Measures confirmed in the Budget could together change how the UK attracts business investment, develops competitive industries and creates better-paid jobs, according to the National Centre for Universities and Business (NCUB).
Plans to give mayors a share of income tax revenues would link their funding more directly to local employment and earnings growth. Alongside investment in innovation clusters, scale-up finance, procurement and skills, this could strengthen their ability and incentive to address barriers holding regional economies back.
NCUB welcomed the potential of the combined measures, while calling for clarity on research funding and delivery. The previously announced £1bn UKRI cluster commitment will reprioritise existing resources, leaving questions about the implications for other programmes.
Rosalind Gill, Director of Policy, Analysis and External Affairs at NCUB, said: “The significance of this Budget lies not just in individual announcements, but in how they could work together to change the way the UK drives growth. Fiscal devolution, innovation clusters, scale-up finance, procurement and talent measures all address different parts of the same challenge: turning the UK’s existing research and innovation strengths into unlocked investment, meaningful economic growth, a globally competitive edge and prosperity that reaches everyone.
“Giving local leaders greater control and a direct financial stake in economic growth creates an opportunity to connect research and innovation with skills, infrastructure and business finance around the strengths of each place. Universities and businesses must be involved in shaping these priorities from the outset. Their research, talent, expertise and investment are fundamental to building competitive industries and ensuring innovation translates into economic impact.
“Devolution must strengthen the UK’s innovation economy, not fragment it. Research strengths, supply chains and labour markets cross regional boundaries, and the UK’s ability to compete internationally depends on connecting capabilities across the country. Greater local discretion must go hand in hand with strong national research and innovation capabilities, sustained investment and collaboration between places.
“The UK Government must also be clear about the funding behind its ambitions. The £1bn commitment to innovation clusters reprioritises existing research funding, so it is important to understand what this means for other priorities and how the underlying research base will be sustained. The test of the Budget will be whether it changes behaviour and delivers results: more business investment, more technologies reaching customers, more innovative firms scaling in the UK, and better-paid careers across the country.
“We also welcome the decision to retain a two-year Graduate visa for eligible graduates, which can help maintain the UK’s attractiveness to international students and the talent they bring to the workforce. However, eligibility criteria and wider changes to visa and salary requirements, including the removal of the PhD salary discount, will need careful consideration to understand their combined impact on universities’ and businesses’ ability to attract the graduates and researchers they need.”
