Jaguar Land Rover's huge proposed investment in its Solihull plant, which was announced this week at the Frankfurt Motor Show, has brought the industrial supply chain sharply into focus. One year on from launch, and with over £4bn of public funds already committed to it, the government's Industrial Strategy is also now turning its attention to the UK supply chain as an engine for growth.
At a joint BIS/CBI conference held on Wednesday (September 11) at the University of Warwick, business secretary Vince Cable announced £266m of government-industry support for manufacturing supply chains, skills training and green construction.
With serendipitous timing alongside this announcement, BP also revealed that it had handed a new £65m contract to a firm in Leeds, bringing the total value of contracts that BP and its partners have now awarded to UK-based companies to over £1bn.
Prime Minister David Cameron, clearly delighted by the unexpectedly optimistic UK growth figures, also announced this week, was not about to lose any of the momentum.
"I have a clear mission that runs through everything that this government does: to make sure Britain succeeds in the tough global race of today," he said in a statement coinciding with the Warwick meeting. "Around the world right now countries are competing for investment and jobs. If Britain is going to be at the head of the pack, a proper industrial strategy – supporting businesses that employ hundreds of thousands of people - is absolutely vital.
"This isn’t about state planning or picking winners, it’s about talking to businesses of every size, in every sector, in every part of our country and asking the simple question – what can we do to help you succeed? Listening to when businesses want support from government and when they want us to back off," the Prime Minister continued.
"From short to long term growth, there is absolutely no room for complacency - we have to keep our pedal firmly to the floor. Because I want to make sure that the next generation of quieter planes, cleaner cars and affordable food are all made and grown right here in Great Britain."
In his keynote speech to the industrial strategy conference at Warwick, Vince Cable announced five projects that have secured £116m of government-industry investment from the Advanced Manufacturing Supply Chain Initiative (AMSCI), which was set up to strengthen UK supply chains and encourage major new suppliers to locate in the UK. He said this alone will create and safeguard around 1,500 jobs.
Everton Football Club, Balfour Beatty and the National Grid are among eleven successful bidders for government funding from the Employer Ownership Pilot scheme to design their own skills training. The hard-pressed construction sector will benefit from up to £150m of government-industry investment, delivered by the Technology Strategy Board, to help reduce building times, and improve building quality and efficiency.
"A stronger economy won’t be built overnight," warns Dr Cable. "It won’t simply emerge of its own volition. It will come from long-term thinking and the government working in partnership with business.
"We know manufacturing, training and innovation have all suffered. I hear it time and time again from companies across the UK. That’s why our industrial strategy is making the most difference by strengthening manufacturing supply chains, supporting new designs and developing skills.
"This support has already helped economic growth. We’ve secured £1 billion of new capital for our Business Bank, and a further £1.6 billion for the aerospace, automotive and agri-tech sectors. The focus is now on working in partnership with industry to deliver."
The CBI was impressed by the rhetoric but director-general John Cridland said the challenge now is delivery against the many commitments that have been made.
"The gathering momentum of recovery must not distract us from tackling the profound economic imbalances which built up during the boom years," said Mr Cridland. "It’s important that, as things start to look up in the short term, we don’t take our eye off the ball when it comes to long-term challenges.
"Essentially, we’re at a commercial tipping point, and delivering a coherent industrial strategy will undoubtedly boost confidence about the UK’s long-term success.
"For me this means three things: taking action to further improve the competitiveness of the UK’s business environment, strengthening supply chains that underpin our key growth sectors, and raising the bar on implementation by both business and government.
On the Government's Advanced Manufacturing Supply Chain Initiative (AMSCI), Mr Cridland had this to say:
"We are calling for industrial strategy to focus on strengthening UK supply chains and this initiative is one of the best ways to deliver this. The winning bids will support new technologies and jobs in supply chains for key sectors including aerospace, chemicals, electronics and life sciences.
"To build on the scheme’s success, the government should commit to funding AMSCI for the long-term and encourage greater participation from a wider array of industries, so that more businesses are able to benefit."
The CBI released its latest report this week. Entitled: Raising the Bar – Business Priorities for Industrial Strategy One Year On, it reveals that twelve months after the launch of the UK’s Industrial Strategy, businesses are split on whether they believe the UK will be a more competitive place in five years’ time.
The report can be read here.
Les Hunt
Editor