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South East: UK manufacturers call for urgent support

By Jo Whittle
15 February 2021

55% of UK manufacturing businesses say that the Government’s Covid-19 support measures are inadequate with further funding for the sector urgently needed, according to Crowe’s Manufacturing Outlook Report 2021, produced in collaboration with the Confederation of British Metalforming and sponsored by Hornby.

Johnathan Dudley, partner and head of manufacturing at Crowe said: “The past year has been dominated by the effects of the coronavirus pandemic and in keeping with the campaign which we have been running throughout the year, ‘getting back on to a new and safe track’ is the theme of this year’s survey.

“We very quickly realised that after the initial shock to the manufacturing supply chains back in March 2020, there was a need to firstly stabilise businesses, then ‘health check’ them to prepare for a return to what would be a new way of working.

“These latest results paint a clear picture and message from the industry – existing support levels are not enough. If supply chains are to be safeguarded, which is essential for removing uncertainty in the short-term, and for providing support for growth in the longer-term, manufacturing businesses that have been the backbone of the British economy for so long, must not be left behind.

“The retention bonus U-turn has been particularly harmful. In conducting this survey, we heard from businesses who were expecting support reaching up to £400,000. Funds that would have been directed towards growth and investment are now being urgently diverted to keep staff in jobs and the wheels just about turning.

“The nature of manufacturing supply chains heightens the urgency of government action. You are only as strong as your weakest link and it only takes one company to slip for the whole supply chain to come crashing down.

“In terms of exporting assistance, in an economic environment where most commentators and government agencies see the future prosperity of the UK manufacturing sector as being ‘export-led’, government assistance to increase exporting and to encourage businesses to even make a start is key.

“We urge the Government to provide more support to the manufacturing industry.”

Stephen Morley, president of the Confederation of British Metalforming added: “These results very much mirror the views of CBM members, which shows the effects have been widespread across all manufacturing sectors.

“There was still some indication of positivity for the future of the sector, which we hope will become reality as the year progresses, with 83% of companies expecting turnover to grow. However, we have to be realistic and say they are working from a very low starting point, mainly down to the effects of the pandemic.”

Lack of effective government support is not the only issue keeping UK manufacturers up at night. Additional results from Crowe’s manufacturing outlook report saw 31% of respondents reporting either an attempted or successful cybercrime attack in the last 12 months and 12% of respondents confirming that they had experienced incidents of suspected fraud in the last year.

It is worth noting that these results record just what respondents know to be the case and there may be further instances of fraudulent activity that remain undetected.

Jim Gee, partner and head of forensic services at Crowe comments: “Fraudulent activity historically always increases in times of economic hardship and an increased reliance on digital systems will further extend this trait as there is no longer a physical need for a perpetrator to ‘put their hands in the till’.

‘With the spotlight increasingly coming on supply chain accreditation, it is highly likely that companies will have to prove that they have carried out fraud and cybercrime assessments of their businesses, much in the same way as they have previously sought BS and ISO accreditations’

“Fraud and cybercrime now represent over 40% of all crime in the UK and the financial and reputational risk from falling victim to such crime can be devastating.”

DOWNLOAD THE REPORT HERE  https://www.crowe.com/uk/croweuk/industries/manufacturing

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