Department for Business, Innovation and Skills
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Government launches new framework for UK manufacturers

Government launches new framework for UK manufacturers

DEPARTMENT FOR BUSINESS, ENTERPRISE AND REGULATORY REFORM News Release (2008/187) issued by COI News Distribution Service. 8 September 2008

The Government today unveiled a new strategy for the UK's manufacturing sector - 'New Challenges, New Opportunities' - to help UK firms take advantage of changing global trends in manufacturing.

In bringing forward its refreshed manufacturing strategy, developed by the Department for Business and the Department for Innovation, Universities and Skills, in partnership with industry, the Government is reaffirming is commitment to the sector as a key part of a mixed and balanced UK economy in the future.

The strategy brings together almost £150 million of medium term support for UK manufacturing, and sets out Government's view of what the sector needs for success in the long term - including seizing the opportunities of the low carbon economy, supporting skills, realising overseas opportunities, and improving the perceptions and understanding of manufacturing.

The government recognises these are demanding times and is committed to doing all it can to help manufacturers to get through them. But despite the current challenging global economic climate, and recent downturns in the sector, there is reason to be confident. And it is right to have a medium term framework to help businesses emerge from these challenging conditions and remain competitive in an increasingly globalised sector.

Britain has the open and flexible markets that will allow British business to react to changing and challenging circumstances and manufacturing is still very much a UK success story and the unsung hero of the UK's economy.

Business Secretary John Hutton said: "Manufacturing is central to the success of the UK economy and it is vital the sector has the right foundations to endure the current economic slowdown and emerge stronger and fitter than ever.

"We are the world's sixth largest manufacturer - the industry accounts for over half our exports, contributes £150 billion to the economy and around three million jobs. But we need to recognise that the global landscape is changing so we can help UK manufacturers stay ahead of the game. I want the UK to be at the forefront of opportunities opened up by the move towards a low carbon economy. With the right support in place, we can grow our nuclear and renewables industries to become world-leaders in green technologies, supporting hundreds of thousands of "green collar jobs.

"And for many years the industry's success has suffered from a lack of public recognition, and it is time we redressed this balance. We must attract more talented young people - the lifeblood of future success - into the industry and ensure that this talent is nurtured and developed."

Skills Secretary John Denham said: "We want to support innovation in UK manufacturing by maintaining a world-class research and development infrastructure, through intelligent use of Government procurement and regulation to stimulate markets and the growth of innovative business, and to build world-class skills.

"We want businesses to be able to nurture and develop the talent of their people, so we will make it easier for manufacturing employers to access skills support and extend the number of high-quality apprenticeships available by supporting firms in training additional apprentices.

"Building on the successes of our innovation strategy, we'll continue to drive innovation in high-value manufacturing, with the Technology Strategy Board investing an additional £24m in research and development to help British manufacturers not only maintain but increase their technological and innovative edge over global competitors."

The strategy sets out Government's view of what the sector needs for success in the long term. It includes:

Seizing the opportunities of the low carbon economy

Next year, a low carbon industrial strategy will address the challenges facing manufacturers as they try to reduce their carbon footprint and the huge opportunities from investment in energy and a shift to a low carbon economy. The Office of Nuclear Development will work with industry partners to develop the nuclear supply chain and maximise high value-added work captured by UK manufacturers from an estimated £20bn capital expenditure in nuclear. And a new Office for Renewable Energy Deployment will be established to address barriers to renewables deployment including helping to develop the UK supply chain. Nuclear and renewables alone could create up to 260,000 jobs over the next ten years.

Supporting skills

There will be a new focus on apprenticeships. This will see 1,500 new manufacturing apprenticeships, in addition to the 9,000 places announced earlier this year which will increase the total number of manufacturing apprenticeships by over 10%. We will expand the new places by inviting bids from larger manufacturers to train additional apprenticeships, including for their supply chains. And for manufacturers, there will be a simplification of the ways they can access support on skills and training with a MoU published today by the skills agencies on how they will work to do that.

Realising overseas opportunities

Manufacturing attracts more FDI to the UK than any other country in Europe and globally the UK is second only the US. Manufacturing growth in other countries means opportunities for the UK. UK Trade & Investment (UKTI) will allocate additional resources to target a package of new support for 600 UK companies of all sizes to identify manufacturing value chain opportunities in India and China. And the UK Intellectual Property Office (UK-IPO) will advise on using and protecting IP in these markets.

Improving technology networks

In addition to the existing centre in Yorkshire and the centre currently being built in Glasgow, there will be a new Manufacturing Technology Centre in Coventry. It will have industrial scale pre-production and demonstration facilities, which could lead to £130 million of investment in business-led applied research and its exploitation over the next 10 years. And the Technology Strategy Board will invest £24 million into research central to high vale added manufacturing.

Changing the image of manufacturing

A new body, 'Manufacturing Insight' will be tasked with making the public perception of manufacturing reflect the realist of a successful, modern and broad sector and ensuring young people are aware of the exciting career opportunities available will be established. There will also be a 'Manufacturing the Future' schools campaign to promote manufacturing career prospects to young people.

Making the most of 'intangibles'

Firms in the UK are using other areas of leading British skills and industry to make them more globally competitive. UK and global businesses are growing their investment in intangible or knowledge assets, such as software, design, brand building in order to improve their global competitiveness and to meet the changing needs of customers. The Design Council and Regional Development Agencies will implement the findings of the current review of the Designing Demand programme to increase penetration of the programme across the regions. We have supported the creation of the UK Design Skills Alliance and will work with the Alliance to help ensure the world leading UK design sector has the skills required by manufacturers to compete in global markets.

The refreshed strategy is intended to inform dynamic process and will shape further new policies and programmes in the future. It replaces the Government's manufacturing strategy of 2002, which was the first strategy for the sector for more than 30 years.

Notes to Editors

1. "Manufacturing: New Challenges, New Opportunities," and supplementary materials published jointly by the Department for Innovation, Universities and Skills and the Department for Business, Enterprise and Regulatory Reform, are available at http://www.berr.gov.uk.

2. The refreshed strategy is based on extensive consultation and working with the Ministerial Advisory Group on Manufacturing (MAG) and other stakeholders. http://www.berr.gov.uk/sectors/manufacturing/MAGonmanufacturing/page47668.html

3. Rise in applications to study STEM subjects at university. UCAS figures for applicants accepted for entry in autumn 2007 show there have been increases in acceptances for STEM subjects. This includes physics (+9.8%), chemistry (+8.8%), biology (+3.5%), maths (+9.3%), Combined maths/computer science (+16.3%), as well as most of the engineering subjects including chemical engineering (+11.5%), Civil engineering (+10.3%) and Mechanical engineering (+4.6%).

4. STEM in the labour market. DIUS is leading a study, in collaboration with BERR, DCSF and the Prime Minister's Strategy Unit, to analyse the demand for STEM skills from all employers to understand employer needs and the UK's future needs for STEM skills. Key Stakeholders including CBI, Research Councils, EEF, BCB and others will be involved in gathering evidence and interpreting its findings. The report will be produced in October 2008.

5. Working with schools and colleges. In June this year John Denham asked two university Vice Chancellors - John Coyne, VC of Derby University and Julia Goodfellow, Kent VC and past Chief Executive of the BBSRC, to report to him on how volunteer universities could work directly with schools to raise attainment in the key STEM subjects, especially with a view to reaching schools where science performance is poor in order to help deliver our widening participation goals.

6. Science and engineering ambassadors (SEA). Through the Science and Engineering Ambassadors programme, more than 20,000 expert volunteers representing companies and organisations of all sizes are supporting school activities, offering mentoring, career guidance and are positive role models. There is a target to increase SEAs to 27,000 by 2011.

7. Science funding. The science budget will increase from £3.4bn per year, this year to almost £4 billion per year by 2010/11 - taking Government support for the UK's research base to its highest level ever. We remain second only to the US in global scientific excellence (as measured by citations), while collaboration between the research base and business continues to grow ever stronger.

8. Innovation and the Technology Strategy Board. We want to make sure that Britain is the best place to run an innovative business or service - this is critical to the UK's future prosperity, our quality of life and future job prospects - and, in March 2008, published a White Paper, Innovation Nation, to help to achieve this. The Technology Strategy Board will develop and lead a strategic programme worth £1 billion over the next three years. The TSB will be investing £100M in eight collaborative R&D technology areas.

9. Apprenticeships. Over the past ten years, the Government has more than doubled the number of young people and adults starting apprenticeships. Last year, 184,000 people started high-quality apprenticeships spanning the entire economy - from veterinary nursing to film production. Ministers anticipate the numbers will grow further over the next 10 years as, from 2013, all suitably qualified school leavers will be entitled to an apprenticeship. Completion rates have nearly trebled over the past five years, reaching an all-time high of 63%, comparable with the best in Europe.

10. The skills system. The Government has already taken a number of steps to simplify the landscape on skills for manufacturers. These include: major changes to enhance the Apprenticeships programme announced in World Class Apprenticeships; a commitment to rapidly expand the Train to Gain service, with funding expected to reach over £1 billion by 2010-11; sector skills compacts with two Sector Skills councils ProSkills and SEMTA making £127m of the Train to Gain budget available to their manufacturers over the next three years; and a Business Support Simplification programme to streamline business support at the national, regional and local level from over 3,000 schemes to fewer than 100.

11. In March this year, HM Treasury and the Department for Business, Enterprise and Regulatory Reform jointly published "Enterprise: Unlocking the UK's Talent", a new 10 year strategy to make the UK the most enterprising economy in the world - and the best place to start and grow a business. http://www.berr.gov.uk/enterprisestrategy

12. The Department for Business Enterprise and Regulatory Reform helps UK business succeed in an increasingly competitive world. It promotes business growth and a strong enterprise economy, leads the better regulation agenda and champions free and fair markets. It is the shareholder in a number of Government-owned assets and it works to secure, clean and competitively priced energy supplies.

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