UK manufacturing sector risks falling behind international rivals on AI and automation

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UK manufacturing sector risks falling behind international rivals on AI and automation
Britain’s manufacturing sector is warning the UK risks falling behind its international rivals in the race to embrace cutting edge technologies such as AI and other game changing automation seen as vital to Britain’s industrial future. The warning was made on the back of a major survey published by Make UK and Infor. The survey shows that companies are fully committed to investing in AI, Machine Learning and other automation to improve productivity, processes and efficiency. However, despite this, a majority of manufacturers believe the UK is falling behind competitors and hampered by access to key technical and digital skills, as well as short term policy incentives which do not match investment cycles or expected returns on investment (ROI). In response, Make UK is calling on Government to reform the Apprentice Levy to help expand Britain’s technological skills base, roll out a widely proven scheme to help boost digital adoption by SMEs and introduce a better approach to the tax system with policies which match the average investment cycle of manufacturers and expected ROI. Verity Davidge, Director of Policy at Make UK, said: “The adoption of AI, automation and other game changing technologies by manufacturers is rapidly accelerating and will provide vital pieces in solving the productivity puzzle. But, there is still more to be done to match our competitors, especially among SMEs who face far greater hurdles in adopting digital technology. “As well as tackling the digital skills barrier which remains the biggest hurdle, Government should roll out the Made Smarter scheme across the UK. This has a proven success in delivering step change for SMEs on their automation journey.” Andrew Kinder, SVP, Industry Strategy, Infor, added: “We are seeing a substantial shift in the adoption of digital automation as manufacturers seek to improve efficiency, instill agility and drive greater productivity. While generative AI is still in its relative infancy, intent to capitalise on it is incredibly encouraging with many companies saying they are ‘aware of and planning to use’ the technology. “Actions, however, speak louder than words. While the government clearly has a role to play in supporting AI adoption, manufacturers have an opportunity to take control in bridging the gap between intent and value in creating first-mover advantage. The technologies are now widely available, affordable and come with a typically fast return on investment, which all help manufacturers compete in increasingly challenging conditions.” According to the survey, more than half of companies (55%) have already implemented, or are planning to implement, AI and Machine Learning to automate decision making processes and improve operational efficiency. In addition, four fifths of companies have already introduced, or are planning to introduce, Augmented Reality and Virtual Reality techniques in areas such as design and prototyping. More than three quarters of companies (76%) have invested in automation, while almost six in ten (59%) plan to increase their expenditure this year compared to last. Furthermore, a fifth of companies plan to automate between a quarter and half of processes in the next two years, while a further quarter plan to automate between 10% and 25%. These investments are aimed at improving manufacturing processes (65% of companies) and product design & development (49%) with companies seeing significant benefits of improved productivity (60%) greater labour efficiency (49%) and a similar number seeing better quality. However, despite this positive picture, 40% of companies believe the UK is falling behind competitors in adopting automation. Robot density in the UK is currently at 101 units per 10,000 workers, below the average of 126 units globally. Overall, the UK ranks 24th globally and is the lowest of the G7 nations. According to the survey, significant barriers to investing in automation are a lack of technical skills cited by almost half of companies (48%) and a similar number integration and data challenges (41%). More than a third of companies cite high costs and workplace culture (38% and 36% respectively) as barriers. In addition, the survey shows a clear mismatch between policy incentives designed to boost investment and the expected ROI. More than eight in ten companies expect up to five years for a positive impact of investment. In contrast, more than half of manufacturers (56.4%) believe Government policies are not sensitive to the time needed to see a ROI. To help address these barriers and boost further automation, Make UK has made the following recommendations:
  • Roll out the successful Made Smarter scheme nationwide. This is a proven scheme to help with the adoption of new technology in manufacturing businesses. It should also extend the remit of Made Smarter to include industrial decarbonisation to aid energy efficiency and transition to net zero.
  • Make full expensing capital allowances permanent to enable businesses to plan investment over long leads.
  • Expand the R&D tax credit to include capital expenditure to spur further digitalised R&D.
  • Government should work with business organisations and sector specific bodies to help SME engagement with the successful Catapult Centres. This is especially important given the geographic distribution of the centres and would help more SMEs take advantage of their world leading facilities.

Next upgrades profit guidance as third quarter sales beat expectations

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Next upgrades profit guidance as third quarter sales beat expectations
Leicestershire retailer Next has further upgraded its profit guidance for the year following better than expected sales in its third quarter. Full price sales from August to October were up 4% on last year, £23m ahead of anticipated levels (expected to be up 2%). Next is thus increasing full year guidance for profit before tax by £10m to £885m. The company said: “Sales growth has been variable. We believe the volatility in sales performance is a result of changing weather conditions rather than any underlying changes in the consumer economy. In an Autumn season cooler weather is good for sales, warmer than average weather depresses sales. Over time the average performance is a better indicator of underlying consumer demand than any one week.” The retailer also now expects full year sales of £4.74bn, up 3.1% on last year.

Milestone transaction achieved at Pride Park

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Milestone transaction achieved at Pride Park
Regional commercial property consultants Rigby & Co have completed one of the largest office-based transactions in Derby in recent years on Pride Park in the city. Acting on behalf of Derby College Group, Rigby & Co have successfully negotiated a sub-letting of an area of 40,000 sq ft within the college’s Johnson Building to the University Hospitals of Derby and Burton NHS Foundation Trust. The letting has enabled Derby College Group to relocate part of its curriculum and estate into the nearby Roundhouse complex. Work is currently underway to deliver a new automotive centre at the Stephenson Building following the securing of a £3.5m Government grant. A new Institute of Technology (IoT) centre is being built at the same location, which will provide world class training in engineering, manufacturing, and digital skills. The Hospital Trust had spent two years looking for a consolidated base that would fulfil a range of functions including records storage and office/training and administration purposes. Commenting on the letting, Heather Kelly, deputy chief executive of Derby College Group, said: “We are delighted to welcome The University Hospitals of Derby and Burton NHS Foundation Trust into the Johnson Building. “We have instructed Rigby & Co to market the rest of the building, which will be available for occupation from Summer 2024.” Russell Rigby, managing director of Rigby & Co, added: “This deal is a great outcome for both Derby College and the Trust – two of Derby’s leading employers, both of whom are going through challenging times in reorganising their real estate. “We are now actively looking for an occupier for the balance of the building which extends to around 45,000 sq ft of high-quality offices, storage and space.” Geldards LLP represented Derby College Group, and Browne Jacobson represented the University Hospitals of Derby and Burton NHS Foundation Trust.

Corporate insolvencies hit twenty-year high

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Corporate insolvencies hit twenty-year high
A perfect storm of economic issues has led to the highest Q3 corporate insolvency figures in more than two decades, with a combination of rising costs, director fatigue and increased creditor pressure meaning more firms are now turning to a corporate insolvency process to resolve their financial issues. This is according to the Midlands branch of insolvency and restructuring body R3 and follows latest statistics published by the Insolvency Service which show that there were 6,208 seasonally adjusted corporate insolvencies in the third quarter of 2023, which is a 10.2% increase on the 5,635 in Q3 2022 and 54.8% higher than the 4,010 in Q3 2021. The Q3 2023 figure is also 41.3% higher than the Q3 2019 pre-pandemic figure of 4,393. R3 Midlands chair Stephen Rome said: “The key driver behind the numbers is the rise in Creditors’ Voluntary Liquidations, which have reached their second highest figure on record and the highest number ever recorded in Q3. “After years of battling through the pandemic, supply chain issues, increasing costs, rising inflation and requests for higher wages, many directors have simply had enough and are calling it a day while that choice is still theirs. “Compulsory liquidation numbers have reached a four year high – partly because of legislation preventing them and then making the winding-up petition threshold higher in the aftermath of the pandemic, but also because these firms are now under their own pressures and are calling in debts in the hope of balancing their own books. “Trading conditions are particularly tough right now, with the upcoming Christmas period a crucial time for a large number of firms. This year could be make or break for many local businesses, especially those in retail and hospitality. “Our message to anyone who is worried about their personal or business finances is to seek advice as soon possible. We know that it can be a hard conversation to have, but speaking to a qualified advisor when worries are in their early stages can provide more potential options for resolving them than waiting for the problem to worsen. “Most R3 members will give a free initial consultation to prospective clients so they can learn more about their situation and outline the potential options for resolving it.”

Electrical contractor relocates after 33 years in Nottingham HQ

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Electrical contractor relocates after 33 years in Nottingham HQ
A fast-growing electrical contractor is relocating after 33 years in its Nottingham headquarters.Peel Electrical is one of the first tenants at the second phase of the Stanton Forge light industrial scheme in Stanton-by-Dale, Ilkeston, Derbyshire.The company has moved into the 1,400 sq ft Unit 5 at Stanton Forge, in a move which will see it grow and expand as a business.Russell Peel, operations director at Peel Electrical, said: “While it is sad to say goodbye to our Nottingham base for so many years, the new HQ at Stanton Forge helps us present ourselves to existing and potential clients as positively as possible.“The clean, fresh and vibrant look of the second Stanton Forge is fantastic. The new unit is a blank canvas which allows us complete freedom of design.“What’s more, the new address is more local to many of our staff, affording them shorter travel times and less spent on fuel.”Russ said that Peel Electrical will build a mezzanine floor area in Unit 5 for office staff, while downstairs the company will continue the growth of its panel shop within the BMS side of the business. There is also the potential to create more jobs due to the increased floor space, which enables Peel to increase the orders it can take.NG Chartered Surveyors Managing Director, Richard Sutton, brokered the deal on behalf of the developers and landlords D M Hartshorn Investments.Richard said: “I’d like to welcome Peel Electrical to the second phase of Stanton Forge. Russ and his team are incredibly forward-thinking and they saw right away the benefits of moving to this fantastic scheme would have for the staff and wider business.“We look forward to announcing more new tenants at Stanton Forge over coming weeks.”

Chamber secures £8.9m funding to deliver new generation of business support

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Chamber secures £8.9m funding to deliver new generation of business support
Businesses in the region are to receive a significant boost to their operations with a helping hand from East Midlands Chamber’s new generation of business support. The chamber of commerce for Derbyshire, Leicestershire and Nottinghamshire has secured £8.9m of public funding until March 2025 to deliver its Accelerator project, which aims to provide one seamless point of entry for relevant business support. It comprises key activities under the strands of net zero, innovation, digital and finance, with the aim of helping companies at all stages of their development to start, sustain, grow and innovate. The East Midlands Chamber Accelerator project brings together a number of publicly-funded contracts including the UK Shared Prosperity Fund (UKSPF), a key part of the Government’s levelling up agenda to enhance communities, businesses and skills; Innovate UK EDGE, which helps innovative SMEs to grow and achieve scale; and Made Smarter East Midlands, which assists manufacturers in switching to advanced and automated technologies. Diane Beresford, deputy chief executive of East Midlands Chamber, said: “The East Midlands Chamber Accelerator programme has been carefully designed to provide businesses across the district with the right support, at the right time. “At the heart of the project is a team of locally-based advisers and specialists, employed by the Chamber, who will offer high-intensity support to businesses seeking to grow, create new jobs or exploit technology to improve performance. “Working with an adviser or specialist will be a key ingredient for businesses interested in taking advantage of Accelerator support and a diagnostics report will show them where best to point their energies.”

Council eyes acquisition of large brownfield site in Northampton

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Council eyes acquisition of large brownfield site in Northampton
West Northamptonshire Council is taking steps to purchase the former St James Bus Depot and ensure the large brownfield vacant site benefits from regeneration. The brownfield site has stood vacant to the west of Northampton Town Centre for more than a decade. As part of the wider extensive regeneration of Northampton, this area has been identified as one which could significantly benefit from redevelopment. Since West Northamptonshire Council was made aware of Church’s Shoes’ intention to sell the site, the Council has been working closely with them. As one of the last remaining brownfield sites in Northampton, on a key route into the town centre, it is important for local businesses and the local community to make sure that the best regeneration and economic potential of the area is realised. WNC has engaged with Church’s to agree on the purchase of the building and is now looking at the future viability of the site through a feasibility study to ensure that any future development meets the needs of residents while maintaining the historic character of this landmark. Cllr Dan Lister, Cabinet Member for Economic Development, Town Centre Regeneration and Growth at WNC, said: “The former St James Bus Depot boasts a prominent large brownfield site, central to Northampton Town Centre. This historic landmark has been vacant for some time, during which Church’s has added land to the site and carried out some remediation work. “We have engaged with Church’s on the sale of this site in order to be able to bring forward a viable scheme which will benefit our residents. We are committed to retaining the historical and iconic frontage of this site and will be working with key partners to ensure that the area is empathetically regenerated. “As part of the delivery of this scheme, we will seek to provide much-needed high-quality homes to accommodate the needs of our growing communities. The views of our residents are essential to ensure that this site meets the needs of our local community, and we will be looking at opportunities to hear their views on the coming months.”

Rutland hotel operator ordered to pay over £195,000 after serious employee accident

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Rutland hotel operator ordered to pay over £195,000 after serious employee accident
A hotel operator in Rutland has pleaded guilty to a breach of health and safety law and been ordered to pay more than £195,000 after a serious accident at work which left a man with life-changing injuries. The prosecution arose from a serious accident at Barnsdale Hall Hotel on 24 May 2021 (trading as Barnsdale Hall Hotel (Resorts) Ltd). On that day, two employees of the Hotel, including a Mr Andrew Veasey, were tasked with removing a loose tree branch. This was done by raising Mr Veasey up with a non-integrated working platform. The platform was attached to a JCB vehicle parked across a slope. As a result, when the platform was raised, the vehicle toppled over and crushed the roof of a car before plummeting into a bank, causing Mr Veasey serious injuries. Mr Veasey had to be resuscitated at the scene and sustained life-changing injuries which mean he is no longer able to care for himself. With the full support of Mr Veasey and his family, an investigation into the incident was undertaken by Peterborough City Council, on behalf of Rutland County Council. This investigation revealed significant deficiencies in the Defendant’s risk assessments, level of training and instruction, safe use of machinery and system of work when carrying out non-routine tasks such as the one in question. The case was heard at Leicester Magistrates Court on 19 September 2023, where the defendant pleaded guilty to a Section 2 offence under the Health and Safety at Work Act 1974, whereby it is the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all their employees. Barnsdale Hall Hotel was ordered to pay a fine of £146,700, together with £50,000 awarded for costs and a £190 Surcharge. Councillor Christine Wise, Cabinet Member for Public Protection and Community Safety, said: “This is an extremely serious case where failure to put appropriate health and safety measures in place has caused life-changing injuries to an individual, as well as irreparable damage to a family that will never be the same again. “The sentence imposed on the Defendant following their guilty plea should serve as a clear warning that employers have a duty of care towards their staff and action will be taken in response to breaches of health and safety law. “The employers in question have taken all of the required regulatory action required in response to the findings of our investigation. However, nothing can return Mr Veasey to full health and so it is important those responsible are held accountable to the full extent of the law.”

Gold for Alstom, Gleeds and Toyota at Ministry of Defence Awards

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Gold for Alstom, Gleeds and Toyota at Ministry of Defence Awards
Fourteen of the East Midlands’ greatest champions for our Armed Forces have been celebrated at a glitzy award ceremony held in the Officers’ Mess at Prince William of Gloucester Barracks. Winners of the Ministry of Defence’s prestigious ‘Gold Award’ for 2023 include Alstom, Gleeds and Toyota Manufacturing UK. Campbell Cain Wealth Management, Everyone Health, Fred Sherwood Group and Rail Operations Group have also been awarded the highest accolade in the Defence Employer Recognition Scheme for recognising the value of Defence personnel in their business. Completing the list are Derbyshire Healthcare NHS Foundation Trust, Northamptonshire Police, Nottinghamshire Police, SRC UK, United Lincolnshire Hospitals NHS Trust, Wescom Group and West Northamptonshire Council. Partnerships between Defence and civilian employers are a fundamental foundation of the UK’s Reserve Forces. Thousands of such partnerships exist to support and advocate not just the Reserves but former and serving Armed Forces personnel and their families and Cadets across the East Midlands. Some of these are informal, whereas others are formally recognised by entry into the Defence Employer Recognition Scheme. Each year the most extraordinary champions are awarded the Ministry of Defence’s highest accolade for employers – the Gold Award – which this year took place in Grantham on 19th October for the East Midlands. This honour recognises organisations which proactively demonstrate their Forces-friendly credentials as part of their recruiting and selection processes. They also, amongst other policies, provide Reserves within their workforce with at least 10 days of additional paid leave for training. In return, employers benefit from members of staff who return with new qualifications and skills. For 2023, each recipient was handed their award by Lieutenant General Tom Copinger-Symes CBE, Deputy Commander of UK Strategic Command. They were joined by special guests His Majesty’s Lord-Lieutenants of Lincolnshire, Derbyshire and Northamptonshire and the Vice Lord-Lieutenant of Leicestershire. The Officers’ Mess unique charm provided a backdrop to what was a special occasion. A display of light field guns courtesy of 103 Regiment Royal Artillery, a visit from The Mercian Regiment’s mascot Lance Corporal Derby, support from military musicians and also the Prince William of Gloucester Detachment Army Cadets added to the ceremony’s distinct atmosphere. Fred Hopkins, Head of Engagement at East Midlands Reserve Forces and Cadets Association, said: “Achieving the Gold Award is a remarkable accomplishment and I would like to congratulate our 2023 winners. “We are very proud of the support and advocacy our Gold holders provide to Defence, especially for Reserves and Cadets. “I very much look forward to building on these mutually-beneficial partnerships and establishing even more through the Defence Employer Recognition Scheme in the years ahead.” Kirstie Lawrence, Regional Employer Engagement Director at East Midlands Reserve Forces and Cadets Association, added: “Award holders in the Defence Employer Recognition Scheme celebrate the excellence of Defence people in the workplace routinely, having seen it for themselves and now gaining Gold for promoting it to others who have since shared that success. So it was a wonderful experience to thank them.”

Vestatec appoints new quality manager

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Vestatec appoints new quality manager
Nottingham-based metal forming and PVD coating specialist, Vestatec, has appointed Claire Lloyd to the role of quality manager. With most of its products being delivered into the heavily regulated automotive sector, this is a key role in the organisation, taking the lead to ensure that the company stays compliant with the ever-changing standards and expectations set by its global customer base. Bringing a wealth of experience following an extensive career in the manufacturing industry, Claire joins the team from Guildford Performance Textiles, where she spent some 30 years taking on the role of quality systems engineer before moving into a product testing role. Commenting on her appointment, Claire said: “I’m delighted to have joined such a fantastic team here at Vestatec. In what has only been a short time at the company so far, I can see the care and dedication of each and every person in the business which is clearly shown through the end product.” The recent appointment comes as the company’s current quality manager, David Marriott looks to step down from his role as he approaches retirement. Claire added: “I’m looking forward to utilising my industry experience to support the company in its quality management programme continuing the great work that David and the team have implemented to date, and ensuring that only the highest quality products leave our facility on their way to our loyal customers.” On the approach to his retirement, David said: “Having begun my career in manufacturing back in 1974, I’m delighted to have had the opportunity to spend the final years of my career with the team here at Vestatec. “The family ethos of the organisation is truly unique. Everyone is an individual from the team making the parts, booking in the material, loading the trucks, or those in management – everyone knows one another and is treated as a family.”
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