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How will the 2016 Budget affect engineering?

18 March 2016

Following the announcement of the new 2016 Budget, industrial companies comment on how it will impact the engineering profession.

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Dr Colin Brown, Director of Engineering at the Institution of Mechanical Engineers, said in response to the 2016 Budget:


“Given plans to make all primary and secondary schools academies by 2020, Government needs to urgently clarify the structure and legislation it plans to oversee the national teaching workforce’s professional learning as a whole, and not simply rely on the goodwill of individual head teachers. The speed of change in science technology engineering and mathematics mean that teacher professional development in these areas are essential if young people are to find out about the modern world of employment. In Scotland where schools are largely under a local authority umbrella, lifelong subject training is both valued and mandatory. We call on the Government in England to ensure that not only is professional training maintained, but extended to meet this vital need for high tech savvy teachers.

“Government plans to teach mathematics until the age of 18 for all pupils is very positive news. This will pose a challenge for establishing more imaginative ways of engaging the interest and ability ranges of all young people. Engineers use maths as a tool for solving real-world problems and this should be better reflected in school education. Many more school pupils will develop greater numeracy if they have an opportunity to experience problem-based learning.”


“The green light given for Crossrail 2 and High Speed Rail 3 is very welcome news. However it is vital that these investments fit within a wider integrated transport strategy. At the moment major infrastructure projects are being developed in isolation and a holistic approach would better serve passengers, tax payers and businesses.

“We suggest that government department’s work together to develop a strategy to incentivise and support the private sector, eliminating practices that create congestion on the public transport network, while it remains quiet at other times. Government would do well to learn and build on the experience of Crossrail ? a project that is being delivered on-time and on-budget. We need to be able to use the knowledge and people skills developed from Crossrail to ensure other rail projects in the UK can be delivered more effectively and efficiently.

“The announcement of plans for trials of driverless cars on the strategic road network by 2017 is positive but do not go far enough. Making all vehicles autonomous could prevent up to 95 percent of all traffic accidents and the widespread adoption of autonomous vehicles could bring billions of pounds to the UK economy. Government needs to take urgent action to resolve legislative, technological and insurance issues to help encourage the rollout of autonomous or driverless vehicles.”


“Plans to increase our dependence on electricity interconnectors to nine gigawatts is no silver-bullet to meeting the UK’s electricity demand. A greater reliance on interconnectors to import electricity from Europe and Scandinavia is likely to lead to higher electricity costs and less energy security. Currently there are insufficient incentives for companies to invest in any sort of electricity infrastructure or innovation. Government needs to introduce measures to encourage reducing electricity demand. We need to take urgent action to work with industry to create a clear pathway with timeframes and milestones for new electricity infrastructure to be built including fossil fuel plants, nuclear power, energy storage and combined heat and power.” 

In the 2016 Budget, Chancellor George Osborne failed to announce updates to the Apprenticeship bill and levy.

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With a continued strain on productivity and learning, the Chancellor has missed a crucial chance to address the skills gap and create business incentives for the energy industry.

Tanuja Randery, President UK & Ireland, Schneider Electric commented on this:

“The chancellor faced some tough calls as he looked to balance the need to bolster UK investment to stimulate growth, whilst finding an additional £4bn in savings. However, more could have been done to address the UK’s ability to train, recruit and retain skilled people to drive innovation.

“It’s a shame that the apprenticeship bill remained unchanged in the budget, missing a crucial chance to deliver meaningful impact in productivity and learning. I’d like to have seen updates to the bill to create more of a partnership with businesses and incentives for the investment in the long-term skills and future of the UK workforce. If the levy is to deliver meaningful impact in the areas of productivity and learning, more must be done to ensure the apprenticeships are focused on the areas of skills shortages, with businesses given more room to influence the qualifications available through the program.

“Without a real focus on addressing the ever-widening skills gap, the UK will fall behind in the global economic race. Today, technology is no longer a challenge. There are tools and solutions available that can drive efficiency in our homes and commercial buildings, automation can strengthen production and drive down costs in our industrial plants and smart grid technology can help integrate renewables into our grid to ensure consistency of supply. But without the right skills, none of these projects or their benefits can be realised.”

“The government and private sector must come together to forge a plan to develop, attract and retain a diverse skill set if we are to win the war for talent. This means revitalising the UK’s apprenticeship programmes, upskilling existing workforces and encouraging students to pursue careers in the STEM subjects. At Schneider Electric, we’ve committed to offering over 50 UK apprenticeships each year to 16 to 25 year olds as well as a partnership with the Institute of Engineering and Technology (IET) to support the continued professional development of our engineers and technicians.

“Investment in skills today will pay dividends for generations to come, enabling the UK to harness the technological innovations to deliver projects that improve business and communities and deliver economic growth.”

Following the announcement at the Budget that growth has been revised down to 2 percent, Earl Yardley, director at Industrial Vision Systems, a supplier of machine vision systems to industry, comments on UK manufacturing.

He believes that UK manufacturing must be at the centre of a better-balanced economy and industry must continue to invest in cutting edge industrial automation to drive manufacturing growth.

"Whilst the chancellor has highlighted in his Budget speech that growth has been revised down to 2 percent, with the UK economy still growing faster than any other western economy it is vital to remember that the manufacturing sector is key to ensuring a healthy and positive outlook. Adoption of automation technology is growing rapidly and at Industrial Vision Systems we have witnessed clear evidence that UK manufacturers are adopting standard manufacturing principles which have been used in German manufacturing for many years, and this has resulted in a transition which has seen the performance of the manufacturing sector in the UK change significantly through continuous investment, and all for the better. UK factories continue to make products that are more competitive now than at any time in the modern era. This is exactly why UK manufacturing must be at the centre of a better-balanced economy and industry must continue to invest in cutting edge industrial automation to drive manufacturing growth and stay competitive."

Click here for more information on the 2016 Budget.

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