Central to the Government's vision is an ambition to position the UK as a global leader in manufacturing. Building upon previous commitments outlined in the Advanced Manufacturing Plan, Jeremy Hunt affirmed the Autumn Budget’s £4.5bn investment in strategic manufacturing sectors, including automotive, aerospace, life sciences, and clean energy.
Ahead of the Budget announcement, Hunt commented, “We are 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.”
The automotive industry will receive more than £2bn of the previously announced £4.5bn investment for the manufacturing industry. A further £975 million has been earmarked for aerospace. These funds will be available over a five-year period, commencing in 2025.
The Spring Budget further confirmed plans for a £50 million Apprenticeship Growth Sector pilot, which aims to support the development of 13 high-value apprenticeship standards across advanced manufacturing, green, and life sciences sectors.
“The year of the SME”: Recovery Loan Scheme
Dubbing 2024 the “year of the SME”, the Government plans to increase support for UK small and medium-sized enterprises (SMEs), with Hunt describing them as “the lifeblood of the economy and the beating heart of local communities”.
In a bid to boost business growth, the Government has announced two key initiatives: the VAT registration threshold will be increased to £90,000, effective from 1 April 2024, and the Recovery Loan Scheme will be extended to March 2026.
Rebranded as the "Growth Guarantee Scheme", the latter will continue to facilitate SMEs' access to finance and offer a 70 percent government guarantee on loans.
This has largely been welcomed by the manufacturing sector. As Make UK explained, “Small manufacturing businesses account for 99 percent of the UK manufacturing base, so the extension of the Recovery Loan Scheme will enable those who require support to have a safety net, ensuring their long-term viability, and generate prosperity for local communities, of which small manufacturers play a vital role in providing high-quality jobs and investment.”
Nuclear energy
The UK Government has also strengthened its commitment to nuclear energy as a key component of its energy security strategy. Alongside ongoing projects like Hinkley Point C and Sizewell C, plans are underway to explore additional large-scale reactor projects, as well as to advance the development of Small Modular Reactors (SMRs).
The Government has also announced a new £160 million deal with Hitachi, to purchase two sites to develop nuclear energy: the Wylfa site in Ynys Môn (which was previously abandoned by Hitachi in 2019 due to failed financial negotiations with the Government) and the Oldbury-on-Severn site in South Gloucestershire.
“We want nuclear to provide up to a quarter of our electricity by 2050. As part of that, I want the UK to lead the global race in developing cutting-edge nuclear technology,” said Hunt.
AI
As part of what it describes as a "landmark public sector productivity plan" the Government has allocated £4.2 billion to support public services in investing in new digital technologies. For example, the NHS will receive £3.4 billion, which will help to facilitate the adoption of AI in streamlining administrative tasks and in vital MRI scanners. This, Hunt claims, will help “unlock £35 billion in cumulative productivity savings from 2025-26 to 2029-30”.
While this investment is designed to enhance NHS efficiencies, some argue that greater emphasis should be placed on leveraging AI in healthcare beyond its data processing capabilities.
Julian Mulhare, Managing Director EMEA at technology consulting firm Searce, said: “Leaders must take a more holistic approach to AI adoption, firmly rejecting the notion of AI as a tool to cut headcounts and replace humans.
“To foster trust and expedite AI’s integration among teams, it must be incorporated not as a threat but as a collaborative tool for workers, propelling business agility and growth.”
The Spring Budget also announced the launch of a new £7.4 million upskilling fund pilot designed to help SMEs cultivate AI skills and capitalise upon the opportunities presented by this rapidly developing technology. This will complement the AI Opportunity Forum and the soon-to-be-launched SME Digital Adoption Taskforce, which will promote AI adoption across the private sector, thereby enhancing productivity, fostering innovation, and driving economic growth.
A further £100 million will be allocated to the Alan Turing Institute, which was founded in 2015 to advance data science and AI research, over the next five years.
Professor Sir Jim McDonald GBE FREng FRSE, President of the Royal Academy of Engineering, praised the focus on developing the AI sector, describing the investment as “vital to support the development of emerging technologies and engineering that can help to address complex societal challenges.”
“However,” he stressed, “It’s crucial that this continued investment is delivered in a way that unlocks opportunities for innovation, skills development, and economic success in all nations and regions across the UK, to ensure that advancements in AI engineering contribute to a more inclusive economy.”
This sentiment was echoed by Make UK, which stressed the need to develop AI skills first in schools: “The Chancellor believes that AI offers a way of improving Britain’s poor productivity record,” the manufacturing association stated in its Manufacturing Mondays newsletter.
“However, to improve productivity research alone won’t do, we need to empower manufacturers and help them embrace these transformative technologies and enshrine digital skills across the education system so that digital skills are fully embedded in the national curriculum for schools. This will be key to maintaining our competitive edge on the global stage.”