UK manufacturers say industrial strategy aid is patchy

Fluke's research found that fewer than one in three UK manufacturers have received direct grant funding linked to the Government's Industrial Strategy. It also found that 61% of UK respondents said they had benefited from the strategy in some way.

The findings suggest a gap between broad support for industrial policy and the direct financial help reaching manufacturers. Among UK businesses surveyed, 28% said they had received direct grants, while 24% said they had benefited from research and development tax incentives or credits.

That left the UK behind Germany and the United States on tax support. In Germany, 28% of respondents said they had benefited from R&D tax incentives or credits, compared with 34% in the US.

Skills support also appeared limited. Only 32% of UK manufacturers said they had hired or trained staff through government-backed programmes, even though workforce readiness remains a challenge for many employers.

When asked what barriers were preventing their workforce from using technology, 35% of UK respondents cited inadequate training or support. The research adds to wider concerns in manufacturing over labour shortages, retraining needs and the pace of technology adoption in factories and industrial sites.

The survey was conducted by Censuswide for Fluke among 600 respondents at manufacturing companies in the UK, Germany and the US across food and beverage, oil and gas, life sciences and automotive. Of that total, 199 respondents were based in the UK.

Delivery gap

Paraic O'Lochlainn, Vice President of eMaint, a Fluke brand, said the issue was no longer whether industrial policy mattered, but whether businesses could access meaningful support.

"One year on from the launch of the UK's Industrial Strategy, the case for strengthening domestic manufacturing has become much harder to ignore. Recent geopolitical tensions and continued pressure on global supply chains have shown how important it is for the UK to have the skills, infrastructure and industrial capacity to stand on its own two feet."

"There are encouraging signs. The strategy has helped bring industry back into the national conversation, creating momentum around investment and workforce development. But many manufacturers are still waiting to see those ambitions translate into tangible support on the ground."

"Skills remain one of the biggest challenges affecting businesses. Fixing the apprenticeship system is a start, but it will not be enough on its own. Our research found that only 32% of manufacturers have hired or trained staff through government-backed programmes, despite 90% saying skills shortages are having a direct impact on their organisation."

"Closing industrial skills gaps requires a bold, integrated approach that brings together education, industry and government to rapidly upskill the existing workforce and develop the future one. The same applies to technology adoption. If UK manufacturers are going to compete globally, they need greater support to invest in the tools and innovation that drive resilience."

"Despite significant public investment in industrial policy, fewer than one in three manufacturers report receiving direct grant funding, with the UK trailing competing markets when it comes to incentives for R&D. If the UK is serious about reshoring, reindustrialisation and long-term resilience, the next phase of the Industrial Strategy must focus on delivery."

"Manufacturers need easier access to funding, stronger support for workforce development and greater incentives to invest in innovation. The ambition is there, but turning that ambition into lasting economic growth will depend on how effectively businesses are enabled to act on it."

The research suggests many manufacturers see some value in the Industrial Strategy, but more targeted support has yet to spread widely. While a majority reported some benefit, the lower figures for grants, tax incentives and training schemes suggest direct intervention has not reached much of the sector.

That matters because manufacturers are facing several pressures at once. Businesses are dealing with supply chain disruption, skills shortages and investment demands tied to automation and digital tools, while trying to improve productivity and remain competitive against overseas rivals.

The comparison with Germany and the US is likely to sharpen questions about how the UK uses industrial incentives. Tax support for research and development is often seen by manufacturers as a practical way to encourage plant upgrades, process changes and product development.

Training support is another test of whether industrial policy reaches the factory floor. The finding that more than a third of respondents see inadequate training or support as a barrier to enabling workers to use technology suggests capital investment alone may not be enough.

For employers trying to modernise operations, access to people with the right skills can be as important as access to finance. The survey indicates that, for many firms, both remain constrained.

Only 28% of UK respondents said they had received direct grants, and just 32% said they had hired or trained staff through government-backed programmes.