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The eight high growth sectors covered in the Industrial Strategy (IS-8) are advanced manufacturing; clean energy industries, creative industries; defence; digital and technologies; financial services; life sciences; and professional and business services.

Alongside the over IS-8 paper, the government has released sector-specific plans for each of the eight aforementioned growth areas.

Principle amongst the promises in the Industrial Strategy is the declaration of electricity cost savings for businesses within the industrial sector.

Energy-intensive firms paid twice the amount in the UK than in Europe last year and so as part of its strategy the government has promised to slash electricity costs by up to 25% from 2027 for electricity-intensive manufacturers, like steel, chemical or glass firms.

Alongside this, further promises have been made to the infrastructure sector, following on from the Infrastructure Strategy released last week, including the agreement to fast-track more building projects through the planning process. This will see gigafactories, laboratories and data centres being allowed to “opt in” to be designated as Nationally Significant Infrastructure Projects (NSIPs).

Further, as part of the strategy, the government wants to reduce the average preapplication period for major infrastructure projects from two years to 12 months by scrapping “overly burdensome” consultation requirements. This has the potential to save projects £1bn over the course of this Parliament per the strategy, it says.

The strategy further outlines plans to “make timely planning decisions” with a 13-week target for decisions made by ministers on called-in applications.

“This is giving greater confidence to businesses that decisions on high priority developments, from solar farms and data centres to housing and transport, are being made speedily and supported by a more strategic policy framework,” the strategy states.

As part of this, the strategy promises to improve the responsiveness of Local Planning Authorities by providing funding for 300 new planning officers and offering new flexibilities for planning application fees to be set locally so they cover the costs of the service.

The government also plans to accelerate digitalisation to encourage the development and adoption of the next generation of planning services and save developers time and money by implementing a Nature Restoration Fund. This fund will mean developers can make a single payment to identify and meet their environmental obligations related to protected sites and species.

The strategy also outlines plans for the renewable energy sector. It states that the government will double the investment in clean energy industries by 2035 with a further £700M in funding for clean energy supply chains, taking the total funding for the Great British Energy supply chain fund to £1bn.

The Clean Energy Industries sector plan explores plans to “lean into our strengths as a coastal power” and “build on our status as a leading nuclear nation”.

Within the Clean Energy Industries sector plan, a new Connections Accelerator Service will provide support connecting to the grid for demand projects, including prioritising those that create high-quality jobs and bring the greatest economic value. The government expects this new initiative to begin operating at the end of 2025.

Reaction

While many built environment stakeholders are please the government is taking the industrial sectors seriously by releasing the strategy, some have spoken out against the construction sector’s direct absence.

Building Cost Information Service (BCIS) chief economist David Crosthwaite said: “After the highs of the Infrastructure Strategy comes the complete omission of the construction sector in the Industrial Strategy. The sector’s contribution to growth across the wider economy is inextricable, yet it remains excluded from the government’s sector hit list.

“Without construction, there are no gigafactories to make batteries for electric vehicles, no laboratories to develop pioneering medical technologies, no carbon capture infrastructure to drive the net zero agenda.

“Construction’s omission from the strategy is like saying you don’t need water to grow crops. It’s a complete oversight.”

The Railway Industry Association (RIA) was also perturbed at the lack of rail in the strategy, with its chief executive Darren Caplan saying: “Whilst there is some mention in the Industrial Strategy for rail – and we and our members welcome the direction of the Government’s recent Spending Review and Infrastructure Strategy when it comes to large rail projects – we remain concerned that this Strategy does not include transport and rail as significant enablers to growth, either for the eight specific sectors mentioned or for UK industry and the economy more widely.

“Rail is a large and growing industrial sector in its own right, supporting some 640,000 jobs, £43bn GVA and providing over £14bn Treasury revenues annually; and for every pound spent in rail, £2.50 is generated in the wider economy, and for every rail job created in rail, four jobs are supported beyond rail too. Rail is also a potential exports enabler – whilst exports forms a key component of the Industrial Strategy announced today, there is little mention of transport-related exports, even though UK Export Finance has helped secured major overseas rail project contracts for the UK.

“So we would urge the DBT to work with the railway industry in the months ahead to ensure rail has a driving role to help facilitate growth in both our and the other specific sectors mentioned in the Government’s Industrial Strategy – whether advanced manufacturing, digital technology, or professional and business services – and to also recognise the role rail can play in helping thousands of large and SME UK businesses sell their goods, services and expertise oversees, ultimately to the benefit of UK plc.”

In opposition, Civil Engineering Contractors Association (CECA) spokesperson Lorraine Gregory celebrated infrastructure’s allocation as a key stimulant for the industrial sector.

She said: “CECA members will be pleased to see infrastructure placed at the heart of the Government’s plans to build a more productive, balanced and future-ready economy.

“The Industrial Strategy’s focus on long-term investment, enhanced digital and transport connectivity, and the reform of planning processes, aligns closely with CECA’s long-standing calls for a more strategic and joined-up approach to infrastructure delivery.

“We particularly welcome the commitment to create a more efficient and responsive planning system, as well as the Government’s emphasis on skills development and innovation – both of which are essential to meeting future construction demand.

“For our members, the Strategy provides renewed confidence that Government understands the fundamental role civil engineering contractors will play in unlocking opportunity, improving resilience, and delivering sustainable growth across all regions of the UK.

“We welcome the government’s recognition of the need to reduce delays and complexity in infrastructure planning and delivery, and we are looking forward to the publication of the infrastructure pipeline digital platform next month, which will provide much-needed visibility for industry, and allow our members to plan with confidence in delivering the UK Government’s infrastructure agenda.”

Royal Institution of Chartered Surveyors (RICS) chief executive Justin Young said: “It is encouraging that the UK government chose Foundational Industries, which is to say, those that produce materials such as steel, concrete and infrastructure parts for one of the eight key sectors (IS-8) in its industrial strategy.

“Challenges to supply chains, including material shortages and rising costs severely disrupt construction projects. It is also a positive step that the strategy places a focus on improving support for small and medium-sized enterprises (SMEs), which, according to RICS research, account for nearly a fifth of the UK’s construction industry and play a critical role in material production.

“Another positive focus for the built environment is Clean Energy Manufacturing being one of the IS-8, which will be fundamentally important given the Government’s recent commitment to solar panels for newly built homes as well as increasing demand for heat pumps.

“Similarly, IS-8 also focuses on improving the synergy between private investment and the needs of industry, which should hopefully increase investment in key projects.”

WSP UK & Ireland and Africa chief strategy officer Paul Tremble said: “Today marks a pivotal moment in the UK’s economic renewal.

“The government’s new Industrial Strategy lays the foundations for a decade of innovation, investment and productivity, driven by bold action on skills, defence, advanced manufacturing and clean energy.

“The £1.2bn annual commitment to technical training, AI capability and apprenticeships in priority sectors, including defence, is a powerful signal that we’re serious about building a workforce fit for the future.

“And cutting green levies to ease energy costs for industry sends a clear message: this is a strategy that backs business, empowers workers, and builds a high-value, future-ready economy where good jobs and sustainable growth are shared across the UK.”

Greenpeace UK head of climate team Mel Evans said: “Gas company profiteering has had a huge impact on businesses up and down the country, so it’s welcome news that the government is looking at how to lower costs.

“Our bills are sky-high because our over reliance on volatile oil and gas has kept us beholden to the whim of authoritarian leaders like Putin. The best way to tackle high bills for consumers and businesses is to stop the price of gas from setting the price of electricity and get off fossil fuels for good.

“Electricity produced by renewables like wind and solar power is three times cheaper than power produced by gas, so why do we allow gas to set the price we pay? It’s a complete scandal. The government must take action to stop gas companies from ripping us off, which will in turn enable renewable energy to bring down our bills for good.”

Stantec UK&I managing director Brian Yates said: “Across the main Industrial Strategy and eight long-term sector papers, there will be much for experts in almost every area of the UK economy to digest in the days and weeks to come.  What is immediately clear is that the government has listened to many of the recommendations from our sector, particularly three key points: overall clarity and confidence in a long-term plan; access to investment to enable skills training and capacity building; and reducing barriers to innovation and growth – from lowering energy costs to planning reforms.

“In Stantec’s response to the strategy’s consultation, we called for a greater focus on creating industrial clusters across the UK, so we welcome the commitment to the Strategic Sites Accelerator, and the acknowledgement of the important role of infrastructure and connectivity in creating these regional centres of excellence.  It is also encouraging to see clean energy front and centre of the strategy, and one of the first sector papers to be published.  Investment in clean energy generation and transmission isn’t just good for our energy security and the planet, it is foundational to the success of all our other industries and innovations – data centres, transportation, life sciences, advanced manufacturing and many more.  This is an ambitious plan that spans almost every element of the modern economy.  The responsibility is now on sector leaders to take this onboard and make the most of the opportunities it presents.”

Ramboll UK & Ireland managing director Neil Sansbury said: “We welcome today’s Industrial Strategy, which takes important steps to build resilience and drive growth across the UK economy.  Strengthening supply chains, accelerating upgrades to the power grid, and aligning skills across key sectors such as clean energy, advanced manufacturing, life sciences and defence will position the UK as a global leader in these areas.

“Investment in the new industrial clusters, including the life sciences super cluster in the Northwest and the defence industrial base, will require integrated infrastructure, skills, and connectivity to succeed.  We’re pleased to see £4.3bn committed to advanced manufacturing and £600m for sector-specific clusters. The UK has the potential to be a global leader in wind, CCS and hydrogen and it is encouraging that the industries are receiving the support needed to help reach their full potential. These investments can unlock long-term growth if backed by smart delivery and cross-sector collaboration.

“It is good to see a clear focus on diversified and resilient energy supply chains. With global tensions rising, this is no longer a future concern, it’s an urgent national priority.”

Institution of Civil Engineers (ICE) director of policy and external affairs Sam Gould said: “It’s good to see the government’s continued focus on long-term planning and providing certainty for the sector in the Industrial Strategy.

“It’s clear that the government has listened to industry needs and carefully considered how various strategies should link together, and how the country must plan for future needs.

“Clear strategic direction and more certainty for investors will help create the right environment for successful delivery.

“Now, with the leadership of the National Infrastructure and Service Transformation Authority, the UK needs to get on with its mission to spark growth and meet its environmental ambitions.”

AtkinsRéalis industrial market lead – UK & Ireland John Rawlinson said: ”Today’s Industrial Strategy is a welcome long-term plan with the potential to strengthen the UK’s industrial sectors and accelerate the research, development and roll-out of new technologies across the UK.

“This Industrial Strategy sets out a long term vision with innovation, partnership and people at the centre, creating a platform for accelerated growth across the sector, as well as a vital interface with connected strategies like defence and the wider economy as a whole.

“A resilient and thriving industrial ecosystem with access to secure, affordable energy supply will underpin much of the UK’s growth ambitions and net zero goals, from local economic development to the sector-wide strategies that will enable greater investment in skills, technology and innovation.

“The strategic siting of industry is highly dependent on reliable energy connections, sustainable resource availability, good transport infrastructure, a solid skills pipeline and interconnected regional growth strategies, and we welcome that this holistic approach is reflected in the plans published today.”

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