Industrial Strategy Green Paper (abridged)

This Green Paper outlines proposals which may form a UK industrial strategy. The Department for Business, Energy and Industrial Strategy are inviting responses to the proposals alongside their programme of engagement. Responses are requested by April 2017 after the Spring Budget. Respondents do not need to answer all of the questions. This paper sets out the key ideas.

Section 1 — Supporting Sector Deals and Local Leadership

Plans to strengthen institutions to complete “sector deals”

The Green Paper sets out a tentative role for local authority leaders. Local authorities in successful clusters help local industries to thrive by coordinating policies on planning, transport, skills and quality of life.

The Green Paper proposes more business expertise within local government. It mentions creating an “Alderman” role in local government. The Government wants to work with local areas to identify and help develop local specialisms.

The Government believes leadership can boost innovation and support skills. It proposes to strengthen existing networks such as university collaboration. It will support the new bodies including research institutes.

The Government wants every area to have “bodies” capable of identifying emerging strengths and developing policies and targetted investment at local and sectoral levels. The Government will also bring forward a single view of sector specific skills gaps for the UK to help local leaders.

To assist local leaders, there is likely to be a slate of reports and reviews. The Green Paper sets out the Government’s intention to conduct reviews on

  • how to improve business networks and improve access to capital for firms, particularly outside of London and the South East.
  • how Local Enterprise Partnership and Research Council Laboratories support local growth
  • on the potential relocation of Government agencies, cultural assets and quangos
  • On entrepreneurship by the new Chief Entrepreneurial Advisor
  • Long-term investment (“patient capital”) with a consultation paper in the Spring
  • Best practise in University “spin-out” companies which aim to commercialise research
  • Support “sector deals” to shape local economic growth

The Green Paper said Departments will work with those leaders who engage all companies and major sectoral players willing to nurture supply chains. The Government will encourage “sector deals” with a strong focus on local institutions and universities who can apply for research funding.

Sectoral deals will be underpinned by plans which commit the sector to raise productivity and investment along the supply chain, promote competition and innovation, stimulate clusters and exports, commercialise research and support high value jobs. The Government will strike sector deals with local leaders putting forward plans for industry sectors and their supply chains.

Section 2 — Boosting research and innovation

Boosting R&D investment and commercialising research

The Green Paper invites views on supporting research and innovation in local areas. The Fund will allow UK Research and Innovation to support industrial R&D activities through joint-research projects, graduate placements and creating centres to bring together academics and firms.

The Government may consider expanding Higher Education Innovation Funding (HEIF) and Knowledge Transfer Partnerships (KTPs) which place PhD students into companies. The Government will also review best practise in University spin-outs and pilot placing representatives of the Intellectual Property Office in the Northern Powerhouse and Midlands Engine.

The Government will also a publish a UK measurement strategy following a consultation last year. The strategy would allow investment in research and infrastructure for the metrology sector. This matters for manufacturers of thermometers and measurement instruments

The Government will drive up private R&D investment and is inviting views on the priorities for UK Research and Innovation to target up to £4.7bn of additional investment by 2020. The recently created body is already looking at robotics, clean energy and biotechnology through the Industrial Strategy Challenge Fund. It will look at the mass market potential of 5G and battery technology.

Public Procurement and Local Economic Growth

The Government will also publish new guidance for public bodies how to drive up innovation. This may include specifying intellectual property arising from contracts may also be retained by the supplier. It will also roll out ways of gathering feedback from suppliers in public sector procurement. The Green paper asks what further steps can be taken.

The Green Paper outlines key aspects of globally competitive clusters. Local areas may have “anchor businesses” to attract skilled workers to an area and stimulate spin-off firms. Finance supports entrepreneurship and this may be through local venture capital networks and investment funds attached to specific universities to support spin-offs and commercialised research.

Section 3 — Local Economic Areas supporting firms and exports

Local Economic Growth and Supporting Firms

The Government will also explore how to make available data to local organisations to identify businesses which are ready to expand quickly (“scale-up”). The Green paper sets out that local economic growth strategies should focus not only on high-growth scaleups but also on businesses with ambitions for steady or moderate growth.

The Government proposes to work in partnership with Local Enterprise Partnerships (LEPs), Growth Hubs and the private sector to enable the timely delivery of scale-up plans across the country Strategic partners working with firms identified as “fast-growing” will include universities, business schools, business bodies, associations, and the private sector to build peer-to-peer business networks specifically for fast-growing firms.

Supporting trade and investment for sectors and local areas

The Department for International Trade will be more responsive to local priorities and opportunities through better relationships. It has established teams for the Northern Powerhouse and Midlands Engine to organise trade missions in order to attract investment. Further work may be explored to ensure a UK presence in international trade fairs alongside grants.

The Government will review inward investment promotion and report in 2017. The Department for International Trade Capital Investment Organisation will support the marketing of local regeneration projects to international investors. This may include creating trade fairs for emerging sectors and working with behavioural insight teams and HMRC to target exporters.

Section 4 — Addressing the Skills Gap

Reforming Vocational Education/Further Education

The Government will address concerns that further education providers can meet employer demand for higher level technical qualifications. From September 2019, qualifications will be rationalised to 15 “core technical routes” providing progression at 16 and 19 to the “highest skill levels” and a work placement The Government will rationalise higher level qualifications to a standard framework delivered by Further Education or new Institutes of Technology in each city.

The Government will set out a UCAS style information and advice service for choosing vocational educational routes. There will also be a new strategy for the provision of careers information, advice and guidance after a review of international evidence and current provision. This may align with plans for signposting and promotion of online training for people considering retraining.

Targetting local areas with educational underattainment

The Government will work with local areas to test approaches to close the skills gap. It mentions support for local approaches to improve pre-school education, graduate retention, increase take-up of apprentices. This is for areas where skill levels are “too low”.

The Government will review policy to ensure young people leave education with a good standard of maths and english. Students with gaps in basic skills at 16 will be able to take a “transition year” to help ensure all young people are employable through catching up in education.

The Government will train 2,500 specialist maths and physics teachers by 2020. Colleges may be supported to become centres of excellence in teaching maths and english. The Government will also review the model of “maths free schools” and seek (academy) partners to expand provision.

Section 5 — Providing Certainty for Infrastructure Investment

Boosting private sector investment into the economy

The Government accepts that there is a lack of join-up between local infrastructure need and national infrastructure policy. The Green Paper proposes that the Government will take account of the balance of spending per head between different regions when assessing the value for money for infrastructure projects. Regional strategic transport bodies will align transport infrastructure projects with local economic priorities and the roll out of SMART ticketing.

Infrastructure policy has also been moved from Government to delivery agencies. The National Infrastructure Commission will oversee the National Infrastructure Delivery Plan 2016–2021 to be implemented by the Infrastructure and Projects Authority. A “balanced scorecard” will measure progress for all major construction, infrastructure and capital investment projects over £10 million.

Supporting Clean Energy and Reducing Business Costs

The Government is committed to a programme of research and innovation in energy storage, smart technology for the national grid and the roll-out of public charging points for electric vehicle and smart meters in homes and commercial premises. There will be a business case for a new research institute to support this and an Emissions Reduction Plan to give certainty to investors.

The Government will set out in 2017 a long-term roadmap to minimise business energy costs. This will be after a review of opportunities to reduce the cost of decarbonisation including in offshore wind. This will inform the industrial strategy on the issue of containing or reducing energy costs.

Note: This is based on a recent publication by the Government. It isn’t intended to be comprehensive. All errors are my own