TRADE AND INDUSTRY: Science put at the centre of future economic success

Almost 1,500 jobs are to be axed from the Department of Trade and Industry to help fund a £1bn increase in spending on science, innovation and enterprise.

The cuts will enable the department to reduce its administration budget by 15 per cent in three years' time, producing efficiency gains of £380m a year.

The DTI's science budget will rise by £365m to £3.3bn by 2007-08 - an increase of 5.6 per cent a year in real terms. The increase is part of a boost for science announced by Gordon Brown which will see total government spending increase from £3.9bn to £5bn. "The future of the British economy depends on the future of British science," the Chancellor said.

In addition to the extra £1.1bn, the Wellcome Trust, the world's largest medical research charity, has pledged to at least match government spending by investing £1.5bn on science projects, taking the total increase in funding to £2.5bn.

Mark Wolport, Wellcome's director, said he was pleased Mr Brown had recognised the role charities were playing in funding British science. "We have worked across Government to identify shared priorities and partnership opportunities," he said. The brunt of the job cuts will be within the core operations of the DTI, where staff numbers will fall by just over 1,000. There will be a further 200 job losses in UK Trade and Investment and 270 in other bodies.

Aside from extra money for scientific research councils and to support knowledge transfer from academia to industry, there will also be a range of new initiatives to boost innovation. The DTI plans to invest at least £178m in a new technology strategy, to increase support for its Manufacturing Advisory Service, and to launch a new round of enterprise capital funds worth up to £25m each.

Elsewhere, there will also be a £250m increase in the budget for Regional Development Agencies, taking total spending from £234m at present to £483m by 2007-08.

In overall terms, the DTI's budget will rise by 3 per cent in real terms from £6bn next year to £6.6bn in 2007-08 but this will include contributions to the Government's new Nuclear Decommissioning Authority of £638m in 2005-06 and £856m and £746m in the following two years.

Digby Jones, the director general of the CBI, said business welcomed the increased investment in science and innovation. But he cautioned: "It must make a difference in the real commercial world, not just the university sector."

THE FIGURES

Department of Trade and Industry

Spending in 1996-97: £3.1bn

Spending in 2002-03: £4bn (Increase in spending of 29 per cent)

Future spending: £1.25bn

Where the money will go: Extra £1bn for science and innovation budget by 2007-08 and almost 1,500 job cuts at DTI producing efficiency gains of £380m a year. Extra £250m a year for Regional Development Agencies.