The government’s refreshed industrial strategy pairs energy relief, capital and skills programmes — but firms will need stronger procurement, P2P automation and data discipline to qualify for support and convert savings into lasting competitiveness.
The UK’s refreshed industrial strategy is more than a policy statement: it is a coordinated package of energy relief, capital and skills programmes intended to reset the conditions facing British manufacturing. According to the government’s “Powering Britain’s future” press release on 22 June 2025, the Modern Industrial Strategy includes the British Industrial Competitiveness Scheme, which the government says will cut electricity costs by up to 25% for more than 7,000 energy‑intensive businesses from 2027, alongside measures to speed grid connections and raise support for heavy industries. That energy relief sits alongside long‑standing capital commitments — notably a £4.5 billion package announced by HM Treasury in November 2023 targeted at strategic sectors such as automotive, aerospace, life sciences and clean energy — and a detailed Advanced Manufacturing Sector Plan published on 23 June 2025 that sets out specific ambitions for digital adoption, decarbonisation and regional cluster growth.
Taken together, these moves amount to a rare alignment of public incentives. But policy alone will not deliver a manufacturing renaissance. Companies must demonstrate the operational discipline and data maturity that make them credible recipients of grants, tax relief and low‑cost energy. Simply put, the prize is large; the entry ticket is better controls, transparent reporting and integrated systems.
Show me the controls: why procurement and P2P matter
Much of the new funding is conditional on credible investment plans and measurable outcomes. That creates a practical barrier for firms still operating with fragmented finance and procurement processes. Government announcements and sector plans emphasise commercialisation, scale and supply‑chain resilience — criteria that require clear financial visibility and robust procurement governance.
Industry benchmarking underlines the point. Research from the Institute of Finance & Management shows that accounts payable teams that automate core processes achieve materially lower per‑invoice costs, faster cycle times and stronger controls than those that remain manual. These are the levers funders and auditors will seek when assessing grant applications or approving government‑backed finance. SoftCo and other vendors argue that end‑to‑end purchase visibility and P2P automation shorten approval cycles and improve spend compliance; vendors’ case studies report large efficiency gains among early adopters, though these figures should be read as vendor‑reported outcomes rather than independent audits.
Energy savings: a means, not an end
For many manufacturers, the headline figure will be the potential 25% fall in electricity bills from 2027. The government frames this as a structural change to improve industrial competitiveness; the Treasury and sector plan documents present it as one pillar of a broader package that also includes billions for R&D and skills. The crucial managerial question is how to deploy the recurring savings: reinvest in plant and automation, accelerate decarbonisation, or shore up margins against future volatility.
Operational automation is a pragmatic use of freed‑up capital. Automated invoice processing, for example, reduces manual errors, cuts processing times and improves supplier relationships — outcomes supported by IOFM benchmarking. Vendors also report that automation frees finance teams for higher‑value tasks such as analysis and supplier negotiation, which in turn can improve procurement outcomes and strengthen applications for public funding. Again, these benefits are well documented in industry studies, but firms should measure expected returns against their own baselines.
Clusters, digital twins and supply‑chain resilience
The Advanced Manufacturing Sector Plan explicitly targets regional clusters where research, production and skills co‑locate. Governments see clusters as engines of scale and innovation; industry sees them as complex networks requiring consistent data standards and real‑time information flows.
Here the policy and the technology roadmaps intersect. McKinsey’s analysis on digital twins shows how virtual replicas of production and supply networks can improve delivery performance, reduce inventory and enable rapid scenario testing — benefits that are especially valuable in multi‑site clusters and long, interdependent supply chains. Embedding digital twins with live data feeds and procurement systems lets management identify bottlenecks earlier, model the impact of supplier failure and prioritise investments that raise overall cluster resilience.
Skills, automation and the changing role of the workforce
Upskilling is a central plank of the strategy, but that does not mean recruiting large numbers of new staff. Government materials and the sector plan advocate a mix of training and digital tools to shift existing employees from transactional tasks to higher‑value roles such as supplier relationship management, compliance and analytics.
This human angle matters for retention as well as productivity. Industry evidence suggests that work which emphasises problem‑solving and decision‑making is more satisfying and helps retain scarce talent. The policy emphasis on combining skills with digital adoption — for example through programmes modelled on Made Smarter — reflects that reality.
What success looks like in practice
Private and vendor case studies illustrate the operational payoffs when strategy and systems align. SoftCo’s account of a global electronics manufacturer reports around 83% touchless processing for purchase‑order‑based invoices and full visibility across more than 100,000 invoices a year, enabling faster approvals without headcount increases. Such outcomes, the case study claims, translated into improved auditability and supplier performance; firms considering similar moves should treat vendor case studies as indicative rather than definitive, and test assumptions against internal metrics and third‑party benchmarks.
A pragmatic checklist for manufacturers
- Start with data hygiene: standardise supplier records, centralise performance metrics and remove “black holes” in AP and procurement workflows.
- Map funding requirements to operational capability: grants and schemes will demand evidence of governance, cost control and measurable outcomes.
- Prioritise quick wins in automation: accounts payable and P2P processes frequently deliver rapid, measurable ROI and free capacity for strategic work. IOFM benchmarking can help set realistic targets.
- Pilot digital twins for critical supply chains: use scenario testing to quantify resilience benefits before wider rollout, following approaches recommended in recent industry analyses.
- Treat energy savings as strategic capital: direct recurring gains toward capabilities that raise competitiveness, not simply short‑term margin boosts.
- Document outcomes and build the case for investment: funders will favour projects with clear metrics for productivity, job quality and decarbonisation.
Policy creates possibilities; operations create winners. The government’s recent announcements provide a once‑in‑a‑generation package of energy relief, capital and skills support. But to convert public incentive into private growth, UK manufacturers will need to combine the strategic openings with disciplined procurement, transparent financial reporting and targeted automation investments. For those that do, the coming years could be an opportunity to move from protection to genuine competitive advantage. Vendors and consultants are already offering advisory sessions to help firms align projects with funding criteria; manufacturers should pick partners that can demonstrate independent benchmarks and measurable outcomes rather than optimistic projections alone.
Source: Noah Wire Services
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