On Thursday, the Chancellor Jeremy Hunt delivered his much-awaited Autumn Statement aimed at calming the markets and setting the UK on a more sustainable course following a year of global and domestic chaos. In this piece, we will examine the key areas which affect the IVD industry going forward.
Evidently, while the overall theme of the statement was that of financial prudence, Mr Hunt pledged that two areas which would see continued investment were the NHS (and social care) and schools. Mr Hunt argued relentlessly for a comprehensive workforce plan from DHSC when he was out of Government. Now he is the occupant of No 11, he will finally get his wish.
The NHS will publish an independently verified workforce plan, outlining the number of doctors, nurses and other professionals needed in 5, 10 and 15 years, while also acknowledging that more needs to be done to increase productivity levels and better retain staff.
Following on from the hints in the Health Secretary’s speech on Wednesday, £8 billion of additional funding will be allocated to NHS and adult social care in England in 2024-25, with £3.3 billion of that available to rapidly tackle significant pressures. The rest — £4.7 billion – will ensure that adult social care is funded adequately to improve services and the lives of those who are in the system.
The NHS budget as a whole will be increased by £3.3 billion each year for the next two years, while grant funding for adult social care stands at £1 billion this year and £1.7 billion the next. This will ensure much-needed beds are vacated by those who are ready for discharge into social care.
Integrated Care Boards will continue to be empowered to make local-based decisions. This will be solidified in an independent review led by former Health Secretary Patricia Hewitt to understand how ICBs can best work autonomously while remaining accountable.
In an exciting announcement for the life science industry – specifically named by Mr Hunt as a key growth industry – was the prioritisation of these growth industries, including how the Government can best unlock their potential. This would involve a rapid assessment of retained EU law across these industries over the next year with a focus on reforming these laws to unlock growth.
To assist with this, the Government Chief Scientific Adviser and National Technology Officer, Sir Patrick Vallance, will convene great minds from across industry to assess how the UK can better regulate emerging technologies. In other food news, public investment in R&D is also set to rise to £20 billion in 2024-25.
Investment zones also featured in Mr Hunt’s speech, although less extensively than promised by his predecessor in the calamitous ‘mini-budget”. The Investment Zone programme will be used to catalyse a limited number of the highest potential knowledge-intensive growth clusters, including through leveraging local research strengths.
The first clusters, expected to be centred around universities in left behind areas, for growth industries will be announced in the coming months. Mr Hunt also confirmed that funding for the UK’s nine Catapults will increase by 35% compared to the last 5-year funding cycle.
The Autumn Statement also brought good news for innovative SMEs across the UK. The Made Smarter Programme, which has already been rolled out extensively across the North and Midlands, will now extend to the East Midlands, and aims to help manufacturing SMEs boost their productivity through advanced digital technology.
Mr Hunt also mentioned the previously announced expansion of the Seed Enterprise Investment Scheme and Company Share Option Plan and pledged that the Government is ambitious and unrelenting in its support for institutional investment into innovation so that UK savers can benefit from the growth of high potential businesses.
SMEs will also be protected by a newly announced Transitional Relief Scheme which will support properties by capping bill increases caused by changes in rateable values at the 2023 revaluation. The ‘upward caps’ will be 5%, 15% and 30%, respectively, for small, medium, and large properties in 2023-24, and will be applied before any other reliefs or supplements.
The 300,000 properties with falls in rateable values will see the full benefit of that reduction in their new business rates bill from April 2023. This is part of the £13.6 billion package that the Government has announced to tackle business rate pressures.
Additionally, for expenditure on or after 1 April 2023, the Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20%, the small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86%, and the SME credit rate will decrease from 14.5% to 10%.
Furthermore, The Government will consult on the design of a single scheme and, ahead of the Budget, work with industry to understand whether further support is necessary for R&D intensive SMEs, without significant change to the overall cost envelope for supporting R&D.
Amidst a bleak economic situation, the Autumn Statement marks a rather big sigh of relief for our sector. The NHS has, thankfully, been protected and, while measures could go further, there is a clear acknowledgement of the importance that innovative growth industries, such as the IVD sector, play in rescuing an ailing economy in the medium and long-term. We look forward to seeing how these plans develop in the coming months.