Written evidence submitted by the Wellcome Trust (RAD002)

Key points

• A long-term, coordinated and stable approach across Government is essential to ensure the most effective and efficient investment in science. 
• The UK needs a strategic and long-term approach to capital investment, and the Government must also ensure sufficient funding for operational costs to sustain world-class facilities.
• The National Audit Office report does not fully recognise the unique role of charities. Medical research charities are an integral part of the research and development funding landscape, investing over £1.2 billion in 2012. Their independence and flexible approach means they can support innovative research across a wide range of disease areas, including rarer conditions.

Introduction

1. The Wellcome Trust is a global charitable foundation and the UK’s largest medical charity. We invest around £600 million each year in biomedical research to realise our vision of achieving extraordinary improvements in human and animal health.
2. We are pleased to have the opportunity to respond to the House of Commons Science and Technology Committee’s inquiry into research and development funding, and have included more detailed comments on the questions most relevant to the Trust in the section below.             

Inquiry questions

General points

3. Investment in science delivers benefits to the economy, to society and to health, and is essential to underpin economic recovery and drive growth. In 2008, the Wellcome Trust, the Medical Research Council (MRC) and the Academy of Medical Sciences published Medical Research: What’s it worth?[1] which found that for every pound spent on cardiovascular and mental health research, a stream of benefits is produced equivalent to earning 39 pence and 37 pence respectively each year in perpetuity. The report also illustrated the substantial time lag between research expenditure and the realisation of health benefits, estimating this to be 17 years. A follow-up study has recently been commissioned by Cancer Research UK, the Wellcome Trust, the Department of Health and the Academy of Medical Sciences. This will assess the economic and health gains arising from cancer research, and the time lag between investment and achievement of health benefits. The study is expected to report in Autumn 2013.
4. Because of these time lags, the Government must ensure a long-term, coordinated and stable approach to research and innovation. This should signal to potential R&D partners that the UK is strongly supportive of science and intends to pursue an upward investment path as soon as economic conditions permit. The Life Sciences Strategy has set a transformative direction for the sector, boosting the UK’s attractiveness for R&D. But its potential will only be achieved with continued Government funding and commitment.
5. Public funding for science and research achieves huge leverage. Between 2003 and 2013, the Wellcome Trust partnered with the Government to commit nearly £1.5 billion to support medical research, training, education and innovation. Between 2006 and 2011, MRC funding of £2.5 billion led to a further £1.4 billion commitment from charitable organisations[2]. Every £1 increase in public funding for medical research stimulates up to £5 of investment by the pharmaceutical industry. Sustained Government support will ensure continued confidence and investment from both charities and industry.
6. World-class research requires world-class facilities. The UK needs a strategic and long-term approach to capital investment if it is to remain competitive. The Research Councils UK Strategic Framework Investing for growth: Capital Infrastructure for the 21st Century[3] sets out clear priorities for funding and the Government should use it as a basis for future commitments, matched with an appropriate funding profile.
7. In addition to capital, investment decisions must take into consideration ongoing operational costs and funding requirements. Where the UK already has world class facilities — such as the Diamond Synchrotron — the ongoing operational costs must be supported to ensure that there is maximum return on the investment.
8. The regulatory environment for R&D must actively facilitate innovation while remaining proportionate and appropriate. Not only is this necessary to ensure the UK maintains its economic competitiveness by limiting costly regulatory burdens, it is also important to maintain public trust in science. In relation to medical research, the establishment of the Health Research Authority is an important first step. Effective European legislation is also a priority given the increasingly global nature of research. It will be particularly important to ensure that the Clinical Trials Regulation — currently passing through the European Parliament — facilitates the efficient conduct of clinical trials for patient benefit.

NAO review of R&D funding

9. As part of its overview of research and development investment in the UK, the National Audit Office notes the contribution of the private non-profit sector but does not fully recognise the importance of this unique funding stream and the vital role of medical research charities as independent, flexible and innovative funders. They support a wide range of high quality research across disease areas, often driven by patient demand and public donation.
10. In 2012, members of the Association of Medical Research Charities (AMRC) spent more than £1.2 billion on research aimed at tackling diseases such as cancer, diabetes and heart disease, as well as rarer conditions such as cystic fibrosis and motor neuron disease. Between 1994/95 and 2010/11, Wellcome Trust funding for research and development rose from £161.5 million to £498.8 million; an increase of 209%. Over the past 10 years, the Trust has also committed £430 million in translational funding to 243 projects in more than 100 institutions and companies. These projects have already generated over £800 million in third-party finance.
11. We welcome the Government’s recognition of the importance of charity funding for the research base and the resulting commitment to the charity research support element of QR funding. This funding stream enables the Government to leverage additional partnership funding from the charity sector and encourages donations by giving the public confidence that their charitable donations will be spent directly on research.

2010 Spending Review

12. The outcome for science and research in the 2010 Spending Review was better than expected, with the announcement that the science and higher education research budget would receive flat funding to 2014/15. We were particularly pleased about the settlement for medical research, with a real terms increase in spending on health research through the Department of Health, maintenance of the MRC budget in real terms, and confirmation of the Government’s capital commitment to the Francis Crick Institute.
13. However, we were concerned that capital was excluded from the Science Budget ring-fence in 2010 and was cut by 41 per cent. While additional capital funding for specific projects was announced during subsequent Budgets and Autumn Statements, there is a real risk that such a piecemeal approach might prevent the UK from taking a strategic approach to infrastructure investment.

2013 Spending Review

14. In 2013, the settlement for science was again much better than expected. At a time of great economic challenge, we were pleased to see that investment in science and research was maintained, and particularly welcomed the Government’s long-term commitment to provide more stable capital funding for science and its backing of the Charity Research Support Fund.
15. Specific details of departmental allocations have not yet been announced. We will continue to work with BIS and other departments as these details are worked through. 

Potential future inquiries on UK R&D funding

16. Research and development clusters provide a crucial mechanism to facilitate collaboration, promote knowledge sharing and accelerate innovation. There is an opportunity to examine progress in this area, consider where and how UK clusters might develop, and assess if there is sufficient funding for initial set up and operational costs.

August 2013