17 February 2014

Call for pro-investment culture in UK manufacturing

A new report published on 27 November last year, entitled Making Good, warns that UK manufacturing is being prevented from becoming 'wholly competitive' by a national industrial culture that discourages companies from investing in vital long-term business drivers such as skills development and technological innovation.

The report was published by the All-Party Parliamentary Manufacturing Group (APMG) - of which BPIF is an associate member - and highlights many firms' reluctance to engage with available support packages and business development programmes as evidence of manufacturing businesses being disinclined to seek advice and collaborate in order to grow. The report is the product of a nine-month inquiry by the APMG, chaired by Conservative MP Chris White and Labour's Jonathan Reynolds MP. Kathy Woodward gave evidence to the Inquiry in person on 10 July and the BPIF subsequently submitted written comments.

The need to create a culture of competitiveness in which UK manufacturing businesses can thrive lies at the heart of the Report's findings. In addition to calling on government to do more to create and foster a pro-investment culture in UK manufacturing, the Report also asks that it restructure key interactions between manufacturing businesses and policymakers and that it takes steps to build competitive business practices into manufacturers' strategic thinking. In particular, it urges the Government to lead a cross-party initiative, in consultation with industry, to establish a ten-year fiscal framework designed to encourage manufacturing businesses to adopt more ambitious growth strategies based on longer-term investment. Crucially, the report seeks stability on government policy on support for manufacturing by calling on all political parties to honour the framework regardless of the outcome of the next general election.

The report also urges the Department for Business Innovation and Skills (BIS) to radically restructure its civil service manufacturing team, with vertical teams to better mirror and support supply chain sectors and ensure their growth and stability, and with horizontal teams focused on size of company, rather than sector.

Further recommendations are that:

• All parties should commit to protect funding to 2020 for the Technology Strategy Board, the Engineering and Physical Sciences Research Council, and the UK's seven R&D Catapult Centres.
• The Cabinet Office should coordinate, with BIS, pilot projects looking at take-up of business support policies, in advance of the full roll-out of the Business Bank.
• Government should work more closely with trade associations in the manufacturing sector, particularly those with a strong core of SME members, in the initial design of policy programmes, and subsequently in marketing programmes to their members.
• BIS should collaborate with industry on a national campaign for automation, with a focus on myth-busting, making the case for automation and job creation.
• UK Trade & Investment (UKTI) should be more targeted in its approach, and collaborate with existing bodies to promote export training where appropriate.
• The Government's Manufacturing Advisory Service should undertake a review of its strategic management advice, and expand its remit in this area with more targeted support. It should work with organisations including business schools, trade associations and Chambers of Commerce, and partner with the Design Council and UKTI, amongst others, to link strategic business advice to structural evolution of the business.

Following its formal launch at Westminster on 3 December, the report was debated in Parliament on 14 January as part of a Westminster Hall debate on the future of UK manufacturing. The two APMG co-chairs - Chris White MP and Barry Sheerman MP - both spoke, with Business Minister Michael Fallon MP praising the report and the Group's wider work.

Making Good can be downloaded here