NEWS 14 HYDRAULICS & PNEUMATICS April/May 2025 www.hpmag.co.uk IET responds to Spring Statement, emphasising innovation and skills for defence industry growth The Institution of Engineering and Technology (IET) has welcomed the UK Government’s commitment to boosting the nation’s defence industry in the Spring Statement, particularly the £400 million investment in the development and deployment of new technologies like quantum computing and artificial intelligence (AI). According to Stephanie Baxter, Head of Policy at the IET, this funding has significant potential to drive groundbreaking innovations in engineering and technology, not only advancing the UK’s defence capabilities but also benefiting the wider economy and society. Baxter acknowledged the government’s vision of making the UK a Defence Industrial Superpower, but she stressed that such ambitions would not be realised without a critical focus on the skills of the workforce. She explained: “However, we will not be able to become a secure, sustainable and resilient Defence Industrial Superpower without the highly skilled engineers and technologists who underpin the advanced manufacturing base. That is why it is critical that government also invests in the skills training and systems to ensure these new technologies are secure and resilient against vulnerabilities.” The IET’s statement underscores the need for government investment in skills training and systems to ensure that the Make UK’s Industrial Strategy Skills Commission has called for sweeping reforms to address the UK’s growing skills deficit, which is hindering economic and productivity growth. The Commission’s recommendations include the creation of a formal ‘Skills Covenant’ between government and industry to increase investment in workforce training and upskilling. Among its proposals, the Commission advocates for ringfencing the £800 million in unspent employer contributions to the Growth and Skills Levy and redirecting the £650 million raised annually from the Immigration Skills Charge solely to skills investment. These funds could train 40,000 new engineers, addressing the manufacturing skills gap that costs the UK economy £6 billion annually. The Commission also highlights the decline in vocational courses, particularly in engineering and manufacturing, due to financial pressures on education providers. To remedy this, it recommends increasing funding for key courses, such as the Level 3 engineering apprenticeship, and allowing levy funds to be used for investing in equipment and machinery. To further support upskilling, the Commission proposes a tax rebate for businesses investing in accredited training, along with a revamp of careers guidance in schools. It also calls for expanding the University Technical College (UTC) model to provide more technical training opportunities. Robert Halfon, Co-Chair of the Commission, emphasised the need for reform to support innovation in manufacturing and engineering, especially in new green technologies. He warned that failure to act could undermine the UK’s growth agenda. Make UK CEO Stephen Phipson echoed these concerns, criticising the current Apprenticeship Levy and urging immediate action to ensure proper funding for vital courses and recruitment of experienced trainers. The Commission’s message is clear: urgent action is needed to address the UK’s skills crisis and secure the future of its manufacturing sector. Make UK’s Industrial Strategy Skills Commission proposes sweeping reforms next generation of engineers are equipped to tackle the complexities of emerging technologies. With the increasing reliance on cutting-edge innovations in defence, Baxter highlighted the importance of ensuring these new technologies are secure, resilient, and protected against potential vulnerabilities. As the UK looks to strengthen its position as a leader in defence innovation, the IET’s call for a balanced investment in both technology and talent development is a reminder that the country’s ambitions must go hand-inhand with long-term strategies for skills development to maintain a competitive and secure edge.
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