- £4.5 billion for strategic manufacturing sectors including £960 million earmarked for clean energy
- Funding will be delivered to eight sectors key to economic growth, energy security, and levelling-up
- Part of wider Government support to ensure UK is the best place to start, grow, and invest in manufacturing
The Government has announced £4.5 billion in funding for British manufacturing to increase investment in eight sectors across the UK. The funding will be available from 2025 for five years, providing industry with longer term certainty about their investments.
Over £2 billion has been earmarked for the automotive industry and £975 million 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 £960 million for a Green Industries Growth Accelerator to support clean energy manufacturing, and £520 million 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, like 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 our world-leading decarbonisation track record and strong deployment offer.
The funding forms part of the Prime Minister’s pledge to grow the economy, and his focus on making decisions for the long-term, ensuring the fund doesn’t just focus on the most successful sectors today but looks ahead to how we keep pace internationally and build the UK’s expertise for the industries of the future.
Together with our existing manufacturing support and plans for net zero transition, this package will help unlock private investment, provide certainty to investors, boost energy security, and protect and create jobs. This approach has already mobilised £198 billion in public and private investment in low carbon energy deployment since 2010.
Today’s announcement comes ahead of the second Global Investment Summit later this month, which will showcase innovative companies from across the UK, with significant investment opportunities in sectors such as technology, sustainability, life sciences, advanced manufacturing, and creative industries.
It will also help ensure that the UK remains at the forefront of the global transition to net zero and can seize growth opportunities in the new green economy. The UK remains a world-leader in cutting emissions, having decarbonised faster than any G7 country since 1990 and set out clear plans to meet all our climate targets and deliver energy security.
Chancellor of the Exchequer, Jeremy Hunt, 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, create more skilled, higher-paid jobs in new industries that will be built to last.”
Business and Trade Secretary Kemi Badenoch said: “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 £4bn 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.”
Energy Security and Net Zero Secretary Claire Coutinho said: “Today we are announcing nearly £1bn to back our green industries.
“While we’ve already attracted £200bn in low carbon investment since 2010, with another £100bn expected by 2030, this will unlock even more. We have long been energy pioneers in advanced manufacturing, and this will allow us to carry on that great British tradition.”
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 today that the Government will expand the Made Smarter Adoption programme to all English regions in 2025 before working with the Devolved Administrations to explore making the programme UK-wide from 2026/7.
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.
Stephen Phipson, CEO of Make UK, the manufacturers’ organisation said: “Make UK has long campaigned for Made Smarter to be a fully national scheme so that all SME manufacturers can benefit from the expertise the programme delivers and we are delighted at today’s decision from Government to commit to a national rollout.
“Made Smarter has already transformed thousands of companies in the North East, North West, West Midlands and Yorkshire & the Humber and now it can help turbo-charge industrial digitalisation in SMEs across the whole of the country.
“The end-to-end specialist support the programme delivers has successfully helped smaller businesses dramatically boost productivity, improve energy efficiency, drive growth, upskill roles and deliver new jobs in digital skills to create workforces of the future which will allow Britain’s smaller manufacturers to continue to grow and remain globally competitive.”
Additionally, the Government yesterday committed to extend the Connected and Automated Mobility Research and Development programme with up to £150 million of funding between 2025/6 and 2029/30. This will help the UK secure first-mover advantage in the deployment of self-driving vehicles and services.
The UK’s first Battery Strategy is also expected to be published next week, which will outline the Government’s activity to achieve a globally competitive battery supply chain in the UK by 2030 that supports economic prosperity and the Net Zero transition.
They have also set out their plan to launch a Hydrogen industry taskforce, delivered in partnership with the Hydrogen Innovation Initiative and Innovate UK, supporting our ambition to maximise investment opportunities for UK manufacturing of hydrogen propulsion systems.
The Government will set out more about its offer to the manufacturing sector next week with the publication of the Advanced Manufacturing Plan.
Manufacturing stakeholders react to the £4.5 billion in funding announced today for British manufacturing to increase investment in eight sectors across the UK:
Kevin Craven, Chief Executive, ADS Group said: “On behalf of industry, ADS is very pleased to welcome the measures announced by the UK Government to support UK aerospace, re-affirming long-term backing for our world-leading advanced manufacturing sector.
“The UK’s aerospace, defence, security, and space sectors are powerhouses of growth, hubs of ground-breaking innovation, and pioneers of the UK’s advanced manufacturing capability.
“Set against a backdrop of increasing global competition, the continued commitment towards aerospace R&D is significant and will provide a boost to continued investment in innovation and advanced manufacturing in the UK. This is a very timely intervention given the growing pace of aerospace recovery, huge aircraft order backlog and industries’ continued commitment to net zero.”
John Harrison, Chairman, Airbus UK and General Counsel, Airbus said: “Airbus welcomes the funding earmarked for aerospace and advanced manufacturing which offers greater certainty for long-term investment in sustainable aviation and highly skilled jobs here in the UK.
“This is positive for the UK economy both in terms of R&D investment today, as well as securing future growth”
Mike Hawes, Chief Executive, The Society of Motor Manufacturers and Traders (SMMT) said: “Today’s announcement is an unequivocal vote of confidence in the UK’s critical automotive industry.
“Coming on the back of almost £20 billion committed by the sector in next generation plants and technologies this year alone, it is indicative of the scale of investment such support can leverage and the result of substantial collaboration between Government and the industry.
“This additional Government investment reflects the fact the UK automotive sector has the talent, the innovation and the determination necessary to thrive in the face of fierce global competition. It will deliver benefits not just for the automotive sector but for the whole country in terms of growth, high value jobs and productivity. It also sends a powerful signal that the UK is open for business.”
Richard Torbett, Chief Executive, the Association of the British Pharmaceutical Industry (ABPI) said: “We’ve long believed that the UK’s has the potential to be a world leader in advanced and sustainable medicines manufacturing.
“This £520 million will supercharge UK life sciences manufacturing, combatting the increasing international competition to attract major manufacturing investment. Added to our existing strengths and technical expertise in manufacturing innovation, today’s announcement is a major step forward in delivering on our shared ambitions for long term growth.”
Dan McGrail, Chief Executive, RenewableUK’s said: “At a time when international competition for investment in clean technology manufacturing is fierce, the Chancellor is right to take a more proactive approach to stimulate green industrial growth.
“The UK’s leadership in areas like offshore wind has given us a strong foundation to build on, with supply chain companies already in place across the country employing thousands of workers. But with the global market set to skyrocket in the years ahead, we should be looking to capture as much of this multi-billion pound opportunity as we can through a more strategic approach to building the UK’s manufacturing base.
“The Chancellor has been clear that the Green Industries Growth Accelerator is for strategic industries, targeted to unlock maximum private investment where the UK can be competitive – and there couldn’t be a better fit for that than offshore wind and renewables.
“With the right support, the likes of which we’ve seen from Government today, industry estimates that the offshore wind supply chain alone could boost the UK’s economy by £92bn by 2040. The sector is working to develop an Industrial Growth Plan which will set out how we can capture this opportunity to boost our energy security, grow our domestic supply chain and provide affordable power to consumers”.
Brian Holliday, managing director at Siemens Digital Industries UK, and co-chair of Made Smarter, said: “Today’s announcement clearly says that UK manufacturing matters. It represents a tremendous investment boost for our makers that will enable the confidence to invest in innovation, productivity and sustainability.
“Key sectors benefit but so does the long tail of small and medium firms which is really important to directly address our recent challenges of weak overall productivity and investment.
“The business benefits of digitalisation are now clear, while being an enabler for industrial decarbonisation too – the package of measures announced in bolstering Made Smarter, targeted regulatory reform and sector support, along with our world-class Catapults and Universities now makes the UK one of the best countries on the planet to sustainably design, make and export goods.“
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