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Statistical bulletin: UK Government Expenditure on Science, Engineering and Technology, 2013

Released: 17 July 2015 Download PDF

Main points

  • In 2013, £10.9 billion was spent on Science, Engineering and Technology (SET) by the UK Government, an increase of 9% in current prices compared with 2012. Allowing for inflation (in constant prices), this was a 7% increase compared with 2012, and reversed the downward trend in SET expenditure since 2009.
  • The UK Research Councils contributed the most to expenditure on SET in 2013 at £3.6 billion, 33% of all expenditure on SET.
  • Between 2002 and 2013, defence expenditure on SET decreased by £2.1 billion in constant prices to £1.5 billion. Over the same period there was an increase in Research Councils' expenditure on SET of £1.0 billion.
  • The 2013 SET estimate of £10.9 billion consists of expenditure on Research and Development (R&D) of £9.8 billion, indicative UK contributions to European Union (EU) R&D expenditure of £0.8 billion, and the amount spent on knowledge transfer of £0.3 billion.

Overview

Science, Engineering and Technology (SET) expenditure by the UK Government covers expenditure by government departments, Research Councils and Higher Education Funding Councils (HEFCs). It also includes indicative UK contributions to the European Union’s (EU) research and development (R&D) expenditure. This should not be confused with the UK Gross Domestic Expenditure on R&D, 2013 (GERD) statistical bulletin, which only includes expenditure on R&D performed within UK borders, but by all sectors of the economy.

GERD only comprises estimates of expenditure on performing in-house R&D by each sector of the UK economy. However, whilst SET includes expenditure on performing in-house R&D, its largest component is expenditure on externally purchased/funding provided for R&D, along with EU budget contributions and knowledge transfer. This is explained in more detail in Background Note 1, which includes graphical representation of the comparable values of GERD and SET. R&D (in-house and purchased/funded) is the main component of the SET statistics.

SET statistics used to be published by the Department for Business, Innovation and Skills (BIS). We took over publishing the statistics for the first time in July 2014 in a new statistical bulletin. BIS included the year of publication in the SET Statistics title, not the year the estimates related to. The title of this SET statistical bulletin includes the reference period, which is 2013.

For the purpose of SET statistics (Tables 1 and 2), UK government expenditure on SET consists of:

  • Expenditure on in-house R&D, purchased R&D and other funding provided to external organisations for R&D (Tables 3 and 4);

  • Indicative UK contributions to the EU's R&D expenditure (Tables 1 to 4);

  • Knowledge transfer activities (including technology transfers) which are associated with research and experimental development, and contribute to the dissemination and application of scientific and technical knowledge. Knowledge transfer estimates which are included in the SET totals in Tables 1 and 2 are separately identified in Tables 5 and 6.

Estimates of R&D are on a net expenditure basis and therefore are net of funding received.

This definition of SET excludes all other scientific, technical, commercial and financial steps that are often necessary for the successful development and marketing of new or improved products, processes or services.

Two types of estimates are presented in this release, current and constant prices. Estimates in current prices present the value of expenditure in cash terms. Constant price estimates have been adjusted for inflation between years using the Gross Domestic Product (GDP) deflator. This allows changes in the volume of government expenditure on SET to be examined on a more comparable basis over time.

This release also includes data tables sourced from our Labour Force Survey, referring to personnel associated with scientific and technical postgraduate education and training. These provide estimates of the number of persons with higher education qualifications, their employment status and their type of occupation.

In this statistical bulletin, R&D and related concepts follow internationally agreed standards defined by the Organisation for Economic Cooperation and Development (OECD), as published in the ‘Frascati Manual’ . This manual defines R&D as “creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society and the use of this stock of knowledge to devise new applications”.

The Frascati Manual was originally written by, and for, the experts in OECD member countries that collect and issue national estimates of R&D. The definitions provided in this manual are internationally accepted and serve as a common language for designing and evaluating science and technology policy.

Estimates in this release have the status of Official Statistics as they have not been assessed by the UK Statistics Authority (see Background Note 2).

The estimates in this bulletin and associated data tables relate to financial years. The main source of estimates for this publication is the annual Government Research and Development survey (GovERD).

Your views matter

We are aiming to improve this release and its associated commentary. We would welcome any feedback you might have, and would be particularly interested in knowing how you make use of these estimates to inform your work. Please contact us via email: RandD@ons.gsi.gov.uk or telephone Cecil Prescott on +44 (0)1633 456767.

To gauge user opinion we are carrying out an online survey, in order to gather feedback which will enable us to continue to improve this publication.

SET expenditure 2013

In 2013, £10.9 billion was spent on SET by the UK Government, an increase of 9% in current prices compared with 2012. In constant prices, SET expenditure increased by 7% compared with 2012, the first annual increase since 2009.  However, SET expenditure was still 5% below the £11.5 billion seen in 2002. The decrease in SET expenditure in constant prices from 2009 to 2012 was the result of decreases in expenditure by the HEFCs, Research Councils and the Ministry of Defence (Figures 1 and 4).

Figure 1: UK Government expenditure on SET, 2002 to 2013

Figure 1: UK Government expenditure on SET, 2002 to 2013
Source: Office for National Statistics

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Figure 2 shows UK government expenditure on SET as a percentage of GDP. Total expenditure on SET in 2013 represented 0.63% of GDP. This estimate has seen a downward trend in recent years but is broadly unchanged from 2011.

Figure 2: UK Government expenditure on SET as a percentage of GDP, 2002 to 2013

Figure 2: UK Government expenditure on SET as a percentage of GDP, 2002 to 2013
Source: Office for National Statistics

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SET expenditure by sectors of the UK Government

The UK government’s expenditure on SET can be categorised into expenditure by Research Councils, HEFCs, and also into civil and defence departments, all of which include elements of knowledge transfer. The indicative UK contributions to EU R&D expenditure provided by HM Treasury are also included in SET expenditure. Figure 3 shows the contribution each of these made to the 2013 total SET estimate. Almost a third (33%) of UK government expenditure on SET was by Research Councils, with civil departments and HEFCs contributing 25% and 21% respectively. The remaining 21% of the total SET estimate consisted of the Ministry of Defence (MoD) (14%) and contributions to EU R&D expenditure (7%).

Figure 3: The components of UK Government expenditure on SET, 2013

Figure 3: The components of UK Government expenditure on SET, 2013
Source: Office for National Statistics

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Figure 4 shows changes in SET components between 2002 and 2013 in constant prices. Defence expenditure decreased by £2.1 billion (58%), from £3.6 billion in 2002 to £1.5 billion in 2013. Over the same period there was an increase in Research Councils' expenditure on SET of £1.0 billion.

The defence estimate of £3.6 billion for 2002 was during a time of change for the MoD, with changing internal structures, and the introduction of new accounting systems, as well as a review to ensure that Frascati Manual definitions were being adhered to. Caution is therefore advised when using the SET defence estimate for this period, as it is likely to be overestimated. Please see Background Note 10 for more information on defence statistics.

The UK indicative contributions to EU R&D expenditure increased by 55% between 2007 and 2008 in constant prices. This rise related to member states’ contributions being increased to meet the needs of the growing number of EU member states. They have remained around the same level since then.

Figure 4: The components of UK Government expenditure on SET in constant prices, 2002 to 2013

Figure 4: The components of UK Government expenditure on SET in constant prices, 2002 to 2013
Source: Office for National Statistics

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Research Councils' expenditure on SET in current prices increased by 11% in 2013

Research Councils UK (RCUK) is the strategic partnership of the UK's 7 Research Councils. Each year the Research Councils perform research covering the full spectrum of academic disciplines, from the medical and biological sciences to astronomy, physics, chemistry, engineering, social sciences, economics, environmental sciences and the arts and humanities.

In 2013, expenditure on SET by Research Councils was £3.6 billion, an increase of £0.4 billion (11%) in current prices compared with 2012. Allowing for inflation (in constant prices), this was an increase of £0.3 billion (9%) compared with 2012.

The Research Council with the highest expenditure on SET at £1.0 billion in 2013 was the Engineering and Physical Sciences Research Council (EPSRC). This represented 28% of all Research Councils' expenditure on SET.

The Research Councils’ estimated expenditure on SET includes their pension arrangements. These pension contributions are included separately on the data tables associated with this publication (Figure 5).

Figure 5: Breakdown of UK Research Councils’ expenditure on SET, 2013

Figure 5: Breakdown of UK Research Councils’ expenditure on SET, 2013
Source: Office for National Statistics

Notes:

  1. EPSRC = Engineering and Physical Sciences Research Council; MRC = Medical Research Council; BBSRC = Biotechnology and Biological Sciences Research Council; STFC = Science and Technology Facilities Council; NERC = Natural Environment Research Council; ESRC = Economic and Social Research Council; AHRC = Arts and Humanities Research Council.

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Civil departments' expenditure on SET in current prices increased by 15% in 2013

The UK Government owns many research institutes and laboratories that carry out R&D, which is the largest component of SET. It also uses a range of different suppliers with facilities to carry out research, both inside and outside the UK.

In 2013, expenditure by civil departments on SET was £2.7 billion, an increase of £0.4 billion (15%) in current prices compared with 2012. Five departments contributed £2.6 billion (93%) to the 2013 total. The civil department with the largest expenditure on SET was the Department for Business, Innovation and Skills (BIS) (£1.0 billion) which represented 37% of total civil departments’ expenditure on SET (Figure 6).

Figure 6: Breakdown of UK Government civil departments’ expenditure on SET, 2013

Figure 6: Breakdown of UK Government civil departments’ expenditure on SET, 2013
Source: Office for National Statistics

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Higher Education Funding Councils' (HEFCs) expenditure on SET in current prices increased by 5% in 2013

HEFCs promote and fund teaching and research in Higher Education Institutions (HEIs).

All HEIs (including universities) provide finance statistics to the Higher Education Statistics Agency (HESA). To estimate government funded R&D expenditure in HEIs, grant income is used as a proxy for expenditure. Please see Background Note 4 for more information.

In 2013, expenditure on SET by HEFCs was £2.3 billion, an increase of £0.1 billion (5%) in current prices compared with 2012. Allowing for inflation (in constant prices) this was an increase of £0.07 billion (3%) compared with 2012 and an increase of £0.2 billion (10%) since 2002. This was in contrast to the decrease from the peak of £2.6 billion in 2009 (Figure 4).

The funding council for England (HEFCE) provides the most research funding as it has the highest number of HEIs. In 2013, expenditure by HEFCE on SET was £1.8 billion. This was 77% of the total HEFCs' expenditure on SET, a similar level to recent years (Figure 7).

Figure 7: Higher Education Funding Councils' (HEFCs) expenditure on SET, 2002 to 2013

Figure 7: Higher Education Funding Councils' (HEFCs) expenditure on SET, 2002 to 2013
Source: Office for National Statistics

Notes:

  1. The map refers to 2013 estimates.

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Ministry of Defence (MoD) expenditure on R&D in 2013 decreased by 58% in constant prices from 2002

In 2013, expenditure on SET by the MoD was £1.5 billion, an increase of £0.1 billion (4%) in current prices compared with 2012. Allowing for inflation (in constant prices) this was an increase of £0.03 billion (2%) compared with 2012, but a decrease of £2.1 billion (58%) since 2002. This was mainly due to a decrease in development expenditure of £2.0 billion, with some large projects moving from the development phase into the manufacturing stage of their programmes, and not being replaced with other high value projects (Figure 8).

Figure 8: Defence expenditure on SET by research and development, in constant prices, 2002 to 2013

Figure 8: Defence expenditure on SET by research and development, in constant prices, 2002 to 2013
Source: Office for National Statistics

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Indicative UK contributions to EU R&D expenditure

In 2013, the indicative contributions that the UK made to EU R&D expenditure totalled £0.8 billion. This is an increase in constant prices of £0.2 billion (32%) since 2002. These figures were provided by HM Treasury and are broad estimates. This is because Member States’ contributions are not made to individual expenditure programmes, but to the EU budget as a whole. They are therefore referred to as the “indicative UK contributions to EU R&D expenditure”.

Background notes

  1. Main issues specific to this bulletin

    This is the second time that we have published the UK Science, Engineering and Technology (SET) Statistics. These estimates are official statistics which were previously published annually by the Department for Business, Innovation and Skills (BIS) using estimates provided by us. If you have any questions regarding the levels of SET expenditure by government departments, or any other queries related to science and technology policy, please contact James Achur at james.achur@bis.gsi.gov.uk or telephone +44 (0)20 7215 1331.

    SET statistics are broader than just research and development (R&D), as they comprise government R&D expenditure on in-house R&D, purchased R&D and funding provided to external organisations for R&D, the indicative UK contributions to European Union (EU) R&D expenditure, knowledge transfer activities, and personnel associated with scientific and technical postgraduate education and training.

    The main source of the estimates related to UK government departments, Research Councils and HEFCs, is our annual Government Research and Development survey (GovERD). The GovERD survey collects gross and net expenditure estimates, as well as funding received for R&D. Net expenditure is calculated as gross expenditure minus all funding received for R&D. This is to avoid any double counting. As previously mentioned, the estimates in the UK Gross Domestic Expenditure on R&D, 2013 (GERD) statistical bulletin relate to expenditure on performing in-house R&D by each sector of the UK economy, whereas SET focuses on the UK government financing for all R&D regardless of who undertakes the work. 

    HM Treasury provides the indicative contributions that the UK makes to EU R&D expenditure.

    Estimates from the GovERD survey, of expenditure on R&D performed in the UK by government and Research Councils, are also included in the GERD statistical bulletin published earlier this year and these form part of the broader estimates of SET.

    The main distinctions between this publication and GERD are:

    a) UK GERD includes only R&D expenditure which is carried out within the UK borders, and includes all sectors of the UK economy. UK government departments’ expenditure on R&D, both as funder and performer in the UK, are included in GERD. It also includes all the other UK sectors both providing the funding and performing R&D in the UK.

    b) SET includes all UK government expenditure on in-house R&D, purchased R&D and other funding provided to external organisations for R&D (both within the UK and overseas). As a result, the estimate of the R&D component of the UK government’s expenditure on SET in 2013 (£9.8 billion) is just over 4 times larger than the UK government departments’ expenditure on performing in-house R&D in the 2013 UK GERD (£2.3 billion). Figure 9 and Table 1 show the amount that each SET contributor spent in 2013 on in-house R&D performed in the UK and on total SET expenditure. Please note that HEFCs are only funders of R&D as they do not perform R&D themselves. Therefore the HEFCs' value in figure 9 is all classed as SET expenditure. Also, it is unknown where and how the UK contributions to EU R&D expenditure are spent, so none of these estimates are regarded as R&D performed in the UK.

    c) SET additionally includes the UK’s indicative contributions to EU R&D expenditure and expenditure on knowledge transfer. Knowledge transfer (including technology transfers) are activities designed to help the conveyance of ideas, research, results and skills between researchers, businesses and wider communities. These actions contribute to the dissemination and application of scientific and technical knowledge, including consultancy services, demonstration projects, and sharing information. For example developing partnerships, establishing forums for knowledge exchange, specialist training, and licensing.

    Table 1 in the UK GERD Statistical Bulletin published on 20 March 2015, included the totals of expenditure on performing in-house R&D by UK government departments (civil and defence departments) and Research Councils of £1.5 billion and £0.8 billion respectively. This included funding from other UK sectors and overseas. The breakdowns of these high level estimates are available in this SET publication in Tables 12 and 13.

    Figure 9: UK Government total expenditure on SET, including expenditure on R&D performed in the UK by the government sector, 2013

    Figure 9: UK Government total expenditure on SET, including expenditure on R&D performed in the UK by the government sector, 2013
    Source: Office for National Statistics

    Notes:

    1. The amount of expenditure on R&D performed by the UK government sector in Figure 9 includes funding from other sources.

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    Table 1: UK Government total expenditure on SET, including expenditure on R&D performed in the UK by the government sector, 2013

    £ billion
      R&D performed by UK government sector (Included in GERD) SET expenditure
         
    Research Councils 0.8 3.6
    Civil departments 1.3 2.7
    HEFCs 0.0 2.3
    Defence department 0.2 1.5
    Contributions to EU R&D expenditure 0.0 0.8
         
    Total 2.3 10.9

    Table source: Office for National Statistics

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    SET also includes data tables on qualified scientists and engineers in the labour force by gender. These estimates are from our Labour Force survey and are categorised by type of qualification and occupation, from the population of Great Britain aged 16 to 64. Occupation is based on the Standard Occupational Classification 2010 (SOC 2010). See Tables 14 and 15 in the data section of this publication.

    A quality report for this specific output is not yet available, but should be available by the end of August 2015. However, one is available for the UK GERD (137 Kb Pdf) . This contains relevant information as the majority of the SET estimates were collected via the GovERD survey, the same source as the government sector part of the UK GERD.

  2. Official statistics

    The UK Statistics Authority has not yet reviewed this publication, and these statistics are still designated as Official Statistics. This is a relatively new publication, and feedback from users in the coming months will help shape the future of this bulletin ready for UK Statistics Authority formal assessment.

  3. Timeliness and punctuality

    These official statistics were previously published by BIS in September each year. By publishing the 2013 SET Statistical Bulletin in July 2015, we have enabled access to these estimates two months earlier.

  4. Completeness of coverage

    The GovERD survey is conducted annually as a census survey. UK government departments, including Research Councils and HEFCs, are contacted to establish their department’s structure and whether they carried out and/or funded R&D activities in the survey period. This ensures that the correct respondents receive the survey. Approximately 140 government departments and Research Councils are sent the questionnaire. Government departments are asked to include the R&D they performed as part of their estimates. These include estimates for R&D performed by local authorities and NHS trusts.

    To estimate government funded R&D expenditure in Higher Education Institutions (HEIs), grant income is used as a proxy for expenditure.

    The grants are classified into 3 groups:

    • Research-oriented grants. These include the block research grant, plus other grants which are all deemed to be used for research;

    • Teaching-oriented grants. These are considered to be for teaching only activities, and are not included in the research expenditure estimate;

    • Other grants. These are not allocated specifically for research or teaching, but may contain elements of both to varying degrees. These are reviewed annually and an estimate is made of the research expenditure elements within each grant.

    The estimates of R&D expenditure were collected from the HEFCs for England, Scotland, Wales and the Department for Employment and Learning in Northern Ireland (DELNI).

  5. Revisions

    Revisions have been made to a small number of the estimates in 2011 and 2012. These were notified through the survey process by individual departments, and were mainly due to a combination of late returns and misreporting, which had little impact on the SET estimates.

  6. Sampling variability

    The estimates from the GovERD survey are based on a census of all UK government departments, Research Councils and HEFCs known to carry out and/or provide funding for R&D activities. They are not therefore subject to sampling errors, but may have some non-sampling errors. These include factors such as population coverage, misreporting and non-response bias. These errors are generally hard to quantify because of the difficulty in identifying the population of actual/likely R&D performers, and because of problems ensuring departments adhere to Frascati R&D definitions.

    The response rate was 95% and included all the departments with the highest SET expenditure. Forecast data were used to estimate for the non responding departments, which accounted for approximately 3% of the total SET estimate.

  7. Discontinuities in estimates

    UK government departments and Research Councils change their reporting structures as governments and policy requirements change. These may have an impact on the comparability of individual departments' estimates over time, as responsibilities move between departments for specific projects.

  8. General information

    These points should be noted when examining the data tables (573 Kb Excel sheet) included in this release:

    • There may be discrepancies between totals and the sum of their independently rounded parts.

    • Caution should be taken when examining departmental time series. Please use the notes beneath each table which explain machinery of government changes.

    • Launch Investment is a risk sharing government investment in the design of civil aerospace projects in the UK. The investment is repayable at a real rate of return, usually via levies on sales of the product. Launch Investment is only available to the civil aerospace sector, and is permitted under the Civil Aviation Act 1982, which charges the Secretary of State with “organising, carrying out and encouraging measures for the designing, development and production of civil aircraft”. These values have been negative every year since 2004. See BIS Annual Report and Accounts 2013-14 for more information. The UK Government’s commitment to the UK civil aerospace sector is documented in the Aerospace Growth Partnership.

    • The categories as presented in Table 7 are defined by the UK Government’s primary purpose for the R&D activity, and not the intentions of the researchers or the end result. The primary purposes are: General research – all basic and applied R&D which advances knowledge for its own sake, and support for post graduate research studentships (PhDs); Government services – R&D relevant to any aspect of government service provision (all defence expenditure is included here); Policy research – R&D which government funds to create new knowledge which informs policy making (excluding government services and technology support), and for monitoring developments of significance for the welfare of the population; Technology support – applied and/or strategic R&D that advances the technology underpinning the UK economy.

    The EU supports R&D programmes in member states. The UK makes a positive net contribution to the EU budget and a proportion of this is assumed to be for R&D, and is included in SET data Tables 1 to 4. However, because no specific information is available on where and how these contributions are spent, they are excluded from the remaining SET tables.

    The Organisation for Economic Cooperation and Development (OECD) terminology is used to classify the main sectors of the economy. Government corresponds to the General Government sector of the UK National Accounts.

    Prior to 2007, VAT related to these estimates was collected separately, but has been excluded from these estimates. However, it should be noted that various amounts of VAT may have been included by some departments due to difficulties in separating out expenditure subject to VAT. Since the 2007 data collection, the GovERD survey has included additional information throughout, notifying respondents to exclude VAT from the estimates they provide.

  9. Users and uses of SET estimates

    There are users within and outside government who use these estimates to produce various analyses and to inform policy decisions.

    As this is a relatively new statistical bulletin relating to R&D statistics, we would appreciate your views. Do you make use of our annual estimates on the UK Business Enterprise Research and Development (BERD), UK GERD or this bulletin? If yes, we would like to hear from you (RandD@ons.gsi.gov.uk) and understand how you make use of these statistics, and how we can seek to improve them. This will enable us, in the future, to better meet your needs as a user.

  10. Coherence

    UK government departments' R&D expenditure in the UK were included in the UK GERD Statistical Bulletin published on 20 March 2015.

    The Ministry of Defence (MoD) publishes extensive defence statistics. Their expenditure on defence R&D is published as part of the UK Defence Statistics Compendium.

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  12. Special events

    We have published commentary, analysis and policy on 'Special Events' which may affect statistical outputs. For full details visit the special events page on our website.

    Release policy

  13. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

Statistical contacts

Name Phone Department Email
Cecil Prescott +44 (0)1633 456767 Structural and International Statistics Division RandD@ons.gsi.gov.uk
Get all the tables for this publication in the data section of this publication .
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