The government has, at last, published its long-awaited Advanced Manufacturing Plan, which sets out the actions it is taking for the UK “to be the best place in the world to start and grow a manufacturing business”.
The Plan, from the Department for Business and Trade (DBT), made the Sunday newspapers on November 26th, four days after the autumn statement and nine days after several points were covered in a gov.uk press release. It is a relatively modest 40 pages plus appendices; but strong promotion is promised for the coming months.
Advanced manufacturing defined
Defining advanced manufacturing has been a contentious, not least within government. The Plan says: “We consider ‘advanced manufacturing’ to be production processes that integrate advanced science and technology, including digital and automation, to manufacturing. These processes use R&D, innovation, our extensive knowledge network, and our highly skilled population. This helps UK manufacturers create products that are meeting future technological demands and enable the UK to lead on the twin transitions of net zero and digitalisation.”
This definition implicitly rejects HM Treasury’s use of “advanced” to mean chosen, unspecified sub-sectors, although aerospace, automotive, life sciences and green energy are specified economic priorities. But the Plan takes a sector-wide view of manufacturing, including food and drink.
“Our machinery sector, which is the fourth largest in Europe behind only Germany, Italy, and the Netherlands in value added terms. This includes products from engines and turbines, to highly specialist technical instruments. The sector exported £36.4 billion of products in 2022, representing 8.6% of all UK goods exports and 4.4% of total UK goods and service exports,” the Plan notes.
Other highlights, with comments in brackets:
- DBT describes the UK as “a global hub for advanced manufacturing”. Rejecting “a subsidy battle” with other countries, the Plan focuses on “a strong business environment, a world class network of universities and innovation institutions, and a highly skilled workforce”.
- Priorities include: a) investing in the long-term future of manufacturing; b) cooperating internationally and building supply chain resilience; and c) reducing costs and removing barriers to boost competitiveness. (The EU is barely mentioned in terms of trade and supply chain, although improvements will be seen by some firms as an important for the sector to prosper.)
- Security of vulnerable and critical manufacturing supply chains is being sought in deals with, for example, the US and Japan.
- DBT is to set up an industry forum on access to finance for manufacturers and will shortly launch a call for evidence on the subject.
- A ”Manufacturing Observatory” is to be set up, working with the Institute for Manufacturing ((IfM)) at the University of Cambridge and other organisations. “This would aim to build our capability with industry and researchers on manufacturing evidence and analysis. Better evidence and analysis through the Manufacturing Observatory will ensure better informed business decisions and policy making.” (The IfM is the business department’s most important academic resource, and produced a report in 2019, “Inside the Black Box of Manufacturing”, which set out arguments for the importance of the sector to the economy as a whole. It will be interesting to see how it offers effective information for making business decisions, and to which categories of company.)
Further highlights, as already noted in the autumn statement:
- Made Smarter Adoption (MSA) to be expanded from 2025. Curiously, the Plan is less detailed than the autumn statement, which identified £30 million a year in England for the three years to 2029. (While no funding streams can be regarded as definitely secure, especially in the current economic and political environment, Labour has spoken positively about the need for MSA. With 18 months before the expanded service, there may be opportunities for sectors to help to shape the development of MSA and to improve effectiveness. At the moment, MSA schemes vary and are delivered regionally. It will be important to have national coherence and to make best use of national organisations, such as trade associations.)
- The High Value Manufacturing Catapult, comprising 18 sites across the country, “works with manufacturers, technology firms, and academia to commercialise great ideas” and is the largest advanced manufacturing research capability in Europe, the Plan says. The Catapults networks are to have their funding increased by one third. (The extent to which the HVMC could be more effective in supporting manufacturing SMEs is likely to be much debated. There is little reference in the Plan to UKRI and Innovate UK, which is perhaps biggest surprise, and one might have expected to see more detail on how government will help to turning research and innovation into UK manufacturing, securing long-term, retained value in the UK. Why there is not more on that is unclear. One reason could be that UKRI now comes under the Department for Science, Technology and Innovation – previously part of the business department.)
- £50 million for a 2-year pilot to explore ways to stimulate training in growth sectors. This initiative appears to be at an early stage.
- An extension of the tax incentives available in freeports and investment zones.
- Changes to the planning process and a Grid Connections Action Plan with Ofgem that DBT says will help to reduce delays from an average of five years to six months.
- A hydrogen manufacturing taskforce will be set up identify the size of the opportunity to invest in the UK design and development of hydrogen propulsion technologies.
The Advanced Manufacturing Plan is a surprisingly brief document and it was perhaps unrealist to expect a detailed exploration of what is a very diverse sector. As it is, the Plan sets out the government’s key points.
The history of the Plan can be traced back to the Levelling Up White Paper (February 2022), which noted an imperative to “reverse the historic decline of manufacturing in the UK”. A Manufacturing Investment Prospectus was promised by end-2022 but never appeared. With the value of UK manufacturing controversial, one wondered if it ever would.
Finally, the sector has a published plan. Next steps for DBT are “championing our plan and UK manufacturing over the coming months, both at home and abroad, ensuring as many businesses as possible are aware of the opportunities the UK offers. The Plan was formulated having listened to investors, manufacturers, trade associations, academics, and stakeholders.
“We will continue to work with these organisations, as well as devolved administrations and local authorities, to monitor, evaluate and implement the Plan, so the UK continues to be a world leader in manufacturing.”
This is very positive. The implicit recognition that the Plan is a work in progress and the openness to collaboration is welcome and encouraging.