Invest to be the best!

So why is the UK so reluctant to invest? Of course, there is a myriad of reasons – from short term-ism to a traditional attitude of if-it-aint-broke-don’t-fix it – but what many of them boil down to is a lack of knowledge, not just about the technology and potential benefits, but also about the available finance opportunities. This has been highlighted in a recent report from Make UK, NatWest and Lombard, which found that investment levels amongst the UK’s manufacturers could be boosted by up to £10 billion in the next year if they were to take advantage of the range of public and private finance options available to them.

Such a boost would, asserts Make UK, raise the investment potential of the sector overall by up to a fifth and help address the UK’s long-term productivity weakness. Furthermore, the report shows that more than a quarter of companies (26%) would increase their investment by up to a fifth if access to finance was improved, while more than one in ten (12%) would increase their investment by up to half. However, the report also showed that more than half of companies (54%) are unaware of the range of public sources of finance and government schemes tailored towards manufacturers.

Boosting investment is critical to the sectors’ efforts to improve productivity and innovation performance given the top priorities for investment are capital equipment (62%) while access to finance will be required for investment in automation and energy efficiency by a third of companies (32% and 31% respectively). Furthermore, the report also shows almost three quarters of companies (70%) said that investment would not take place without access to finance, while just under a third (30%) said their investment would have taken place without any access to finance.

The report shows that, as well as improved awareness of private financial options available to manufacturers, there needs to be far greater awareness of the public sources of finance and Government schemes. More than two thirds of companies (67%) have not heard of the Horizon Europe programme, while a lack of awareness of domestic schemes such as the Government’s flagship management Help to Grow scheme (61%) and British Business Bank (58%) is also alarmingly high. By contrast, just 2% of companies have successfully accessed the Horizon programme, 14% accessed the Help to Grow scheme  and 12% accessed the British Business Bank. According to Make UK, this means Government must be cautious before scrapping schemes that companies are unaware of.

To improve manufacturers’ awareness of the range of public and private finance available Make UK is calling for a centralised database which would signpost both public and private provision. Could this be the magic bullet that will get UK industry investing? Probably not, but there's no doubt that it would make a positive contribution.

Charlotte Stonestreet

Editor