The government has announced a £1.2 billion annual skills investment as the centrepiece of its new industrial strategy, including a significant boost to technical training and apprenticeships.
This will include funding for technical excellence colleges, short courses in artificial intelligence and investment in training providers in England.
Prime minister Keir Starmer said the new industrial strategy would support 1.1 million new “well-paid jobs” over the next decade.
As part of the package, more than 7,000 businesses will see their energy bills cut by up to 25% from 2027.
Under the new British Industrial Competitiveness Scheme, electricity-intensive businesses in manufacturing sectors such as automotive, aerospace and chemical will have their bills reduced by up to £40 per megawatt hour.
Industrial strategy
Spending review: ‘much-needed cash’ but ‘little on workforce’
These companies support more than 300,000 skilled jobs, according to the government, and the energy cuts will help them to “grow and hire without delay”.
The strategy covers plans for five sectors: advanced manufacturing; clean energy industries; the creative industries; digital and technology; and professional and business services.
There will be £187 million for training one million young people in tech skills, the government said, plus targeted investment in “frontier technologies” such as cyber security.
The creative industries will enjoy a £380 million boost to film, TV, video games, advertising and marketing, and the performing arts.
Other sector highlights include:
- In professional and business services, Level 7 apprenticeships will remain funded by the growth and skills levy for new starters aged 16-21, an exemption that will “rebalance apprenticeship funding towards early careers entrants”;
- In digital and tech, there will be a £35 million investment in semiconductor skills through 300 electronic engineering bursaries, and a skills action plan for quantum computing;
- Investment in engineering skills of £100 million over three years to increase the pipeline of talent into clean energy and advanced manufacturing;
- An energy skills passport that means oil and gas workers can move into roles in offshore wind;
- £625 million to train “thousands” of new construction workers, including in sustainable construction skills’
- A £9 million creative careers service;
- A plan to ensure women make up 35% of the advanced manufacturing sector by 2035.
The government will also invest £54 million in a “global talent taskforce” to attract world-class researchers to the UK, starting this year. This will cover all eligible costs, such as relocation and research expenses, for researchers and their dependants coming into the UK.
“This is how we power Britain’s future – by backing the sectors where we lead, removing the barriers that hold us back, and setting out a clear path to build a stronger economy that works for working people. Our message is clear – Britain is back and open for business,” said Starmer.
Business secretary Jonathan Reynolds said: “Tackling energy costs and fixing skills has been the single biggest ask of us from businesses and the greatest challenge they’ve faced – this government has listened, and now we’re taking the bold action needed.
“Government and business working hand in hand to make working people better off is what this Government promised and what we will deliver.”
Dame Clare Barclay, chair of the industrial strategy advisory council and president of enterprise and industry for EMEA at Microsoft, welcomed the “strong focus on skills”.
“Commitments such as £187 million for the TechFirst programme will ensure the UK has the skills it needs to support our growth industries and seize transformative opportunities like AI,” she said.
Think tank the Institute for Public Policy Research noted that the UK has had 11 economic strategies in 13 years.
Harry Quilter-Pinner, executive director, said: “That chop-and-change approach wasn’t fit for purpose. Today’s industrial strategy finally turns a page, offering much-needed consistency, clarity and certainty for business.
“No industrial strategy pleases everyone. But this government’s clear focus on clean energy, defence and advanced manufacturing shows it’s serious about going green to boost the economy and create good jobs outside of London.
“The test now is whether this 10-year strategy moves from PDF to process. It must drive decisions across government – from scaling green supply chains to training skilled engineers- and be backed with funding beyond the current spending review. It can’t just sit on a shelf as a job well done.”
Neil Carberry, chief executive of the Recruitment and Employment Confederation, agreed that the test was whether the government could deliver on the strategy.
He said: “The inclusion of professional and business services, including recruitment and talent firms, in a government industrial policy for the first time is hugely welcome.
“Recruitment and staffing alone is worth £44bn per annum to our economy – and like other sectors, is included because it helps drive the whole economy. From infrastructure to food on the shelves, talent firms help every sector thrive.”
However, Carberry added that workforce issues still required “more attention”, with skills not featuring prominently in the recent spending review.
“Yet taking on workforce questions is how we tackle the systemic problems of lagging productivity, lack of skills provision and low confidence. If we address workforce needs, we can unlock £39bn every year of growth by giving companies access to the people and skills they need to build and grow.
“We will be pressing government to go further on this in both the industrial strategy and the growth plan.”
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