Article | Creating Resilience
UK Budget 2023: What are the implications for Life Sciences?
March 17, 2023 3 Minute Read
Rishi Sunak has pledged his commitment for the UK to become a Scientific Superpower by 2030.
The measures announced in the March 2023 budget are encouraging in their support of the UK Life Sciences sector to continue its growth trajectory. Collectively, infrastructure, R&D incentives, the ability to supply high quality lab space and accelerated regulatory approvals are all levers that will attract both new entrants to the UK market and encourage companies to stay as they grow and mature.
The R&D tax incentives outlined take on two forms: RDEC (Research and Development Expenditure Credit) for larger companies and R&D tax credits for smaller SMEs. This is a welcomed improvement on the measures announced in the Autumn 2022 Statement: favourable for larger companies but cutting R&D tax credits for SMEs. Given these are often pre-revenue companies, this was seen as a huge blow to the sector, and it was estimated that this decision could cost British biotech’s £800m and potentially drive them out of the country.
The latest announcement’s reversed approach towards SMEs will be a relief for the start-up and scale-up companies. Given these are future tenants of many proposed life sciences lab developments, it is also reassuring for the real estate sector.
Infrastructure remains a key component of connecting the life sciences ecosystems and enabling collaboration and mobility of talent within them. The latest announcement recognising the importance of the Oxford-Cambridge link shows the appreciation of infrastructure investment needed to connect key clusters, but it still needs to be delivered.
Although it may not instantly seem relevant to the real estate sector, favourable regulatory frameworks are key for attracting foreign companies into the UK, giving them the opportunity to gain faster approval of their products. The MHRA, the UK regulator, proved its agility and global leadership in approving the covid vaccines at unprecedented speed.
The importance of developing new lab space to support the growth of the sector and the companies within it was referenced. Real Estate is now seen as a key component of the ecosystem supporting the Life Sciences Vision and the governments recognition of this is significant. Directly addressing the planning barriers for pivotal new developments in locations with the most occupier demand will be welcomed by the real estate sector.
While these new budget measures are encouraging, they are not enough alone to propel the UK to ‘global leader’ in the sector and the pledges made now need to be followed through to execution, with a long-term investment plan to realise the life sciences vision in becoming a Scientific Superpower.
