Astrazeneca Abandons Speke Expansion Amid Government Funding Row

The pharmaceutical giant AstraZeneca has scrapped plans for a £450m expansion of its childhood flu vaccine manufacturing site in Speke, Merseyside, following protracted negotiations with the UK government over state funding. The decision was taken after months of discussions yielded no resolution over the funding disparity, resulting in the proposed next-generation vaccine facility being shelved.

A tense meeting held on 29 January saw Shaun Grady, UK chair of AstraZeneca, announce the cancellation of the project, which was confirmed publicly just two days later. The move came mere hours after the chancellor, Rachel Reeves, had praised AstraZeneca in a speech as one of the country’s leading companies capable of driving UK economic growth. If successful, the Speke facility would have become a six-hectare hub for vaccine research and development, boosting the UK’s pandemic readiness through advanced manufacturing capabilities.

The breakdown in negotiations revolved around a decline in the funding offer from £90m under the previous government to £40m when Labour took office in July 2024. Despite later being revised upward to £78m, AstraZeneca had demanded the original £90m promise be honoured to make the project economically viable. The company’s chief executive, Pascal Soriot, stated that while the firm was willing to increase its own investment to £500m, the business case could not be justified without adequate government support.

The setback mirrors an earlier instance with GSK, another major pharmaceutical player, which also walked away from potential UK investments during the Covid-19 pandemic. Clive Dix, former chair of the Covid vaccine taskforce, attributed both failures to governmental inefficiencies, citing overly bureaucratic procedures and difficulty in securing timely agreements to support large-scale investments.

The announcement has sparked criticism from political and local leaders in Liverpool, a city that houses a growing life sciences sector. Steve Rotheram, mayor of the Liverpool City Region, expressed frustration over the withdrawal, while urging that the originally earmarked funds be redirected to support other life sciences projects within the region. Shadow business secretary Andrew Griffiths harshly criticised the government’s handling of the issue, branding it a case of missed economic opportunity for the UK.

Concerns have been heightened by the fact that AstraZeneca is allocating billions of pounds globally, including a $3.5bn investment in the United States and $1.5bn in Singapore, where government incentives are significantly larger. Soriot has pointed to increasing global competition for life sciences investment as a pressing challenge for the UK, especially in the backdrop of rising NHS drug pricing clawbacks that have discouraged further commitments from major pharmaceutical firms.

Emma Walmsley, CEO of GSK, echoed the sentiment by stressing the need for the UK to accelerate progress in the face of rapidly advancing international competitors. Industry experts warn that a failure to modernise policymaking and funding strategies could result in the UK falling further behind in a critical growth sector such as vaccine manufacturing and research.