Transformative Sector Deal outcomes will need clear guidance from government

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Sector Deals are a new concept as part of the Industrial Strategy. Under this approach instead of government researching and prioritising sectors (and being accused of ‘picking winners’), sectors instead are asked to come together themselves and set out their ambition to win on their own terms.

A discussion would then take place with government on how it can support or enable that ambition.


But how should a sector go about putting together a Deal? What does the process look like? What are the timescales and expectations? The Green Paper set out some answers but there are several other questions that need answering.

 

EEF has been working with our members and trade associations across manufacturing and engineering to understand what value Sector Deals could bring for industry, what the ambition from industry looks like and what information they need from government to help them craft Deals.

This builds on our work looking at what is missing from the Industrial Strategy published earlier this week.
In a new paper published today “Unlocking business ambition through an improved Sector Deal Framework” we set out our findings. This blog explores the key messages.

Sector Deals could bring considerable value to industry and the wider industrial strategy

Getting the Sector Deal framework right could provide support for the overall industrial strategy by allowing companies to feel the tangible and specific vertical benefits for their sector. But business support for the idea shouldn’t be seen as a done deal.

As a new concept manufacturers are understandably lukewarm in their support, our survey found in aggregate that most want to see policies kept at a national level. However over time this may change with sector focussed support on technology diffusion leading the pack.

sector-paper---rush-to-sectorise-lukewarm

Aside from providing tangible benefits, there are several other reasons why a sector-specific approach could be useful. Sector Deals could:

  • Ensure the industrial strategy goes with the grain of sector activity – by aligning national ambition with sector ambition.

  • Help mitigate supply chain disruptions caused by structural economic changes such as Brexit – by strengthening UK supply chain linkages around shared ambition

  • Provide foresight for government on the economic direction of travel – through a sustained dialogue with sectors, the process will serve as an early warning of looming challenges on the horizon

But with some sectors already putting together Deals, the overriding message from industry is the need for guidance from government

The lack of guidance risks businesses spending time developing Deals which collapse as they don’t meet government expectations. That risk would not just undermine the Sector Deal approach but the industrial strategy as well.

Our paper sets out in detail the questions government must provide answers to on the Sector Deals process, including clarity on the sign-off process, transparency around the criteria on which different bids will be selected and the policy areas that are out of scope.

In the absence of guidance what should sectors be doing?

The first steps sectors can take to develop strong deals is outlined in our paper, which provides advice and examples to businesses and industry leaders about the initial questions they should be seeking to answer.

These include developing a shared ambition for the sector and the contribution it makes to the UK economy, outlining what issues the sector can solve on its own and where Government intervention and funding could help.

You can download the full paper here.

Author

Head of Business Environment Policy

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