3 minute read - 18th November 2023
Government announces £4.5bn of funding for manufacturing
The government has announced £4.5bn in funding for British manufacturing to increase investment in eight sectors across the UK. The funding will be available from 2025 for five years to help boost economic growth, energy security and provide industry with longer term certainty about their investments.
Over £2bn has been earmarked for the automotive industry and £975m for aerospace, supporting the manufacturing, supply chain and development of zero emission vehicles, and investment in energy efficient and zero-carbon aircraft equipment.
Alongside this, the government has committed to £960m for a new Green Industries Growth Accelerator programme to support clean energy manufacturing, and £520m for life sciences manufacturing to build resilience for future health emergencies and capitalise on the UK’s world-leading research and development.
With the entire manufacturing sector making up over 43% of all UK exports and employing around 2.6 million people, this funding is targeted at the UK’s strongest, world leading sectors; including where the industry is undergoing fundamental changes to remain at the forefront of the global transition to net zero, such as the move to zero emission vehicles in the automotive industry.
The Green Industries Growth Accelerator investment will support the expansion of strong, home-grown, clean energy supply chains across the UK, including carbon capture, utilisation and storage, electricity networks, hydrogen, nuclear and offshore wind. This will enable the UK to seize growth opportunities through the transition to net zero, building on its world-leading decarbonisation track record and strong deployment offer.
The government said that together with its existing manufacturing support and plans for net zero transition, the package will help unlock private investment, provide certainty to investors, boost energy security, and protect and create jobs, which has already created £198bn in public and private investment in low carbon energy deployment since 2010.
Jeremy Hunt, the chancellor, said: “Britain is now the 8th largest manufacturer in the world, recently overtaking France. To build on this success, we are targeting funding to support the sectors where the UK is or could be world-leading. Our £4.5 billion of funding will leverage many times that from the private sector, and in turn will grow our economy, creating more skilled, higher-paid jobs in new industries that will be built to last.”
Kemi Badenoch, business and trade secretary, added: “The UK is a global hub for advanced manufacturing, with world-leading automotive, aerospace and maritime sectors. This package builds on recent investment wins, such as the £4 billion gigafactory, and the £600m invested to build the next generation of electric Minis, and ensures that the government can continue to help create jobs, grow the economy, and secure the future of great British manufacturing.”
The government has also published its response to Professor Dame Angela McLean’s review of the role that regulation and standards can play in driving innovation and growth in advanced manufacturing.
The government accepts all 14 recommendations in the industry expert-backed report which builds on the UK’s role as a global leader in setting industrial standards and sets out how, with the right regulations, advanced manufacturing processes can enhance safety and support the drive to net zero and a more sustainable economy.
Among the recommendations accepted is to accelerate the deployment of digital twins, which enables companies to create accurate digital replicas of the full manufacturing process. Used across a range of sectors, digital twins have seen significant uptake in the automotive sector, including car production, where they offer a transformative approach to product development, manufacturing and maintenance, helping firms test how to fix problems or make processes more efficient.
To boost growth in small and medium sized manufacturing businesses more widely, it has also been announced that the government will expand the Made Smarter adoption programme, offering the scheme to all English regions in 2025-26 before working with the devolved administrations to explore making the programme UK-wide from 2026-27.
The programme helps small and medium sized manufacturing companies to use advanced digital technologies which can reduce carbon emissions and drive-up productivity, and its expansion will also involve inclusion of digital internships.