Emily Smith, Chair of ICAEW’s Manufacturing Community advisory group celebrates her first year in post

The purpose of the group is to represent the views of a cross section of ICAEW members across manufacturing companies, as well as advisers from practice and independent roles. Our aim is to identify the key issues that members in this sector face, give feedback to government agencies such as BEIS and HMRC on topical issues and consultations, and give guidance on education and training needs for members and their staff. You will often see our members quoted in ICAEW Daily News articles or perhaps speaking on webinars.

Meetings take place quarterly; we are always looking for new members to join and would be happy to hear from anyone with manufacturing knowledge and experience who is interested in applying. If so, please email communities@icaew.com for further information.

In September we held the first in person meeting since 2019. Hot on the list of topics was  the recent Business Confidence Monitor for Manufacturing and what it could mean for the future. As anticipated, it wasn’t a positive picture.

Then we discussed the issues that each of us were facing. Energy was top of the list and it was a relief to subsequently see the announcement of an Energy Bill Relief Scheme. We will endeavour to look at how easy this is to access in a forthcoming webinar.

Employment issues were reported by some as being a worse problem than energy prices. Recruitment and retention of staff was discussed at length. In some areas or industries it is very difficult to recruit staff at an entry level wage and then keep them. Workforces were reported as demanding higher basic wages and threatening strikes or resignation. A discussion followed on the practical benefits that business can introduce to help support, such as car sharing and being as transparent as possible with staff about the costs of business.

Supply chains continue to be problematic, with members reporting up to 50-week lead times and a lack of communication from suppliers. On-shoring and near-shoring again seems to be a solution.

Workplace parking levies were discussed, with examples in Cambridge and Leicester where local councils may introduce costs of up to £550 per parking space.

A more upbeat topic was “exciting instability” that can give rise to innovation in the sector. Examples given included businesses that are developing B to C channels or investing more into R&D or identifying new markets as a result of supply chain shortages. Nick Tiley, a fellow member of the advisory group has written an article that urges us to look for opportunities:

• Embrace instability and look for business opportunities

There is no doubt, the last 32 months have been a significant challenge for many businesses, with manufacturers being some of the hardest hit when it comes to rising energy costs, rising labour costs and supply chain issues. Not to mention that the sector is top of the list when it comes to the skills gap crisis.

Employers must look at staff retention measures and up-skilling their current workforces. However, that inevitably comes at a cost. That coupled with some of the most skilled workers taking retirement earlier than anticipated, further adds to an already challenging position for manufacturers.

The recent mini-budget and U-turns have added instability, of course, but there were some positives in that the 1.25% National Insurance increase is being reversed from 6 November and the annual investment allowance is being held at £1m.

The energy price cap will have also provided a relief for businesses in the short term but provides little certainty for the period thereafter, particularly for manufacturers who are energy intensive. There is also uncertainty around energy shortages over the winter months and what impact these may have on the sector.

Despite the Government’s announcements, which will help some businesses in the short term, prices are still on the rise and manufacturers will need to come up with a strategy to pass on price increases to customers if they are going to survive the next 12 months.

I spoke on 9 November, looking at practical steps and quick wins to help navigate through the current instability in this webinar:

• Managing your business through volatility: practical steps to consider

We are planning to also celebrate the success of women in manufacturing. Details will be available soon. If you have any suggestions for future topics please do get in touch.

In case you have missed them, here are some of the webinars we have recorded this year:

• Cut carbon emissions to save tour business and the planet (5 October)
• Navigating your business in an inflationary world (23 June)
• How manufacturers can use Customs and VAT procedures to survive and flourish in a post-Brexit world (4 July)
• Reaching net zero in manufacturing – how to meet and measure targets (27 April)

To share comments, feedback or anything else please get in touch with communities@icaew.com and we will do our best to help.

^{*The views expressed are the author’s and not ICAEW’s.}