Departmental Spending
Department for Business, Energy and Industrial Strategy BEIS
Day-to-day Spending (Resource DEL) Breakdown of changes in budget from 2017-18 to 2018-19, £m BEIS spends 1% of total Resource DEL
Spending Review 2015 Total The SR planned reductions, year-on-year in BEIS’ resource DEL. Most reduction in science funding was reclassified as capital in 2016. As a result, BEIS’s BEIS’ capital DEL became far bigger than its day-to-day, resource budget. resource DEL budget: - 4% Trends • Chart below restates figures for current BEIS responsibilities. • R&D spending is excluded (shown against capital on next slide) • Spending on industrial strategy and investment has been reducing over the SR period.
• Overall BEIS’ Resource DEL has reduced in recent years. 1 2
Long-term spending trends (£m, nominal) 1
3,000
2,500
2,002 Changes from last year 2,000 1,938 • Non-inclusion this year of funding to exempt energy intensive industries from costs of government energy 1,500 policies • Lower allowance for science and research 1,000 depreciation this year • Lower income from nuclear decommissioning 500 currently forecast this year compared to last
0 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 Actual Spend Final Initial Plans Budget1 Budget2 1 Final budget at Supplementary Estimates 2017-18 (Feb 2018) 2 Initial budget as at Main Estimates 2018-19 (April 2018) BEIS Investment Spending (Capital DEL) Breakdown of changes in budget from 2017-18 to 2018-19, £m BEIS spends 17% of total Capital DEL Spending Review 2015 The SR protected science and research funding in real terms. Since then: • An extra £814 million of R&D funding, above previous planned Total reduction baseline for 2018-19, was announced in Autumn Statement in BEIS’ capital 2016. DEL budget • There has been reprofiling between years of some projects and -0.8% programmes.
Trends • Science and research budget (resource & capital) has grown by 38% since 2012-13 from £5,927 million to £8,174 million 2 • Net spending on investments and government as shareholder 1 1 has fluctuated from year to year 2 • Overall capital spending has increased in recent years
Long-term spending trends (£m, nominal) Changes from last year 12,000 10,856 10,769 • Reduced net investment (likely both higher loan
10,000 repayments/sales of government shareholdings and/or lower loans out or amounts invested) through British Business 8,000 Bank (-£421 million), Enterprise Capital Fund (-£221 million) and launch investments (-£55 million) 6,000 • Spending on science & research grows from £7,460 million to £7,950 million 4,000 • Spending on tackling climate change up from £66 million to £255 million, including extra £124 million on “heat” 2,000 • Capital nuclear decommissioning cost estimates down from
0 £2,058 million to £1,851 million 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 1 Actual Spend Final Initial Plans Final budget at Supplementary Estimates 2017-18 (Feb 2018) 1 2 Budget Budget 2 Initial budget as at Main Estimates 2018-19 (April 2018) BEIS Breakdown of DEL spending: BEIS 700
600 Resource DEL
• BEIS has a Resource DEL that is less than a fifth of 500 the size of its capital budget overall
• Industrial strategy and investment includes funding 400 for business and enterprise, “market frameworks”,
the Insolvency service, British Business Bank, Post 300 Office network subsidy, ACAS and international climate finance. 200 • Energy legacy spending consists mainly of British Energy liabilities and concessionary fuel. 100
0 Industrial strategy and Competition and Tackling climate change Science and research Nuclear Other energy legacy investment markets decommissioning 9,000 2015/16 2016/17 2017/18 2018/19
Capital DEL 8,000 • BEIS’ capital DEL budget is over five times the size of BEIS’ resource DEL budget and now the biggest 7,000 capital DEL budget in Whitehall. 6,000 • This budget is dominated by science and research 5,000 funding (nearly £8 billion): making up nearly three quarters of BEIS’ capital DEL budget after being 4,000
protected in real terms under the last Spending 3,000 Review. • Other major elements including nearly £2 billion in- 2,000
year spending on nuclear decommissioning, and 1,000 reducing levels of net investment and shareholdings 0 Industrial strategy and investment Science and research Nuclear decommissioning 2015/16 2016/17 2017/18 2018/19 Productivity, GDP growth and R&D spending comparisons:
International comparison in Productivity: Constant price GDP per hour worked (2007=100%) 110 France
Germany 105 UK
US
Percentage 100 G7
95 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: ONS international comparisons of productivity, April 2018 OECD ranking of UK on R&D spending:
OECD total
Source: OECD gross domestic spending on R & D Source: OBR Economic and Fiscal Outlook, March 2018