to collaboration at a scale that would not have occurred otherwise, and widely supported and informed government policy.

May 2023

UK Biobank announced £127.6 million move to a new purpose-built facility in Manchester, supported by the UKRI Infrastructure Fund, replacing outdated infrastructure and promoting academic, commercial and public health links in the Manchester region and beyond.

June 2023

We celebrated 15 years of our North America Office and its evolution and impact in the key relationships and partnerships that have been nurtured.

EPSRC and Innovate UK unveiled a suite of AI investments during London Tech Week, bringing academic and industry partners together to continue to build and expand the UK’s global strengths in AI.

July 2023

Four new research facilities were announced, supported by £52 million investment from our UK Research Partnership Investment Fund and a further £113 million leveraged by the projects from industry partners, charitable organisations, and philanthropic donors, boosting UK research into childhood mental health, the rail industry, and the manufacture of medicines.

August 2023

We announced a £6 million investment to help the fashion and textile industry integrate more sustainable and responsible practices.

An evaluation of Innovate UK’s Knowledge Transfer Partnerships (KTPs) estimated that for every pound of public and private investment, KTPs generated a return of £4.20 to £5.50 in net economic benefits between 2010 and 2020.

September 2023

We published plans to improve support for students studying towards doctorates and other research degrees, through a new deal for postgraduate research.

A new £4 million transatlantic initiative, supported by MRC, was announced to enable UK researchers to undertake placements at leading US cancer research institutions.

The scale of UKRI investments and its focus on multiple critical themes has underpinned wide-ranging and substantive impacts’ according to an independent evaluation of our response to COVID-19.

October 2023

Innovate UK launched a £32 million competition to develop Collaborative AI solutions to improve productivity in key sectors.

We announced £177 million investment for doctoral training in AI, ensuring that the UK has the skills needed to seize the potential of the AI era.

The Regional Innovation Fund boosted support for universities to engage with businesses, investing £48.8 million to grow local economies.

November 2023

We embraced government’s response to the independent review of the UK’s research, development and innovation organisational landscape, including announcing £10 million Metascience unit, supporting our role as an expert, evidence-based, innovative investor.

We launched the first phase of a new AI Research Resource, a national facility to provide world-leading AI-specialised compute capacity to public researchers, academia and industry, though a landmark collaboration between UK government, UKRI, the University of Cambridge, the University of Bristol, Intel and Dell.

We supported growth of the UK’s creative economy by launching a national network of labs through AHRC’s CoSTAR programme, powering up major industry names and SMEs across the creative
industries with new facilities, partnerships and technological approaches, from virtual production to AI.

UKRI celebrated 5,000 Global Talent visa endorsements, helping attract outstanding scientists and researchers to pursue their careers in the UK.

January 2024

We announced two new Innovation and Knowledge Centres, supported by EPSRC and Innovate UK to deliver new semiconductor technologies to market, boosting UK industry and enhancing our workforce capability.

State-of-the-art MRC Laboratory of Medical Sciences building opened, heralding new ‘team science’ era.

February 2024

A report showed the significant impact of BBSRC funding in driving economic value through the UK spin-out community, estimating a real net Gross Value Added of over £5 billion.

We launched STFC’s Cluster Strategy, in parallel with the DSIT Cluster Mapping Tool, identifying and describing UK innovation clusters.

We announced £100 million investment to unlock the potential of engineering biology through six new Engineering Biology Mission Hubs and 22 Mission Awards, funded through BBSRC and the UKRI Technology Mission Fund to transform solutions in areas like vaccine, textile and food production.

March 2024

We announced the UK’s largest investment of over £1 billion to support critical engineering and physical sciences skills through EPSRC’s Centres for Doctoral Training, including in critical technologies such as AI, quantum technologies, semiconductors, telecoms, engineering biology.

Financial overview

UKRI’s expenditure is reported on two different bases in this Annual Report and Accounts:

The Consolidated Statement of Comprehensive Net Expenditure presents net expenditure of £9.4 billion for the UKRI Group. The expenditure is calculated following accounting standards and guidance which are explained in more detail in Note 1 to the Financial Statements and on a similar basis to those rules applied by organisations internationally.
The outturn against budget is £9.6 billion. These figures are calculated in accordance with HM Treasury’s budgeting framework. The figures used in this Annual Report have been prepared on this basis. There is a difference between these two bases primarily due to additions to Property, Plant and Equipment of £239 million that are capitalised, rather than being in the Statement of Comprehensive Net Expenditure, but which have a budgetary impact.

Table 1: Outturn against budget 2023 to 2024
UKRI 2023 to 2024 budget allocation	Full year outturn (£ million)	Full year budget (£ million)	Variance to outturn (£ million)	UKRI variance to outturn
UK research base	7372.3	7209.8	(162.3)	(4.3%)
Core research	5515.9	5390.1	(125.8)	(2.3%)
Non-core research	1856.2	1819.7	(36.5)	(2.0%)
Research and development – other	555.0	525.7	(29.3)	(5.6%)
Core innovation	838.8	867.4	28.7	3.3%
Core capital allocation	8765.9	8603.0	(163.0)	(1.9%)
Core innovation: DfT zero emission, HGV technologies	14.7	11.2	(3.5)	(31.1%)
Official Development Assistance (ODA)	51.1	63.5	12.4	19.5%
Department for Science, Innovation and Technology managed programmes	150.0	174.7	24.7	14.2%
EU programmes	359.3	405.8	46.5	11.5%
Ring-fenced capital allocation	575.1	655.3	80.1	12.2%
Grand total capital allocation	9341.1	9258.2	(82.9)	(0.9%)
Innovation loans	21.7	19.0	(2.7)	(14.3%)
Other financial transactions	(1.3)	5.5	6.8	123.2%
Ring-fenced resource budget	252.0	234.2	(17.8)	(7.6%)
Annually managed expenditure	(29.7)	91.7	121.4	132%
Total allocation	9583.8	9608.6	24.8	0.3%

Note for table: each year excludes outturn where UKRI increased expenditure by reprofiling quality-related funding payments to higher education institutions at the request of Department for Science, Innovation and Technology (DSIT), for which DSIT did not transfer UKRI any budget cover.

Table 1 provides a summary of UKRI’s outturn against budget. UKRI has a financial management target to deliver an outturn that is within 1% of its capital allocation.

The table includes a £181 million balance within UK research base, where UKRI increased expenditure by reprofiling quality-related funding payments to higher education institutions at the request of DSIT. Additionally, DSIT agreed for UKRI to deploy a total spend of £11.4 million to CERN and Square Kilometre Array Observatory to utilise Horizon Europe underspends. If these two elements are removed from outturn numbers, UKRI can report an underspend of £29 million against the core capital allocation (0.3% variance).

Table 2 sets out out-turn since 2018 to 2019.

Table 2: Outturn since 2018 to 2019
UKRI allocation headings	Full year outturn 2023 to 2024 (£ million)	Full year outturn 2022 to 2023 (£ million)	Full year outturn 2021 to 2022 (£ million)	Full year outturn 2020 to 2021 (£ million)	Full year outturn 2019 to 2020 (£ million)	Full year outturn 2018 to 2019 (£ million)
UK research base	7372.2	7034.3	6821.3	7204.1	6021.1	6011.0
Core research	5515.9	5121.2	4968.5	4959.2	4447.8	4555.2
Non-core research	1856.2	1913.0	1852.9	2244.9	1573.2	1455.8
Research and development – other	555.0	485.7	461.4	474.1	481.5	306.7
Core innovation	838.8	678.6	643.4	553.0	546.4	563.5
Core capital allocation	8765.9	8198.7	7926.2	8231.2	7048.9	6890.8
Core innovation: DfT zero emission, HGV technologies	14.7	0.1	0.0	0.0	0.0	0.0
Official Development Assistance (ODA)	51.1	118.6	131.9	387.7	347.5	301.9
DSIT managed programmes	150.0	445.7	378.0	294.9	268.2	268.7
EU programmes	359.3	524.9	5.9	0.0	0.0	0.0
Ring-fenced capital allocation	575.1	1089.1	515.8	682.5	615.7	570.5
Grand total capital allocation	9341.1	9287.8	8442.0	8913.8	7664.6	7461.3
Innovation loans	21.7	5.3	62.3	37.7	23.7	15.9
Other financial transactions	(1.3)	(11.4)	(20.3)	(3.0)	(17.5)	(18.0)
Ring-fenced resource budget	252.0	198.2	203.5	192.6	190.0	233.2
Annually managed expenditure	(29.7)	(57.6)	120.0	23.6	88.0	(20.1)
Total allocation	9583.8	9437.5	8807.5	9164.8	7948.8	7672.2

UK research base outturn grew by £1.2 billion in 2020 to 2021 due to the additional spend on COVID-19 interventions, a single-year increase in World Class Labs expenditure of £293 million designed to support the sector during the COVID-19 pandemic and reprofiling of quality-related payments to higher education institutions to manage the overall UKRI core capital position.

The Strategic Priorities fund also started in 2020 to 2021 which contributed to this increase in spend when compared to 2019 to 2020. The overall UK research base position has remained broadly balanced since 2020 to 2021. The increase of £338 million in UK research base in 2023 to 2024 compared to 2022 to 2023 has been driven by core research spend, in particular a £206 million increase in international and £109 million increase in quality-related (QR) research funding.

The ‘research and development (R&D) other’ ring-fence has increased spend in 2023 to 2024, mainly driven by increases within the Technology Missions Fund, Levelling Up Programme and Faraday Institution compared with last year. The Industrial Strategy Challenge Fund spend has reduced slightly in 2023 to 2024 compared to prior years as the fund draws to a close.

In Spending Review 2021, our core innovation budget received a significant, specific uplift in funding; it is expected that core innovation spend will be £2.4 billion between 2022 to 2023 and 2024 to 2025. The total core innovation spend in this period to date is £1.5 billion, with a £160 million more spent in 2023 to 2024 compared to 2022 to 2023.

UKRI councils’ and programmes investments 2023 to 2024

Investments from councils and cross-UKRI programmes include:

core Arts and Humanities Research Council: £85 million
core Biotechnology and Biological Sciences Research Council: £301 million
core Engineering and Physical Sciences Research Council: £661 million
core Economic and Social Research Council: £125 million
core Innovate UK: £819 million
core Medical Research Council: £558 million
core Natural Environment Research Council: £319 million
core Research England: £2105 million
core Science and Technology Facilities Council: £609 million
existing time-limited commitments: £85 million
collective talent funding: £636 million
infrastructure programmes: £946 million
existing cross-UKRI strategic programmes: £813 million
new cross-UKRI strategic programmes: £258 million
centrally managed funding: £278 million

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