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The Deputy Prime Minister announces a new ambitious action plan to help UK manufacturers to work together with British companies.

Deputy Prime Minister Nick Clegg shares news that a solid action plan dedicated to boosting manufacturing supply chains to deliver a multi-billion pound lift for British industry will be put in place from January.

Huge efforts have been made by government and industry to work together and implement Industrial Strategies for key sectors like aerospace and automotive. But there is yet to be a coherent plan put in place for the vital networks of suppliers that are crucial to making and building things in the UK.

View a set of infographics about Industrial Strategy on Flickr.

The ambitious action plan, to be published from the New Year, will encourage and support UK manufacturers to work together with British companies to produce the parts they need, rather than relying on overseas manufacturers. The government will work in partnership with leading employers to develop the plan in keeping with our approach to Industrial Strategy.

It will build on the work that the government has already done to help secure the growth of the manufacturing industry – including through theRegional Growth Fund, the Advanced Manufacturing Supply Chain Initiative, Reshore UK, the Manufacturing Advisory Service and greater support for employer-led skills training. But there is much more that can be done to unlock the potential of this part of our manufacturing sector.

Automotive sector

For example, while the UK automotive sector is one of our biggest manufacturing success stories, UK vehicle makers still import more than £11 billion worth of components annually, sourcing around 40% of their parts from domestic suppliers, compared to over 60% in Germany and France.

Renewable energy

By 2020, it’s estimated that there will be around £40 billion worth of renewable electricity projects in the UK and it’s been projected that the offshore wind sector alone could support 30,000 supply chain jobs by 2020 - yet only around 20% of the components needed to build our offshore wind farms are being sourced right now in the UK.

Focusing on supply chains

We now need to ensure we focus our attention on those supply chains that are the foundation of our manufacturing base. These are vital for all end manufacturers – whether its manufacturers of steel for car production, wings and control systems for planes. These industries rely day in day out on the parts they use – from the tiniest of nuts and bolts, to gearboxes and car seats and to vast wind turbines.

yesterday’s announcement will mean that, by early next year, the Department for Business, Innovation and Skills will publish and implement the action plan to address some of the challenges UK supply chains face in tackling skills gaps, adopting innovation and research, and ensuring more business finance to those British companies.

The Confederation of British Industry estimates that the UK could unlock around £30 billion and generate up to 500,000 more jobs over the next decade by supporting and strengthening our domestic supply chains through concerted action. .

Deputy Prime Minister Nick Clegg said:

Every successful company is only as good as its supply chain. The last four decades have seen the UK’s manufacturing base increasingly forced to compete with low-cost economies for investment, jobs and growth. Some businesses have struggled and it has resulted in a hollowing out of the UK’s domestic supply chains with over half the supplies used in British manufacturing coming from overseas.

This cannot go on. That’s why I’m acting now so we can get off this merry-go-round where every time a manufacturer shifts production overseas, the local companies that support them begin to disappear too. These supply industries are huge, important sectors in their own right – our steel makers, petrochemical companies, glass producers all the way down to car seats manufacturers – all of which employ thousands of people and generate millions for our economy but they need our support.