Boosting British Manufacturing: A £360 Million Investment

Curtis Bligh

March 4, 2024

It’s been declared ahead of the Budget that Chancellor Jeremy Hunt will announce a package worth £360 million to make the UK ‘a world leader in manufacturing’. This comes as part of the government’s commitment to bolster its manufacturing and R&D sectors.

The aim of the budget looks to drive innovation and support economic growth, all the while creating jobs. The life sciences, automotive and aerospace sectors in particular look to benefit from this budget. Let’s explore this investment in a little more detail;

Funding Breakdown

Life Sciences

Of this £360 million investment, a £92 million industry-government investment is being allocated to life sciences to expand facilities for manufacturing life-saving medicines and diagnostic products. The aim here is to enhance health resilience and ensure timely access to critical treatments. This comes on the backdrop of COVID 19 and a strained NHS.

Here the government aims to demonstrate their commitment to healthcare and scientific progress leading up to the next general election. Furthermore, it looks to strengthen the UK’s position as a global leader in scientific research and innovation, with life sciences earmarked as a key area for job creation and economic growth.

Government will invest £7.5 million to support to pharma companies investing a combined £84 million. This includes the expansion of Almac in Northern Ireland and Pencoed in Wales which will support the creation of up to 300 jobs.

Science Secretary, Michelle Donelan is quoted as saying: “The UK’s £108 billion life sciences sector is driven by the pioneering contributions of over 300,000 highly-skilled individuals who transform lives through groundbreaking advancements in drug discovery and diagnostics.

“We fuel this progress by fostering a dynamic environment where cutting-edge technologies like AI and genomics meet world-class research to create the next generation of healthcare solutions, including in our NHS. By investing in advanced manufacturing facilities, we are protecting our communities by ensuring we can rapidly respond to future health emergencies and deliver life-saving innovations when they are needed most.”

Aerospace

Elsewhere, a whopping £200 million joint investment is being allocated to zero-carbon aircraft technology. The goal of sustainable aviation is considered important in aligning investments with global efforts to reduce emission and create a greener sector. Not to mention the government’s commitment to next-zero emissions by 2050.

The aerospace sector has faced considerable challenges due to changing market dynamics during its post pandemic recovery. This investment aims to ensure the industry’s long-term resilience and competitiveness in a global market. What’s more, the UK seeks to be at the forefront of sustainable aviation technology.

Automotive

In the meantime, nearly £73 million in combined government and industry investment will be supporting Automotive research and development. Electric vehicle technology will benefit the most from this investment with cutting-edge R&D projects.

This includes four projects for next generation battery EVs to improve efficiency and competitiveness. Automotive manufacturers YASA and Empel Systems are currently leading these projects. Furthermore, Integrals Power is developing and scaling up high-performance battery systems ahead of testing their mass-commercialization to enhance safety, power density and cost-efficiency.

Chanceller Jeremy Hunt is quoted as saying “We’re sticking with our plan by backing the industries of the future with millions of pounds of investment to make the UK a world leader in manufacturing, securing the highly-skilled jobs of the future and delivering the long-term change our country needs to deliver a brighter future for Britain”.

Implications for British Manufacturing

The package sets to targets areas where the UK already hold expertise or has the potential to achieve global leadership. Strategically, this investment aims to strengthen the UK’s position on the world stage, attracting investors and creating a favourable environment for growth.

Some industry leaders have viewed this announcement favourably including MAKE UK Chief Executive, Stephen Phipson who is quoted as saying “Industry will welcome this announcement as yet another boost for key sectors that will put advanced manufacturing at the heart of the UK’s economic future. These industries will be key to addressing many of the societal challenges we face in a competitive world and highlight what can be achieved with a constructive dialogue between Government and business.

Taken together they are another piece in the jigsaw of a modern industrial strategy to make the UK a world leader in key sectors of the future”

Katherine Bennett, CEO of High Value Manufacturing Catapult is also quoted as saying “Today’s funding announcements from the Chancellor for R&D and manufacturing projects are welcome news for our domestic life sciences, automotive and aerospace sectors and will support the growth of cross-sector low carbon supply chains across the UK.

“From developing technology for lower-carbon aircraft wings, to supporting the expansion of UK-based supply chains in offshore wind, hydrogen and electrification our network of innovation centres is helping drive industrial transformation across the UK”

Some remain critical including Labour Party shadow business Secretary Jonathan Reynolds. While acknowledging the positive intent behind the funding, he emphasizes the need for long-term stability to ensure sustained growth and prosperity in the manufacturing sector. Reynold’s points out that the UK’s business investment remains the lowest amongst G7 nations and recycled announcements may not be sufficient to reverse this trend.

Verdict

The intent behind this announcement is certainly well received, and it is good to see UK government start to take manufacturing seriously, or at least they appear so. Investments in key areas of our sector will be crucial for long term growth and economic prosperity.

However, it’s hard to ignore that simple truth that successive governments have failed to prevent the spiraling of our great industry since the 70’s. And there are many actions government could and should take in order to support businesses within British manufacturing.

The increased support for SMEs for examples in simplifying and streamlining access to loans, grants and venture capital. In doing so, encouraging private investment in small manufacturing business.

Encouraging apprenticeship schemes to bridge the skills gap and create a pipeline of skilled workers for the manufacturing which business are in dire need of. Incentives and tax breaks along with better infrastructure including Energy costs which are substantially high.

The promotion of “Made in Britain” both domestically and internationally. Highlighting quality craftsmanship, and innovation associated with goods made in the UK. And even, a minister for manufacturing!

We will be keeping our eye for more announcements from government!