PwC comments on the Spending Review - R&D investment drives innovation and skills

Cara Haffey, leader of industry for industrials and services at PwC UK, said:

"The announcement of increased funding for research and innovation is crucial for continued development and upskilling within the manufacturing sector. The regional focus of the R&D package is particularly encouraging, as this approach empowers 'innovation clusters' like the Midlands and the North to thrive, bringing about new jobs and growth, and enabling local leaders to make decisions based on their individual region’s strengths and needs. It's a pivotal step toward strengthening the sector. 

“While the UK excels in engineering and idea-generation, significant investment is essential to rapidly scale operations and stay ahead, ensuring we leverage our domestic engineering strengths effectively. Innovation is key to accelerating our speed to market and ambitions to deliver on the Industrial Strategy.” 

Stephen Aherne, pharmaceuticals and life science leader at PwC, said:

“The Government’s commitment to increase NHS England’s day-to-day spending by an average of 3% in real terms annually is a welcome signal. This investment provides a critical opportunity to modernise care, reduce waiting times, and support the integration of innovation into frontline services. However, the NHS’s rich data assets remain largely untapped.  

“Significant R&D investment will allow devolved governments to make local decisions more tailored to their local strengths and areas of expertise and will support the broader regional life sciences strategy in places like Greater Manchester, West Yorkshire and Liverpool. However, it remains unclear whether this is game- changing enough for the UK to further excel at the leading edge of life sciences on the global stage.   

“Talent shortages, rising visa costs, and a more fragmented global landscape may impact the UK’s ability to attract and retain the best talent from around the world. The precarious position of many universities - long-standing engines of innovation - poses a serious risk. Without targeted support, we risk weakening the very infrastructure that drives discovery and commercialisation.   

“Commercial clinical trials remain underleveraged. Despite their proven role in improving market access for innovative medicines, there is still insufficient focus on scaling trial activity and partnering with the NHS in the UK. This is further compounded by a challenging commercial environment for the reimbursement of therapeutics. Current arrangements run the risk of disincentivising companies from investing in the UK, potentially pushing us in the opposite direction in terms of reaching our goals of scientific strength and leadership.”