AstraZeneca abandoned plans for a £450 million expansion of its vaccine site in northwest England after the UK government failed to meet a critical funding deadline, the company’s UK chairman has told MPs.
The FTSE 100 pharmaceutical company’s decision to withdraw its investment in the Speke, Liverpool site in January sparked political controversy, as the government seeks to attract private sector funding to revitalise Britain’s sluggish economy.
Speaking to the Commons business and trade select committee on Tuesday, AstraZeneca’s chairman Shaun Grady confirmed that delays in securing a £90 million government contribution led to the collapse of the project.
“We don’t have any regrets that we repeatedly made clear the critical importance of that August deadline,” Grady told MPs.
AstraZeneca had initially received assurances from the previous Conservative government about funding support for the expansion, but discussions were put on hold during the general election period. After Labour formed a new government in the summer, negotiations resumed, but a final decision was not reached in time.
“We had made very clear to government that we needed confirmation of the availability of the grant and the amount by August, because that was our deadline to commence the R&D,” Grady explained. “Because that confirmation wasn’t forthcoming, we missed the [flu] season. The business case, which to be honest had been quite marginal in the first place, was significantly undermined because our launch dates were put back.”
By the time an offer of £75 million was made in October, it was too late. “That didn’t then support the revised business case with the new timelines sufficiently,” he said.
Reports surfaced earlier this year, following a Freedom of Information request, revealing that Business Secretary Jonathan Reynolds had been warned in a letter shortly after the election that securing AstraZeneca’s investment was an “urgent issue.”
Tom Keith-Roach, AstraZeneca’s UK president, used the hearing to highlight broader concerns about Britain’s declining attractiveness as a hub for pharmaceutical investment.
“The UK really is an outlier now as one of the most difficult places in the world in which to bring new medicines to patients,” he said.
While he acknowledged that this was not the direct cause of AstraZeneca’s decision to pull its Liverpool investment, he suggested the wider environment was making it harder to secure global investment.
“I’ve been involved in trying to bring a number of global investments to the UK over the last five years, and it is very difficult to do that when the broader mood music says the UK is a country that does not value innovation,” Keith-Roach added.
In response, a government spokesperson stated that AstraZeneca had made “a significant change in the composition of their proposed investment, resulting in a smaller level of research and development being conducted in the UK” and that this had led to “a corresponding change in government support.”
The scrapped investment raises fresh concerns about the UK’s ability to attract and retain high-value R&D projects, particularly in critical sectors such as pharmaceuticals. With AstraZeneca now shifting focus elsewhere, it remains to be seen whether the government can reverse the trend and position Britain as a more competitive destination for future investment.
