A DRONE which entered controlled airspace before crashing in a field 40m from people's homes was not tested or built properly, a report has found.
The unmanned aircraft's remote pilot lost control of the drone, which was performing a demonstration flight at the Goodwood Aerodrome during its Festival of Speed on July 4, 2019.
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The 95kg Alauda Airspeeder Mk II drone climbed to approximately 8,000ft and entered controlled airspace at a holding point for flights arriving at Gatwick Airport, before its battery depleted and it crashed to the ground.
A report by the Air Accidents Investigation Branch (AAIB) said the remote pilot had tried to operate the safety "kill switch" but this had no effect.
The drone crashed in a field of crops 700m outside of its designated operating area and 40m from people's homes.
No-one was injured, the report said.
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The remote pilot had launched the drone with an audience of about 200 spectators, with many watching from a nearby roof terrace.
When the remote pilot lost control of the aircraft, the audience were instructed to "take cover".
Following its investigation into the incident, the AAIB made 15 recommendations, including 13 for UK regulator the Civil Aviation Authority (CAA).
It said the CAA had assessed the operator’s application and after amending some aspects had allowed the flight to go ahead - but did not meet the operator or inspect the Alauda Airspeeder Mk II beforehand.
The report said the operator's Operating Safety Case contained "several statements that were shown to be untrue" and found the drone "was not designed, built or tested to any recognisable standards and that its design and build quality were of a poor standard".
Aluada Aeronautics, an Australian-based designer and manufacturer of "high performance electric aerial vehicles" had been invited to exhibit its Airspeeder Mk II as part of an event at Goodwood House, and to do some flying demonstrations at Goodwood Aerodrome.
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The company is developing an electric, remotely-powered "flying race car", the Airspeeder Mk3, to run in a series of unmanned races later this year.
Crispin Orr, chief inspector of air accidents at the AAIB said: “Thankfully there were no injuries caused by this accident but the potential for a more serious outcome was clear.
"This accident demonstrates why it is so important that manufacturers, operators and regulators of unmanned aircraft ensure they are airworthy and operated in a safe and appropriate manner."
The CAA and Aluada Aeronautics/Airspeeder have introduced measures to address issues identified, the AAIB said.
A spokesman for Airspeeder said: "There was a short loss of control caused by unforeseen external factors affecting our control systems.
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"The incident was concluded without injury and we have worked with regulators and the appropriate bodies to provide all required information.
"Recommendations made since have been addressed and the company has moved through three successful development phases.
"Since 2019 we have worked closely with regulators and bodies, including the AAIB, to provide all required information.
"During this period we have built robust safety processes, led by senior engineering and project management professionals drawn from leading names in the aviation and automotive industries. This has been informed by constant cooperation with regulators."
The CAA was approached for comment.
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