£1bn supply chain fund to solve productivity challenge

The Chancellor’s upcoming Budget should set aside more than £300m investment in a £1bn productivity improvement programme to boost manufacturing supply chains, ADS has revealed.

A Government commitment of £345m in the November Budget would secure private sector investment of more than £600m for initiatives supporting supply chain companies in the aerospace, defence, automotive, rail and civil nuclear sectors.

While the UK’s largest manufacturers have the ability to boost production rates in-house, to achieve growth they are dependent on the ability of local suppliers to continue improving their productivity.

In the aerospace sector, with civil aircraft production rates set to rise 40 per cent by 2020, small and medium sized companies need to invest in growth and boosting competitiveness.

 

ADS Chief Executive Paul Everitt said: “By supporting this productivity improvement programme the Government can help UK supply chain companies who are investing in their own productivity and competitiveness.

“High value industries like aerospace and defence can boost prosperity throughout the UK in the years ahead.

“But, as the UK and the EU progress through Brexit negotiations, UK government and industry must work together on an industrial strategy that ensures our globally competitive, high-productivity sectors are as strong as possible.

“This programme can benefit manufacturing sectors across the economy and help to solve the national productivity challenge.”

The aerospace sector has seen productivity gains of nearly 20 per cent since 2010, and the defence sector 23 per cent in the same period.

Benefits from existing industrial strategy programmes under the successful Aerospace Growth Partnership have extended across the whole of the UK, with more than 70 per cent of the companies participating being based outside London and the South East.

Targeted Government funding of can reap dividends in helping the UK achieve balanced growth across the country and creating new high-value jobs.

This productivity improvement programme is composed of two initiatives:

National Manufacturing Competitiveness Levels (NMCL)

This programme developed to support supply chain companies in the automotive and aerospace sectors, and now also covers the rail industry. It provides companies with in-depth assessment of their competitiveness and a roadmap that can be used to fuel business growth.

Sharing in Growth (SiG)

Already covering the aerospace, defence and civil nuclear sectors, this programme has been working with UK suppliers for four years. It is aimed at growing businesses with a turnover of between £10m and £40m, and companies participating in the programme have already secured contracts worth around £2bn with their improved competitiveness. Businesses taking part in Sharing In Growth receive informed and ongoing guidance from major customers including Airbus, Rolls-Royce, GKN and Bombardier.

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