Increasing UK lab space to deter life sciences brain drain

The life sciences sector has seen rapid expansion in the past few years, reporting an annual turnover of £89 billion back in 2020. However, a scarcity of lab space has capped the UK’s potential to establish itself as a global leader.

Announcements made during the Spring Budget could provide an answer, spurring growth and supporting research and development (R&D) for established firms and startups alike. However, more still needs to be done to turn the UK into the “science superpower” the government has pledged by 2030.

• Life sciences firms signed approximately 800,000 square feet of office and lab space in the London, Oxford, and Cambridge “golden triangle” in 2022.
• R&D tax relief outlined in the Spring Budget will provide much-needed support for 20,000 life science start-ups.
• The government aims to establish the UK as a global leader in life sciences – but is the planned infrastructure and investment enough to keep innovation on British shores?

London’s lab space boom

Hosting some of the world’s top hospitals, universities, and research centres – such as The Francis Crick Institute in King’s Cross and Imperial’s White City campus – London is a leading actor in the UK’s life sciences stage. But with the number of start-ups growing – and established companies looking to expand – there is an increased demand for lab space.

Last year, life sciences firms signed for around 800,000 square feet of office and lab space in the “golden triangle” of London, Oxford and Cambridge, according to commercial real estate firm, CBRE. A plot of modular labs, developed by British Land and due to open in Canada Water this May, is the latest example of rental lab space being offered for start-ups. The same developers also have plans for a sprawling 300,000 square foot building with the potential to meet the demand of life sciences businesses.

To keep pace with fast-moving start-ups and attract companies and talent across the globe, even more firepower may be required. Plans have been submitted to build Europe’s largest commercial lab building at Canary Wharf, potentially deterring promising companies – or in-demand life science talent – from moving to global locations such as Boston or Singapore.
 

R&D tax relief to spur start-up growth

Infrastructure, however, is just one aspect of creating a thriving life science ecosystem – investing capital in emerging start-ups may be equally important.

In his Spring Budget, Chancellor Jeremy Hunt revealed that qualifying SMEs investing over 40% of their operating costs in R&D will receive up to 27p for each £1 they have invested. Or in the Chancellor’s words, “That means an eligible cancer drug company spending £2 million on research and development will receive over £500,000 to help them develop breakthrough treatments.”

With 85% of businesses in the life sciences sector being classed by the government as SMEs, the proposed R&D tax incentives could serve as a real catalyst for growth, affecting 20,000 start-ups in the government’s estimation.
 

Going beyond the golden triangle

London is not the only part of the UK embracing a life sciences development surge, with regions such as Yorkshire and the Humber already home to a growing medtech cluster, aligning with the government’s “levelling up” agenda. And following last month’s Budget, further growth is in the pipeline.

The Chancellor’s announcement to launch 12 Investment Zones across the UK means that life sciences – one of the government’s high growth sectors – could see further expansion outside of the “golden triangle”. The proposed zones include eight in England – all outside of the southeast – along with four locations across Scotland, Wales and Northern Ireland.

Entitled to £80 million worth of government funding, the zones will benefit from the creation of new business clusters, tethered to universities and research centres. Whether these zones will become “12 new Canary Wharfs” remains to be seen, but it appears that the life sciences sector is gradually breaking away from its old haunts.
 

Skills needed to become a science superpower

The announcements made by the Chancellor last month will be welcome news for the life sciences and biotech industry, but even more infrastructure and ecosystem join-up will be needed to establish the UK as a true “science superpower”.

Of course, all the infrastructure and investment in the world would count for nothing without the talented professionals who can engender real discovery and innovation. According to our latest salary guide though, 97% of organisations experienced skills shortages last year. Establishing a long-term pipeline of skilled professionals will be fundamental in securing a sustainable and successful life sciences future.

To secure passionate, diverse and skilled professionals capable of enacting real change, speak to your specialist consultant today.