The chancellor George Osborne has said that research funding will be protected in real terms over the course of this Parliament in what is being seen as a better than expected result for universities.

Setting out the government’s spending review today, Mr Osborne said that funding for science would be protected in real terms – rather than cash terms, as it has been since 2010 – and would rise to £4.7 billion by 2020-21.

However, the spending review document said that it was "today's £4.7 billion science resource funding" that would be protected in real terms, suggesting that the final budget at the end of the Parliament would actually be higher.

This would, though, include a "new £1.5 billion Global Challenges" fund, raising fears that the result for other research funding would in effect be a cut.

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BIS confirmed that the wording in the document "was correct", suggesting a mistake in Mr Osborne's speech, meaning that the current £4.7 billion research budget was being protected in real terms, and was set to rise by £500 million over the course of this Parliament.

Jo Johnson, the universities and science minister, had been quoted as saying that a continuation of the previous “flat-cash” settlement was the best possible outcome.

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In his speech, Mr Osborne said: “In the modern world one of the best ways you can back business is by backing science. That’s why in the last Parliament, I protected the resource budget for science in cash terms."

The chancellor also said the recommendations from a review of research councils by Sir Paul Nurse would be implemented. The report, released last week, recommends creating a new body called Research UK to coordinate the strategies of the existing seven research councils, and the creation of a fund to back research that cuts across them.

david.matthews@tesglobal.com