UK Government Expenditure on Science, Engineering and Technology: 2012

Key Issues Specific to this Bulletin

This is the first time that ONS has published the UK Science, Engineering and Technology (SET) Statistics. These estimates are official statistics which have previously been published annually by the Department for Business, Innovation and Skills (BIS) using data provided by ONS. If you have any questions regarding the levels of SET expenditure by government departments, or any other queries related to science and technology policy, please contact James Achur at james.achur@bis.gsi.gov.uk or telephone +44 (0)20 7215 1331.

SET statistics are broader than just research and development (R&D), as they comprise government R&D expenditure (performed in the UK and overseas), knowledge transfer activities, the indicative UK contributions to the European Union’s (EU) R&D expenditure, and personnel associated with scientific and technical postgraduate education and training.

The main distinctions between this publication and the UK Gross Domestic Expenditure on R&D, 2012 (GERD) are:

a) UK GERD includes only R&D expenditure which is carried out within the UK borders, and includes all sectors of the UK economy. UK government departments’ expenditure on R&D both as funder and performer in the UK, are included in GERD. It also includes all the other UK sectors both providing the funding and performing R&D in the UK.

b) SET includes all UK government departments’ expenditure on R&D, both within the UK and overseas. It additionally includes expenditure on knowledge transfer and the UK’s indicative contributions to EU R&D expenditure. As a result, the estimates of the R&D part of the UK government’s expenditure on SET are much larger than the UK government departments’ expenditure on R&D in the UK (GERD).

UK government departments R&D expenditure in the UK were included in the UK GERD Statistical Bulletin published on 12 March 2014. Table 1 in that publication included the totals of R&D performed by UK government departments and Research Councils, £1.4 billion and £0.8 billion respectively. This included funding from other UK sectors and overseas. The breakdowns of these high level data are available in this SET publication in Tables 12 and 13.

Figure 9 shows the amount of expenditure on SET by each contributor, and also shows the amount of expenditure each contributor who performs R&D in the UK, spent on R&D in 2012. Please note no R&D expenditure appears in Figure 9 for HEFCs as they are R&D funders and not performers. Also, it is unknown where and how the UK contributions to EU R&D expenditure are spent, so they are not included as a UK R&D performer.

The main source of the data related to UK government departments, Research Councils and HEFCs’ R&D and SET expenditure, is ONS’ annual R&D survey of UK government departments (GovERD). The GovERD survey collects gross and net expenditure data, and also funding received for R&D. The net expenditure is calculated as gross expenditure minus all funding received for R&D. This is to avoid any double counting.

HM Treasury provides the indicative contributions that the UK makes to EU R&D expenditure.

SET also includes data tables on qualified scientists and engineers in the labour force by gender. These estimates are sourced from ONS’ Labour Force survey and are categorised by type of qualification and occupation, from the population of Great Britain aged 16 to 64. Occupation is based on SOC 2010. See Tables 14 and 15 in the data section of this publication.

A quality report for this specific output is not yet available, but one is available for the UK GERD (137 Kb Pdf). This contains relevant information as the majority of the SET data were collected via the GovERD survey, the same source as the government sector part of the UK GERD.

Official statistics

The UK Statistics Authority has not yet reviewed this publication, and these statistics are still designated as Official Statistics. This is a new ONS publication, and feedback from users in the coming months will help shape the future of this bulletin ready for UK Statistics Authority formal assessment.

Timeliness and punctuality

These official statistics have previously been published annually by BIS in September. By publishing the 2012 SET Statistical Bulletin in July 2014, ONS has enabled access to these data two months earlier.

Completeness of coverage

The GovERD survey is conducted annually as a census survey. UK government departments, including Research Councils and HEFCs, were contacted to establish their department’s structure and whether they carried out and/or funded R&D activities. This ensured that the correct respondents received the survey. Approximately 140 government departments and Research Councils were sent the questionnaire. Government departments were asked to include the R&D they performed as part of their estimates. These included estimates for R&D performed by local authorities and NHS trusts.

A method has been established between the HEFCs, BIS and ONS to estimate government funded R&D expenditure in Higher Education Institutions (HEIs) by using grant income as a proxy for expenditure.

The grants are classified into three groups:

• Research-oriented grants. These include the block research grant, plus other grants which are all deemed to be used for research

• Teaching-oriented grants. These are considered to be for teaching only activities, and are not included in the research expenditure estimate

• Other grants. These are not allocated specifically for research or teaching, but may contain elements of both to varying degrees. These are reviewed annually and an estimate is made of the research expenditure elements within each grant

The R&D expenditure data were collected from the HEFCs for England, Scotland, Wales and the Department for Employment and Learning in Northern Ireland.

Revisions

Revisions have been made to a small number of the estimates in 2010 and 2011. These were notified through the survey process by individual departments, and were mainly due to a combination of late returns and misreporting, which had little impact on the SET estimates.

Sampling variability

The estimates from the GovERD survey are based on a census of all UK government departments, Research Councils and HEFCs known to carry out and/or provide funding for R&D activities. They are not therefore subject to sampling errors, but may have some non-sampling errors. These include factors such as population coverage, misreporting and non-response bias. These errors are generally hard to quantify because of the difficulty in identifying the population of actual/likely R&D performers, and because of problems ensuring departments adhere to Frascati R&D definitions.

The response rate was 96% and included all the departments with the highest SET expenditure. Forecast data were used to estimate for the non responding departments, which accounted for a very small amount of the total SET estimates.

Discontinuities in data

UK government departments and Research Councils change their reporting structures as governments and policy requirements change. These may have an impact on the comparability of individual department’s data over time, as responsibilities move between departments for specific projects.

General information

These points should be noted when examining the data tables (533.5 Kb Excel sheet) :

• there may be discrepancies between totals and the sum of their independently rounded parts

• for the purposes of estimation, the recommended practice of the OECD is to use information from those performing R&D, where this is available. These estimates are considered more reliable than those from surveys of R&D funders, as funds allocated for R&D may not necessarily all be spent on R&D by the recipient

• caution should be taken when examining departmental time series. Please use the notes beneath each table which explain machinery of government changes

• launch Investment is a risk sharing government investment in the design of civil aerospace projects in the UK. The investment is repayable at a real rate of return, usually via levies on sales of the product. Launch Investment is only available to the civil aerospace sector, and is permitted under the Civil Aviation Act 1982, which charges the Secretary of State with “organising, carrying out and encouraging measures for the designing, development and production of civil aircraft”. These expenditure values have been largely negative in recent years. See BIS Annual Report and Accounts 2012-13 for more information. The UK government’s commitment to the UK civil aerospace sector is documented in the Aerospace Growth Partnership

• the categories as presented in Table 7 are defined by the government’s primary purpose for funding the R&D activity, and not the intentions of the researchers or the end result. The primary purposes are: General research – all basic and applied R&D which advances knowledge for its own sake, and support for post graduate research studentships (PhDs); Government services – R&D relevant to any aspect of government service provision (all defence expenditure is included here); Policy research – R&D which government funds to create new knowledge which informs policy making (excluding government services and technology support), and for monitoring developments of significance for the welfare of the population; Technology support – applied and/or strategic R&D that advances the technology underpinning the UK economy

The EU supports R&D programmes in member states. The UK makes a positive net contribution to the EU budget and a proportion of this is assumed to be for R&D, and is included in SET data Tables 1 to 4. However, because no specific information is available on where and how these contributions are spent, they are excluded from the remaining SET tables.

OECD terminology is used to classify the main sectors of the economy. Government corresponds to the General Government sector of the UK National Accounts.

Prior to 2007, VAT related to these data was collected separately, but excluded from these estimates. However, it should be noted that various amounts of VAT may have been included by some departments due to difficulties in separating out expenditure subject to VAT. Since the 2007 data collection, the GovERD survey has included additional information throughout, notifying respondents to exclude VAT from the data they provide.

Users and sses of SET data

There are users within and outside government who use these data to produce various analyses and to inform policy decisions. These include:

• OECD uses GERD data (which contains parts of the SET data) for constructing internationally comparable databases, and producing regular statistical publications such as the ‘Main Science and Technology Indicators’ (MSTI). These data are also used for analytical studies, which underpin economic analyses and policy reviews

• The Department for Business, Innovation and Skills (BIS) use SET data to assess policy impact and inform debate. R&D data underpins their assessments of UK innovation performance as well as international work in this field

• The Welsh Government (WG), Scottish Government (SG) and the Department for Employment and Learning, Northern Ireland (DELNI) use SET and GERD data as key indicators for measuring the performance of their respective economies within the UK, as well as to monitor and develop R&D policies which seek to increase R&D investment

• The Research and Development Society is a UK based organisation formed to promote the better understanding of R&D in all its forms. Its members include representatives from industry, government departments and agencies, universities and consultants. The Research and Development Society make use of SET data, as a key source of information for understanding how much is being invested in R&D from the UK on an annual basis, and to inform wider debates about R&D

As this is a new ONS statistical bulletin relating to R&D statistics, we would appreciate your views. Do you make use of our annual estimates on the UK Business Enterprise Research and Development (BERD), UK GERD or this new bulletin? If yes, we would like to hear from you (RandD@ons.gov.uk) and understand how you make use of these statistics, and how we can seek to improve them. This will enable us, in the future, to better meet your needs as a user.

Coherence

UK government departments R&D expenditure in the UK were included in the UK GERD Statistical Bulletin published on 12 March 2014.

The Ministry of Defence (MoD) publishes extensive defence statistics. Their expenditure on defence R&D was published as part of the UK Defence Statistics Compendium: 2012, and Finance Table 1.7 contains these data.

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