Third Report of Session 2021–22 Contents

---

1EU Research Programme: Horizon Europe1

This EU document is legally and politically important because: the UK and EU have agreed that the UK will associate to Horizon Europe for the period 2021–27, paying an estimated gross contribution over that period of approximately £15 billion, subject to adjustments and exchange rate variations. Action Report to the House. Draw to the attention of the Business, Energy and Industrial Strategy Committee and the Science and Technology Committee.

Overview

1.1Under the terms of the UK-EU Trade and Cooperation Agreement (TCA), the UK will associate to the EU’s Framework Programme for Research—Horizon Europe—lasting from 2021 until 2027. The UK’s association is granted in return for a financial contribution. We explained the detail of this arrangement in our Report of 12 May 20212 and, at the same time, we wrote to the Minister for Science, Research and Innovation (Amanda Solloway MP) requesting further information on the cost of the programme, how that cost would be met, any areas of the Programme from which the UK might be excluded and on the reciprocal nature of the arrangement.

1.2In her response of 25 May, the Minister explains that the expected gross cost of the Programme over seven years before UK receipts are taken into account is £15 billion although—as we noted in our earlier Report—this is necessarily speculative and could be adjusted both upwards and downwards based on actual spending as well as exchange rate variations and UK GDP. The UK’s liability in 2021/22 is expected to be around £1 billion. The Government expects the majority of the funding to flow back to UK businesses and researchers in the form of grants. Funding for future years will be determined as part of the Spending Review, in line with the rest of public spending.

1.3Concerning how the UK’s contribution will be funded, the Minister recognises that there was concern within the research community that the UK’s association to the Programme would impact on existing research budgets. She confirms that, in 2021/22, UK scientists will have access to “more public funding than ever before”.

1.4The Minister explains that, in addition to the budget for Research and Development (R&D) in 2021/22 set at the recent Spending Review, the Government will be providing funding for ongoing UK research projects already awarded under earlier EU Programmes, which is worth over £500 million in 2021/22 for UK scientists and innovators. The Government, she says, will be making an additional £250 million available in 2021/22 for Horizon Europe association. Furthermore, £400 million of the funding announced at Spending Review 2020 to support Government priorities will help to pay for association to the Programme.

1.5The additional investment announcement, says the Minister, takes total Government investment in R&D to £14.9 billion in 2021/22 and follows, she adds, “four years of significant growth” in R&D funding, including a boost of more than £1.5 billion in 2020/21. The Government will shortly be publishing its R&D allocations for 2021/22, which will provide further information.

1.6Concerning possible exclusions from Horizon Europe in the areas of quantum and space, the Government would expect any exclusions to be applied transparently and fairly and has raised this issue with the Commission.

1.7Turning to reciprocal access for EU researchers to UK funding programmes, the Minister notes that EU researchers are already able to participate in a variety of UK funding schemes. The form and level of this participation varies from scheme to scheme and can take the form of acting as a lead researcher on a grant if they are based at a UK university through to acting as a project partner in co-funded schemes.

Our assessment

1.8We note that there remains substantial uncertainty over how the UK’s contribution to Horizon Europe will be met over the whole period 2021–27. The payment schedule for Horizon Europe reduces payments in the first few years of the UK’s participation but increases them proportionally in later years. More specifically, the UK will pay half of its contribution to Horizon Europe for 2021 and 2022 in those years, and the other half in 2026 and 2027 respectively (in addition to its contribution for these latter years). While, therefore, annual payments of around £1 billion will be required early in the Programme, that is likely to rise to around £3 billion by the end of the Programme. The Minister does not address this point, saying only that funding for future years will be determined as part of the Spending Review, in line with the rest of public spending. While we understand her position, it does mean that our query concerning how the UK’s contribution will be financed remains unresolved and is therefore a matter which we will continue to monitor with interest.

Action

1.9While the UK’s association to Horizon Europe remains a matter of interest to us, we require no further information on this document. We are reporting this chapter to the House given the political importance of the UK’s association to Horizon Europe.

1.10We are also drawing the Minister’s letter and our Report to the attention of the Business, Energy and Industrial Strategy Committee and the Science and Technology Committee.