Autumn Budget 2024 boosts innovation and clean growth in the aerospace and automotive sectors

The recent Autumn Budget 2024 pledged significant investments to drive UK innovation and economic growth. For those of us involved in innovation, the headline was perhaps the £13.9 billion committed to the Department for Science, Innovation, and Technology (DSIT) to invest in R&D in 2025-26.  

Following closely behind, however, were the announcements that two key UK sectors – aerospace and automotive – would receive significant funding, to the tune of £975 million and £2 billion respectively.  

Both initiatives offer significant opportunity, but what might they look like in practice?

Autumn Budget 2024: Aerospace summary

The funding allocated to aerospace is for research and development to maintain and grow the UK’s competitive edge in the sector. It is likely to be distributed via the Aerospace Technology Institute (ATI) – in partnership with the Department for Business and Trade and Innovate UK – which runs several key funding programmes. Three competitions are due to open in January, April and September 2025, following expressions of interest. 

All projects must align with the UK Aerospace Technology Strategy, focusing on investment in aircraft technologies that enable the use of both sustainable aviation fuels (SAF) and hydrogen fuels, which will be a vital part of achieving net zero by 2050. The programmes are: 

Strategic programme

This focuses on clean growth in the aerospace sector.

Eligibility: Projects aligning with Destination Zero (a net-zero emissions target), which include:  

1. Zero-carbon emission aircraft technologies (propulsion and infrastructure development to enable zero-carbon tailpipe emissions);  
2. Ultra-efficient aircraft technologies (improving energy efficiency, impacting CO2 emissions, NOx and noise); and  
3. Cross-cutting enabling technologies (developing cross-cutting enabling technologies and capabilities for whole aircraft design and analysis – aircraft lifecycle from design, manufacturing and assembly, operation and end of life). 

SME programme

Designed to support technology innovation within the civil aerospace supply chain and SMEs. 

Eligibility: Applications aligning with Destination Zero and at least 50% of eligible costs must go to micro, small, or medium-sized businesses in the consortium. 

Non-CO2 programme

This programme focuses on innovative technologies to reduce non-CO2 emissions in the aerospace sector and supply chain. 

Eligibility: Projects must align with the Non-CO2 Technologies Roadmap. 

Automotive: Autumn Budget pledges

The £2 billion commitment for automotive has also been allocated to maintain and grow the UK’s competitive edge. This funding is likely to be distributed by the Automotive Transformation Fund (ATF) in partnership with the Department for Business and Trade, the  Advanced Propulsion Centre (APC), Innovate UK, and other partners.  

The Automotive Transformation Fund is a UK government programme that provides funding to assist the electrification of the UK’s automotive industry. It aims to support the development of a high value, electrified automotive supply chain in the UK.  

The fund provides support for large-scale, capital-focused projects in key electric vehicle technology areas:  

• batteries including cells (“gigafactories”)

• electric machines and drives

• power electronics

• fuel cells

• upstream supply chain for any of the above. 

The fund has been designed to support the industrialisation of investments that fulfil key elements of strategic electrified supply chains. This should accelerate the transition to electrification for a net zero automotive industry in the UK and beyond. 

Both ATI and ATF use a two-stage process:  

• Expression of interest (EoI): The first stage is an EoI competition where applicants outline their proposal and potential benefits to the UK.  

• Full application: If an applicant’s EoI is successful, they will be invited to submit a full application.  

What next?

The ATI and ATF are competitive grant funding mechanisms. Identifying the appropriate grant or incentive scheme, developing a compelling case for grant and complying with the requirements for managing a funded project can be complex and time consuming.  

Our team has a wealth of experience helping companies to access millions of pounds of incentives in England, Wales and Scotland from grant funding bodies. If you need support to navigate the new funding opportunities in these two key sectors, either now or at a future date, do get in touch. ForrestBrown can assist with all aspects of the grant application process, as well as post-application in principle due diligence. 

We also continually horizon scan and have the latest intelligence on grant funding opportunities. We bring them together in our regular newsletter – Grant Scan – which delivers the latest grant funding opportunities direct to your inbox. If you would welcome a copy to stay ahead of the latest changes, sign up today.