Tough climate for charities as we approach the spending round conclusion

Posted on June 20, 2013 by


Today AMRC launches its annual research expenditure data showing that,  whilst our members spent c £1.2bn on UK research in 2012, the fifth year in which annual spend has exceeded £1bn, in real terms (that is when the effect of inflation is stripped out) research spend has yet to recover to pre recession levels in 2008.

We are using these data released today to remind Government, in the last week of the spending review process, that charities are doing their best to maintain their commitment to research but need the continued partnership of government in that endeavour. And crucially if Government spending were to be cut, charities would not be in a position to fill that gap in public spending.

What are the key trends?

In nominal terms, in 2012, charity spending on research in the UK remained approximately flat on 2011 levels, which was itself a year of rather modest growth. You can find the  detailed graphs here.

Research in UK spend 2008-13The picture of tough financial  circumstances for charities is even more telling when we look at real figures adjusted for inflation. There we see that the real underlying trend in research expenditure remains flat and has yet to recover from the pre-recession levels in 2008. And the projected spend for 2013 suggests  that charities are working hard to maintain their spending on research but do not yet see any prospect of significant spending increase.

There has clearly been a welcome (if modest) recovery in spend levels since 2010 when spend fell by more them £80 million (though some of this was due to accounting changes) and more than 50 member charities reported reduced expenditure on research as a result of the 2009 recession hitting charitable income. The effects of a recession on long term programmes of activity  like research often lag the recession itself  and we believe that the marked downturn in 2010 was a direct effect of the 2009 recession on member income and spend.

Two other important trends – first, growing international spend.

Research is international and medical research charities  fund the highest quality science wherever it is located. Although they have a strong links with the UK, the latest data clearly shows that international research spend has increased since 2010, on average by 15% each and every year, so that by 2012 1 in every 10 pounds spent by charities is spent overseas. This reminds us that research really is a global endeavour and charities have a duty to fund the best science wherever it is. charities are funding those scientists and those projects which will have the greatest impact on the conditions they fight. We need to make sure that those great scientists are in the UK.

The second important trend – research contends with other non- research charitable activities.

Many of our member charities do not only fund research, but also support a wide range of other vital charitable activities such as care and support to patients and their families and running helplines and providing other sorts of information to the public. This year, for the first time we are able to use our data to show that research activities are becoming a smaller proportion of our members charitable spend.

spending as a proportion of charitable activies 2008-12Whilst total real charitable spend (including research) has risen on average by 3% p.a. over the period, the proportion spent on research has shown a modest contraction (on average by 1.1% p.a. in real terms). We believe that this illustrates some of the pressures charities face in meeting their obligations to support patients and run helplines in the present,  whilst still investing  in high quality research that may provide a cure in the future.


So what do charities need?

Well firstly they need the best scientists and the best infrastructure to be here in the UK.  Luckily the UK is a world-leader in medical research, with 4% of the worlds population but 11% of the worlds scientific citations. we must not squander this advantage. Government must invest to maintain this research capacity and be sure it does nothing to destabilise the delicate funding ecosystem on which our science success depends.

Secondly it is clear that never has the government’s support for science and medical research been more important; the government through its Charity Research Support Fund adds 25p to every charity pound invested in universities. This support is not only good for patients, it’s good for the economy too; research shows that for every pound invested in medical research, a stream of benefits is produced equivalent to earning 37-39p each year ‘in perpetuity’. So, on the eve of the conclusions of the spending round we urge the Government to continue to support science, as charities do, despite current economic stricture.

Posted in: Policy