Oxford, UK - The Spring Budget delivered by the Chancellor on 8 March 2017 continues to hit the headlines. What is its potential impact on the UK biotech industry?
Contributed by Mike Shearan, Senior Manager, James Cowper Kreston (and OBN Investment & Tax Special Interest Group (ITSIG))
We set out briefly below some announcements from the Budget which affect the biotech industry in longer-term ways:
REVIEW OF ‘PATIENT’ INVESTMENT
Although there were no proposals to amend rules on EIS or SEIS, the Budget announced a review of ‘patient’ or long-term capital investment into high-growth companies. This review will look at the workings of longer-term finance by institutions, and also the current workings of tax reliefs on investments into companies to make sure that they are effective.
R and D TAX CREDITS
Again, although there were no detailed proposals to amend R&D tax credits, the Budget also confirmed that there were no plans to reduce or wind down the availability of the scheme. Instead, there will be a review aimed at reducing administrative burdens in its operation, and action to improve awareness of the tax credits amongst small and medium businesses.
NEW GOVERNMENT FUNDING IN HIGH-TECH AREAS
Government has various funds and initiatives aimed at promoting R&D in different sectors. Some announcements in this Spring Budget were:
The National Productivity Investment Fund is a wider fund of Government money, of up to £23 billion, which was first announced in late 2016, covering spending on housing, R&D and economic infrastructure. The R&D aspect of this is intended to ‘enhance the UK’s position as a world leader in science and innovation’. It is understood that approximately £4.7 billion will be the amount spent on R&D, over the next few years, and this is starting to be allocated, with £300 million committed to science and innovation research, £270 million to researching the disruptive technologies of the future, £16 million to a 5G mobile technology hub and £200 million to the Government’s National 5G Innovation Network.
The Industry Strategy Challenge Fund, to be overseen by UK Research & Innovation, is another programme and fund within the context of the Government’s industrial strategy. There is a programme of engagement with academia and industry to identify ‘disruptive technologies’, and the first round of funding for 2017/18 includes accelerating patient access to new drugs and treatments from new medicine manufacturing technologies. More information below:
GLOBAL RESEARCH TALENT
The Budget announced spending of up to £90 million on new PhD places to help secure a pipeline of research in key science and technology areas.
An additional £50 million, allocated from existing international development budgets, will go towards fellowships to attract researchers to the UK from emerging researching countries such as India, China, Brazil and Mexico: