Skip to content

Manufacturing highlights from the Chancellor’s Spending Review

The Chancellor’s Spending Review for 2021-22 included announcements on apprenticeships, R and D funding, £100 billion in capital expenditure and a new national infrastructure bank.

More Manufacturing news

What type of manufacturing support do you need?


The £100 billion spending allocation will be supported by a new National Infrastructure Strategy, which outlines the government’s long-term vision for infrastructure investment, as well as a £4 billion Levelling Up Fund to boost growth across all regions of the country.

Part of this funding will be mobilised for the Prime Minister’s recently-announced Ten Point Plan for a ‘Green Industrial Revolution’, which will plough £12 billion into key industries including offshore wind, hydrogen and electric vehicles. Elsewhere, £24 billion has been earmarked for the defence industry over the next four years.

A new UK Infrastructure Bank, which will be headquartered in the north of England, will be launched in 2021 to help finance major investment projects.


Nearly £15 billion will be invested in R&D in 2021-22. Key focus areas include vaccine research and manufacture, defence, 5G and low and zero-emission technologies. At least £490 million will be made available for Innovate UK to provide businesses with access to capital and funding for innovation activities.

Verity Davidge, Director of Central Policy at Make UK, commented:

“The boost to R&D funding is critically important for manufacturers who invest a greater proportion than other sectors of the economy. If we are to become a global leader in the adoption of digital technologies and put science and research at the heart of  our economy, then financial backing from the government will be vital, especially if the UK is to lose EU funding.”


A further £2.5 billion will be made available to support apprenticeships in 2021-22. From August 2021, employers who pay the Apprenticeship Levy will be able to transfer their unspent levy funds to SMEs through a new ‘pledge’ function, providing smaller businesses with more funding to take on apprentices. The function will be supported by a new online service to match levy payers with SMEs that share their business priorities.

In addition, temporary incentive payments for hiring apprentices that were announced earlier this year will be extended to 31 March 2021. Employers can receive £2,000 for each new apprentice they hire under the age of 25, and £1,500 for new apprentices aged 25 or over.

The recently-launched Kickstart Scheme, which aims to create hundreds of thousands of government-subsidised job placements in employers of any size, will also continue through 2021-22.

Verity Davidge added:

“Apprentices have always been the lifeblood of many manufacturing businesses. However, this year, on the back of reduced demand and cutting of employee numbers, manufacturers have had to make tough choices which have resulted in a decline in the number of companies recruiting apprentices in the next year.

“There is an urgent need to get these numbers back on track or risk a major skills crisis in the coming years. Increasing the incentive scheme will help small businesses get their apprenticeship programmes back off the ground.”


Photo credit: Chancellor Rishi Sunak leaving 11 Downing Street to deliver his Spending Review. Credit: HM Treasury Flickr / CC BY-NC-ND 2.0

Share this post

GenAI-Powered Chatbot