Developing life sciences, driving digital and technology and helping our key cities to build valuable clusters were all highlighted as positive plans in the government’s freshly launched industrial strategy, but where was mention of the real estate sector?
That was the rallying call from the industry as a consultation into the 66-page green paper was launched on Monday 14 October.
Invest 2035: The UK’s Modern Industrial Strategy outlines eight sectors it wants to prime for long-term growth through a 10-year strategy. The aim is to use targeted support to drive growth across key sectors in a way that is distributed across the country.
Those sectors are: advanced manufacturing, clean energy, creative industries, defence, digital and technology, financial services, life sciences, and professional and business services.
The paper says the UK’s economic performance is too reliant on London and the South East and identifies Greater Manchester, the West Midlands and Glasgow as underperforming in delivering growth and prosperity. It quotes Centre for Cities analysis which claims that for the largest eight cities outside London, the gap between actual and potential productivity stands at £47bn per year. This increases to £66bn for the next 25 city regions outside the South East.
The government aims to encourage the development of high-performance clusters as a means of remedying this and points to existing clusters such as life sciences in Cambridge and Liverpool, financial services in Leeds, Edinburgh and London, digital industry in Bristol and Northern Ireland, and advanced manufacturing in areas across northern England and Wales.
By removing obstacles to growth at local level and with enhanced powers for mayoral combined authorities, the government believes it can enhance these clusters.
It will also aim to support these clusters through the choice of locations for its new towns, which will aim to provide large-scale settlements to house workforces.
British Property Federation chief executive Melanie Leech said the green paper was a welcome statement of intent from government, but urged it to support the real estate sector as being foundational in providing the infrastructure the strategy will require.
“One of the issues facing the life sciences sector is a chronic undersupply of lab space, while London is facing a shortage of the best-in-class, sustainable office workspace favoured by the world’s best professional services firms,” said Leech. “Overlaying this, the UK will only succeed in the global war for talent if we can ensure there is sufficient supply of high-quality homes in and around our towns and cities.”
She added: “The government has shown a real urgency to reform the planning system and has the opportunity through its industrial strategy to further fast-track delivery of the infrastructure and specialist workspaces we need to support key growth industries.”
Jackie Sadek, chair of the UK Innovation Corridor, shared Leech’s concerns over the lack of specific focus on property.
“The fact that we haven’t had any industrial strategy for so long is utterly perverse,” she said. “I was surprised that housebuilding is not named as one of the eight priority industries – after all the sound and fury over the summer – in fact, property seems to have been bypassed altogether.”
Michael Meadows, head of public affairs and planning at British Land, said the strategy also needed to focus on investment in water, power and transport as vital infrastructure to deliver place.
“The government’s continued commitment to collaboration with businesses to develop sector and local growth plans is also welcome,” he said, “and our campus model is well placed to support the growth and clustering of these high-potential sectors, by creating dynamic and inclusive environments where businesses and innovation thrive.
“We look forward to working with regional and local government partners to build on existing strengths and identify priorities for growth.”
Lord Richard Harrington, author of the Harrington Review on foreign direct investment and recently installed chair of London-based developer Regal, called the strategy essential.
“It provides a robust framework for a true partnership between industry and government, ensuring we can effectively collaborate for mutual benefit,” he said. “It also aligns clearly with the recommendations of the Harrington Review, which emphasises the importance of targeting government resources toward sectors where we can truly excel. By doing so, we can create meaningful incentives for companies, sovereign wealth funds and pension funds to invest here in the UK.”
The prime minister, Sir Keir Starmer, wants the strategy to be a blueprint for investors and has promised to do everything in his power to “galvanise growth, including getting rid of regulation that needlessly holds back investment”.
“We are focusing on investment because the mission of growth, in this country especially, demands it. Private sector investment is the way we rebuild our country and pay our way in the world,” said Starmer. “We’ve got to look at regulation where it is needlessly holding back the investment to take our country forward. Where it is stopping us building the homes, the data centres, warehouses, grid connectors, roads, train lines, you name it, then mark my words – we will get rid of it. We will rip out the bureaucracy that blocks investment and we will make sure that every regulator in this country takes growth as seriously as this room does.”
Consultation on the industrial strategy was launched this week and remains open until 24 November. Microsoft UK chief executive Clare Barclay has been appointed to run an advisory board for the strategy with the aim to ensure a “clear and strong voice” on behalf of business.
The full strategy, which will include detailed sector-specific plans, will be published in spring next year.
Photo by Mathias Reding/Pexels
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