Budget choices will shape fluid power EDITOR’S COMMENT www.hpmag.co.uk HYDRAULICS & PNEUMATICS October 2025 3 The Budget needs to recognise the strategic role fluid power plays in UK industry. ‘ ’ Artificial intelligence is now a routine part of operations in many plants and facilities across the UK. Predictive maintenance, data analytics, and machine learning are improving asset reliability and cutting downtime. But in hydraulics and pneumatics sectors that underpin manufacturing, energy, and infrastructure progress depends on whether the November 2025 Budget delivers the right mix of incentives and investment. Without targeted policy support, many firms risk being left behind in the shift towards digitalised, low-carbon production. The Budget needs to recognise the strategic role fluid power plays in UK industry. Hydraulics and pneumatics are vital to automation, materials handling, and transport systems, yet much of the equipment in use is ageing and energy intensive. Tax relief for upgrading to digitally connected, energy-efficient systems would help companies cut costs and emissions. Extending full expensing or introducing enhanced capital allowances for automation, sensors, and condition-monitoring equipment would make a tangible difference, particularly for small and medium-sized suppliers. Investment in digital infrastructure should also be a priority. AI-enabled maintenance and digital twins rely on high-quality data and reliable connectivity. Many smaller plants still lack the networks needed to capture and process operational data effectively. A dedicated industrial digitalisation fund, supporting cloud integration, data standards, and cybersecurity in manufacturing, would allow the hydraulics and pneumatics sectors to deploy predictive technologies at scale rather than in isolated trials. The Budget must also address the skills gap. Fluid power engineering is traditionally strong in mechanical expertise, but the workforce now needs digital literacy data interpretation, control integration, and software maintenance. Funding for apprenticeships and midcareer retraining in mechatronics and industrial data science would help ensure that AI and automation complement, rather than outpace, the existing skills base. The creation of regional training hubs, jointly supported by industry and government, would allow smaller firms to access this capability without prohibitive cost. The sector would also benefit from a dedicated innovation challenge - similar to those run through Innovate UK - focused on energy-efficient hydraulic systems, electrified actuation, and smart control architectures. Providing matched funding for R&D projects that apply AI and digital twins to fluid power would accelerate development and encourage collaboration between manufacturers, suppliers, and universities. Long-term industrial competitiveness depends on stable policy frameworks that give firms the confidence to invest. Committing to multi-year funding for manufacturing innovation, and ensuring that decarbonisation policy recognises the role of efficient hydraulic and pneumatic systems, would provide that certainty. Digitalisation is already reshaping maintenance and manufacturing, but for hydraulics and pneumatics, the coming Budget will determine whether this transformation spreads across the whole supply chain or remains concentrated among a few large players. With the right fiscal measures, investment incentives, digital infrastructure, targeted skills funding, and stable policy, the UK can secure a stronger, more efficient, and more resilient fluid power industry for the decade ahead. Aaron Blutstein Editor
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