Government announces £125m sector deal for UK aerospace industry

A new sector deal between the UK aerospace industry and government has been announced in a speech by Business Secretary Greg Clark.

At a Government event in Bristol with businesses, researchers, civic leaders and industry representatives to mark the first anniversary of the modern Industrial Strategy, Greg Clark has announced new support for the UK’s leading aerospace sector and the next generation of transport to tackle ground congestion and pollution in towns and cities.

Click here for the Government policy paper on the sector deal

The deal will develop ‘Future Flight’ – including electric planes with vertical take-off capability, goods and service drones, to autonomous aircraft.

Today’s package includes:

• A multi-million pound package of new investment to turbo-charge UK industry in support of the modern Industrial Strategy and put the UK at the forefront of the industries of the future, including up to £125 million from the Industrial Strategy Challenge Fund to develop future flight


• £15 million government investment for GKN Aerospace’s new Global Technology Centre in Bristol. The centre is expected to open in 2020 and will ensure the UK is a hub for world class innovative technology for the next generation of fuel-efficient aircraft


• The new government-industry Aerospace Sector Deal which includes support proposals for supply chain SMEs to boost their competitiveness on the global stage and a pledge to increase the number of women in aviation


• Follows yesterday’s announcement of the £1.3 billion Life Sciences Sector Deal 2 with record investment in diagnostics and early intervention to help people live healthier, longer lives


• The next steps for establishing a technical education system that will rival the best in the world, with an action plan for the introduction of the new T level qualifications as set out by the Secretary of State for Education in a speech at Battersea Power Station today


• Also, includes the Bio-economy strategy which was published earlier in the week to help double the size of the bio-economy to £440 billion by 2030, setting out an ambition for world-leading standards for bio-based and biodegradable plastics

As part of the deal, the government is launching the Future Flight Challenge, which will provide up to £125 million to aerospace and other manufactures to research and engineer new technologies and infrastructure, which industry will match. This will support the development of electric and autonomous aircraft and transform the future of transport in urban areas as we utilise our airspace to ease congestion. Industry will initially focus on smaller aircraft and drones to ensure the suitability of the new technologies before developing them for larger passenger aircraft. It means that by 2026, the government and industry will have jointly invested more than £4 billion in the future of UK aerospace.

Speaking about the deal, Greg Clark said: “The UK’s contribution to the global aerospace industry cannot be underestimated. Half of the world’s modern large passenger aircraft have wings designed and built here in the UK; and every 2.5 seconds, a Rolls-Royce powered aircraft takes off or lands.

"But we are not complacent. The future of aerospace is cleaner, greener, and more efficient, and we want the UK to be the pioneers of new technology that will pave the way for increased electrification and autonomy in commercial aviation.

"This deal is our modern Industrial Strategy in action, combining the forces of government and industry to boost a sector that is vital to our future economy, export capabilities and will place the UK at the forefront of the next generation of air travel."

ADS Chief Executive Paul Everitt said: “A strong long-term partnership between government and industry is essential for UK aerospace to meet the challenges of global competition and new market opportunities.

“The Aerospace Sector Deal demonstrates the UK’s commitment to continue as one of the most attractive locations for the global aerospace and aviation industries.

“The Future Flight challenge will ensure the UK takes a lead in delivering cleaner, quieter and more innovative aircraft. We must fast-track the electrification of flight, exploit the global potential of new urban mobility solutions and pioneer autonomous aviation.”