In delivering his Autumn Statement to Parliament today Osborne stated that science was ‘a personal priority’ and a key driver for economic growth.
Osborne said £5.9bn of investment will continue in science, including £235m for the creation of the Sir Henry Royce Institute for Advanced Material Science in Manchester, with branches in Leeds, Liverpool and Sheffield; plus a further £61m allocated to the High Value Manufacturing Catapult to help around 2,250 manufacturers create technologies and products in areas including robotics, printable electronics and carbon fibre composites.
Around £95m will be made available for the UK’s involvement in the next European mission to Mars, and £28m is being made available to create the National Formulation centre which will specialise in formulated products such as medicines and chemicals.
‘In 2010, the UK was ranked fourteenth in the Global Innovation Index. Today we are ranked second. But we aim to be the best,’ Osborne said.
The decision to strengthen science research in northern cities forms part of Osborne’s plan to create a Northern Powerhouse.
He said: ‘One of the great challenges of this country is to create a more balanced national economy - a challenge that has eluded governments for generations.
‘Our ambition is to build a northern powerhouse as a complement to the strength of our capital city, where we bring together our great cities of the North.’
A new sovereign wealth fund for northern England will ensure that shale gas resources in the region are used to invest in the future of the area.
Long-term plans for infrastructure include £15bn on roads, nearly £6bn funding for local road improvements, and over £2.3bn towards over 1,400 flooding and coastal erosion protection schemes.
Skills & finance:
- From 2016-17, income-contingent loans will be available for postgraduate taught masters courses in any subject for those under the age of 30. The loans, of up to £10,000, will beat commercial rates.
- To make it cheaper to employ young people, from April 2016 employers will not have to pay National Insurance contributions (NICs) for all but the highest earning apprentices aged under 25.
- Funding for Lending extended for another year
- R&D tax credit increased for small and medium companies to 230 per cent and the credit for large firms to 11 per cent
- £45m package to connect British firms to economies in Asia, Africa and South America, and provide new support to first time exporters.
- Small Business Rate Relief doubled for another year.
- Inflation-linked increase in business rates at capped at two per cent
The annual speech from HM Treasury has received its customary cautious welcome, with Philip Greenish CBE, chief executive of the Royal Academy of Engineering stating: ‘Today’s announcement by the Chancellor of major investment in [infrastructure] is welcome.
‘Development of infrastructure and technology will ensure that the UK is prepared to meet future challenges on a global stage.
‘However, we must also ensure that we are training the right number of engineers who will be required to deliver the plans announced by the Chancellor.
‘The Academy estimates that the UK needs to train 75,000 professional engineers every year to 2020, where we currently create only 22,000 graduates.
‘From transport to high-value manufacturing, solving this engineering skills gap will be critical if we are to deliver the package announced in today’s Autumn Statement. Only significant investment in higher education will unlock the engineering talent that the UK economy needs to succeed.’
John Rowley, director at electronic assembly specialist SMT Developments, added: ‘We welcome the increase in R&D Tax Credits to 230 per cent, which will undoubtedly help cash flow and release money that can be directed into developing new processes and products.
‘Maintaining lower business rates is also a win for small business and I was really pleased to hear about the £45m support package for export. Whilst we need to hear the full details, any additional specialist support that increases our ability to trade overseas is something most manufacturers will like the sound of.
‘The chancellor also outlined the importance of delivering skills and backing apprentices…removing NI contributions when you employ young people will act as a spur for creating employment.
‘However, the finer details of how we bridge the much publicised skills gap are still vague. We need 150,000 new engineers in the West Midlands alone so a few extra apprentices here and there isn’t going to be the answer on its own.’
Reaction round up
Infrastructure
‘The UK has great ideas and plans for improving our infrastructure, but we are lacking a critical path to delivery. Implementation needs to be our primary focus now, including measures to tackle some of our key challenges such as skills and efficiency in public procurement.
‘The nature and scale of infrastructure projects mean they extend beyond the political lifecycle, so cross-party support remains key.’
Mark Naysmith, UK managing director at WSP
Manufacturing
‘The additional support being offered for investment in research and development and the creation of funds to encourage more UK manufacturers to export will be warmly welcomed by UK manufacturers.
‘While the manufacturing sector has demonstrated strong growth over the last three years, the ambition of most UK manufacturers is to accelerate the pace of growth.’
Darren Jukes, manufacturing leader at PwC
Education and skills
‘Proposals to cut National Insurance for companies employing apprentices under 25 is encouraging, but we need to ensure that all apprenticeships meet the rigorous standards of engineering apprenticeships and really do provide people with the skills and knowledge to prosper. These apprenticeships should be in industries where there is a real potential for jobs, like engineering, and that standards are verified through accreditation by bodies such as the Institution of Mechanical Engineers.’
Dr Colin Brown, director of Engineering at the Institution of Mechanical Engineers
Investment in science
‘These one-off injections will bring benefits but stable investment is needed to make the UK’s science and innovation ecosystem work best to the benefit of the public and UK plc. Government has a duty to ensure that public money is used efficiently and to greatest effect. A long-term investment plan for science is the way to do that.’
Dr Sarah Main, director at CaSE
Click here for a full transcript of George Osborne’s speech.
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