A tale of two halves

Chancellor Rishi Sunak’s spring budget has received a mixed response from industry and healthcare leaders, with pharma representatives welcoming elements such as a reform of R&D credits, but those on the health side slamming the spending plans as a missed opportunity.

Unsurprisingly, COVID-19 took centre stage, with Sunak promising an extra £1.65 billion for the roll out of the national vaccination programme, a further £28 million to boost the UK’s capacity for vaccine testing, and an additional £5 million investment in clinical-scale mRNA manufacturing to create vaccines that will work against COVID-19 variants.

However, there was a notable absence in additional NHS funding for COVID-19. As the British Medical Association (BMA) lamented, last year the government said it would give the NHS ‘whatever’ it needs to get through the COVID-19 crisis, and yet this budget has failed to give any extra to help the service cope with increasing demand fuelled by the pandemic, tackle the burgeoning backlog of non-COVID care or support general practice.

The BMA also voiced disappointment over the lack of further commitments to invest in public and mental health services. It has called for mental health spending to be doubled over the period of the Long Term Plan to ensure mental health services are properly resourced, as well as for further investment in public health, which is crucial particularly against the backdrop of the pandemic.

Danny Mortimer, chief executive of the NHS Confederation, said the chancellor’s plans “once again left funding for health and social care services desperately wanting”.

“While an additional £3 billion of funding to tackle the elective care backlog and wider pressures was announced in the autumn Spending Review, this fell far short of the £10 billion investment in the NHS recommended by the Health Foundation, and supported by our members, to deal with the impact of pressures and fallout from COVID-19 on our services.

“With this in mind, this Budget’s failure to address the crucial and long-term funding needs of the NHS weakens the contribution that our incredible, hardworking, yet exhausted health and care teams can deliver. It has also missed the real opportunity to go further and faster to address the significant and pressing investment needed to tackle the gaping holes in provision in capital, social care, in public health and in workforce training and education spending.”

On the plus side, for the pharmaceutical and life sciences industries Sunak revealed some key initiatives within the budget to help boost the sectors, including a consultation on reforming R&D tax reliefs to support ‘cutting-edge’ research in the UK.

Also of note is the introduction of a business tax ‘super deduction’ allowing companies to claim 130% capital allowances for expenditure incurred from April 2021 until the end of March 2023 on qualifying plant and machinery investments, which will help some in the life sciences sector to rebuild capacity.

This move was welcomed by BIVDA, the UK’s in vitro diagnostics (IVD) trade body, which said it would “allow IVD companies and our wider life sciences sector to invest in their businesses with confidence, by cutting companies’ tax bills by 25p for every pound they invest in new equipment,” which will “provide a major incentive to modernise, digitise and grow companies across the country.”

Reforms to the immigration system have also been announced with the planned introduction of a high-skilled visa scheme, which could help UK pharma and life sciences companies to attract and retain international talent.

Elsewhere, a £375 million ‘Future Fund: Breakthrough’ will invest in innovative companies working within life sciences, quantum and clean tech, offering support to companies that are aiming to raise at least £20 million of funding.

“The chancellor has recognised that innovative industries like ours must be at the heart of our future plans for growth,” said Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry (ABPI), welcoming the moves.
“Enhanced capital investment rules and a consultation on how to reform R&D tax credits will help support this vision and are great steps towards attracting more cutting-edge investment to the UK. New high skilled visas and support for apprentices will also help us to attract and develop the talent of the future.”