The UK government is set to inject a landmark £86 billion into the science, technology, and innovation sectors as part of a comprehensive economic renewal plan. This investment aims to supercharge Britain’s leadership in fields such as artificial intelligence, life sciences, advanced manufacturing, and clean energy, while empowering local regions to drive innovation tailored to their strengths.
Chancellor Rachel Reeves will unveil this transformative funding in next week’s Spending Review, announcing a commitment to £22.5 billion annually by 2029/30. The funding will support breakthroughs ranging from next-generation medicines and long-lasting batteries to cutting-edge AI technologies, expected to create thousands of high-skilled jobs and deliver billions in economic returns.
“Britain is the home of science and technology. Through the Plan for Change, we are investing in Britain’s renewal to create jobs, protect our security against foreign threats and make working families better off,” said Chancellor of the Exchequer Rachel Reeves.
A key feature of the plan is up to £500 million for local innovation across the UK. Through a new Local Innovation Partnerships Fund, regions will have the power to shape how R&D investment is spent based on local expertise and economic needs.
“Incredible and ambitious research goes on in every corner of our country… empowering regions to harness local expertise and skills for all of our benefit is at the heart of this new funding,” said Science and Technology Secretary Peter Kyle.
This means that cities and towns will now be in the driver’s seat when it comes to economic renewal, Liverpool will expand its life sciences sector to accelerate drug discovery, Northern Ireland will focus on defence technologies to strengthen national security and South Wales will invest in semiconductor design to power devices from smartphones to electric vehicles.
The new funding builds on the momentum from the Innovation Accelerator pilot, which saw regional partnerships drive real-world benefits. For example, Greater Manchester’s diagnostic accelerator developed faster, cheaper tests for heart, liver, and lung diseases, while Moonbility in the West Midlands applied AI to predict rail disruptions in real time.
Research and development is already a powerful economic engine in the UK, underpinning 3 million jobs. According to the government, every £1 invested in R&D returns up to £7 in economic benefit, and businesses receiving their first R&D grants see over 20 percent increases in jobs and revenue.
Alongside this, nearly £5 million will fund a new partnership between Manchester and Cambridge, linking two innovation hubs to attract business investment and share best practices globally.
Regional leaders are welcoming the funding as a game changer
“This is exactly how we turn our potential into progress. This investment backs regions to lead the way in the industries that will define the future,” “It will drive innovation that not only grows the economy but creates jobs, builds opportunity, improves health and changes lives.” said Richard Parker, Mayor of the West Midlands.
North East Mayor Kim McGuinness added
“This announcement boosts my mission to create new growth, new jobs and new opportunities… from the car industry and green energy to kitchen table innovations and our fast-emerging trailblazers in the space industry and AI.”
The announcement comes just ahead of London Tech Week, the UK’s flagship technology event, reinforcing the government’s vision of a decade of national renewal rooted in innovation, jobs, and prosperity for every part of the country.