Concidence: the new British government is a coalition that is united mainly by the belief that the budget deficit should be tackled sooner rather than later. At the same time, the crisis in the Eurozone has led to severe austerity measures in Greece, Portugal and Spain. All of a sudden, it seems like cost-cutting is "in the air"; our own government will no doubt be encouraged in cutting spending by being able to answer its critics "go to Spain and see how much worse things are over there", or perhaps "if we don't cut now, we'll end up like Greece."
I expect research to be in the line of fire; an open question is whether cuts to the research councils' budgets will be "game-changing" ie will they have an impact on the way funding is handed out, and researchers' approach to competing for it. A bit of reform could be something of a silver lining on the cloud.
Let's try to foresee some changes.
Increased importance of EU funding. This is easy, just look at the figures. European Research Council funds have been spiralling up in recent years, just as EPSRC is facing a cut.
Full economic costing of research grants has got to go. In a nutshell, the background is this. About 10 years ago, universities complained to the Government that their research activities were bankrupting them, because research grants did not cover the expenses incurred. It is important to note that this problem did not actually stop them from fighting like rats in a sack over these supposedly inadequate research grants. And the Govt duly boosted Britain' s science budget, but... the way the funds were handed out, was essentially by doubling the cost of individual grants. The result: heightened competition for grants, and a boom/bust pattern to peoples' (and universities') research incomes. Reviewers of research proposals are told to ignore all value-for-money considerations, and comment only on the quality of the research, leading to anomalies like successful applicants getting more than 100% of their salary paid by their grants... enough of this!
A simplified research funding regime. I'm entering the wishful-thinking zone here. The rationale is, that if you've only got ten quid to dish out to the research community, there's no point making them spend hours poring over impact statements, and peer-reviewing each others' long and highly-technical grant proposals. You should just give it to a subset of universities, or share it equally amongst anyone who can exhibit a decent track-record, or something. The new government is likely to cause a welcome delay to the Research Excellence Framework.
Theoretical research may be well-placed to survive a worst-case scenario. This is appropriate, since a lot of theoretical CS addresses worst-case performance of algorithms. Actually, CS generally may be in better shape than other sciences, since computers are cheap.
And finally, a tongue-in-cheek suggestion: Since London-based academics receive London weightings to their salaries, they end up doing the same work at a higher cost. It makes sense to support academic research (and indeed teaching) in less expensive locations.