The UK manufacturing sector is calling on the Treasury to release £1 billion in unspent levy funds to address critical skills shortages. According to a Make UK report, the sector’s future hinges on access to advanced skills, with digital transformation and AI poised as key productivity drivers. The report highlights that 99% of manufacturers see skills supply as vital to growth, and half identify it as their main challenge.
The current education system is failing to deliver the necessary skills, with 39% of companies expressing concerns. Make UK warns that the Industrial Strategy’s success is at risk unless this issue is addressed. SMEs, in particular, face barriers to scaling up due to talent shortages, a persistent weakness in the UK economy.
Make UK urges the Treasury to allocate the unused levy funds to support employer investment in training, describing it as an “extra tax on business.” The organisation asserts that this funding could facilitate 235,000 new apprenticeships, crucial for tackling youth unemployment. Robert Halfon, Executive Director of Make UK, emphasises the urgency, stating, “Industry is committed to investing in the talent pipeline, but we need the right policy levers.”
The report reveals that 53% of manufacturers believe the education system can deliver the right skills, yet a significant minority disagree. Leadership and management skills are critical for SMEs to scale up, and using existing business revenues to boost the skills budget could prevent counterproductive decisions on apprenticeship funding.
The future of manufacturing will be shaped by investments in digital transformation and AI, with 65% of companies planning significant investments in the next five years. The survey, conducted among 148 companies from 8 to 26 January, underscores the pressing need for government action to ensure the UK manufacturing sector remains competitive.
For more information, visit Make UK’s website at www.makeuk.org.
