£360 million to boost British manufacturing and R&D

4 Mar 2024 02:20 PM

Ahead of the Spring Budget this week, the Chancellor Jeremy Hunt yesterday (Monday 4 March) announced a significant investment package in the UK’s life sciences and manufacturing sectors, as part of the government’s plan to grow the economy, boost health resilience and support jobs across the UK.

• Chancellor to announce significant funding package for R&D and manufacturing projects across the life sciences, automotive and aerospace sectors.
• £92 million joint government and industry investment to expand facilities to manufacture life-saving medicines and diagnostics products.
• £200 million joint investment in zero-carbon aircraft technology to develop a more sustainable aviation sector and almost £73 million in automotive technology.
• Follows the Advanced Manufacturing Plan to give the industry the long-term certainty to grow and invest in the UK, backed by £4.5 billion of targeted support announced at Autumn Statement to boost the British manufacturing sector.

The funding will go towards several companies and projects who are making cutting edge technology in sectors key to economic growth and part of wider government support to ensure the UK is the best place to start, grow and invest in manufacturing.

This includes £7.5 million to support two pharmaceutical companies who are investing a combined £84 million to expand their manufacturing plants in the UK. Almac, a pharmaceutical company in Northern Ireland produces drugs to treat diseases such as cancer, heart disease and depression, while Ortho Clinical diagnostics in Pencoed, Wales, is expanding its facilities producing testing products used to identify a variety of diseases and conditions.

These new life sciences investments are the latest step in the government’s plan to grow our economy, encourage innovation and support levelling up with nearly 300 supported jobs across the UK.

The Chancellor is also confirming that companies will soon be able to apply for a share of the £520 million funding for life sciences manufacturing announced at Autumn Statement, with competitions for large scale investments opening for expressions of interest this summer and medium and smaller sized companies in the autumn. The fund is designed to build resilience for future health emergencies such as influenza pandemics and capitalise on the UK’s world-leading research and development.

On top of this, the government has announced almost £73 million in combined government and industry investment for cutting-edge automotive R&D projects to support the development of electric vehicle technology, delivering highly skilled jobs and cementing the UK’s position as a global hub for EV manufacturing.

Supported by more than £36 million of government funding awarded through Advanced Propulsion Centre UK (APC) competitions, this includes four projects which are developing technologies for the next generation of battery electric vehicles, making them more efficient and competitive, led by companies including automotive manufacturers YASA and Empel Systems.

This funding is also supporting a project led by Integrals Power, developing and scaling up high-performance battery systems ahead of testing their mass-commercialisation, enhancing safety, power density, and cost-efficiency.

These projects build on the record of the government’s established automotive initiatives. The Autumn Statement provided future certainty, announcing over £2 billion across five years from 2025 to unlock investment in the manufacturing and development of zero emission vehicles, their batteries and supply chain. The government will ensure a seamless transition to the new Auto2030 programme which will deliver support in future, and investors are still able to apply to the current schemes. 

The government has already spent over £2 billion to accelerate the uptake of zero emission vehicles, including reducing the upfront cost of electric vehicles and supporting the roll-out of charging infrastructure. The UK’s first ever Battery Strategy published last year outlines our plan for the UK to attract investment and achieve a globally competitive battery supply chain by 2030, with the battery sector alone expected to create 100,000 highly paid and skilled jobs in the UK. 

The significant funding package for R&D and manufacturing projects announced yesterday is targeted to support sectors where the UK is or could be world-leading and is designed to unlock investment from the private sector by providing certainty to investors – supporting the government’s priority to grow our economy by protecting existing and creating new jobs, so we can deliver the long-term change our country needs to deliver a brighter future.

Chancellor of the Exchequer Jeremy Hunt yesterday said:

“We’re sticking with our plan by backing the industries of the future with millions of pounds of investment to make the UK a world leader in manufacturing, securing the highly-skilled jobs of the future and delivering the long-term change our country needs to deliver a brighter future for Britain”.

Business and Trade Secretary Kemi Badenoch yesterday said:

“Today’s announcement builds on the success of our Advanced Manufacturing plan announced last year, and will ensure we continue to grow the economy, help create jobs and secure the future of great British manufacturing.

“Our plan for the British economy is working – which is why firms like Airbus and BMW are continuing to bet on Britain.”

Science Secretary, Michelle Donelan, yesterday said:

“The UK’s £108 billion life sciences sector is driven by the pioneering contributions of over 300,000 highly-skilled individuals who transform lives through groundbreaking advancements in drug discovery and diagnostics.

“We fuel this progress by fostering a dynamic environment where cutting-edge technologies like AI and genomics meet world-class research to create the next generation of healthcare solutions, including in our NHS. By investing in advanced manufacturing facilities, we are protecting our communities by ensuring we can rapidly respond to future health emergencies and deliver life-saving innovations when they are needed most.”

Further measures include:

• As part of the investments announced yesterday, almost £200 million of joint government and industry funding is also going to aerospace R&D projects, supporting the development of energy efficient and zero-carbon aircraft technology and accelerating the transition to net zero aviation.
• This includes £40 million which is going towards a project developing zero-carbon aircraft engine technology - led by Cambridge-based Marshall Group - and around £96 million is being invested in Airbus-led projects. Airbus, which manufactures almost all its aircraft wings in the UK bringing in jobs and investment to the UK economy – is developing more efficient wing designs and increasing carbon fibre production rates for wing components, reducing CO2 emissions and fuel burn.
• Funding for these projects will be delivered through the Aerospace Technology Institute (ATI) programme. It was also confirmed yesterday that the £975 million in aerospace funding over five years from 2025, announced at Autumn Statement, will be allocated to the ATI programme. The programme has facilitated over £3.6 billion of joint government and industry R&D investment to date - providing industry with continued confidence and security to invest in the UK for the long term - and includes R&D support for small businesses through the ATI SME competition.
• The Chancellor is also announcing up to £120 million increase to the Green Industries Growth Accelerator (GIGA) to further support expansion of low carbon manufacturing supply chains across the UK, lowering costs and accelerating the transition. The government is also confirming that the total fund, which has now increased to almost £1.1 billion, will be split between the clean energy sectors, with around £390 million earmarked to expand UK-based supply chains for electricity networks and offshore wind sectors, and around £390 million for carbon capture, utilisation and storage and hydrogen sectors.
• The remaining £300 million has been previously announced for UK production of the fuel required to power high-tech new nuclear reactors, known as HALEU.
• The GIGA funding will enable the UK to seize growth opportunities through the transition to net zero, building on our world-leading decarbonisation track record and forms part of the government’s priority to grow the economy focusing on making the right long-term decisions for a brighter future by creating better-paid jobs and opportunity right across the country.

Energy Security Secretary Claire Coutinho yesterday said:

“We are backing our green industries with extra cash for the Green Industries Growth Accelerator - taking the total to more than £1 billion. We have long been energy pioneers in advanced manufacturing and this will allow us to carry on that great British tradition. While we have attracted £300bn in low carbon investment since 2010, with £24bn since September alone, this will help to unlock even more.”

• Alongside this, the Chancellor yesterday set out further details of the two-year £50 million apprenticeship growth sector pilot announced at Autumn Statement.
• Following engagement with the sector, from April eligible apprenticeship providers of apprenticeship standards including pipe welder, nuclear technician and laboratory technician will now benefit from targeted payments worth £3k for every start of an apprentice.
• It is intended the funding will be used to support providers in making capital investment that will unlock their ability to grow and deliver the standards in scope of the pilot, such as purchasing course specific equipment, tools, and machinery that will last beyond delivery of a single apprenticeship.
• This will explore ways to stimulate training and break down barriers to high-quality training in advanced manufacturing and engineering, green industries, and life sciences apprenticeships. Further detail will be set out in upcoming guidance later this month.

Yesterday’s announcements follow £4.5 billion announced at Autumn Statement to increase investment in strategic manufacturing sectors – auto, aero, life sciences and clean energy - across the UK for five years from 2025.

Katherine Bennett, CEO of the High Value Manufacturing Catapult yesterday said:

“Today’s funding announcements from the Chancellor for R&D and manufacturing projects are welcome news for our domestic life sciences, automotive and aerospace sectors and will support the growth of cross-sector low carbon supply chains across the UK.

“From developing technology for lower-carbon aircraft wings, to supporting the expansion of UK-based supply chains in offshore wind, hydrogen and electrification our network of innovation centres is helping drive industrial transformation across the UK”  

Stephen Phipson, Chief Executive of Make UK, yesterday said:

“Industry will welcome this announcement as yet another boost for key sectors that will put advanced manufacturing at the heart of the UK’s economic future. These industries will be key to addressing many of the societal challenges we face in a competitive world and highlight what can be achieved with a constructive dialogue between Government and business. Taken together they are another piece in the jigsaw of a modern industrial strategy to make the UK a world leader in key sectors of the future.”

APC Chief Executive Officer Ian Constance yesterday said:

“We’re committed to building the electric vehicle supply chain in the UK. By investing in the capability and expertise in this country we will grow businesses and take decisive action towards creating zero tailpipe emission technology. Our latest R&D funding does just that.”

Yesterday’s announcements come alongside wider progress across government’s commitments set out in the Advanced Manufacturing Plan including:

• The industry co-chaired Made Smarter Commission met earlier this year to advise on delivery of the Autumn Statement commitment to expand the Made Smarter Adoption programme. The Made Smarter Adoption programme supports manufacturing SMEs to use advanced digital technologies. As part of the 2023 Autumn Statement and Advanced Manufacturing Plan, government committed to expanding the programme from 2025-26.
• This month the government will hold the first meeting of the Hydrogen Propulsion Manufacturing Taskforce involving leading manufacturers across auto, aero, rail and marine. This taskforce will make recommendations to government and industry to maximise investments in the UK manufacture of hydrogen propulsion systems.
• In the coming weeks, Minister for Industry Nusrat Ghani and Brian Holliday of Siemens will convene the new Industry Innovation Accelerator with leading digital companies and manufacturing businesses to identify how to speed up and widen the adoption of transformative AI solutions across manufacturing. The work of this group will complement the wider work of the AI Opportunity Forum, announced by the PM late last year.
• The renewed Battery Strategy Taskforce will meet quarterly to identify knowledge gaps requiring further research and consider potential risks to UK battery supply chains.

A full breakdown of the auto and aero winning projects is included below:

Advanced Propulsion Centre Collaborative R&D projects led by:

• Nissan Technical Centre Europe: Building the UK R&D electric vehicle capability and enhancing the knowledge base in the UK EV battery industry as a whole.
• JLR: Developing a next generation EDU ‘toolkit’; a modular family of electric machines, inverters and transmissions for future vehicle platforms.
• YASA: Developing a dual inverter for regenerative braking in BEVs, enabling new vehicle designs with EV specific, optimised electronics and safety systems.
• EMPEL Systems: Developing a UK-designed and sourced innovative silicon carbide power module for use in high efficiency automotive inverters and DC-DC converters.

Advanced Propulsion Centre Scale-up Readiness Validation (SuRV2) competition funded by the Automotive Transformation Fund: 

• Integrals Power: The scale up of high-performance, low-cost Lithium Iron Phosphate (LFP) battery chemistry, that offers superior performance including high discharge rate, improved capacity retention and rate recovery, specifically in extreme temperatures.

9 Aerospace Technology Institute Programme projects led by:

• Marshall Group: Developing and testing a smart, connected liquid hydrogen (LH2) fuel system for the next generation of zero emission aircraft.
• Airbus and National Composites Centre: Developing technology which increases the production rate of carbon fibre upper covers for aircraft wings.
• Airbus: Developing ultra-efficient technologies to cut fuel burn and weight, independent of the fuel choice.
• Airbus: Developing wing design and manufacturing technologies for lighter, more efficient aircraft.
• Spirit AeroSystems: Developing technologies for the storage and integration of liquid hydrogen on large aircraft.
• Goodrich: Developing a power-dense electric propulsion motor drive system aimed at hybrid and electric aircraft including helicopters and potentially next generation single aisle planes.
• TT Electronics: Developing technology to support electrical power conversion and electric machines for future more electric and all electric aircraft operating at higher voltages.
• Safran Landing Systems: Developing new designs, methodologies, and technologies to accelerate and catalyse benefits for current and next generation landing gears.
• Phoenix Scientific Industries: Transforming the production of titanium powder via ‘cold-crucible’ gas atomisation to enable high volume production.