Any future reduction in the level of government financial support for medical research is likely to cause disproportionate damage to the UK as a whole, a new report warns.

Last autumn's Spending Review did not hit the science sector's budget as badly as other sectors but, given continuing financial pressures, government support for health research is likely to remain under scrutiny, says the study, which is published by the industry-backed Office of Health Economics (OHE).

The report warns that any future reduction would be damaging for the UK as a whole because of the negative impact on: - the UK economy, as it would discourage private investment in the life sciences sector with a consequent loss in UK Gross Domestic Product (GDP); - the ability of medical research charities to raise funds; - the charitable sector's contributions to research; and - UK patients' health care. An active research environment has a positive impact on the standard of care - fewer clinical trials in the UK could lead to a decline in UK patients' health outcomes, it says.

The UK offers a high-quality, internationally-respected scientific research base that relies on support from a mixture of public, for-profit and charitable funders, and a key strength of this environment is the existence of the critical mass necessity to enable research to be conducted efficiently and successfully, says the OHE. In particular, regional clusters of universities, institutes, hospitals and private companies work together to create an environment with substantial research synergies.

"Reducing public funding for medical research would cause short-term damage that would take a long time to repair," it warns, as the loss of infrastructure and personnel could not be reversed overnight, leaving the UK far behind in the research stakes as other nationals continue to invest.

The study was commissioned by Cancer Research UK, which spends around 51% of its research budget, or £165 million each year, on research in universities, and points out that this is only possible because of the government's Charity Research Support Fund (CRSF), which universities use to top-up charity-funded research. This pays for maintaining laboratories, buying the latest equipment and, crucially, paying researchers' salaries, allowing charities to focus on funding the actual research, says the organisation.

Although Cancer Research UK receives no direct funding from the government for its research, around 60% is indirectly supported or eligible for support through initiatives such as the CRSF, says Professor Nic Jones, chief scientist atthe charity.

"Without this money, we simply couldn't keep up the levels of research we're doing to find new treatments and to figure out new ways to detect disease," he warns.

Sarah Woolnough, director of policy at Cancer Research UK, adds that while the focus of government policy on growth has centred on getting more private investment into research, charities invested over £1 billion last year into research in the UK, "and the government should be making it a priority to do all they can to maintain it."