NEWS 14 HYDRAULICS & PNEUMATICS June 2026 www.hpmag.co.uk The number of NEETs and the UK’s benefit bill could fall within 3 years, if government and industry manage to close the skills gaps and shortages that plague our economy, leading skills charity Enginuity has said. A new report, from Enginuity, the former Sector Skills Council for engineering and manufacturing, SEMTA, shows that the skills gap in the engineering and manufacturing sector is costing the UK more than £5Billion a year - and if not addressed with urgency, will cast further adrift the ‘lost generation’ identified by Alan Milburn. The report, entitled, Mind the Gap, says that the sector faces a ‘perfect storm’ of interrelated factors which will only make matters worse over time. The £5bn lost annually to skills shortages represents a major missed opportunity. Based on typical starting salaries in the sector, it would be equivalent to supporting over 300,000 apprenticeships each year— a scale of intervention that could materially reduce the number of those not in education, employment or training (NEET) by 30% and help to reduce pressure on the benefits bill. Ann Watson, CEO of the charity Enginuity, the former Sector Skills Council which commissioned the report, said: “ “The findings highlight a significant productivity challenge for our sector but also a clear opportunity. At a time when NEET numbers & benefits pressure could tumble if skills gap is filled says Enginuity Government backs UK battery manufacturing The UK Government has announced a £380 million grant to support Agratas’ plans to build a battery gigafactory in Somerset. The facility, which will produce battery cells for Jaguar Land Rover, is expected to support around 4200 direct jobs, create 300 apprenticeships and generate opportunities across the manufacturing supply chain. The announcement forms part of the Government’s Modern Industrial Strategy and is intended to strengthen domestic battery production while supporting investment in advanced manufacturing. Alongside the Agratas funding, additional support has been announced for battery research and development projects and automotive businesses developing electric vehicle technologies. According to the Government, the measures are designed to boost investment, strengthen supply chains and support long-term growth across UK manufacturing. the UK is striving to boost growth, we cannot afford to see talent, investment and potential go to waste. We have a generation of young people struggling to access good work, employers crying out for skilled talent and growing economic inactivity placing increasing pressure on public finances. The solution is there in front of us. “Government needs to take note of these findings and ensure they are reflected in efforts to remove barriers to growth and talent entering the sector.” “Through The Policy Centre for Supply Chain and SMEs: Powered by Enginuity, we will be feeding these findings and recommendations directly to government and work with them to bring about change.” The survey evidence, from SQW, demonstrates that skills challenges are particularly widespread among engineering and manufacturing SMEs. Around half of surveyed SMEs (small and medium sized companies), reported skills related issues in the past year, with 36% experiencing skills gaps and 35% reporting skills shortages. Where skills gaps exist, firms estimate that around one in five employees are affected, while SMEs facing shortages typically report two to three hard to fill vacancies. SMEs report shortages in core technical and manual skills alongside growing gaps in digital, data and managerial capabilities. These challenges are not confined to humanitarian support and save millions of lives. Upon winning Kanav commented “It’s so surreal! The moment they say your name you completely zone out…because of how much effort you put into it, and to see all of that come to life is really great!” James Mackay, Head of STEM, UK at Thales commented: “Congratulations to The Big Bang UK Young Engineer of the Year. We were delighted to see the creativity and impressive STEM skills from all the finalists. Kanav’s project really impressed the judges, along with his tenacity, dedication and drive. “Supporting these future engineers is truly exciting for us at Thales. The Competition is a great reminder that the next big breakthrough could come from anyone. We need many more young people to pursue STEM careers. It’s been great to see so many students thinking about how they can innovate and create real-world solutions with engineering.” entry-level roles and are most commonly associated with lost productivity, with knock-on effects for turnover and future growth. Based on survey evidence and economic modelling, it is estimated that skills related challenges cost the engineering and manufacturing sector approximately £5.2bn per year, equivalent to around 10% of their annual output. At an individual business level, affected companies may be losing as much as 10% of their annual Gross Value Added (GVA), - equivalent to approximately £110,000 per company, per year. Ann Watson, CEO of the charity Enginuity
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