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What the Chancellor’s statement means for engineering

Professional Engineering

(Credit: Shutterstock)
(Credit: Shutterstock)

On Wednesday, Chancellor Rishi Sunak unveiled a range of measures aimed at supporting businesses as the furlough scheme gradually tapers off through until October.

Measures included VAT cuts for the hospitality industry, and a ‘Eat Out to Help Out’ scheme aimed to boosting restaurant visits during August. But there was also plenty of relevant content for engineering firms – particularly around recruitment and training, and green energy.

UK businesses who bring staff back from furlough and retain them until the end of January will be eligible for a £1000 one-off payment per employee, applicable to workers earning over £520 per month. A £2bn ‘kickstart scheme’ will fund six-month work placements for 16 to 24 year-olds on universal credit, covering national minimum wage, pension contributions and national insurance for 25 hours per week. Employers in England who take on new trainees will receive a £1000 grant per trainee, and there are grants for hiring apprentices too – £2000 for under-25s, and £1500 for over 25s, starting from August 1 for six months.

The statement will have been of particular interest for companies in green industries such as insulation and solar. There will be £1bn of grants to public sector bodies to improve energy efficiency, and £50m to improve the efficiency of social housing, as well as a further package of green measures announced separately. 

We gathered the thoughts of some in the industry. 

“Any funding that goes directly to companies to encourage them to take on apprenticeships is welcome, but we need to see the full details to see what a difference this will make to businesses and their recruitment intentions," says Bekki Phillips, Managing Director of In-Comm Training. 

“Firms are already receiving a £1000 grant to take on 16-18 year-old apprentices so we’re presuming the £2000 announced is on top of that or does it replace it? Likewise, can this be used in tandem with the Kickstart scheme, designed to get more young people back into work? If it can be, then this really is a gamechanger.

“With over 700 apprentices currently being trained at our three academies, we wanted to see specific support about protecting those currently studying so their jobs are safeguarded. The bonus for bringing a furloughed worker back could help in a small way, but I think we needed a bit more. We also wanted to see the Government look at funding a programme-led approach to apprenticeships, where we could train young people up to Level 2 and then find them an employer at the end – hopefully when the economy has picked back up again.”

“It’s hugely significant that the Chancellor has acknowledged the important role that the “green economy” can play as part of the country’s post-Covid recovery,” says Bean Beanland, Chairman of the Ground Source Heat Pump Association. “The heat pump industry will readily work with Government to deliver a high value investment plan that will get the UK moving to reduce carbon and greenhouse gas emissions, decarbonise heat and create new skilled jobs up and down the country.  Our members and our sector’s new training programmes, worked up with industry-wide collaboration, can ensure the highest quality deployment, provide upskilling for existing fossil fuel engineers and technicians and apprenticeship opportunities, and deliver a lasting legacy of near zero emissions heating and cooling in our homes and workplaces.   

“All that said, we ask Government to provide the heat pump sector with a clear and consistent policy framework that will enable our members, the wider supply chain and, crucially, the commercial customers and homeowners, to invest their money with confidence. This is a golden opportunity to contribute to the two biggest challenges of our time - the economic recovery and climate change, and is one that we cannot afford to waste. Heat pumps are a proven technology, and their deployment can be scaled up if the right long-term strategic polices are put in place.”

John Kitchingman, Managing Director at Dassault Systemes, says the Chancellor’s plan to increase funding for a green deal would enable the UK to capitalise on some of the benefits we have witnessed recently: reduced pollution, increased consumer demand for safer products and services, and decisions by many industries to review their current practices to put sustainability at the heart of their businesses.  

“As we embark on the journey to net zero, we need to ensure that every aspect of our society is sustainable – from the buildings in our cities to the products we design, the materials we source, the road from the factory to the consumer and even the treatments our patients get given,” he said. “The way to do so is by using virtual twins, which enable industries to create digital prototypes of anything from a shoe to a city. This reduces the risk of prototypes ending in landfill and provides the additional benefit of creating various scenarios to make the product, service or infrastructure project sustainable. The World Economic Forum announced that 2020 was going to be the year of sustainability. Support from the government will enable all industries to accelerate their move to a greener, safer and healthier future – a fundamental change if we are to align people, planet and profits in post-COVID Britain.”

Ritam Gandhi, Founder and Director, Studio Graphene, says: “The Government’s commitment to subsidise work placements and traineeship programmes is a positive investment in young people’s futures, and will ease the burden on SMEs; particularly those who have perhaps put their hiring plans on hold due to the uncertainty caused by COVID-19. It is the stimulus small businesses need to bolster their workforce as they return to normality.
 
“That said, further tax breaks and economic incentives are needed if we hope to catalyse SMEs for sustained economic recovery. Despite the scale of the Chancellor’s efforts to date, the future of many small businesses still hangs in the balance and they cannot wait until the Autumn Budget for a bolder stimulus package.”

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Content published by Professional Engineering does not necessarily represent the views of the Institution of Mechanical Engineers. 

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