On the devolution of Research, Development and Innovation funding: some tentative principles

The current government is committed to a new “plan to fundamentally rewire the state by shifting power, funding and accountability from Whitehall to local leaders”. This includes giving local leaders much more power and responsibility to drive economic growth in their regions. Since one of the main rationales for government funding of research, development and innovation (RD&I) is to support economic growth, this opens up the question of the degree to which RD&I funding should itself be devolved. Here I attempt to summarise the rationale for devolution of RD&I funding and identify some potential pitfalls, before outlining some tentative principles.

What problems are we trying to solve?

The primary issue is the uneven level of economic development across the UK (as measured by regional productivity and disposable income). As shown by e.g. Philip McCann, Tom Forth, and others, one very important dimension of this is the underperformance of UK second cities. Meanwhile, there are persistent economic and social difficulties in coastal and rural peripheries. The government’s priority of “Good growth in every postcode” won’t be achieved without addressing these imbalances.

We know that innovation is the key to achieving sustainable productivity growth, and the private sector research and development, that produces new products and improved processes, is an important (if not the only) driver of the innovation that leads to productivity growth.

We know that, due to a well-understood market failure, private firms will tend to invest less in RD&I than would be societally optimal. This is the justification for public sector investment in RD&I. But the very spillovers that firms fail to benefit directly from, are what allows other firms in the area to raise their own levels of innovation, leading to the formation of sector-based geographical clusters.

Public RD&I spending can therefore support the formation and growth of such clusters. Geography remains important – despite the widespread availability of the products of scientific research, the application of knowledge to produce economic growth depends on tacit knowledge and the networks of people who hold that knowledge. Those networks are localised in specific places. The UK has been very successful at using public RD&I spending to create highly productive economic clusters, for example in Cambridge, and in the Kings Cross region of London, but these face other barriers to growth.

Currently, public RD&I funding is highly concentrated in the Greater Southeast. This means there is a significant opportunity to support and build high productivity clusters in those parts of the country that are currently economically lagging, by investing RD&I funding in a more place-conscious way, with the specific target of increasing levels of private sector research, development and innovation in those places.

Why might RD&I devolution help?

The key argument for devolution of RD&I funding is that local places have an understanding of their own economies that is more detailed and more granular, than it is possible for central government departments or agencies to have. They can create structures that bring together voices from innovation intensive businesses, from public sector R&D organisations like local universities, and officials and elected leaders from local and regional government – the so-called “triple helix”. Informed by such bodies, local places can have a better understanding of the areas of potential for growth of their economies, and of the barriers that restrict growth, than central government.

Across the UK, regional economies have very different shapes and different specialisms. Many of these specialisms are invisible, or only faintly discerned by central government. To give just one example, the chemical industry has delivered consistently high productivity growth over many decades, and remains important across much of the North of England, yet its interests have been almost entirely neglected by central government. The voice of local businesses is much more strongly heard in their own cities and regions than in Whitehall.

The growth of industrial clusters in high value, innovation intensive, exporting sectors – in support of the government’s “reindustrialisation” priority – will not be achieved by RD&I investment alone. Having set their own economic strategies based on this local knowledge, Strategic Combined Authorities can align RD&I investment with their other capabilities, in skills, transport and other hard infrastructure, in spatial planning, to maximise its economic potential.

In the wider context of the government’s “Rewiring the state” agenda, more local control of innovation spending addresses a perceived lack of accountability of national, arms-length bodies, and supports the government’s commitment to “support local places to reindustrialise by building on frontier sector and cluster strengths”. That said, the need for an arms-length body, incorporating independent expert science advice, to oversee government RD&I spending has been recognised for more than a century. UK Research and Innovation should maintain a central role as the overseer of the national RD&I system, building on and extending its recent work to incorporate more place-based perspectives in its strategy and operations.

What dangers might emerge from RD&I devolution?

There is a risk of poor decision making, due to lack of expert knowledge and failure to understand the national context, especially in Strategic Combined Authorities that are relatively newly established. The necessary connectivity between and engagement of SCAs, universities and businesses takes time to establish, while regional business sectors may not be effectively organised.

Weak governance could lead to conflicts of interest and capture by a few favoured incumbents. Places with weak economies with low levels of private sector innovation may be automatically disadvantaged by a lack of experienced representatives of business who have the time to devote to the wider interests of the region – this is particularly likely to be the case in economies which are dominated by SMEs rather than larger primes.

In many cases, economic geography doesn’t coincide with political geography. Poorly designed devolution could lead to a fragmentation of infrastructure, with competing facilities not at critical mass in neighbouring regions.

Political pressures could lead to diversion of RD&I funding to more immediate and politically salient priorities. Pressures to satisfy too many constituencies, combined with weak governance, could lead to the dividing up of RD&I funding into a large number of sub-critical pots.

What have we learned from past and existing place-based RD&I funding schemes?

There have been a number of previous place-based RD&I funding schemes, and it is important to learn the lessons – both positive and negative – from these initiatives. These include:

  • Innovation funding by the Regional Development Agencies in the 2000s, funding from the European Regional Development Fund, and by devolved nations up to the present.
  • Specific place-based funding run by UKRI and its component parts, including the Strength in Places Fund, the Innovation Accelerator pilots, Research Council place based impact acceleration accounts, Innovate UK’s Launchpad programmes, and the Local Innovation Partnership Fund. The last of these is perhaps the largest in scale and ambition, but is still ongoing.
  • Funding whose primary purpose isn’t regional economic development, but which in practise has contributed significantly to this goal, including Catapult Centres, and various funding streams to promote university-business interactions and spin-out and start-up activity, including HEIF.

One positive outcome of these previous initiatives has been to increase the profile of innovation as a key component of regional economic development.

One key theme that is emerging is the power, not without tensions, of co-creation between regional triple-helix organisations and national agencies such as Innovate UK and Research England.

Some tentative principles for devolving RD&I spending

Basic discovery science needs peer review by experts who themselves are at the scientific frontier, and benefits from competition at a national (or indeed, supranational, as through the UK’s participation in the European Research Council) level. In the language of UKRI’s evolving strategy, the first priority, “Supporting discovery and curiosity-driven research” (“bucket 1”) funding should be entirely retained by UKRI.

Full RD&I funding devolution should be focused on the innovation end of RD&I; the goal should be to increase private sector R&D, to support the diffusion of innovations, and to build innovation capability in support of high productivity clusters in Strategic Combined Authorities, or otherwise to have a direct positive impact on their citizens.

For research in support of strategic government and societal priorities (“bucket 2”), UKRI will need to take an overarching national view, though they should always take into account the evolving geographical distribution of RD&I funding, and they may be able to work with places and regions, using their local knowledge and powers to mobilise additional resource in support of larger scale collaborations and programmes.

While the right spatial unit for RD&I devolution should be, in England, the Strategic Combined Authority, there needs to be a recognition that economic clusters may be larger than a single SCA, and incentives should be provided to support collaborative activities.

These collaborations could span neighbouring SCAs where they are spanned by a single sector cluster (e.g. industrial biotechnology and engineering biology, across Liverpool City Region, Greater Manchester, and Cheshire), or they could link disconnected regions where there are clear complementarities (e.g. Cambridge and Manchester).

Careful attention needs to be given to the situation in the devolved nations; although the economic logic probably suggests devolution to city-regions there too, there needs to be sensitivity to the different political situations in the devolved nations, and the right of their administrations to choose different paths.

Devolved RD&I funding should, at least in the initial stages, be ring-fenced for activities that fall within the Frascati definition of R&D. The expectation should be that SCAs will support their strategic RD&I investments by linked interventions in areas like skills, transport infrastructure, planning, access to finance, and attraction of inward investment.

A condition of RD&I devolution should be that SCAs develop robust “triple helix” governance arrangements, with strong representation of innovation-intensive private sector business, public R&D institutions such as HEIs, and SCAs. The governance arrangements should have robust safeguards against conflicts of interest, they should include real expert voices (including independent experts from outside the region), and they should have the political backing they will need to make difficult decisions about geographical and sector focus.

While the new landscape should encourage much more collaboration between HEIs, industry and SCAs, it is important to respect the autonomy of the collaborating institutions. They should be incentivised to support their local economies, but be given the freedom to deploy funding in support of those goals independently.

Many Strategic Combined Authorities will need help and support in developing suitably robust governance structures, and the analytical capacity needed to underpin good decisions. UKRI should develop explicit new capacity to support these developments, as well as to take an overview of the development of the national RD&I landscape.

Finally, it should be recognised that devolution of late stage RD&I funding alone will not be sufficient to counteract a geographical imbalance of government R&D spending that has been many decades in the making. National decisions about significant scientific infrastructure have long-lasting consequences, on the future attractiveness of their locations for both public and private R&D activities, and on the future economic trajectories of those places. In the future these decisions should not be taken without careful consideration of their long term consequences on regional innovation capacity.

Some further reading

Rewiring the State – Cabinet Statement, 31 July 2026

Science and the Economy, Royal Society, 2024

The UK ‘geography of discontent’: narratives, Brexit and inter-regional ‘levelling up’ , Philip McCann , Raquel Ortega-Argilés, 2021, Cambridge Journal of Regions, Economy and Society

Tackling the UK’s regional economic inequality: binding constraints and avenues for policy intervention, Anna Stansbury, Dan Turner & Ed Balls (2023) Contemporary Social Science

The Missing Four Billion: making R&D work for the whole UK. Tom Forth and Richard Jones, NESTA, 2020

UK Science and Innovation: Five Years since the Missing £4bn, Tom Forth and Richard Jones, 2025. In “Joining Up Pro-Productivity Policies in the UK”, NIESR Occasional Paper 65

Regional research and development subsidies are working. But not in the way most people think. Tom Forth, 2024

R&D, place, and developing regional innovation systems: some lessons from Greater Manchester

Earlier this week I gave a talk at Imperial College’s Centre for Sectoral Economic Performance with this title. The talk covered a lot of ground that will be familiar to regular readers of my blog, so here’s a summary, with references to some of my earlier posts, which give more details. The talk slides can be downloaded (5.6 MB PDF) here.

Talk slides (5.6 MB PDF):R&D place and regional innovation systems.

My interview on Cylch – Alumni Wales

There’s a long interview with me by Ollie Barrett on Cylch – Alumni Wales, a substack devoted to highlighting the contributions of Welsh professionals in England. This covers my scientific career, my thoughts on industrial policy and regional economic growth, my Welsh roots, and (inevitably) my take on Andy Burnham’s plans for growth in every postcode.

Finding Burnhamism: The Scales of Industrial Policy

The Sheffield Heavy Spring Trade

My repost earlier this year of my piece on the history of the Sheffield steel industry prompted an interesting response from John Austin, who has written a history of one subsector of that industry – The Sheffield Heavy Spring Trade – and was kind enough to send me a copy. Reading it prompted these thoughts.

Capital investment bubbles always offer great, and sometimes unexpected, opportunities for producers of some relatively obscure intermediate goods. We’re seeing that now as a result of the the huge AI-driven investment in data centres; aside for the obvious demand for GPUs and memory chips, the makers and installers of HVAC systems (heating, ventilation, and air conditioning) are also seeing a bonanza. For a 19th century parallel one can, perhaps, look to the great railway boom. The railways were built on steel – for boilers, for bridges, and above all for track. But they also needed waggons to run on those tracks, those waggons needed springs. By 1861, there were about 175,000 waggons on a railway network that was still exponentially growing, and most of the springs for those waggons were made in Sheffield, building on that city’s predominance in the steel trade.

Austin’s book tells the story of the rise and fall of this significant subsector of the steel industry, and illustrates in microcosm much about the wider story of the UK’s industrialisation. The industry emerged in Sheffield from the craft traditions of the coach builders of the early nineteenth century, and built on the availability there of crucible steel, Benjamin Huntsman’s great 1740 invention. Sheffield’s near-monopoly position bred a complacency about foreign competition, and its early lead led to technical conservatism. But essentially, the industry rose and fell with the wider fortunes of the railway industry in the UK and in overseas markets.

The spring industry’s workforce were well-paid, and transactional in their relationship with their employers. They were well aware of their value, arising from their skills and their resilience in being able to cope in a job that made huge physical demands in a dangerous and unpleasant environment: the “romantic image of the Sheffield craftsman, hard and coarse but skilled and strong” wasn’t entirely groundless. There was a long tradition of trusting craft wisdom over science; the crucial processes of heating, tempering and working the metal were optimised purely on the basis of experience, while much depended on the quality of the spring steel itself. So what technical improvements came along in the 19th and early 20th century were largely upstream of the spring industry – in the transition from crucible steel, first to the output of the Bessemer process, and then the Siemens open-hearth process.

Even these innovations were met with suspicion by the workforce. Austin quotes the recollection of Harry Brearley, the inventor of stainless steel and one of the pioneers of the new early twentieth-century scientific approach to steel-making. Brearley asked a spring smith how he liked working with the new Siemens open-hearth steel compared to the older Bessemer steel. “I don’t like it… I can’t explain the difference but I can feel it. He talks of steel being composed of molecules; if there are such things in Bessemer steel they are round and in this new stuff they are square – I can feel them grate over the corners as I bend it”.

The twentieth century saw a decline of the industry, inevitable perhaps given economic depression and the troubles of the railway industry. A government “Spring Research Committee” doesn’t seem to have had a lot of impact. There was undoubtedly some mechanisation, but this was resisted by a pride in doing things the old way. After the Second World War the industry suffered, as a rather peripheral player in a series of nationalisations and reorganisations of the wider steel industry. Despite the invention of a new design of spring for the Ford Transit van in the mid-sixties, the Sheffield industry failed to adapt from the decline of the railways and the growth of road transport.

The nicely written book is both a colourful look at the sociology of the steel industry in Sheffield, and a thoughtful and informed reflection on the way an industry responds – or fails to respond – to changing markets, wider economic conditions, and technological change. The final section is more personal – Austin’s reminiscences of his own time in a spring shop in the 1970s. There’s no sentimentalism here about the nature of work in this kind of heavy industry: “It was a coarse and somewhat brutalising existence, desensitising to an extent that was too often taken home … physically hard, lacking sophistication, arrogant, disdainful of authority, hedonistic, lived in the moment”. These are words that are worth remembering when we consider what it might mean for the UK to re-industrialise.

Done Years Ago

When I was a youth, getting better at rock climbing but still a universe away in ability from the superstars, I’d sometimes sit in the café in the Derbyshire village of Stoney Middleton, then one of the centres of hard limestone climbing in the UK. I’d have a chip butty and a pint of tea, and enjoy overhearing the conversation of those same superstars. Then, when they’d gone back to the rock, I’d take a look the New Routes Book, a tattered hard-back exercise book in which those stars would record their hardest new ascents, to be commented on by their friends and rivals. But every now and again, a hapless interloper (probably a visitor from the South) would have recorded the ascent of a claimed new line, usually at a modest grade. Across the proud paragraph, one of the local superstars would have scrawled in aggressive capitals, “DONE YEARS AGO”.

This illustrates the danger of any field of human activity which is in some sense progressive, with new achievements building on the old ones. As the field gets mature, it’s more and more difficult to have a sense of what’s genuinely new, and what’s merely retreading the old. Science is no exception.

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Moving beyond the dichotomy between pure and applied science

The public funding system for science in the UK is currently going through a major transition. It’s moving from a predominantly discipline-based way of organising funding, to a new threefold categorisation. Lord Vallance’s “three buckets” distinguish between discovery and curiosity-driven research, strategic government and societal priorities, and supporting innovative companies to start, scale and stay in the UK.

Last week, the government department overseeing most of the science budget, the Department of Science, Innovation and Technology, was abolished. Responsibility for science funding has been transferred to an expanded Department of Business and Trade (now the Department of Business, Innovation, Science and Trade) – one motivation for this must be to make a stronger link between the priorities for science funding and the government’s industrial strategy.

Does this mean, as some fear, that we’re seeing a systematic shift from pure science to applied science? There’s certainly more pressure to demonstrate outcomes from the R&D the government supports. The political consensus in support of science funding is crumbling in the face of continuing economic stagnation and fractious politics, and in an earlier piece I’ve argued that UK science must deliver on its promise of economic growth.

But we should take a deeper look at the underlying assumption here, that science is very different from technology, and that it makes sense to distinguish between pure science and applied science. The idea of a one-way trajectory, with applied science emerging from pure science, and then being translated into technology is seductive, but misleading. In this view, pure science is the seed corn from which future technologies emerge – but this neglects the way that technology itself can seed new fundamental discoveries.

We focus a lot on the effectiveness – or lack of it – of our system for translating fundamental science into new, economically valuable technologies. But maybe we should think more about the process of reverse translation – the way in which new science can arise from developments in technology. In the postwar world, it was in the great corporate laboratories, like Bell Labs and IBM, and, in the UK, ICI and GEC, that this reverse translation happened. This relied on having those industrial laboratories employing outstanding researchers working on basic science, alongside more applied scientists and technologists. But that world has largely gone, leaving a giant gap in the institutional R&D landscape. That gap needs to be filled.
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Five glosses on Andy Burnham’s big speech

The leading candidate to replace Keir Starmer as the UK’s next Prime Minister, Andy Burnham, gave a speech on Monday in which he laid out his proposed governing plan. There was a lot in the speech – lots of politics, some immediate priorities, but also a lot more policy than many commentators were expecting. This piece is not a systematic review of the speech, and I won’t touch on the proposals for institutional change, as exemplified by the announcement of No 10 North. Instead, here are some of my reflections prompted by a few key passages, focusing on my interests of innovation, universities, industrial strategy, and regional economic growth.

Bottom up growth:

“It is time for Whitehall to accept that growth cannot be ordered from the top down. Instead, it can only be nurtured from the bottom up … It comes from running sound finances as we have done here in Greater Manchester, which in turn gives businesses the stability and the confidence to invest, increasing their productivity and adoption of new technology. It comes from placing our universities at the heart of local economies, as all the mayors do, and bringing the innovation-lead approach through start-ups and scale-ups.”

This is the central statement of Burnham’s economic thinking – we need economic growth, growth comes from improvements in productivity, & productivity growth is achieved by businesses investing and adopting new technology, and new businesses starting up and scaling. The argument is that this is most effectively encouraged at the level of a place, archetypically a city-region like Greater Manchester.

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Life, death and active matter

“The force that drives the flower drives my green age”

At the dawn of modern chemistry, in the 18th century, the prevailing view was that there was something special about living tissue compared to inert matter.  In conventional accounts of the development of chemistry, this view – known as “vitalism” – is widely believed to have been definitively killed by Wöhler’s synthesis of urea from inorganic starting materials in 1828, opening the way to a purely mechanical concept of biology, full of pumps and levers.

And yet, there is something special about a swimming bacteria, a crawling amoeba, a growing plant, a muscle, a heart, a brain.  We know now that what’s special about these forms of living matter isn’t some occult life-force; it’s a continuous input of free energy.  These systems are driven systems, sustained far from equilibrium by this constant free energy input.  In soft matter physics, we call this kind of matter active matter.  This encompasses not just biological tissues, but increasingly, synthetic analogues.

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UK science must deliver on its promise of economic growth

This piece was first published on the WonkHE blog on 18 May 2026. It’s an attempt to condense the arguments I’ve been making in my three longer blogposts – UK Science in a post-liberal world, UK science policy in transition, and Winds of change for UK science policy.

For more than a decade, there’s been a remarkable cross-party political consensus in the UK in support of funding scientific research.  Despite the wider pressures on public finances, public spending on science has been increasing in real terms, and further increases are planned.  But that consensus is now breaking down – and, in my view, the wider UK research community has not yet woken up to the threat.  We can’t take continuing government and public support for science for granted, and the science funding system needs to adapt and demonstrate that it is delivering for the nation, to make sure that support continues.

The recent English local elections made clear that the old political duopoly is breaking up – and what’s driving many supporters of both Greens and Reform is a sense that the old system is broken.  “Burn it all down” is an emerging political theme. There are obvious new threats that the country needs to respond to, notably increasing geopolitical insecurity.  The Conservative Party’s plan to cut UK Research and Innovation’s funding by 20%, moving the money into direct defence R&D, is a signal that, whoever forms the next government, times are changing.

But perhaps the biggest issue the research community must face is this: the justification for increases in the government’s research budget has been that more R&D will lead to economic growth – but that growth has not materialised.  GDP per person is about 29% lower than it would have been if the pre-2008 trend had continued, and this stagnation manifests itself directly in people’s wages and living standards, which on average have barely increased over the last twenty years, and in governments’ difficulties in funding public services.

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How Sheffield became Steel City

For the first time for several decades, there are grounds for optimism about the future of Sheffield’s steel industry (very much reduced in scale though it now is). Sheffield Forgemasters (now UK state owned) is building a major new facility, and Special Melted Products (with an infusion of Taiwanese capital) is also expanding. This isn’t about the standard grades of steel for use in construction – the expansion is to meet demand for specialised forgings from speciality steels and other alloys, driven by applications in defense, aerospace, civil nuclear and energy, and influenced by a new focus on UK national resilience and industrial capacity. This gives me a pretext to republish this piece I wrote nearly ten years ago about the history of the steel industry in Sheffield – and the valuable lessons this history can teach us about innovation.

As someone interested in the history of innovation, I take great pleasure in seeing the many tangible reminders of the industrial revolution that are to be found where I live and work, in North Derbyshire and Sheffield. I get the impression that academics are sometimes a little snooty about local history, seeing it as the domain of amateurs and enthusiasts. If so, this would be a pity, because a deeper understanding of the histories of particular places could be helpful in providing some tests of, and illustrations for, the grand theories that are the currency of academics. I’ve recently read the late David Hey’s excellent “History of Sheffield”, and this prompted these reflections on what we can learn about the history of innovation from the example of this city, which became so famous for its steel industries. What can we learn from the rise (and fall) of steel in Sheffield?

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