UKRI Budget for 2025–2026: An Update

What does the £8.8 Billion Investment Mean for the Future of UK Research and Innovation?

The Department for Science, Innovation and Technology (DSIT) has confirmed that UK Research and Innovation (UKRI) is set to receive a substantial budget of £8.811 billion for the 2025–2026 financial year. This significant allocation reflects the UK government’s continued commitment to strengthening the country’s position as a global leader in science, technology, and innovation.

The funding forms a core part of the government’s broader pledge to invest £20.4 billion in research and development (R&D) during 2025–2026. This level of public investment is not only unprecedented, but also a clear signal of the government’s ambition to support long-term economic growth, boost productivity, and address major national and global challenges. The investment aims to help achieve the government’s five key missions, which include driving innovation, tackling climate change, advancing health research, enhancing national security, and reducing regional inequality.

With the 2025-2026 agreed UKRI will continue to work closely with DSIT in the upcoming spending review to shape multi-year research and innovation budgets, with the goal of ensuring that every pound invested delivers tangible benefits for the UK’s economy, society, and scientific capabilities. These long-term funding plans will help provide greater stability and strategic focus for universities, research institutions, and businesses involved in cutting-edge innovation.

UKRI Budget Key Highlights for 2025–2026

• DSIT secured an overall cash increase in its R&D budget from £13.3 billion in 2024-2025 to £13.9 billion in 2025-2026, which includes £2.7 billion for Horizon Europe association.
• UKRI budgets no longer include responsibility for two major innovation programmes. The Faraday Battery Challenge, which supports battery research for electric vehicles and energy storage, is now under the remit of the Department for Business and Trade. Meanwhile, the Zero Emission HGV and Infrastructure Demonstration programme, which aims to decarbonise heavy goods transport, is now managed by the Department for Transport. UKRI will receive direct financial support for these programmes from the respective government departments.
• The Innovate UK allocation for core programmes in 2025-2026 is £948 million.

Shift in Budget Profiling

In previous years, particularly in the wake of the COVID-19 pandemic and during periods of global economic volatility, UKRI adopted an approach known as over-profiling. This strategy involved intentionally over-allocating budgets to offset potential underspending and project delays, ensuring that overall targets for investment in R&D were met.

With the economic landscape now more stable, UKRI has announced that it will no longer use over-profiling from the 2025–2026 financial year onwards. This move reflects greater confidence in project delivery timelines and improved financial planning across the research and innovation sector. However, it also means that year-on-year comparisons with previous budgets from 2022–2023 through to 2024–2025 may not offer a like-for-like analysis.

Sustaining the UK’s Global Leadership in Innovation

The £8.8 billion UKRI budget for 2025–2026 reinforces the UK’s position at the forefront of global research and innovation. With strategic alignment between government departments, more targeted programme funding, and a renewed focus on long-term planning, the sector is well positioned to deliver on national priorities. Whether it’s advancing clean energy, developing new health technologies, or driving digital transformation, this investment is expected to have a wide-reaching impact across industries and regions.

For researchers, innovators, academic institutions, and businesses, the latest budget allocation signals a time of opportunity and growth. Continued collaboration between government, industry, and academia will be essential to maximise the return on public investment and build a more innovative, sustainable, and prosperous future for the UK.

How can TBAT Innovation help

The UKRI budget announcement for 2025–2026 brings welcome reassurance that research and innovation remain central to the UK’s long-term growth and success. With clear priorities and continued investment, there are real opportunities ahead for organisations working at the forefront of science, technology, and innovation.

At TBAT Innovation, we see this as an encouraging step for businesses across the UK. Whether you are exploring Grant Funding, developing a new product, or planning your next R&D project, understanding how public funding is being allocated can help shape your next move.

If you are considering your options or want to make the most of the support available, we are here to help. Now is a great time to start a conversation about how we can support your innovation journey.

Book a free 1-2-1 consultation today, 0r contact us via the form below.