A COMMITMENT by the Chancellor to encourage scientific research and a focus on Research & Development for supporting new high technology industries has been welcomed by the West Midlands’ academic and manufacturing community.
Dr David Hardman, managing director of Birmingham Science Park Aston,said: “The Government has made it clear it understands the knowledge economy is key to helping drive future growth and job creation, so it is pleasing to see the science budget will receive no cash cut and the £4.6bn annual spend will be preserved.
“The Government’s emphasis on further research into clean and green technologies, which will help reduce the UK’s carbon footprint whilst also driving economic growth, has to be welcomed.
“However, we are still in the dark in many areas. The abolition of delivery organisations, such as AWM, and huge cuts to local authority budgets only fosters further uncertainty about how initiatives to support new start-ups will be delivered.”
Lord Kumar Bhattacharyya, head of Warwick Manufacturing Group, agreed it was “good news” the science budget was being maintained. However he noted that if inflation was to run at 3-4% it could in reality be reduced by up to 16% during the four-year spending review period.
He also said he thought the West Midlands would take the defence cutbacks, announced by the Prime Minister on Tuesday, in its stride.
The cuts had been “inevitable” but the aerospace sector in the region was strong enough to cope, he added.
“The defence sector has a huge dependency on Government contracts and the cuts will have an effect because manufacturing is so important here.
“But I don’t believe the West Midlands will be hit too hard. There are signs that the regional economy is picking up especially the automotive and green energy sectors. And industry is becoming more efficient.”
Katie Teasdale, policy advisor to the Birmingham Chamber of Commerce Group, said high technology firms and innovators would be pleasantly surprised by the science budget outcome.
“The decision to freeze it in cash terms, rather than an outright cut, will help firms to innovate our way through this difficult period and will offer much-need support to the knowledge economy which will help balance the deficit,” she said.
The boost to adult apprenticeships with an extra 75,000 places being created by the end of the four-year review would help employers who valued their productivity, she added.
Glen Babcock, advisory partner at PwC, said many firms would do well to heed the example set at Jaguar Land Rover where an agreement by unions on wage cuts had helped secure the future of the company’s operation in the West Midlands.
“Almost half a million private sector jobs could be lost as a result of the cuts, although this could be mitigated by increased labour market flexibility on wages and hours worked,” he said.
Richard Lambert, CBI Director-General said he supported extra capital spending on areas that promoted growth.
“These include transport and other infrastructure, education and science, and the low-carbon economy,” he said.
Johnathan Dudley, Midlands managing partner at audit, tax and advisory firm Crowe Clark Whitehill, urged a re-emphasis on Britain as a manufacturing economy.
“The regional growth fund needs to be targeted on manufacturing – making things and adding value – not just running call centres and recruitment consultancies,” he said.
New apprentices and a move towards the low carbon economy was also welcomed by the Federation of Small Businesses, while James Martin, a partner in the Birmingham office of business recovery specialists Begbies Traynor, said: “The country needs a higher skilled workforce, perhaps especially the industrial heartlands such as the Midlands, and let us hope this is the boost which can take us forward.”
He also said he hoped the region would be able to attract its fair share of the regional growth fund, adding this would be particularly applicable to the Midlands given its manufacturing pre-eminence.
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