Autumn Budget 2021 – What does it mean for manufacturing?

Posted on 27 Oct 2021 by Lanna Deamer

The Autumn Budget 2021 took place earlier today as the UK focuses on recovery from a period of unprecedented global economic uncertainty and challenge. Some of the key announcements to impact the manufacturing sector are:

Infrastructure, transport and investment

As part of his plan for levelling up transport across the UK, Rishi Sunak put forward a number of initiatives and plans for investment across infrastructure.

  • Increased investment to support London-style transport across the country.
  • England’s city regions will receive £6.9bn to spend on train, tram, bus and cycle initiatives.
  • £21bn investment on the roads and £46bn on the railways to improve overall journey times between cities.
  • Research and Development (R&D) spending will reach £22bn by 2026-27 and there will be £20bn invested in R&D by 2024-25.

Read more via The Guardian here.

Research and business

The budget and spending review aims to provide significant backing for businesses to capitalise on the recovery and building on the support provided throughout the pandemic.

  • Grants worth £1.4bn will be given to ‘internationally mobile’ companies to invest in UK infrastructure.
  • This includes £345m aimed at increasing resilience for future pandemics and £800m to produce electric vehicles in North-East England and the Midlands.
  • As part of the package, a talent network team will aim to attract high-skilled workers to the UK, through ‘innovation hotspots’ initially based in San Francisco and Boston, US and Bengaluru, India.

Employment and skills

To deliver on the Prime Minister’s vision for a high-wage, high-skilled, high-productivity economy, the government is putting its ‘Plan for Growth’ into action with significant investment in innovation, infrastructure and skills.

  • Spending on skills and training by £3.8bn over parliament, this is an increase of 42%.
  • UK-wide numeracy service launched to help 500,000 adults improve their numeracy skills.

Read more via the BBC here.

Rishi Sunak also announced the creation of traineeships and will ‘quadruple’ places on skills bootcamps in areas such as Artificial Intelligence (AI) and cyber security in his Autumn Budget. The industry was quick to react.

Richard Petley, Senior Vice President, Oracle UK: “From ambition to action, Rishi Sunak’s vow to make Britain ‘the most exciting place on the planet’ is coming to fruition. It’s clear, this investment in AI is an investment into the future of UK workers.

“Amidst changing workplace dynamics, the Government’s Autumn budget to boost places in skills bootcamps is reflective of the needs of the current workforce as 77% of Brits want technology to help build their future. This will empower workers to identify skills they need to develop and guide their career development – helping to regain control of their lives and careers.”

Colin Gray, Principal Fraud Consultant, SAS UK & Ireland: “When you do the maths, the percentage of public money lost to fraud is sickening. Up to £53bn (6.4%) of the UK government’s total receipts for 2019/20 were lost, according to its own estimates. The true figure could easily be much higher.

“It’s clear that public services including the NHS, emergency services and social services, relied upon by 66 million people, will be squeezed this year. What’s worrying is that hackers and thieves, including those exercising internal collusion as often happens in procurement fraud, have made an overwhelming contribution to that. Yet this loss of government funds is often overlooked when the results of a Comprehensive Spending Review and Budget are being delivered.

“The tech exists; it’s time to roll it out. Advanced analytics can detect and predict a comprehensive range of procurement issues for government agencies. By applying a combination of business rules, outlier analysis, social network analysis, predictive models, machine learning and neural networks, government agencies can see a solid trail of evidence to minimise fraud, catch the perpetrators, and ultimately deliver a lot more for taxpayers’ money.”

Shevaun Haviland, Director General of the BCC: “There is much to welcome in this Budget for business communities across the UK. The Chancellor has listened to Chambers’ long-standing calls for changes to the business rates system and this will be good news for many firms. It will provide much needed relief for businesses across the country, giving many firms renewed confidence to invest and grow.

“Additional investment in skills, infrastructure and better access to finance will be key drivers for our economic recovery and will provide longer-term benefits and opportunities for businesses across the country. Businesses have been battered by 18 months of the pandemic and problems around supply chain costs and disruption, labour shortages, price rises, soaring energy bills and taxes, and there may still be difficult months ahead.”

Nimisha Raja, Founder of Nim’s Fruit Crisps, the UK’s only air-dried fruit crisp and ingredients manufacturer: “Investment incentives through business rates are welcome, as we are looking to expand our production footprint in our factory with costs estimated at around £60k for building works alone.

“If I was in charge of the Budget, I would have included some grant support for manufacturers, who are currently trying to cope with rising inflation, material costs and unprecedent supply chain disruption. It’s threatening to derail what has been a strong recovery.

“This won’t get raised by many people, but an increase in childcare spending is also good as it allows parents to work – staff shortages are currently acute and anything that increases the labour pool is a plus.”

Tony Hague, CEO of PP Control & Automation: “The one thing that leaps out the Budget for me is the change in focus around R&D and the new-found desire to try to incentivise more domestic activity.

“This is a very welcome change as the UK has the unenviable track record of being a fantastic idea generator, yet an also-ran when it comes to commercialising these ideas and technologies.

“If we can reverse this by creating a climate where investment and capacity is available on our shores then this could be a real long-term boost for manufacturers, who could be in line for new product introductions and increases in volumes.

“It’s just a shame that the £20bn funding will not come into play until 2024. Why we’re waiting two years is a real ‘head scratcher’ especially when you consider we’re currently vying for pole position in electrification.”