This spending will come from the National Productivity Investment Fund announced in the 2016 Autumn statement.
The Government announced in the 2017 Spring Budget that the National Productivity Investment Fund will include a £250 million investment in skills. This investment was further broken down and detailed into £90 million for 1,000 PhD places in areas aligned with the Industrial Strategy, 85% of which will be in STEM subjects. Another £160 million will support new fellowships for early and mid-career researchers in areas aligned to the Industrial Strategy.
Source: Manifesto - Page 20
Reference 1: Spring Budget 2017