UK Industrial Strategy Sector Plans | Advanced Manufacturing

New British Industrial Competitiveness Scheme from 2027 to reduce electricity costs by “approximately £35-40/MWh up to 2030” for electricity-intensive industries. Eligibility is “to be determined”, but eligible businesses will be exempt from paying costs of the Renewables Obligation, Feed-in Tariffs and the Capacity Market.

Government will also support the development of the Corporate Power Purchase Agreements market in the UK “as a potential route for energy consumers to secure more stable electricity prices for the long term”. Though there is no real detail on how this market will be supported. Useful detail on CPPAs can be found here.

A “significant scaling up” of the British Business Bank’s (BBB) capacity to make equity investments in Advanced Manufacturing scale-ups, including via funds. Additionally, BBB will invest in and build capability of specialist deep tech and Advanced Manufacturing VC fund managers.

BBB and the Intellectual Property Office will explore how to best support lending to IP-rich firms and encourage new IP-backed lending products. A new working group looking at barriers to lending for IP-rich businesses will publish an update and next steps by the end of 2025.

UK Export Finance will launch a new loan guarantee scheme for domestic suppliers selling critical minerals products to UK exporters, aiming to “protect UK exporters from geopolitical risks and bolster supply chain resilience”.

Although examples are limited, the Government expresses its goal to introduce “regulatory reform where possible to drive innovation and invest in technologies which are critical for improving productivity and competitiveness, including AI”, and the need to “ease administrative burdens” is recognised throughout the Plan.

Procurement targets will be set for direct spend with small and medium-sized businesses, with additional provisions to exclude suppliers if they do not pay their contractors on time.

The Plan explicitly sets a “35 by 35” target, aiming to increase female representation in the Sector to 35% by 2035. However, aside from the creation of an “Equality Charter”, no real details are given on how this will be achieved.

The National Wealth Fund “will seek to deploy significant capital across the whole of the electric vehicle supply chain over the course of this Parliament to support our growth ambitions, including a commitment to deploy at least £5.8 billion to five key areas: gigafactories and the electric vehicle supply chain, green hydrogen, carbon capture, ports, and green steel”.

Full implementation of the Automated Vehicles Act by 2027, removing the need for a safety driver and “enabling the self-driving car industry to thrive”.

Pavement delivery robots, e-scooters, and last mile delivery vehicles to benefit from reformed legislation, “when parliamentary time allows”, to provide a more agile regulatory process, in the hope of driving investment in and usage of these forms of vehicles.

Battery Innovation Programme (formerly Faraday Battery Challenge) to be expanded with £452 million of investment, with increased grant funding, R&D funding and initiatives to support academic collaboration with industry to “drive innovation from lab to factory”.

Regulatory levers and a Circular Economy Taskforce to “increase battery collection rates and encourage best practice in end-of-life management”, aligning with EU Battery Passport requirements by 2027, with proposals to be announced in Autumn 2025.

Large scale battery energy storage systems recognised as important for future economy, but no clear plans yet for encouragement of this industry.

Support Sustainable Aviation Fuel (SAF) production with £63 million of funding for 2025 to 2026 via the Advanced Fuels Fund, and seeking to “derisk SAF projects by introducing a revenue certainty mechanism that will provide a guaranteed price for SAF and attract investment into the UK”.

Future of Flight programme to support development of drones, eVTOLs and other advanced air mobility aircraft, aiming to “deliver the regulation, technologies, and infrastructure required for routine use”.

“Transforming our extended pipeline of small and micro-businesses into more consolidated and focussed companies with viable long-term commercialisation plans”, though with no precise detail on how this will be achieved.

Private Investment Framework for Space to use public funding to attract and channel private capital into relevant technologies, with up to £135 million across various existing programmes (including via the UK Space Agency) for grants, R&D infrastructure and match-funding.

An initial £50 million for Phase 1 of a new National Materials Innovation Programme (NMIP), intended to develop pilot schemes for “the development and adoption of strategically important materials”.

AI and machine learning tools to “be used to create approximately 20 new verification services that will support the development of new or improved products and provide guidance on best practice”.

At least £200 million for the Farming Innovation Programme, expected to boost private investment into the sector by de-risking with elements of public funding.

Agri-Tech Export Accelerator Programme to upskill and help businesses sell high-growth potential agri-tech solutions globally.

Additional grant funding to be used to “provide critical evidence of operational feasibility and return on investment, so farmers can have the confidence to invest” in new technologies.