£360 million to boost British manufacturing and R&D

The Chancellor has today (4 March) announced a significant investment package in the UK’s life sciences and manufacturing sectors.

  • 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.

Ahead of the Spring Budget this week, the Chancellor Jeremy Hunt has today (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.

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 today 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 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 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.”

Further measures include:

  • As part of the investments announced today, 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 today 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 today 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.

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.