Infrastructure prominent in new sector-specific industrial strategy

Upgrading infrastructure stands prominent among a list of priorities within government's new industrial strategy, which is being unveiled with a more hands-on approach to supporting individual sectors' specific needs.

A green paper, on the Modern Industrial Strategy, sets out a plan for strengthening living standards and economic growth by helping individual sectors that can come forward with proposals behind strong leadership. Early work has been done on a 'sector deal' for improving UK competitiveness and skills in the nuclear industry. In a wider context, improving the UK's performance on digital, energy, transport, water and flood defence infrastructure is listed as one of ten priorities of the strategy.

There are several other cross-cutting priorities listed with great interest and relevance for infrastructure, including developing skills and improving procurement.

The Modern Industrial Strategy is being unveiled by Theresa May at a regional cabinet meeting in the North West, where she is also expected to launch a £560m boost for Northern Powerhouse projects. This is in addition to £2.9bn awarded to local enterprise partnerships across the north of England.

In a statement released aheadof the cabinet meeting, Theresa May said: "The Modern Industrial Strategy will back Britain for the long term: creating the conditions where successful businesses can emerge and grow, and backing them to invest in the long-term future of our country. It will be underpinned by a new approach to government, not just stepping back but stepping up to a new, active role that backs business and ensures more people in all corners of the country share in the benefits of its success."

Modern Industrial Strategy, the 10 priorities:

1. Investing in science, research and innovation
2. Developing skills

3. Upgrading infrastructure
4. 
Supporting businesses to start and grow

5. Improving procurement

6. Encouraging trade and inward investment policy

7. Delivering affordable energy and clean growth

8. Cultivating world-leading sectors

9. Driving growth across the whole country

10. Creating the right institutions to bring together sectors and places


Commenting on the strategy, Nick Roberts, Atkins’ UK & Europe CEO said: “The UK’s immediate future is full of uncertainties and opportunities. Having a clear, ambitious industrial strategy starts to put us in control of our destiny. It’s in our DNA to be a trading nation and our efforts to re-forge our place in the global marketplace post Brexit will succeed or fail based on being bold, relevant, innovative and competitive.

“The UK is home to a cluster of world leading professional expertise in the financing, design, delivery and operation of high performing infrastructure. We need to nurture this cluster and quickly embrace and capitalise on advancements in technology to meet our own needs and grow a sector which can be a major contributor to our future export success.”  

Nelson Ogunshakin, chief executive of the Association for Consultancy and Engineering, said: "ACE welcomes the government’s new industrial strategy which places infrastructure and skills at the its heart. The UK professional consultancy and  engineering sector has long been a champion of the benefits to the UK from investment  in our digital, transport, water and energy infrastructure as a driver of growth. For too long the skills investment that we need to deliver these projects has, however, been neglected with a result that we now have far too few engineering professionals in the country. It is, therefore, welcome news that we will be seeing an increased emphases on STEM subjects at schools alongside new technical institutions.

"The stated aims of the industrial strategy to deliver jobs across the UK, to expand the reach of UK businesses and export markets, and to innovate new way of doing things, are all things that consulting engineering firms already excel at. With smarter policy making in areas such as public procurement and regulation, however, the sector can do much more to grow UK plc.  ACE will collaborate with other industry bodies to champion working  with BEIS on the development of the strategy going forward to secure the UK's competitive position post Brexit."

Matthew Farrow, executive director of the Environmental Industries Commission, said: "The UK environmental sector is well-placed to make a real contribution to the industrial strategy.  Across areas such as air quality, land remediation, laboratory analysis and flood defence, we have innovative world class companies and a global reputation.  The aims of the strategy - to create jobs across the UK, to reach new export markets and to innovate - are all things the environmental sector already does and could do more of with smart policy making in areas such as public procurement and regulation.  We will be responding in detail and exploring the possibility of a sector deal as suggested in the government's green paper." 

Richard Threlfall, head of infrastructure, building and construction at KPMG UK, said: "I welcome today's clear articulation by the government of its industrial strategy and in particular the recognition that infrastructure and R&D investment are vital catalysts for economic success. The openness of the government's invitation to support sectors which can unite under strong leadership is also to be applauded, but will present a challenge to the construction industry whose voice in government is fragmented."

Richard Threlfall's comments about the challenge for the construction sector to speak with one voice are well made. The government is letting it be known that it is prepared to help industry sectors with trade deals but only for industries that organise themselves and make a strong case for government action. The PM has mentioned the automotive and aerospace industries as good examples of this and the construction sector would do well to heed her remarks.

Given the fact that infrastructure will be a key driver of the economy moving forward, the industry should be pushing at an open door with government. “Substantial infrastructure investment is critical if the UK is to remain competitive in a post-Brexit future," said Richard Threlfall. "The industry will be keen to know quickly the identity of the major new infrastructure proposed and will be disappointed if it transpires that these are ones which have previously been announced," he said.

The government is also to set up an “industrial strategy challenge fund” to help distribute millions of pounds for research and development in areas such as smart energy, robotics and artificial intelligence, and 5G mobile network technology. The plan will also focus on the 50% of school-leavers who do not go to university. It will suggest maintenance loans for those wishing to pursue a technical education, the construction of institutes of technology in every region, and 15 core technical “routes” for students that train them in the skills most needed by employers in their regions.

Labour reacted with scepticism about the proposals, with shadow business secretary, Clive Lewis, questioning how much money the government was investing in the strategy: "We await further detail, but what's been announced so far will fall far short of getting us back to where we were in 2010, let alone equip our economy for the challenges of the 21st century," Lewis said. The University and College Union (UCU) said investing £170m in creating new institutes of technology amounted to a "drop in the ocean". Sally Hunt, general secretary of the UCU, which represents more than 110,000 academics, lecturers, trainers, teachers and administrative staff, said that the government's proposals were not much more than a "relaunched skills strategy".

Infrastructure leaders will be hoping that the new industrial strategy represents a genuine attempt by government to engage with business while intervening to help industry sectors that need assistance. The sector will also need to step up to the plate to speak with one voice to government on the issues that mater and to ensure a more unified approach to ministers than has previously been the case.