UK government announces £4.5bn funding among package of measures to bolster manufacturing

Article by Amanda Jasi

The UK government has announced £4.5bn (US$5.6bn) in funding for the nation’s “world-leading” clean energy, automotive, aerospace, and life sciences sectors.

The package, available from 2025 and running for five years, comes as part of a wider approach for advanced manufacturing. As it announced the support, the UK government also published a response to its chief scientific advisor’s recommendations for advanced manufacturing regulations and standards and said it would expand the Made Smarter adoption programme.

The news came days after a call to politicians from the Manufacturing Five (M5), a coalition of the UK’s leading advanced manufacturing sectors, to unite around a long-term vision for UK manufacturing. Alongside this, M5 released a five-point manifesto setting out the reforms necessary to close the gap with global competitors and unlock the potential for manufacturing to drive prosperity and pride across the UK.

The points included focus on skills and workforce; policies and regulation to foster innovation and growth; innovation to facilitate manufacturing growth; promoting the UK’s manufacturing industries; and supporting a transition to more sustainable manufacturing practices.

Karen Betts, chief executive of M5 member, the Food and Drink Federation, said: “Creating a long-term strategy to drive economic growth and attract investment in advanced manufacturing is critical to the health of the UK economy, which needs manufacturing to thrive.”

Billions to support manufacturing

The manufacturing sector accounts for more than 43% of UK exports and employs around 2.6m people. The government said the £4.5bn in funding is targeted at the UK’s “strongest, world-leading sectors”, including where industry is undergoing fundamental changes to remain at the forefront of the global transition to net zero.

Its total commitment includes £960m for a Green Industries Growth Accelerator to support clean energy manufacturing. The investment will support the expansion of domestic energy supply chains across the UK, including carbon capture, use, and storage (CCUS); hydrogen; nuclear; offshore wind; and electricity networks. The government expects the funding will allow the UK to seize growth opportunities through the transition to net zero.

Ruth Herbert, CEO of the Carbon Capture and Storage Association, said she was “delighted” by the proposed investment in the accelerator. She noted that CCSA has argued for targeted support and intervention to help UK supply chain companies compete globally in “high value opportunity areas where the UK has strengths”.

“This will enable the UK to build a healthy domestic supply chain and maximise our potential to supply a global market for CCUS components that government (2019) estimated could be worth up to £181bn per annum by 2050,” she said. Herbert added that accelerating UK deployment of CCUS in line with projections from UK Climate Change Committee (CCC) projections over the next ten years could deliver 70,000 new jobs and build on our “world-class” manufacturing and offshore capabilities.

The manufacturing package also includes £2bn earmarked for the automotive industry to support the manufacture, supply chain, and development of zero emissions vehicles. Meanwhile, the aerospace industry will benefit from £975m investment for energy efficient and zero-carbon aircraft equipment.

Life science manufacturing will receive an investment of £520m to help build resilience for future health emergencies and capitalise on UK research and development.

IChemE president Nigel Hirst welcomed the planned investment “particularly in sectors where chemical and process engineers are so vital to success, such as pharmaceuticals and clean energy supply chains to facilitate the energy transition to net zero”.

He added: “Recognising the importance of the UK’s manufacturing and production processes is fundamental to reaping the benefits of our technological innovation. Successful technology transfer and scaling up innovations to commercial scale industrial production depends on skilled chemical and process engineers, and this announcement will be a boost for many UK businesses looking to expand their manufacturing and production capability.”

The UK government said that the funding forms part of its pledge to grow the economy and focus on making decisions for the long term. Alongside existing manufacturing support and plans for a net zero transition, the government expects the funding boost will unlock private investment, provide certainty to investors, boost energy security, and protect and create jobs.

UK business and trade secretary Kemi Badenoch said that “the UK is a global hub for advanced manufacturing, with world-leading automotive, aerospace, and maritime sectors”. She added that the package builds on recent investment wins, including a UK-subsidised £4bn gigafactory announced in July.

These moves by the UK government to encourage private sector investment follow the passage of the US’ Inflation Reduction Act (IRA) last year. Offering more than US$370bn in incentives for cleantech, the Act triggered concerns by other nations that private investment would be redirected, and supply chains disrupted. The EU subsequently announced a Net Zero Industry Act, aiming to bolster the bloc’s competitiveness.

Advanced manufacturing recommendations accepted

The same day it announced the £4.5bn support package, the UK government also published its response to a review from its chief scientific advisor, Dame Angela McLean, on the role that regulation and standards could play in driving innovation and growth in advanced manufacturing. The government accepted all 14 recommendations made, which included working with the relevant bodies to:

  • determine and develop standards to accelerate the deployment of digital twins
  • develop 3D printing standards to enable certification of the entire production process, rather than individual parts
  • encourage the development of repair, reuse, and recycling technology and compatibility for composites and other problematic waste streams, with a particular focus on how products can be made recyclable with minimum waste
  • consider how the design, manufacture, and use of more efficient, safe, and sustainable chemicals could be facilitated

Expanding support for technology adoption

Made Smarter is a movement backed by businesses and the UK government that is leading the nation’s ambitions to grow manufacturing through digital technologies, innovation, and skills. Its adoption programme helps small- and medium-sized enterprises (SMEs) in the manufacturing sector to use advanced digital technologies that can reduce carbon emissions and drive-up productivity. Previously, support focused on specific regions, but the government will now expand the programme to boost the growth of manufacturing SMEs more widely.

The programme will be offered to all English regions from 2025–2026, before government starts work with devolved administrations to explore a UK-wide programme from 2026–27. The expansion will also include adding digital internships to the programme portfolio.

Stephen Phipson, CEO of Make UK, which offers a voice to UK manufacturing and engineering, 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 Northeast, Northwest, West Midlands, and Yorkshire and the Humber and now it can help turbocharge industrial digitalisation in SMEs across the whole of the country.”

The manufacturing-focused announcements came ahead of the UK government’s publication of its Advanced Manufacturing Plan, expected this week. A busy few days will also see the publication of the UK’s first Battery Strategy, aimed at helping achieve a globally competitive supply chain by 2030 that supports net zero. The government is also set to outline plans to launch a hydrogen industry taskforce to support investment for UK manufacture of hydrogen propulsion systems.

Update: This article was edited on 23 November to add commentary from IChemE president Nigel Hirst.

Article by Amanda Jasi

Staff reporter, The Chemical Engineer

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