Making manufacturing a key part of our future
The UK manufacturing sector has been a major contributor to the success and wealth generation of the UK economy, global development and influence, for centuries, writes Richard Baker, Partner at national audit, tax, advisory and consulting firm Crowe.
As an island nation, the country’s forefathers, realised that with limited natural resources, to be a successful trading nation, and to provide sustainable income for the exchequer, the UK needed to add value by virtue of innovation, creativity, entrepreneurship and skilful hard work.
The vision and inspiration of the pre-Victorian enlightenment, driven by the likes of the Lunar Society, provided the building blocks for what became the ‘Industrial Revolution’ and created a string of manufacturing, agricultural and engineering successes of which examples continue and remain, throughout the globe.
British engineering and ingenuity and innovation has also played a key role in keeping the UK and the people of the world, safe, free, fed and watered and it continues to do so. In their 2024 report
‘The True Impact of UK Manufacturing’, Lloyds Bank, (working with Oxford Economics and the Manufacturing Technologies Association), identify that the sector is worth £518 billion to the UK economy (23.1% of GDP).
Despite its significance to the economy, 87% of the respondents to Crowe’s last manufacturing survey said the government support for the sector is inadequate.
How can the Government support manufacturing?
Crowe teamed up with various industry figures earlier this year to answer this question and published a
'Manifesto for Manufacturing'.
The manifesto is based on five pillars:
Skills and education
- Strategic review, refocus of education engagement and provision with manufacturing.
- Overhaul the apprenticeship system and its funding processes, including introduction of a tax credit-based system and introduce training incentives for UK graduates.
- Supported graduate level study fees for (STEM) subjects.
Digitisation and innovation
- Reintroduction of enhanced Research and Development relief at 130% uplift for SMEs.
- Training and education measures to build UK cyber resilience and secure technology supply chains.
- Better communication of support and funding streams.
The route to net-zero
- Strategic financial support for manufacturing businesses to decarbonise as part of a single national strategy and assistance scheme.
- A reshoring initiative to provide funding and support for reshoring to the UKof products and components currently produced abroad.
- Carbon Border Adjustment Mechanism (CBAM) to protect ‘homegrown’ production.
- National standardisation of net zero and carbon neutral expectations and requirements.
Secure the UK’s supply chains
- Root and branch risk assessment covering supply chains and national infrastructure plans of UK steel production and technology dependent production processes.
- Public industry procurement process that favours UK suppliers as a point of preference.
- Utilisation and support of the SME supply chain.
Finance and investment
- Capital grants scheme to digitise manufacturing processes and support decarbonisation.
The Government has recently published its Industrial Strategy, “Invest 2035” which references advanced manufacturing as a key area of future growth. Fostering a pro-business environment and working in partnership are key principles. Whilst the messages are positive, time will tell what practical, real-life actions will arise from Invest 2035.
More discussion and commentary can be found in Crowe’s manifesto document which can be
viewed here.
If you would like to know more, please do get in touch with Richard Baker:
