Sector deals success requires transformative guidance

11th August 2017
Source: EEF
Posted By : Anna Flockett
Sector deals success requires transformative guidance

The Government is being urged to set out clear guidance for British manufacturers on the rules of engagement for industry Sector Deals ahead of the forthcoming Industrial Strategy White Paper, so that these Deals are in place in time to help mitigate the impact of Brexit on industry supply chains. The call was made by EEF, the manufacturers’ organisation in a paper: ‘Unlocking business ambition through an improved Sector Deal Framework’

In addition to making recommendations on what Government guidance should include, the paper also sets out the steps that sectors must themselves take to show leadership and come together to engage with Government.

According to manufacturers a focus on sector specific challenges could help them secure positive outcomes. New EEF survey data published today shows manufacturers want higher levels of productivity (54%), increased exports (33%) and increased investment in training (31%) to be the outcomes that Sector Deals target. These outcomes can be realised more quickly as part of the Sector Deals process if government brings forward detailed guidance on the rules of engagement.

EEF is warning, however, that a failure to provide such guidance means sectors could spend considerable time developing Deals which then collapse as they don’t meet Government expectations. Should this happen, EEF fears business may then disengage from aiming for Sector Deals, with a risk of undermining the Government’s Industrial Strategy aims.

Commenting, Chris Richards, Head of Business Environment Policy at EEF, the manufacturers’ organisation, said: “Industry sector deals have the potential to make a significant and positive contribution to a post-Brexit industrial strategy. However, the Government’s Green Paper left a number of questions unanswered around the process and timescales for deals which could hold back companies from engaging.”

Richards added: “Guidance on the role of different departments and what realistically they can and cannot do will support this process of engagement and help companies form rational expectations. There are urgent questions that need to be answered in guidance to support the ambitions of different industrial sectors.”

Chris Aylett, CEO of the Motorsport Industry Association (MIA) commented: “The UK ‘s high performance engineering and motorsport sectors welcome the Sector Deal concept as we can see, if handled correctly, these could increase productivity in our sector, but success will rely on guidance from Government.”

He continued: “Timescales for specific actions needed from sector leaders is critical so that limited resources are not wasted and it would help to know soon which sectors will be prioritised. We particularly support the idea of ‘task and finish’ deals which can be dissolved when completed”.

EEF believes that by having closer links with specific sectors, Government would also gain foresight on the economic direction of travel and intelligence on future challenges such as potential supply chain disruptions as a result of Brexit.

According to EEF, Government guidance must include detail on:

  • Clarity on the sign-off process for Deals. This would enable better industry-government engagement and allow sectors the time to organise themselves and come up with robust proposals for a deal.
  • Transparency around the criteria on which different bids will be selected. Transparency on the criteria to be used is essential to prove the new approach will not be confined to traditional industries and that sectors based on emerging technologies will have the confidence to develop deals.
  • The policy areas which are out of scope. Given deals may go beyond the Department for Business, Energy and Industrial Strategy, it will be essential to specify which government departments will be involved in engaging with sectors and delivering targeted interventions, as well as what policy areas may be out of scope.

The paper also sets out the first steps sectors can take to develop strong deals and provides advice and examples to businesses and industry leaders about the initial questions they should be asking. These include developing a shared ambition for the sector and the contribution it makes to the UK economy and outlining what issues the sector can solve on its own and where Government intervention and funding could help.

The industrial strategy green paper set out Sector Deals as a new concept. Under this approach instead of government researching and prioritising sectors (and being accused of ‘picking winners’), sectors are instead asked to come together themselves and set out their own aims and ambitions to meet the challenges they face. The process is modelled on ‘place’ based Deals which have taken place as a result of devolution.

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