Government Launches Industrial Strategy Green Paper

27 January 2017

Blog by Jeff May, Director of Government Relations and Business Development at the CPA

Government Launches Industrial Strategy Green Paper

The government launched a ‘green paper’ – Building Our Industrial Strategy – outlining its plans to create a new approach to partnering with industry and identifying 10 ‘pillars’ it believes are important to drive forward industrial strategy across the entire economy: science, research and innovation; skills; infrastructure; business growth and investment; procurement; trade and investment; affordable energy; sectoral policies; driving growth across the whole country; and creating the right institutions to bring together sectors and places.  These pillars frame the government’s approach, and across each of them will be set out a programme of new policy.  Highlights of the paper relevant to construction product manufacturers and distributors include:

Investing in science, research and innovation: (all also announced in the Autumn Statement)

  • An additional £4.7 billion of funding for R&D by 2020-21.
  • The creation of UK Research and Innovation (UKRI) which will bring together the Research Councils and later-stage innovation funding through Innovate UK. UKRI will develop and deliver a clear strategy from fundamental research through to business innovation.
  • A new Industrial Strategy Challenge Fund to focus on robotics, clean energy and biotechnology. This builds on the creation of UKRI. It is a new funding stream which will enable UKRI to back technologies at all stages where the UK has the potential to take an industrial lead, from early research to commercialisation.

Developing skills:

  • Create a proper system of technical education, to benefit the half of young people who do not go to university and provide new, better options for those already in the workforce.
  • £170m of capital funding to the creation of prestigious new Institutes of Technology to deliver higher technical education in STEM subjects.
  • Explore how to give technical education learners clear information, which could include a way of searching and applying for courses similar to the UCAS process.
  • Work towards a joined-up, authoritative view of the sector specific skills gaps that the UK faces now and in the future.
  • Publish a comprehensive careers strategy later this year to radically improve the quality and coverage of careers advice in schools and colleges, to make it easier for people to apply for technical education.

Upgrading infrastructure: (largely announced in the Autumn Statement)

  • Regional strategic transport bodies such as Transport for the North and Midlands Connect transport and smart ticketing upgrades.
  • Using infrastructure investment spending to rebalance growth between different regions.
  • Initial allocations from the additional £1.1 billion of funding for local roads and transport in 2017/18 announced in Autumn Statement (NPIF 2017-2021).
  • £40 billion UK Guarantees Scheme (UKGS) to help projects raise finance from the capital markets through Treasury-backed guarantees for infrastructure bonds and loans; and using private finance to deliver public assets through the Private Finance 2 model.

Supporting businesses to start and grow:

  • Work with the British Business Bank to build understanding of the obstacles to firms accessing capital outside London and the South East, and the supply and demand-side causes of lower rates of equity deals.
  • The Minister for Small Business will take on a new role of Scale-Up Champion, overseeing a task force to support high growth scale-up businesses across the UK.
  • Explore how data – such as that held by HMRC and Companies House – can be used to identify scale-up businesses and be made available to enable local public and private sector organisations to better identify, target and evaluate their support to scale-up businesses more effectively.
  • Build on the success of the British Business Bank, and work with the Business Growth Fund (BGF) and other private partners to raise awareness of equity funding, diversify funding streams and increase the supply of finance for growing businesses.
  • Explore how we can support the development of B2B ratings and feedback platforms to make it easier for SMEs to determine the quality of business advice and support services provided to them by other firms.
  • A review into entrepreneurship will be led by the Chief Entrepreneurial Adviser at BEIS to assess the support currently available to entrepreneurs.

Improving procurement:

  • Roll out the “balanced scorecard” approach across all major central government construction, infrastructure and capital investment procurement projects over £10 million, including those in the National Infrastructure and Construction Pipeline.
  • Trial different aspects of designing and gathering supplier feedback in public sector procurement.

Encouraging trade and inward investment:

  • A series of working groups with key trade partners such as Canada, China, India, Mexico, Singapore and South Korea
  • Creating a new more active “Team UK” approach to winning overseas contracts, with the government helping convene consortia of companies to back a single UK bid for major overseas projects. This will enable the government to provide strong political support and increase the chances of winning major overseas contracts.
  • The Department for International Trade will review what we can learn from successful inward investment promotion agencies across the globe and it will report in 2017.
  • Working with behavioural insights experts, to improve our targeting of potential exporters and using HMRC data.
  • explore how we can maximise the opportunities that a UK presence at existing international trade fairs offers for businesses; and explore where there are sectors which could benefit from support to create trade fairs

Delivering affordable energy and clean growth:

  • The government will set out in 2017 a long-term road map to minimise business energy costs.
  • Government will commission a review of the opportunities to reduce the cost of achieving our decarbonisation goals in the power and industrial sectors. The review will cover how best to support greater energy efficiency, the scope to use existing instruments to support further reductions in the cost of offshore wind once current commitments have been delivered, and how the government can best work with Ofgem to ensure markets and networks operate as efficiently as possible in a low carbon system.
  • The Emissions Reduction Plan will be published during 2017, providing long-term certainty for investors.
  • Review the case for a new research institution to act as a focal point for work on battery technology, energy storage and grid technology, reporting in early 2017.

Cultivating world-leading sectors:

  • Propose to set an ‘open door’ challenge to industry to come to the Government with proposals to transform and upgrade their sector through ‘Sector Deals’. This is not about the Government providing additional funding; rather, it would be an open call to business to organise behind strong leadership, to address shared challenges and opportunities.

Driving growth across the whole country:

  • The government will use additional infrastructure funding to unlock growth in areas where connectivity is holding it back E.g. Housing Infrastructure Fund.
  • Work with local areas to test approaches to closing the skills gap; from early years education and the retention and attraction of graduates, to measures to drive the take up of apprenticeships.
  • Propose creating competitive new funding streams to back the clusters of innovative businesses across the country.
  • Work with local areas to identify and help develop industrial and economic clusters of businesses, and local specialisms.
  • Propose establishing Ministerial Forums on Industrial Strategy with each of the Devolved Administrations.

Creating the right institutions to bring together sectors and places:

  • Cabinet Office are reviewing the location of government agencies and arms-length bodies, and will consider relocating them where they could potentially help reinforce a local cluster and support private sector growth.
  • Government will work with the British Business Bank and ScaleUp Institute to understand and address the relative weakness of venture capital funding and entrepreneurship networks outside the South East.
  • Work with local government to review how to bring more business expertise into local governance, and improve links between councils and the private sector.
  • Explore further devolution deals for our largest cities.

 

This green paper reflects a set of proposals for discussion and consideration, and an invitation to others to contribute collaboratively to their development.  The CPA believes this is a major opportunity to work with government and put forward the interests of our membership.  As such, we invite all CPA members to share thoughts or contributions with Jeff May, Head of External Affairs, at jeff.may@constructionproducts.org.uk  as we prepare the CPA submission before the filing deadline of 17 April 2017.  To read the government’s green paper, please click here.