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Manufacturing Advisory Service - Launch of Annual Report

The Rt. Hon. Stephen Timms MP,  Former Minister of State for Competitiveness
House of Commons, London,  25 October 2007

I’m delighted to have the opportunity to launch the Manufacturing Advisory Service annual report for 2006-07, and to contribute to celebrating another successful year for the service, now firmly established as one of the UK’s strongest and most well respected business support organisations.

As I have spoken to people about manufacturing since my appointment in June I’ve heard nothing but good reports about it - from the CBI, the Trade Unions and from companies who have told me about the benefits they have received, including help to recover from the flooding in South Yorkshire earlier in the year.

The credit goes to those here today who are responsible for delivering the service direct to manufacturing companies, helping them to improve productivity and to rise to the challenges from globalisation, and the intense competition which accompanies it.

Manufacturing remains absolutely vital to the UK economy and it will continue to be so. It generates a sixth of our overall wealth, two thirds of our exports and provides 3 million good quality jobs. Of course, the sector has been through some tough times but there is now a refreshing trend of improvement. Manufacturing output grew by 1.3% last year, and a succession of reports since the summer have underlined its good health. The October CBI Monthly Trends Enquiry showed that manufacturing output expectations were positive for the twenty second consecutive month.

People look at me in astonishment when I tell them that Britain is the sixth largest manufacturing economy in the world. Some people don’t believe it when I tell them that we are making almost twice as many cars in Britain today as we did twenty five years ago. We need to do more to point out to people the successes and opportunities in UK manufacturing.

Of course, manufacturing is changing. Transforming across all advanced economies as it responds to intense international competition. India and China have wage costs around 15% of European Union levels – and are expected to account for nearly half of all global growth over the next 15 years.

And yet UK manufacturing continues to make a major contribution to our economy, competing not on the basis of low wages, but on the excellence of its products using high technology, drawing on design, innovation and our strong science base.

We introduced the Government Manufacturing Strategy in 2002 to help companies to meet the challenges they face. It is based on raising investment, applying science and innovation, a high level of skills and global best practice to create a modern, knowledge intensive, manufacturing sector. We will be looking at the Strategy over the coming period to ensure it remains the most effective basis for supporting UK manufacturing.

• We launched the National Manufacturing Skills Academy in January this year to bring world class training to the sector.
• The R&D Tax Credit has provided £1.8 billion in support, most of it to manufacturers.
• We’ve put £435 million into the Technology Programme so that manufacturers can capitalise on key technologies.
• We’ve increased the Science and Research Budget from £1.3 billion in 1997 to £5.4 billion in 2007 and we’ve announced it will rise to £6.3 billion by 2010.
• This is being given added impetus by the Sainsbury Report, with its recommendations to position Britain at the forefront of 21st century innovation.

And of course we’ve set up and supported the Manufacturing Advisory Service. A flagship programme at the heart of the Strategy. Delivering real improvements reflected into the bottom-line of businesses. Reaching companies that have found it difficult to access the support they wanted in the past. It has developed into a highly regarded national brand.

The service’s success is based on the quality, commitment and adaptability of its staff. It is unique in its ability to adapt to meet the needs of the company rather than try to impose a standard template solution. Companies like it because it is provided by experts who really understand their requirements.

From 2002 to June this year, the service responded to 128,000 enquiries, carried out 21,000 diagnostic reviews and completed over 6,000 projects. It added value of over £411 million to the business of the companies concerned.

The Regional Development Agencies are our principal partners in delivering the Service. I appreciate their role in making it a success, and the commitment they are showing to ensure that success continues. I would like to thank also the MAS Ambassadors who have made time to champion the service and ensure that the companies who can benefit from it know about it.

The Future

Today’s report highlights MAS’ achievements over the last twelve months, but it also looks forward. The report shows that the service is not resting on its laurels.

We set up the Development Board last year to look at how the service might expand and develop, whilst continuing to provide the core services that have made it so successful.

The Evaluation study was published earlier this year. I’m pleased that today’s report highlights a new strategy for 2008 with an enhanced range of services to help more and more companies, including help on environmental services.

I fully endorse the recommendations of the Development Board in setting a new strategy for MAS for the next three years. The new enhanced, broader service will offer help with innovation, new products and technologies, strategic planning, energy and waste management, supply chain management and sourcing of supplies.

Development and delivery of the expanded service will require close liaison with Businesslink, and with other business support partners, in order to provide a co-ordinated service and maximise the benefits to companies.

Manufacturing will continue to face strong challenges. I am convinced that with a stable business environment and the right support from government we can develop a successful knowledge intensive modern manufacturing industry. We are absolutely determined to have the strategy in place to achieve that and the expanded Manufacturing Advisory Service will have an important role.

Let me finally just express my thanks, on behalf of the Government, to everyone who has contributed to the success of the service over the past year. You have made an important contribution, and I know we can be confident in counting on you to do so again in the period ahead.

Thank you all very much.