Industrial Strategy introduces transport and construction 'sector deal'

 

The Government has launched its Industrial Strategy to tackle the country’s poor productivity, featuring local industrial plans, funding for infrastructure, and four ‘Sector Deals’ including in the construction and automotive sectors.

The strategy, in the form of a White Paper, contains five ‘foundations of productivity’, including infrastructure, four ‘grand challenges’, and a number of key policies and funding streams worth billions of pounds, many of which were announced in last week’s Budget.

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A centrepiece of the strategy will be Sector Deals, covering the construction (including major transport projects), life sciences, artificial intelligence and automotive sectors.

Business secretary Greg Clark said: ‘We have commercial and industrial sectors – from advanced manufacturing to financial services; from life sciences to the creative industries – which are competitive with the best in the world.

‘In this Industrial Strategy we set out how we will maintain and enhance these and other strengths and deploy them to our advantage. But any serious strategy should address the weaknesses that stop us achieving our potential, as well as our strengths, and this Industrial Strategy does that.’

He added: ‘Britain’s productivity performance has not been good enough, and is holding back our earning power as a country. So this Industrial Strategy deliberately strengthens the five foundations of productivity: ideas, people, infrastructure, business environment and places.’

Under the heading of infrastructure, the strategy confirms that the Government will increase the National Productivity Investment Fund (NPIF) to £31bn through to 2023. The fund started in 2017-2018, meaning the annual funding has gone up from £4.6bn a year to £5.16bn a year.

The fund will also:

  • invest £200m to be matched by private investment, into a new £400m Charging Investment Infrastructure Fund
  • provide £100m to extend the plug-in car grant
  • boost digital infrastructure with over £1bn of public investment, including £176m for 5G and £200m for local areas to encourage the roll out of full fibre networks

Under the ‘places’ heading, the Government plans to agree local industrial strategies that 'build on local strengths and deliver on economic opportunities', create a Transforming Cities Fund providing £1.7bn for intracity transport.

The ideas stream will include a new £725m Industrial Strategy Challenge Fund for programmes that capture the value of innovation.

Officials at the Department for Business, Energy and Industrial Strategy said a Sector Deal deal for construction will substantially boost the sector's productivity through greater investment in innovation and skills, ‘creating new and well-paid jobs and maximising its export potential’.

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‘This will also reduce the environmental impact, improve the efficiency and reduce whole life cost of new projects and buildings to help build the houses, schools, hospitals and major transport projects we need.’

Officials said an automotive Sector Deal would ensure that the UK ‘continues to reap the benefits from the transition to ultra-low and zero-emission vehicles by continuing to build the agile, innovative and cost competitive supply chain needed to secure internationally investment’.

Ministers will also set four ‘Grand Challenges to put the United Kingdom at the forefront of the industries of the future’:

  • AI & Data Economy: We will put the UK at the forefront of the artificial intelligence and data revolution
  • Clean Growth: We will maximise the advantages for UK industry from the global shift to clean growth
  • Future of Mobility: We will become a world leader in the way people, goods and services move
  • Ageing Society: We will harness the power of innovation to help meet the needs of an ageing society
 

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