Aerospace sector gets a lift with further £120m war chest

Posted on 10 Jul 2012

The Business Secretary Vince Cable launched the government’s vision for the UK aerospace sector today, including £120m of new funding from industry and government to advance aerospace manufacturing capabilities.

Senior members of the aerospace industry were rewarded today after months of dialogue and planning with government paid off with the confirmation of a £120m pot for funding the UK’s strengths in aerospace.

Following the launch of the Aerospace Growth Partnership (AGP) on Monday, the Business Secretary today outlined details for further funding of aerospace sector research and technology at the Farnborough International Air Show.

The funding is largely matched by industry, reflecting the closer collaboration between large airframe manufacturers, the supply base and government that the AGP was established to develop.

The new tranche of funding includes £28.2m to cover six new aerodynamics research projects – five research and technology projects and one project with a capital grant – plus a further £20m that will be donated by industry.

The Technology Strategy Board (TSB) will disseminate up to £20m via a new competition for collaborative aerodynamics research projects. This will be match-funded by up to £20m from business.

The remaining funding is made up of:

  • £40m each from government and industry into SILOET – a Rolls-Royce led programme of low carbon aero engine research. Vince Cable said this will focus both on developing light weight aircraft components and carbon reducing aero engine technologies.
  • £15m joint government and industry investment awarded by the TSB and the Engineering and Physical Sciences Research Council to 11 business-led R&D projects

The money tops up the £60 million announced in the Budget for a UK Centre for Aerodynamics, and £3m announced by Prime Minister David Cameron on Monday to fund 500 aeronautical engineers at Masters level over the next three years.

The total government funding in the aerospace sector since the Budget totals £200m and the latest tranche is all new money, provided by the Treasury, Dr Cable confirmed.

A Supply Chain Partnership with government to reveal better visibility of the Ministry of Defence’s spending plans to allow industry to plan and invest is a key part of the AGP.

Access to finance for companies in the aerospace supply chain has been recognised in the AGP, which intends to create a Banking Forum between members of the aerospace industry and banks to explain their long term funding needs more clearly.

A BIS spokesman for Dr Cable told The Manufacturer that BNP Paribas is the first bank to sit on the forum but full details of this collaboration are not available yet.

Asked whether a lack of skilled people in the short term might cause problems for the UK aerospace sector in supplying the huge order books from the main airframe makers, Dr Cable told TM that: “The Government is aware of the issue and has invested in graduates at all levels. We know training people for this sector does not happen overnight and we are working on several activities to bolster the skills base, including increasing the number of apprenticeship starts. About 10,000 new apprenticeships are for the aerospace industry specifically.”

He added: “Many were concerned that the rising costs of education would have a negative effect on university applications but we have seen evidence this is not happening. Demand has held up and the biggest current demand is for engineering places.”

Despite this, official statistics from UCAS on Monday revealed that university applications overall were down 9% this year on 2011.

Robin Southwell, CEO at EADS, and the Secretary of State commended the work of business minister Mark Prisk and CEO of GKN Aerospace and Land Systems Marcus Bryson in delivering the Aerospace Growth Partnership.

Rees Ward, CEO of the ADS said: “The UK aerospace industry is in such a strong and leading position due to the sustained investment by government and industry going back decades.”

He added: “Such shared commitment to the future of the UK aerospace industry can only help the UK retain its pole position as the leading European exporter to global markets and benefit the economy of this country.”