Spring Budget: £360 million to boost British manufacturing and research & development

• 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 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.”

Science Secretary, Michelle Donelan, 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 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 ADG Ltd – 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 £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.

Energy Security Secretary Claire Coutinho 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 has today 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.

Today’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.

APC Chief Executive Officer Ian Constance 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.”

Siemens announces £100m investment for state-of-the-art R&D facility in Britain

• Siemens Mobility to invest £100 million in a brand-new manufacturing and R&D centre in Chippenham.
• Over 800 skilled workers will build the next generation of rail signalling and control systems for Britain, keeping the rail and transport network on track.
• Chancellor champions growth opportunities of innovation in technology on same day that over £360 million of investment into advanced manufacturing is announced.
  

Siemens has announced it is to invest £100 million in a centre of manufacturing excellence in Wiltshire.

The new cutting-edge facility will replace the company’s current Chippenham factory, from which generations of British workers have designed, manufactured and delivered signalling and control systems for the Elizabeth Line, North Wales Coast, Birmingham New Street and many others across the world since the 19th Century.

The new centre is expected to be operational by 2026, with around 800 skilled manufacturing, research, engineering and reporting roles transitioning to the new site and no interruption in production.

Chancellor of the Exchequer Jeremy Hunt said: ““This new commitment from Siemens is a big boost for Britain’s world-class manufacturing sector and shows our plan for the UK to be the best place to invest and grow a business is working.

“This digital technology will improve the safety, reliability and connectivity of our railways and drive sustainable opportunities in higher-paid jobs and exports – as part of our plan to grow our economy.”

Joint CEO of Siemens Mobility UK & Ireland, Rob Morris, said: “This €115 million investment is a strong commitment to Chippenham and our country.

“Siemens Mobility’s Chippenham site, along with our 30 sites across the country, has been transforming rail, travel, and transport in Britain – and it will continue to do so with cloud-based rail technology connecting the real and the digital worlds, digitalizing rail.

“We are very excited to soon start construction of one of the most sophisticated rail factories, digital engineering and R&D sites in the UK, supporting local jobs and skills for the future. There’s a piece of Britain in everything we build.”

Siemens’ investment comes on the advent of one of the most significant modernisation programmes in two centuries of Britain’s railways, with digital rail systems set to better connect communities and make it easier for people to access a wider range of job opportunities.

The plans are also expected to be a boost for the local economy in Chippenham and the wider Wiltshire region, with Siemens Mobility working closely with local small and medium enterprises across the supply chain. As part of today’s investment, Siemens Mobility will continue to develop and code the digital signalling systems to transform rail travel on the East Coast Main Line.

British manufacturing is of great strategic importance for the country on the global stage. The sector makes up over 40% of all UK exports, employs around 2.6 million people and overtook France for output in 2021. To capitalise on this success, the government published its Advanced Manufacturing Plan last year to ensure the UK continues to lead in the development and deployment of digital manufacturing technologies.

This was published shortly after the Chancellor announced £4.5 billion of funding for strategic manufacturing sectors in the UK as part of his Autumn Statement, including £960 million earmarked for a Green Industries Growth Accelerator to support clean energy.

It was announced today this is to be boosted by an up to further £120 million increase (see above). This funding will be available from next year for five years, providing industry with longer term certainty about their investments in line with Prime Minister’s focus on making long-term decisions to grow the economy.

Mr Hunt also announced Full Expensing to support manufacturers in investing for less. As the biggest British business tax cut in history – made possible by the progress the government has made on the people’s economic priorities – this represents an effective corporate tax cut of £55 billion over the next five years and will help manufacturers invest in plant and machinery technologies.

The Chancellor outlined at a Make UK event last week how this will benefit hard-working Brits and help to close the productivity gap with the likes of France and Germany – two economies which the UK has grown faster than since 2010.

Business and Trade Secretary Kemi Badenoch said: “Our plan for attracting more inward investment into the UK is working.

“From the measures in our advanced manufacturing plan that offer certainty to investors, to promoting the UK at our Global Investment Summit, the Government is making sure that investors, like Siemens, choose the UK.”

Transport Secretary Mark Harper said: “This vital investment will help futureproof our rail network as part of our plan to deliver more reliable journeys for millions of passengers across the country through important upgrades.

“Rail manufacturing plays an important role in our economy, supporting thousands of skilled jobs, with this new facility supporting hundreds more.”

Siemens’ investment comes on the same day that the government announced over £360 million will be invested in advanced manufacturing and the life sciences, securing thousands of jobs and building a stronger economy including through the further investment it will help to leverage over the long-term through the private sector.

The UK has attracted more new investment since 1997 than any other European nation, and last year’s Global Investment Summit confirmed over £29.5 billion of additional investment in Britain.