Autumn Statement – what it means for Manufacturers and Engineers
Posted On November 30, 2015 By Hannah Farmborough
Chris Coopey, Head of our Manufacturing sector, muses on what the Autumn Statement did for manufacturers and engineers.
“Of course the headlines were all around the climb-down on Tax Credits, but George Osborne’s Autumn Statement also impacted on manufacturers and engineers on a number of levels.
Foremost perhaps was the further detail put around the Apprenticeship Levy. With a strategy that some would describe as a Payroll Tax, the Chancellor announced that for companies with a wages bill of £3 million or more there would be a 0.5% charge to fund apprenticeships. This new levy is predicted to raise around £3billion and fund around 3 million apprenticeships. If standards (and numbers of potential engineers) is driven up it may be a worthwhile sacrifice, but the proof of that particular tax pudding will take some time to become apparent.
A likely reduction in funding to the Department for Business, Innovation & Skills (BIS) was flagged some time ago but with the detail becoming apparent there have to be real concerns. Given the role of the department in championing many of the areas vital to the manufacturing and engineering sector including innovation and skills any cut is likely to have a negative effect.
Looking at education more broadly, the current area review of Further Education (FE) where much apprenticeship training takes place will surely result in some consolidation, but at least the Chancellor has protected ‘core funding’ for 16-19 year olds and adult skills training. Sadly, ‘protecting’ is likely to be preserving funding at present levels, which means that inflationary pressures will eat away at the value of that core funding. Thus FE is not wholly out of the woods.
There was better news for the budget around support for science which has been increased to £4.7 billion, signalling more support for developing innovative businesses.
Also on the positive side, the Chancellor is set to exempt energy intensive sectors from the costs of renewables – recognition that high energy users need a fair deal if they are to be competitive.
All in all, a mixed bag for Manufacturing & Engineering sector, and certainly nothing that is going to move the UK’s economic equation towards a rebalancing any time soon”.
If you would like to discuss any of these issues in more detail or you would like to speak with a member of our team, please contact Hannah Farmborough or call on 0207 429 4147 to be put in contact with your local representative.