The Plan for Growth: progress update
Introduction
In March 2011, the Government published a plan to put the UK on a path to sustainable, long-term economic growth: The Plan for Growth. The Plan set out actions across seven priority areas and eight sectors of the economy to create the conditions for growth in the UK. These measures are for the short and the long term and are designed to deliver results over the life of the Parliament and beyond by creating the conditions for the private sector to create growth in the economy.
In the Autumn Statement of November 2011, the Government announced a series of further reforms removing barriers to business growth in infrastructure, education and skills, logistics, mid-sized businesses, the rural economy and open data.
Reporting on progress
A report on progress across all the measures announced in The Plan for Growth and the Autumn Statement has now been published alongside Budget 2012. This sets out significant achievements in delivery against each of these growth measures.
The plan for growth: implementation update (March 2012) (PDF, 396 Kb)
The Growth Review: progress update
Access to a wide range of sources of finances is essential for businesses if they are to invest and reach their full growth potential. This is particularly true for small and medium-sized enterprises (SMEs)
To support business and investors:
- the Seed Enterprise Investment Scheme will be launched in April 2012
- major UK banks launched a £2.5 billion Business Growth Fund to address an important gap in the growth capital market, with first investments in October 2011.
- Big Society Capital has been established and announced investments in five organisations.
A successful, dynamic economy has vigorous competition at its heart, creating strong incentives for companies to increase their efficiency and to innovate.
To support this we are:
- reforming and further invigorating the UK’s competition framework
- reducing the barriers for small firms to compete for public contracts
- providing greater certainty for long-term investors in UK infrastructure, and,
- supporting consumer empowerment, setting out a vision with Better Choices: Better Deals
Over time, the financial reporting and audit requirements, and the costs which these impose on UK business have increased. To improve this framework of governance, we are:
- aligning incentives for investors and managers to improve company productivity
- providing the information to investors to encourage investment in UK companies, and
- increasing stability and confidence in UK markets.
These are essential to building sustainable growth and stronger communities. Education, skills and a flexible workforce are vital to our future. A skilled workforce is necessary to stimulate private-sector growth, bringing new jobs and new prosperity for people across the UK. We have set out a range of measures to make the education and skills system more responsive to employer needs.
For the UK to remain competitive, high quality infrastructure is essential. Investing in infrastructure has a stronger positive effect on GDP per capita than other forms of investment. To make the UK’s infrastructure fit for the 21st century, measures were announced to facilitate investment, and the National Infrastructure Plan provides a comprehensive and detailed strategy for coordinating and planning public and private investment in UK infrastructure.
Delivery of a package of Low Carbon measures is well underway, supporting business in maximising opportunities and making sure that UK industry remains internationally competitive. UK companies could save around £23 billion a year by using raw materials, energy and water more efficiently. The Green Investment Bank will be vital for a successful transition to a green economy and will make its first set of green investments in April 2012.
A major inhibitor to growth is the current planning regime. We have committed to overhauling the system to make it more efficient in protecting national assets while enabling sustainable development to support growth. The new National Planning Policy Framework will simplify the planning system by introducing a presumption in favour of sustainable development.
Improving business awareness of government’s spending plans should help confidence in investments in plant, machinery and people that is critical for our economy.
We are:
- improving visibility and certainty of public sector purchases
- updated pipelines for the infrastructure and construction sectors
- published medium-term procurement plans for a wide range of sectors, in April 2012.
We have also committed to simplifying and speeding up public procurement and to publishing assessment of capability gaps within critical supply chains in spring 2012.
Improving access to public data has the potential to boost growth by building opportunities in the data and analytics markets, expanding existing market opportunities, and attracting inward investment. We have announced we are opening up access to core public datasets on transport, weather and health, including giving individuals access to their online GP records by the end of this Parliament.
The burdens of regulation are being tackled by stemming the flow of new regulations, overhauling the existing stock of regulations, and driving culture change across the UK and Europe:
- a moratorium was introduced in April 2011 and is reducing the flow of new domestic regulations on micros and start-ups.
- the Red Tape Challenge, launched in April 2011, has examined around 1,500 regulations, over half of which will be scrapped or improved.
- a review of regulators has been launched to ensure that enforcement arrangements are appropriate, proportionate, fit for purpose and risk-based, and the first three regulatory reviews were announced in Budget 2012.
- to ensure maximum flexibility for businesses and employees, and to make it easier to take people on, we have been striving to reduce the estimated £1 billion burden of complying with employment law.
Increasing our exports to emerging markets and attracting investment into the UK is vital to driving sustainable growth and rebalancing the economy. We want to more than double annual UK exports to £1 trillion by 2020, with new commitments to extend the overseas role of UK Export Finance. Additional measures have been announced to help UK businesses export, including the National Export Challenge to get 100,000 more SMEs exporting by 2020.
Manufacturing represents just over 10 per cent of the UK economy, generating about £130 billion in gross value added in 2010 alone. The UK specialises in highly innovative, knowledge-intensive and high-skilled manufacturing. The Government and the Technology Strategy Board launched the High Value Manufacturing Catapult Centre in which the Board will be investing £140 million over a six year period. The programme of University Technical Colleges is well underway to provide school leavers with technical knowledge and skills.
A strong construction sector is needed to deliver new infrastructure and development to drive growth. Actions have been identified to improve efficiency and increase the confidence of the industry and its customers to invest. The National Infrastructure Plan 2011 and quarterly forward programme of public-funded infrastructure and construction projects will provide greater policy certainty needed by investors and the construction sector.
Our Digital and Creative Industry exports are third only to advanced engineering and financial and professional services. We have set out a package to address the barriers that creative industries have reported, including access to broadband, skills shortages, regulatory constraints and balancing the interests of intellectual property holders against those of potential investors.
The Life Sciences Sector employs over 100,000 people – many in highly skilled, high tech jobs, and the social care market employs a further 1.5 million people of whom 71% are providing direct care and support.
The complexity of health research regulation and governance has increased over the last 20 years, and we are seeking to reduce the barriers to UK health research, one of the most important sectors for research and innovation.
This sector is critical to the success of other businesses throughout the economy and accounts for almost 9% f UK GVA and around 7% of total employment.
The Government has already started to invest £55 million into the Strategic Rail Freight Network, delivering schemes that remove bottlenecks and improve capability and longer term connectivity to the UK’s major ports.
Accounting for around one-fifth of private sector employment and turnover, 15,000 mid-sized businesses (including subsidiaries) represent 0.2 per cent of all UK companies. We have announced:
- £10 million to provide tailored package of support through UKTI to 500 more mid-sized businesses to export per year, and
- extending the reach of UK Export Finance (the new name for Export Credit Guarantee Department – ECGD)
Worth approximately £166 billion a year, the professional and business services sector is internationally competitive, with high growth potential. We are supporting the legal services sector to promote the UK’s world-leading business arbitration and commercial law services. The Rolls Building in the City of London is now the largest specialist centre for the resolution of financial, business and property dispute litigation anywhere in the world.
This sector is a key route to market for other sectors of the economy, notably the food industry, and accounts for 5 per cent of GDP.
We have:
- committed to extending small business rate relief
- acknowledged that the sector was subject to a wider range of regulatory requirements than any other.
- announced that 160 regulations impacting on retailers or their customers would be scrapped or simplified, and
- welcomed the recommendations in the Mary Portas review, to support town centres
Rural England makes a substantial contribution to national economic growth contributing 19 per cent of GVA and 22% of employment in 2008, estimated to be worth around £200bn. Studies have suggested its potential could be worth up to £347bn a year.
Measures announced include:
- £100m of the Rural Development Programme for England to support growth
- £20m Rural Community Broadband Fund and
- funding of up to six Rural Growth Networks
The global space industry is worth around £160 billion and is forecast to grow at 5 per cent a year over the next 20 years. The UK space industry is innovative, with six times more R&D activity than the UK economy average, and Government committed to provide the regulatory certainty and a level playing field with other countries on which continued success depends.
2012 presents a unique opportunity for Britain to showcase what the UK can offer to the rest of the world. Tourism is one of our 6 biggest industries and one of our largest export earners. It generates £90 billion of direct business for the economy each year with over 200,000 businesses providing 1.74 million jobs. It creates wealth and employment in all parts of the country and has the potential to become one of the fastest growing sectors of our economy.
