Last week, the UK government unveiled its long-awaited Modern Industrial Strategy; a ten-year plan to accelerate growth in eight priority sectors, including advanced manufacturing, engineering, defence, clean energy, and digital technologies. At the heart of the strategy is a renewed focus on skills investment, recognising that a strong and adaptable workforce is fundamental to industrial growth. Insignis explores further what this means for manufacturing…
Major investment in skills and education
To deliver on this vision, the government is backing the creation of Technical Excellence Colleges, with a strong emphasis on engineering and defence. These institutions will deliver high-quality vocational training and help bridge the growing skills gap in technical industries.
Sector-specific skills packages
- Engineering: Over £100 million will be invested over three years to expand engineering talent pipelines through further education, higher education and apprenticeships.
- Defence: Funding will support the creation of new educational facilities to train personnel in cutting-edge defence technologies.
- Construction: A £600 million package will train 60,000 new workers, focusing on areas like digital construction and major infrastructure delivery.
- Technology: The TechFirst initiative, worth £187 million, will support graduate and professional training in fields such as AI, cybersecurity and digital manufacturing.
These investments reflect a broader shift towards industry-led training models that can quickly respond to evolving workforce demands.
Launch of Skills England and apprenticeship reform
As part of a wider reform of apprenticeships, the strategy introduces shorter-duration engineering apprenticeships from August 2025. New foundation-level apprenticeships will also help widen participation among younger learners and career switchers. The existing Apprenticeship Levy will be reformed into a more flexible Growth & Skills Levy, designed to support both large and small businesses more effectively.
Addressing the engineering skills shortage
In response, MakeUK has launched the Industrial Strategy Skills Commission, co-chaired by Robert Halfon and Tom Watson. The Commission aims to gather industry input and provide evidence-based recommendations on how to close skills gaps in manufacturing and engineering.
We’ve seen that industry reaction to the new strategy is largely positive. Along with MakeUK, the Institution of Mechanical Engineers and the CBI have welcomed the government’s focus on engineering. However, they stress that real progress will depend on timely implementation and sustained investment.
Supporting business growth and innovation
A total of £4.3 billion has also been committed to advanced manufacturing, including £2.8 billion for R&D over the next five years. These measures are designed to support innovation, productivity and job creation. This will particularly benefit high-value sectors such as aerospace, automotive and electronics.
While these commitments are welcome, some worry that elements of the plan repackage existing programmes under a new umbrella and others believe that the scale of new funding remains modest relative to the ambition.
What’s next?
Funding for skills and industrial growth will also be devolved to local and regional authorities, empowering Mayoral Combined Authorities and Local Enterprise Partnerships (LEPs) to tailor support to local needs. This is expected to benefit regional clusters, such as the North East Process Industry Cluster and Midlands manufacturing hubs.
A step in the right direction
The focus on technical education, apprenticeship reform and regional collaboration is a welcome recognition that people are the foundation of industrial success. If delivered effectively and with genuine, continued partnership between government, industry and educators, this strategy could redefine Britain’s place in global manufacturing for decades to come.
