Preparing for the Spending Review | Part 3: In conversation with funders and members on key messages

In this third edition in our blog series on the 2019 Spending Review, Eric reports from our Committee Summit, where we organised an experienced panel with funders to talk about the SR and presented our emerging key messages. And don’t worry if you missed the other blogs in the series, part 1 is available here and part 2 here.

In my first blog in this series, I discussed how the Spending Review (SR) would have received a whole lot more attention in normal political times than what it has so far. BIA is working hard to change that. Two weeks ago, we brought together a stellar panel in front of our whole membership to discuss what the life sciences sector can expect from the SR and get our members’ feedback on BIA’s emerging key messages.

The panel session took place in the plenary at our annual Committee Summit, where all eight BIA advisory committees meet and discuss their priorities for the year ahead. The panel was chaired by Lord David Willetts, UKRI Board member and former Science Minister (2010-2014), and we heard from Alex Marsh, Deputy Director of Strategy at UKRI, Melanie Welham, Executive Chair at BBSRC, Emily Hirsz, Senior Policy Adviser at the Treasury, Mike Batley, Deputy Director of Research Programmes at NIHR, and Richard Hebdon, Head of Health & Medicine at Innovate UK.

Lord Willetts set the scene by sharing some of his experiences from when he was Science Minister during the 2015 SR, which proved a difficult but ultimately successful SR for the science budget. Following Lord Willett’s opening remarks, each panel speaker presented on this year’s SR process, outlined their organisations’ priorities and explained what the sector can expect from the SR.

BIA’s emerging key SR messages

BIA CEO Steve Bates also presented our emerging key SR messages, which we will take to the Government and funders as part of our activities to influence policy makers. They will also form the basis of a report to demonstrate the value of investment in the sector that will be at the heart of our campaign.

Steve argued that the public investment into the life sciences sector gives the Government great bang for its buck. The sector’s global competitive advantage is increasing through Industrial Strategy, Life Sciences Industrial Strategy and the Sector Deals, it consistently invests more in R&D than any other in the UK, and has a strong track record of leveraging new investment.

Steve attributed the strength of the sector to many years’ successful Industrial Strategy, stretching from the founding of Celltech in 1980 by Margaret Thatcher, through the creation of R&D tax credits by the Labour Government in 2000, to the current Government’s modern Industrial Strategy. As public R&D investment is increased, it is vital that the Government continues to build on its investment into the sector to maintain its global competitive advantage.

Five principles for evolving funding streams

Steve explained that the BIA will continue to highlight that Innovate UK grant funding and the Biomedical Catalyst are main finance sources for life science SMEs to grow, anchor high value manufacturing supply chains, and attract new investors.

He said that for the Industrial Strategy to continue its successful support for the sector and reflect the ever-changing global dynamic, public funding streams may need to evolve. While the Industrial Strategy Challenge Fund (ISCF) is a positive expression of this evolution, it should not replace the variety of funding streams available to life science SMEs.

Steve explained that the BIA has developed five principles to allow public funding streams to most efficiently leverage private investment:

• Balance challenge-led and responsive grants – to allow all types of innovation to thrive 
• Sector-specific – to provide long-term consistency and assurance to researchers and investors
• Grants and equity, not debt – to ensure it pays to start and grow innovative companies
• Maintain a variety of funding streams – to support the varied needs of life science SMEs 
• Unbureaucratic and informed by the needs of the sector –to enable smooth application processes for SMEs and ensure the right areas are funded to deliver the Industrial Strategy’s priorities 

Public funding streams aren’t everything though – the Industrial Strategy’s success in leveraging private investment also relies on several government policy levers, which ensure that the UK’s overall life science environment remains globally competitive:

• Tax incentives – R&D tax credits, venture capital schemes, and Entrepreneur’s Relief 
• Patient (long-term) capital – the British Business Bank and unlocking pension fund investment in SMEs 
• Well-funded ecosystem – the academic funding Councils and National Institute for Health Research (NIHR) 

To summarise: for the Government to reach the 2.4% target, the SR must maximise the amount of private investment leveraged from public funding streams – the life science sector is in a strong position to attract this new investment if the above principles are followed.

An opportunity for members to comment further

Following the panel session, several of our advisory committees discussed the key messages in their meetings and we’re taking their comments onboard. As ever, we’re keen to hear from our whole membership, so if you’ve feedback on any of the above messages, please email me. 

I’ll continue to blog on the SR as our key messages develop and the official SR timelines become clearer, so stay tuned – until next time.