finance

UK aerospace industry raises alarm over pause in R&D state funding


Britain’s Aerospace Technology Institute, which allocates state funding for innovation in the sector, is suspending bids for new research projects until next year, in a move that is raising concerns over the UK government’s commitment to green aviation.

Companies bidding for government funds to support research into technologies such as electric aviation, hydrogen technology and innovative wing design have been told the ATI has “no scope” to commit to new projects this financial year, according to several people with knowledge of the subject.

The squeeze on funding has been caused by a surge in demand from new projects combined with existing schemes delaying the draw down of funds due to the pandemic. A government official insisted there had been no cut to the budget.

The ATI was created in 2013 as a collaboration between government and industry to set the sector’s technology strategy. About 80 per cent of its current research projects contribute in some way to lower emissions, according to the ATI.

The move to pause funding for new projects comes amid growing criticism of the government’s failure to set out detailed plans on how it intends to reach its target of net zero greenhouse gas emissions by 2050. Critics have accused chancellor Rishi Sunak of publishing a “climate lite” budget in March, with little concrete support from the Treasury for the transition.

The ATI confirmed it had paused the funding process but said existing research projects would continue to receive funds from its £150m a year budget, which is matched by industry. The £15m FlyZero feasibility study into carbon free aviation would also continue, the ATI added. 

Aerospace executives said the timing of the ATI’s move — coming as the industry embarks on revolutionary technological change — was particularly ill-judged. The industry had been asking for the ATI’s R&D funding to be doubled to £300m a year in the face of increased competition internationally. France last year announced €1.5bn in R&D support over three years to develop a hydrogen powered aircraft, while Germany and the US have also allocated substantial funds for decarbonising aviation. 

Executives with research budgets would not wait on the UK to relaunch its programme before deciding where to invest, said one senior aerospace figure. “This is an international competition,” he said. “Other countries are firehosing money into aerospace. If we turn off the hose, those other countries will win.”

The ATI said it remained “fully committed” to supporting innovation. The suspension was only temporary, it said. 

A spokesman from the UK’s business ministry (Beis) also insisted that the government was not cutting support for the sector’s green transition.

“We are investing significant funds through R&D schemes such as the £300m Future Flight Challenge and have made almost £11bn of emergency Covid support available to the aviation and aerospace sectors through grants, loans and export guarantees,” Beis said.

But Glenn Llewellyn, Airbus vice-president for zero emission aircraft and in charge of the company’s plans to launch a hydrogen powered aircraft by 2035, told a parliamentary select committee this week that the company was “perturbed” by the news that research funding this year could be “challenged”.

Airbus, which employs more than 12,000 people in the UK, would have to make imminent decisions on where to locate research for the projects that had been planned for this year. “We are an international company. We need to figure out where we are going to do this research and how we can progress it at the pace we need,” said Llewellyn.

Airbus said the match funding provided “significant value add to the UK economy and is vital in ensuring that the UK can maintain its position as a global leader in innovation and R&D”.



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